Posting in Energy
How do you grow algae in the desert Southwest? Startup Sapphire Energy is already doing it and has just raised $144 million to expand a demonstration plant that produces crude oil from algae.
Sapphire Energy has raised $144 million from investors to expand its green crude farm, a commercial demonstration facility in New Mexico that produces oil from algae.
The San Diego-based startup is unlike other biofuel companies out there. It's not making ethanol or biodiesel. Instead, it's extracting oil from algae that can be refined into diesel, jet fuel and gasoline and is compatible with existing fossil fuel-based infrastructure. In other words, the green crude is molecularly similiar to the light, sweet crude oil that we use today to fuel our cars, planes and trucks.
Sapphire uses sunlight and carbon dioxide to grow algae in large open ponds of non-potable saltwater. The algae is separated from water, leaving behind a thick paste-like material. From there, the oil is extracted from the algae biomass. Once the oil has been concentrated, it's prepared for processing and refining, where it can be turned into gas, diesel and jet fuel.
Sapphire has successfully moved out of the lab and tested its fuel in two commercial flights and a cross-country road trip. But it has yet to scale commercially. The company has laid out a pretty aggressive timeline. In the past, Sapphire has said it plans to produce 100 millon gallons per year by 2018.
That's where the Luna County green crude farm comes in. The photo above is an aerial shot of the green crude farm located in Luna County, New Mexico. The neat little rows you see are open ponds used to grow algae. Sapphire wants to expand production at the 300-acre site.
So far, the company has managed to attract investors and snag some government funds. Counting this latest round, Sapphire Energy has raised more than $300 million in private and public funds. That includes a grant award of $50 million from the U.S. Department of Energy and a $54.4 million loan guarantee from the Department of Agriculture.
On a side note: Monsanto was among the group of investors. Last year, Sapphire and Monsanto entered into a multi-year collaboration on algae-based research projects. Why would the world's biggest seedmaker bother with an algae-to-energy startup? Sapphire's genetic research tech, which could help Monsanto boost crop yields.
Finally, some readers might wonder, why has Sapphire located its demonstration plant (and a separate R&D facility) in New Mexico? The area has two critical ingredients: A huge underground reservoir of salt water and abundant sunlight that's used to grow algae.
Photo: Sapphire Energy
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Outside estimates start at $9.84 per gallon to make algae diesel at Sapphire and go up. Some experts hired by potential investors have put the figure closer to $20 a gallon. Even $9 requires the price of oil to nearly double to be competitive. For clarification purposes, $50 million grant from the U.S. Department of Energy and a $54.4 million loan guarantee from the Department of Agriculture was really $104 million from the STIMULUS act with the loan setup identical to the Solyndra loan. Making this in reality a $104 million grant if the company fails. I am glad to see private money starting to come in. Which never happened with Solyndra.
No word in this article as to the cost at the pump. The whole idea of home-grown and home-produced energy is often stated as having the effect of saving the consumers money while making for a greener world. Neither is going to happen with this energy source. Being tied to petroleum the way it is, the production cost will be high and not reduce the use of oil in any significant way. Just shifting around the way oil is consumed. Even if algae-based fuels can be produced cheaper than petroleum-based fuels, by the time gummint adds its taxes and fees, the end price will likely be higher than what it replaces.
Wonder if Bill Gates has been had? We have been hearing about algae grude from this company for years. Now heard they are moving into nutraceuticals, food and feed. Nutraceuticals is not going to get the US off of foreign oil.
Over two billion dollars has been spent on algae biofuel research - mostly in the last five years with exceptionally limited results - so why? Exxon alone claimed to be investing 600 million in 2010 and several other big oils are heavily invested - why? Big oil is logically interested in algae and other biofuels because they would be the primary recipients of biofuels business. All significant scale biofuel production is dependent on NPK fertilizers. (http://krex.k-state.edu/dspace/handle/2097/6243) The N - nitrogen in NPK comes from natural gas. P - phosphorous from rock phosphates (another peak commodity - like oil) whose mining consumes huge amounts of petroleum fuels - diesel and natural gas as does K potassium. Some experts have calculated that a global biofuels industry would quadruple the NPK demand: (http://seekingalpha.com/article/182522-taking-stock-of-phosphorus-and-biofuels) and consequently have dramatic impacts on the 85-95% of human food production (and their prices) that is currently completely dependent on NPK. Did I mention that 85% of the global reserves of essential P (rock phosphate in NPK are located in Morocco and the Western Sahara. (http://www.foreignpolicy.com/articles/2010/04/20/peak_phosphorus?hidecomments=yes) That's biofuels energy independence strategy - we swap Saudi Arabia and the ME for Morocco and N. Africa. Brilliant!