Sapphire Energy Inc. reached a significant milestone in its quest to commercialize algae-based crude oil, paying off its entire $54.5 million loan from the US Department of Agriculture (USDA).
The San Diego-based company received the federal loan guarantee in December 2009 under the Biorefinery Assistance Program, administered by the USDA Rural Development-Cooperative Service.
Sapphire borrowed the money for its Green Crude Farm in New Mexico; in total, it has raised about $300 million in public and private backing – its Series C round was one of the biggest venture capital deals in 2012.
Today, that farm (pictured below) is operational, using algae as a feedstock to refine renewable crude oil for transportation applications.
“The investments being made in low-carbon biofuel production are paying off and moving technologies forward, which will produce savings at the pump for consumers, and spur sustainable, new-wealth creation here in the United States, and make our land more productive,” says Doug O’Brien, Acting Under Secretary for Rural Development.
Currently, 30 full-time employees work at the facility. Sapphire expects to produce 100 barrels of crude oil per day in 2015, reaching commercial-scale production in 2018.
“Sapphire Energy is very grateful to the USDA for supporting algae crude oil as an alternative source of energy as well as our vision to make this industry a reality,” says Cynthia ‘CJ’ Warner, CEO and chairman of Sapphire Energy. “With their backing, we did exactly what we set out to do. We grew our company, advanced our algae technologies, and built, on time and on budget, the first, fully operational, commercial demonstration, algae-to-energy facility that delivers a proven process for producing refinery-ready Green Crude oil."
Sapphire’s biofuels are made from photosynthetic microorganisms (algae and cyanobacteria), using sunlight and carbon dioxide as the feedstock. Unlike many other options, they don’t depend on food crops or precious farmland, do not use potable water and are compatible with existing infrastructure.
The high yield per acre (up to 5,000 gallons of renewable oil per year on a single acre) and minimal environmental impact of algae biofuels make them one of the most viable and attractive biofuels – the algae sector could reach $1.6 billion by 2015, predicts SBI Energy research.
Sapphire isn’t the only algae company to make headlines. Here are other recent developments from other notable pioneers:
Algae.Tec – In July, the Australian company announced a deal with one of the largest biofuel refineries, Biodiesel Industries Australia, to refine algal oil at a carbon capture and biofuels production facility near a Sydney-area coal plant.
Cellana signed a commercial-scale agreement in June with Neste Oil, the world’s largest producer of renewable diesel.
Heliae raised $28.4 million in early July to support the operation and expansion of its first commercial plant in Gilbert, Ariz.
Solazyme, the first publicly-traded algae company, signed a $120 million loan agreement with joint venture partner Bunge for a loan from the Brazilian National Development Bank. It will be used to develop its first commercial-scale renewable oil production facility in Brazil.
Read our background on algae technology.
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