In the "lightning strikes twice" department, another California company in the green transportation field has said it paid off its federal government loans ahead of schedule. In this case, San Diego-based Sapphire Energy, which specializes in converting plant algae to crude oil, says it has paid off its $54.5-million loan, originally granted by the US Department of Agriculture, ahead of schedule.

Sapphire, which took out its loan under the agriculture department's Biorefinery Assistance Program, says it will produce 100 barrels of crude oil from its New Mexico plant on a daily basis by 2015 and will be making oil at "commercial scale" levels three years later. In 2008, the company started publicizing its efforts to combine algae with CO2, sunlight and other microorganisms to produce legitimate gasoline (91 octane, no less). A year later, Sapphire reps drove a Toyota Prius, nicknamed the Algaeus, powered by algae-based gas to drive to New York City from San Francisco.

The other green mobility company to pay off its loan early is electric-vehicle maker Tesla Motors, which said in late May that it paid of its $465 million Department of Energy loan. That loan was also taken out in 2009 and was not due to be paid in full until 2022. Check out Sapphire's press release below.
Show full PR text
SAPPHIRE ENERGY PAYS OFF GOVERNMENT LOAN GUARANTEE

USDA and Sapphire Energy Partnership Demonstrates Effective Use of Taxpayer Money and U.S. Technology Leadership

SAN DIEGO, July 30, 2013 – Sapphire Energy, Inc. today announced it has paid off the entire loan guarantee awarded to the company by the U.S. Department of Agriculture. In Dec. 2009, the company was awarded a $54.5 million loan guarantee through the Biorefinery Assistance Program, administered by the USDA Rural Development-Cooperative Service, to build a fully integrated, algae-to-crude oil commercial demonstration facility in Columbus, N. M. In partnership with the USDA and the U.S. Department of Energy, Sapphire Energy developed and implemented its facility, known as the Green Crude Farm, on time and on budget. Today, the Farm is operational and producing renewable crude oil on a continuous basis.

As a result of the USDA's loan guarantee and USDOE's support, Sapphire Energy is now producing the world's first renewable crude oil, and is in the process of scaling up the technology. The operational crude oil farm has led to additional investment in the company and commercial partnerships. The company repaid the remaining loan balance in full after receiving additional equity from private investors, making the loan no longer necessary to complete the next, planned phase of development. The early repayment of this loan and on-target development roadmap for Sapphire Energy's algae crude oil technologies further solidifies the USDA's role in catalyzing new energy technologies in rural communities, increasing domestic energy production, and creating new jobs. The USDA's investment has advanced the use of algae as a feedstock to produce crude oil and as a viable new crop to produce homegrown energy while creating valuable rural economies.

"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," said Doug O'Brien, Acting Under Secretary for Rural Development.

"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," said 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. We could not have built this first of a kind facility without the support of the USDA. Moving forward, our focus is on commercializing our technology and expanding operations to bring crude oil production to commercial demonstration scale as planned."

The Green Crude Farm integrates biotechnology, agriculture and energy to demonstrate the entire value chain of algae crude oil production, from cultivation to harvest to extraction. More than 600 jobs have already been created throughout its phase 1 construction, and 30 full-time employees currently operate the facility. The company expects to be producing 100 barrels of crude oil per day in 2015, and at commercial-scale production in 2018.

About Sapphire Energy

San Diego-based Sapphire Energy is pioneering an entirely new industry – Green Crude production – with the potential to profoundly change America's energy and petrochemical landscape for the better. Sapphire's products and processes in this category differ significantly from other forms of biofuel because they are made solely from photosynthetic microorganisms (algae and cyanobacteria), using sunlight and CO2 as their feedstock; are not dependent on food crops or valuable farmland; do not use potable water; do not result in biodiesel or ethanol; enhance and replace petroleum-based products; are compatible with existing infrastructure; and are low carbon, renewable and scalable. Sapphire has an R&D facility in Las Cruces, New Mexico, and is currently operating the first Integrated Algal BioRefinery in Columbus, New Mexico, continuously since May 1, 2012.


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    • 1 Second Ago
  • 22 Comments
      Marcopolo
      • 1 Year Ago
      In theory, Algae based feedstock plants would appear to be a perfect solution to produce energy. These facilities can be located near major fossil fuel power plants, capturing and reusing CO2 emissions to produce a form of crude oil. For decades 'Oil- from-Algae' technology, has been the subject of 'green fuel' hopes because it's been relatively easy to produce at a small scale laboratory level. As a result, over the years, billions of dollars has been spent attempting to upscale production to a commercially viable level. The problem has always been the nature of Algae growth, behaviour and processing. Sapphire Energy' claims to have solved all the problems that defeated so many rivals, and has now attracted sufficient private investment to repay the $54.5 million loan guarantee provided by US government agencies. Hopefully, this is an indication that the company's claims are valid, and Sapphire Energy's technology will indeed be a driving force in creating a low pollution, economically viable energy feedstock. On the other hand, it could also be an indication that Sapphire Energy wishes to escape the straight-jacket restrictions of the loan guarantee, and wishes to take advantage of an opportunity to re-finance to a more amenable capital structure. If Sapphire Energy can really make the jump from an R&D facility, to a commercially viable facility, the future for this small US corporation is very bright indeed. However, it's wise to remember that so many others, with seemingly identical claims, all failed at exactly this point. (but at least time, no government money will be lost, and that must be a good thing !). Although on principle, I dislike the idea of 'mandating' any fuel, if Sapphire Energy's product could eliminate the environmentally harmful US corn based ethanol industry, Sapphire Energy may prove to be an enormously valuable solution to repair some of the colossal environmental damage done by the malignant US-corn based ethanol industry. I look forward to Sapphire Energy's future developments.
      raktmn
      • 1 Year Ago
      There seems to be a bit of an underlying theme that somehow late investors coming in after all the risky work was done, somehow points to some free market success of some kind. As if this proves the free market is the key to everything. First off, this company would not even exist if it weren't for the Federal RFS standards that require blenders to buy a certain amount of these 2nd gen biofuels. This wasn't even anywhere near going to market without the mandate that once they were successful that the door would be wide open to them selling this through the oil industry controlled current distribution system. Second off, how much courage does it take as the "free market" to jump in after the gov't took all the high risks, and invest in a product that came into existence because the highest levels of risk have already been taken by the gov't loan program? If anything, this just proves that the free market alone failed to invest in what is becoming a very successful company, and without gov't support, the free market would have failed yet again to bring a green product to market. Can anyone explain how this story is somehow proof that the free market is the solution?
        DaveMart
        • 1 Year Ago
        @raktmn
        If there were a free market in fuel then we might be able to take their financing as an indicator of success. There isn't, nor anything remotely like one. It is perfectly possible that this uses huge amounts of natural gas to dry the algae, and that the venture produces minimal amounts of excess energy, and generates profits simply from subsidy. Note that I am not saying this is what is happening, just that the absence of a free market makes it impossible to judge whether this is a viable new technology, or a subsidy harvesting machine with little additional energy produced. The history of biofuels is full of over optimisms and outright scams.
      GR
      • 1 Year Ago
      But, but, Michele Bachmann told me that investing in these companies was a waste of money?!?
        EZEE
        • 1 Year Ago
        @GR
        The point is that if a company shows actual promise of success, then they rarely need government assistance, as people will happily hand over their money, in the hopes of a positive return. When the government has to invest, the results are often dubious. Hence, at the solyndra factory, they actually had digital marble and glass showers, plus robots who (no joke) whistled Disney tunes. Admittedly in this case, the investment DOES look like it will have good results.
          Pandabear
          • 1 Year Ago
          @EZEE
          Why don't you tell DARPA about this? they are spending way more money in these promising technologies than DOE
          EZEE
          • 1 Year Ago
          @EZEE
          DARPA......uh.....yea. The DEFENSE Advanced Research Projects Agency? The group with that funded agent orange? They are defense. DEFENSE. Corporations usually aren't specifically looking for ways to kill people, unless they are paid by our good and giving friends, the government. One usually doesn't make money, unless other governments PAY for the people killing technologies, and the stock price goes up. One day...just one day....we will have to have bake sales to buy bombers,instead of findng miney for educating our children. Now DARPA is looking for ways to build hummingbird,many dragonfly sized and shaped drones. This....this is the agency you look toward as a force of good, opposed to the FREE market. What is your next promising technology - something to kill brown skinned children is foreign lands? Is tht what you call 'promising?'
      2 wheeled menace
      • 1 Year Ago
      Cool.... i wonder how they paid it off so soon though? Did someone buy them out? Sounds like they haven't exactly moved >$54 million dollars worth of product.. Fingers crossed that this investment pays off rather than just got swallowed up by an oil company..
        EZEE
        • 1 Year Ago
        @2 wheeled menace
        How is the website coming? Send a note to Dan. He HAS to review cars...
        EZEE
        • 1 Year Ago
        @2 wheeled menace
        Click on the press release... The operational crude oil farm has led to additional investment in the company and commercial partnerships. The company repaid the remaining loan balance in full after receiving additional equity from private investors, making the loan no longer necessary to complete the next, planned phase of development. See? Build something that works and people happily invest their money! Nice to see it is working... Question...since they are making oil...is this much greener than digging it out of the ground? No idea, so asking...
          brotherkenny4
          • 1 Year Ago
          @EZEE
          Algae uses CO2 from the atmosphere as a carbon source, just like plants. So, presuming that is the main source of carbon, it is a complete cycle, resulting in no net production of CO2. I'd like to know what they speculate the price will be at "industrial scale", obviously they have convinced investors that it will be competitive, at least as a mandated component.
          DaveMart
          • 1 Year Ago
          @EZEE
          Fair enough on the Algae once it gets to the fuel stage being carbon neutral. The devil is in the details though. One of the big hassles with algae is drying it. Depending on the source of the energy to do that, then that can use shed loads of energy. If you are using closed bioreactors, then making them takes energy, and so does cleaning them. If they are using ponds, then water evaporation can be resource intensive, particularly of course in water stressed areas where solar resources are often best. They might be using salty water though. In fact there are all sorts of twists and combinations possible, so short of really working hard to evaluate this particular technology it is impossible to say what is going on. Even if you attempted a full evaluation, a lot of the info is likely proprietary. This could be anything from an energy negative subsidy ploy to the next great thing.
          DaveMart
          • 1 Year Ago
          @EZEE
          I don't know - and you can quote me on that! There are so many pathways to biofuel using varying amounts of land, water an energy that you really, really have to study to know what is going on, and then you will come up with a particular answer for a particular technology in a particular place. I stick to trying to understand what is going on with electric and fuel cell cars, and pass on biofuels.
          EZEE
          • 1 Year Ago
          @EZEE
          Thanks for all of the responses, very enlightening. And no, 2wheel, the investors were not mentioned in the comment of private equity, so it could be big oil. Although the question there would be, unless they shut it down....why not? Oil is oil. Clean or not. Unless it was for shutting them down,if this company is making money, it would behoove an oil company to buy them,or I vest in their technology. Somehow I doubt there is 'peak algae'. :-) Rak - good perspective....thanks!
          raktmn
          • 1 Year Ago
          @EZEE
          There are 3 area to look at: 1) The short tailpipe veiw, where you just look at what happens when it is burned. This should be cleaner than dino juice, because it will not have any of the impurities found in drilled oil. I would also guess it is naturally sulfur free, like bio-diesel. That will make all of your emissions equipment last longer. It will still produce NOx, ozone, etc the same as any gas engine though. So better than drilled oil, but still not as good as an electric car. 2) The medium tailpipe is as DaveMart says, where anytime we can use the CO2 already in the atmosphere, and recycle it to use it again, we are way better off than releasing more new stuff from deep underground. The biofuel itself is a zero net new CO2 source, the same as ethanol. All of the carbon in the fuel itself is all recycled carbon, making the fuel carbon neutral, just like ethanol. 3) Then there is the long tailpipe argument. This is where ethanol gets attacked because it only produces around 1.3 times to 1.6 times more energy than it takes to make it, giving it an EROI of 1.3 to 1.6. This company is claiming an EROI of 3 units of energy for every unit of energy going in, with improvements expected as they scale up. In layman's terms, it is like having a special gas pump in your garage that you put in 100 gallons of gas, and get 300 gallons out. This is compared to ethanol where your would get just 130 to 160 gallons out. This is an early true 2nd generation biofuel, that is much better than either the gas or the 1st gen biofuel, ethanol. This is exactly the kind of fuel that the RFS (Renewable Fuel Standard) that mandates ethanol use pictures as taking over the next 50% of the RFS mandate. The ethanol fuel mandate caps out at 15 billion gallons, and fuels like this are what will be required in the future as the biofuel mandate goes up to 36 billion gallons. The additional 19 billion gallons of biofuel will have to come from these 2nd generation biofuels. It is almost like someone had a plan.....
          2 wheeled menace
          • 1 Year Ago
          @EZEE
          Yeah, ok - private investors, which ones? :) I hope it is a success story of the market that you suspect it is, and not the plot for 'who killed the biofuel' ;) that's all. Hey, i know i am very pessimistic but look at the past of how things like this have gone.
      Pandabear
      • 1 Year Ago
      pay off, not pay of
      • 1 Year Ago
      Hello all, About CO2 emissions, i read in an article that a french company has found a solution to reduce and to use CO2 emissions for all vehicles. They are specialist for exhaust heat recovery with amazing fuel savings up to 15%, interesting ! More informations in their websites : http://www.exoes.com/EN ; http://www.facebook.com/ExoesRankine ; http://www.twitter.com/ExoesRankine
      Eideard
      • 1 Year Ago
      Typo time, folks: pays "off" not "of"...
        EZEE
        • 1 Year Ago
        @Eideard
        Be nice. It's Danny. He's special...
      EZEE
      • 1 Year Ago
      This is from the press release (I actually read it yay me): using sunlight and CO2 as their feedstock; are not dependent on food crops or valuable farmland; do not use potable water; do not result in biodiesel or ethanol; enhance and replace petroleum-based products; are compatible with existing infrastructure; and are low carbon, renewable and scalable. Nifty things from this - 'do not use potable water' 'are not dependent on food crops or valuable farmland.' And 'are compatible with existing infrastructure.' Ethanol's issues with being shipped via pipeline (having to be shipped via tanker truck) are obviously problematic, and rather defeat the purpose. Now...I was reading the press release and not actual independent review, so this could be the same as, "Cigarrettes are good for you. (study by phillip morris)" But it would be nifty if it all worked on a cost effective manner, on a large scale. The other cool part was, "enhance and replace" existing petroleum based products. Since this is crude, then does this mean that we could mix this in with gasoline (once it is refined) and it would still be 'gasoline?' Then, even if it is a 5% blend, it would still be cool.
      jeff
      • 1 Year Ago
      Boy that is going to make the GOP mad...
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