$100 Million Funding for Algae Biofuels Plant

By David L. Brown

A $50 million federal grant has been awarded to Sapphire Energy of San Diego, CA, for a revolutionary bio-fuels plant to be built in New Mexico. The announcement was made by Energy Secretary Steven Chu, whose department issued the grant under the economic recovery program. At the same time Agriculture Secretary Tom Vilsack announced the USDA would further back the program with loan guarantees up to $54.5 million.

The company is pioneering what it calls “green crude oil,” created from renewable algae. The “green crude” will be used to make biodiesel and jet fuel. The company has already demonstrated the concept with research facilities at Las Cruces, NM and Portales, NM. The process has been demonstrated with several airliner test flights powered by fuel made by the company, and experiments are underway to prove the ability of algae-oil to be used to make gasoline.

potential_mainThe project will demonstrate an integrated process in which algae will be grown in ponds, then processed to remove water and extract oils. In a second stage the oils will be processed to produce fuels. Algae, pictured at left, not only grows fast (think kudzu here), but naturally contains a high percentage of oils.

According to Sapphire CEO the project will create as many as 750 direct and indirect jobs in New Mexico during construction, and 30-40 full-time positions after the plant is opened. Construction is expected to begin next year.

Sapphire claims that the new energy model, which uses water, carbon dioxide and sunlight to grow the algae, will be carbon neutral and produce fuels identical to those made from fossil fuels. It does not require large inputs of water and energy, nor does it rely on agricultural crops as is the case with some other alternative fuel processes such as those used to produce ethanol from corn and biodiesel from soybeans.

New Mexico Senator Tom Udall hailed the project, saying it “will decrease our dependence on foreign oil, reduce our carbon footprint, and create jobs for hardworking New Mexicans.”

Algae offers one of the best sources for bio-fuels, since it can be grown relatively cheaply in ponds or tanks in areas with lots of sunlight, even deserts as in southern New Mexico. Corn for ethanol, on the other hand, is a farm crop requiring many inputs of land, labor, chemicals and seeds. Using farm crops to replace oil is unsustainable, uneconomical, and just plain foolish.

This is not the only such program in the works. On July 15, 2009, I reported (here) a major investment by oil giant ExxonMobil in an algae energy joint venture with Synthetic Genomics, a company founded by geneticist Craig Venter. ExxonMobil was reported to be putting $600 million into the plan. BP and other companies are also jumping on the algae bandwagon, making this one of the hottest areas in alternative fuel development.

All is not roses in the risky business of alternative energy. On May 13, 2009 it was announced that GreenFuel Technologies was closing down, a victim of the credit crunch. I posted an extensive report on this company’s algae fuel program on October 20, 2006 (here). GreenFuel was a joint venture between Harvard and MIT, and invested millions before falling victim to the economic troubles.

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