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Sapphire Energy is now working on scaling up its production of the world's first renewable crude oil

A green crude oil production company has paid off its loan guarantee to the U.S. government early and in full. 

Sapphire Energy, a producer of the world’s first renewable crude oil, fully repaid its $54.5 million loan guarantee early. The loan was awarded to Sapphire Energy by the U.S. Department of Agriculture in 2009 through the Biorefinery Assistance Program.

“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.”


Sapphire Energy is now working on scaling up its production of the world's first renewable crude oil. The company built its Green Crude Farm, which promotes algae crude oil production from cultivation to extraction. Its biofuel is made from photosynthetic microorganisms like algae and cyanobacteria, and uses sunlight and carbon dioxide as their feedstock. Also, its biofuel is not dependent on food crops or farmland, does not use potable water, does not result in biodiesel or ethanol, and is low carbon, renewable and scalable. 
 
The farm has created over 600 jobs throughout its phase 1 construction with about 30 full-time employees currently operating the facility. 
 
Sapphire Energy plans to produce 100 barrels of crude oil per day in 2015, and hit commercial-scale production in 2018.

This isn't the first government loan to be paid off early this year. Back in May, Tesla Motors repaid its $465 million loan to the U.S. Department of Energy nine years early

Source: Sapphire Energy



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Algae based diesel
By FITCamaro on 8/1/13, Rating: 0
RE: Algae based diesel
By toffty on 8/1/13, Rating: 0
RE: Algae based diesel
By Flunk on 8/1/2013 2:38:55 PM , Rating: 2
I don't see the problem, if they pay it back no one has lost anything. Investing in energy independence just makes economic sense as compared to continuing to rely on foreign oil suppliers.

I don't agree with all subsidies, corn ethanol doesn't make any sense because they burn nearly as much gasoline to produce the ethanol as they get out of the process and the net environmental impact is much worse than oil.

But loans for research and development of promising ideas makes perfect sense.


RE: Algae based diesel
By ClownPuncher on 8/1/2013 2:52:51 PM , Rating: 3
Truth be told, no government should be in the business of money lending.


RE: Algae based diesel
By Fallen Kell on 8/1/2013 6:47:21 PM , Rating: 2
With that frame of thought, then no government should be in the business of funding research, even for things it needs like new airplane designs, tanks, destroyers, aircraft carriers, radar, sonar, missiles, etc. If the private industry hasn't made it and isn't selling it, then the government shouldn't be buying it, because the act of inventing something would require lending the money to research the new technology and scientific knowledge to make the item. And lets be realistic here, no private industry would ever risk building an aircraft carrier without having a buyer before making it, and no buyer would purchase something without knowing it works, which means the company would need to foot the bill for researching if their design works, and for something like an aircraft carrier, it would cost billions to prove out the design, and no company would risk billions of capital on something they do not even know there will be a buyer, since the government could simply say, we don't need a new one for another 20 years, at which point the company that spent the capital for the design would be certainly out of business having tossed billions down the hole.


RE: Algae based diesel
By ClownPuncher on 8/1/2013 7:01:09 PM , Rating: 2
I don't see how you jumped to that conclusion.

It is the duty of the government to provide a well equipped military, as stated on the constitution. The pay up front for both the design and manufacture of said aircraft carrier.

It isn't the duty of the government to act as a lending bank. I can see the point of government approved loans for research like this, but it shouldn't be tax dollars paying for it. Private banks should decide whether or not to loan out such large sums based on government approval, credit rating and the choice of said bank.


RE: Algae based diesel
By chenjf on 8/1/2013 8:41:57 PM , Rating: 2
Maybe Fallen Kell shouldnt have used the military. Lets go with the Internet that was started by DARPA.


RE: Algae based diesel
By Paj on 8/2/2013 9:25:07 AM , Rating: 2
True, we probably shouldnt have developed spaceflight, invented wifi, split the atom or conceived of the Internet. Waste of taxpayer dollars, right?


RE: Algae based diesel
By ClownPuncher on 8/2/2013 11:18:01 AM , Rating: 2
Those were mostly government projects aided by private industry. Which I have no problem with.

The government has poven time and time again that it is not good with money. Why would we want them to operate like a bank?


RE: Algae based diesel
By Basilisk on 8/6/2013 10:57:43 AM , Rating: 2
Good grief, I don't even want the banks operating like the banks have been!


RE: Algae based diesel
By Jeffk464 on 8/2/2013 11:12:39 AM , Rating: 2
Government funding gave us the first computer, jet engine, radar, etc.


RE: Algae based diesel
By talikarni on 8/1/2013 2:41:02 PM , Rating: 2
Amen FIT! It is governments responsibility to step in ONLY when something becomes a danger on a large scale to the people (and I do not mean that scam of so called man made global warming that has no concrete proof)... They should not use our tax money to invest in private businesses.

Sure a few have worked out and repaid their loans, but that is the exception to these events.... What about the billions lost in the others that went under like Solyndra and so many others.

So far, 34 companies that were offered federal support from taxpayers are faltering — either having gone bankrupt or laying off workers or heading for bankruptcy. This list includes only those companies that received federal money from the Obama Administration’s Department of Energy and other agencies. The amount of money indicated does not reflect how much was actually received or spent but how much was offered. The amount also does not include other state, local, and federal tax credits and subsidies, which push the amount of money these companies have received from taxpayers even higher.

The complete list of faltering or bankrupt green-energy companies:

Evergreen Solar ($25 million)*
SpectraWatt ($500,000)*
Solyndra ($535 million)*
Beacon Power ($43 million)*
Nevada Geothermal ($98.5 million)
SunPower ($1.2 billion)
First Solar ($1.46 billion)
Babcock and Brown ($178 million)
EnerDel’s subsidiary Ener1 ($118.5 million)*
Amonix ($5.9 million)
Fisker Automotive ($529 million)
Abound Solar ($400 million)*
A123 Systems ($279 million)*
Willard and Kelsey Solar Group ($700,981)*
Johnson Controls ($299 million)
Brightsource ($1.6 billion)
ECOtality ($126.2 million)
Raser Technologies ($33 million)*
Energy Conversion Devices ($13.3 million)*
Mountain Plaza, Inc. ($2 million)*
Olsen’s Crop Service and Olsen’s Mills Acquisition Company ($10 million)*
Range Fuels ($80 million)*
Thompson River Power ($6.5 million)*
Stirling Energy Systems ($7 million)*
Azure Dynamics ($5.4 million)*
GreenVolts ($500,000)
Vestas ($50 million)
LG Chem’s subsidiary Compact Power ($151 million)
Nordic Windpower ($16 million)*
Navistar ($39 million)
Satcon ($3 million)*
Konarka Technologies Inc. ($20 million)*
Mascoma Corp. ($100 million)

*Denotes companies that have filed for bankruptcy.


RE: Algae based diesel
By Spuke on 8/1/2013 3:18:15 PM , Rating: 2
Odd that Navistar is on this list since they're not an energy company.


RE: Algae based diesel
By gamerk2 on 8/1/2013 4:28:24 PM , Rating: 4
But you miss the point: All that money will eventually be made back in future economic growth.

In any industry, you always go though the same period: You have a few (2-3) founding companies, then a massive wave of growth, then a major contraction. Right now, we're at the tail end of the contraction phase. The ones that survive will be the founders of the global renewable energy market, here in the US. Where they will pay taxes (hundreds of millions per years worth) for decades to come.

Short term thinking like yours is what's driving this country into the ground.


RE: Algae based diesel
By Fallen Kell on 8/1/2013 6:58:53 PM , Rating: 2
Add in the fact that the Chinese are subsidizing everything related to energy so that they are the defacto place to produce everything, and you will see even more companies trying to compete in that skewed market fail. And once all the outside competition fails, China will raise the prices. China has already done this on rare earth minerals (which are not really that rare). Over the last 20 years China has been flooding the market with subsidized rare earths to drop the price below what other mines could produce and be profitable. Now that they are the only ones with active mines they cut shipments of rare earths to any manufacturing site located outside China, which has skyrocketed prices, and at the same time shifted the manufacturing of the devices that used them (everything from generators and turbines, to speakers and TV's, to guided missiles) to need to be made in China since you can get the materials in China for cheap as long as they are used in products that are fully manufactured in China, thus sucking away all the jobs from other countries which needed rare earths.


RE: Algae based diesel
By FITCamaro on 8/1/2013 7:52:19 PM , Rating: 1
It's not an issue of whether or not things are good ideas.

It's an issue of whether or not they are constitutional. The law either exists or it doesn't.


RE: Algae based diesel
By Paj on 8/2/2013 9:27:13 AM , Rating: 2
That's fantastic. Sometimes I swear you're an advanced chatbot with a good grasp of satire.


RE: Algae based diesel
By darthmaule2 on 8/2/2013 8:11:29 AM , Rating: 2
I wonder why you only posted the failures and not the successes?

DOE loan success rate: 98 percent; Bain Capital success rate: 80 percent


RE: Algae based diesel
By Jeffk464 on 8/2/2013 11:15:21 AM , Rating: 2
I don't get why the geothermal failed, I thought that one has proven to be practical. Must be an incompetent company.


RE: Algae based diesel
By darthmaule2 on 8/2/2013 8:08:34 AM , Rating: 1
quote:
But I still don't support the tax payers investing in it


We know. You post your ideology at least once a week, and, we are all impressed by your political insights on this technology website.


Excellent
By foxalopex on 8/1/2013 1:49:03 PM , Rating: 2
I own a Chevy volt so I don't need quite as much oil as most folks but seeing how as it's going to take a long time to convert all of our fleets to hybrid or even to EV, this is a great solution. Best of all, it's carbon neutral too as I'm assuming it takes in Co2 to produce the algae to produce the bio oil.




RE: Excellent
By toffty on 8/1/2013 2:05:50 PM , Rating: 2
It would be interesting to see how carbon neutral it is.

My main question is can the oil be used as is or does the oil need to be refined? If the bio-oil still need to be refiened, the process still has inefficiencies since, if it's like crude, it would take enough electricity to refine the oil to gas as it would to drive a Nissan Leaf 20 miles. Either way this does seem like a good source of oil as we transition to PHEVs and EVs as opposed to drilling everywhere and destroying the environment.


RE: Excellent
By othercents on 8/2/2013 8:27:12 AM , Rating: 2
Yes you would refine it just like any other crude oil you get from the ground to produce gasoline and every other product made from crude oil. The difference is that this crude oil is grown and we don't have to use up the natural resources. If electricity is an issue we just grow more crude oil for our electric needs.

Obviously this doesn't satisfy Greenpeace, but nothing does. I think they were against walking due to the amount of CO2 your body released when doing so.


RE: Excellent
By danjw1 on 8/1/2013 2:07:02 PM , Rating: 3
Yes, it does use CO2.


RE: Excellent
By Mint on 8/2/2013 12:41:39 PM , Rating: 2
This is not a yes or no question.

Recycling aluminum is not waste-free, but it's a hell of a lot better than throwing it all the trash.


RE: Excellent
By talikarni on 8/1/2013 2:21:42 PM , Rating: 2
EV on a large scale, nationwide is not a sustainable goal without guaranteeing he ability to drive it for 12+ hours and quick refills like modern day gas/diesel vehicles, which is MUCH farther out and down the line, at least 10-20+ years. Scale up this algae based fuel provided it keeps the same power potential of gasoline, and we can keep our existing infrastructure, vehicles and still go green. All without needing to waste money on some $40-100,000 vehicle in the name of "going green".
As for carbon neutral, it soaks in the same amount of CO2 during its pre-fuel stages as the post fuel stages when burned in a vehicle would produce.


RE: Excellent
By Argon18 on 8/1/13, Rating: 0
RE: Excellent
By Motoman on 8/1/2013 3:32:14 PM , Rating: 2
Yup.

On the other hand, if there actually is a way to produce biofuel in a responsible manner (meaning not only in an environmentally-responsible manner, but also in a socially and financially responsible manner) then we should absolutely be working on that like crazy.

I'll be keen to see what the energy efficiency is of the process (as in, do we get more net energy out of it than we put in, as opposed to ethanol) as well as it's impact on land use (like, does it take otherwise food-bearing or ecologically-important ground out of the cycle) and it's financial soundness (if the resulting fuel costs $20 a gallon...no thanks) reported at some point.


RE: Excellent
By Jeffk464 on 8/2/2013 11:04:33 AM , Rating: 1
Ethanol works great if you can use sugar cane. Its only inefficient when you are using corn as your feed stock.


RE: Excellent
By Motoman on 8/2/2013 12:23:28 PM , Rating: 1
Um, no. Here's your sign.


RE: Excellent
By foxalopex on 8/1/2013 3:44:51 PM , Rating: 3
EV's have their place in our world. For the folks who can afford it and it fits in their daily travel it works great. I own a Volt myself and the last time I remember filling it up with gas was 3 months ago and I use my car every day for work and errands and driving friends.

In comparison to my Corolla 05 that I owned, the car is so quiet that it reminds me of when I was a kid on a bicycle out in the fresh air. While not a sports car it has a tremendous amount of off the line torque and you can use it without any fear of burning excessive amount of gas. I'm also reminded whenever I smell gas fumes from following another car on the road that I'm not making the situation worse for anyone else immediately around me. So yes there are obvious benefits.

A part of ensuring our energy futures is to ensure we have as many alternatives as possible, and not to be just vested in only one option. (oil). EV is only one option.


RE: Excellent
By Reclaimer77 on 8/2/2013 12:43:11 AM , Rating: 2
I just threw up in my mouth a little...


RE: Excellent
By Guspaz on 8/1/2013 4:22:29 PM , Rating: 3
EVs are not remotely cheap enough to be a practical mass-market solution yet, (and won't be for a decade or two), but I take issue with two of your points. First, that it needs to travel 12+ hours (few gasoline vehicles can do that either), and secondly that it can't do quick refills (Tesla does automated battery swaps faster than filling a gas tank).

You're still right about 10-20+ years before EVs really go mass market (making up the majority of sales), but I think the reasons for that are different (pure cost).


RE: Excellent
By Mint on 8/2/2013 12:35:48 PM , Rating: 2
EVs are very close to being cheap enough for mass scale. All they need is smartphone-like financing.

Imagine buying a car and then having a monthly plan to use it ($100/mo for 1000 miles, 10c/mile overage) that was a bit cheaper than gasoline costs for most regular cars. Over 15 years, this works out to $18000 in revenue, and given the proven reliability of electric motors, it should last even longer.

A few grand would go towards refurbishing battery packs (which are much cheaper 5-10 years from now), but the rest can go towards discounting the upfront cost, just like a two year contract discounts a smartphone.

We don't have that yet in the US, but we do have $199/mo leases from several cars. Only the worst gas powered econoboxes can match that in lease+fuel costs.


RE: Excellent
By Jeffk464 on 8/2/2013 11:01:37 AM , Rating: 2
Its really not very safe to drive over 10 to 11 hours a day.


RE: Excellent
By Dr of crap on 8/2/2013 10:17:47 AM , Rating: 2
OH you green people !

Now the rest of just don't car to much about carbon neutral as long as gas isn't so high we need to take out a loan to fill up.

Sure no pollution is a good thing, and using renewable fuel is good, but carbon neutral...
Even cows and earthquakes give off carbon!


RE: Excellent
By Jeffk464 on 8/2/2013 10:48:45 AM , Rating: 2
They didn't say what their best guess is for the cost per barrel.


Huh? My math is missing something.
By spamreader1 on 8/1/2013 2:24:11 PM , Rating: 2
They're not up to 100 Barrels a day. A barrel today costs approx $105. So in 2015, they'll be making $10,500 worth of crude a day, not profit mind you, they haven't mentioned margins at all as far as I can find. They employee lots of employees (~600), so I'm sure they must be burning through more than that in salary alone.

How in the heck did they pay off thier loan, let alone remain solvent?




RE: Huh? My math is missing something.
By toffty on 8/1/2013 2:28:15 PM , Rating: 5
Probably private investors who, in total, have invested more than the $55 million that was just paid back. It was probably found through focus groups that it would be positive news for the company to repay the loan early thus gaining more interest and investments for the company.


RE: Huh? My math is missing something.
By Spuke on 8/1/2013 3:20:09 PM , Rating: 2
Article says they have 30 full time employees. More than likely the 600 was employees plus construction workers, etc.


By spamreader1 on 8/1/2013 5:13:59 PM , Rating: 2
True, I worded that wrong, 600 jobs is more accurate, still even if only 30 employees that would be taxing. Makes sense on the outside investors. I hope they're able to ramp up production as they forsee, would be nice to get something to replace food crop sources.


By Schrag4 on 8/2/2013 2:22:59 PM , Rating: 2
Even if it's just 30 employees, I don't see how 100bbl/day would be near enough to stay in business. Even if each barrel didn't cost them a penny to produce, that STILL doesn't sound like enough. The costs not even related to actual production or salaries would account for a significant chunk of what they can sell the crude for. It kind of makes me wonder if, from a revenue standpoint, the sale of crude will be dwarfed by any subsidies or credits related to renewables.


Fantastic
By Ammohunt on 8/1/2013 1:45:56 PM , Rating: 4
Good ideas do exist in green energy can we quit turning our food into fuel now?




RE: Fantastic
By chmilz on 8/1/2013 6:34:36 PM , Rating: 2
Big Corn don't like your attitude.


RE: Fantastic
By Jeffk464 on 8/2/2013 11:09:03 AM , Rating: 2
People eat algae and its put into a lot of products in the grocery store.


RE: Fantastic
By Jeffk464 on 8/2/2013 11:09:39 AM , Rating: 2
Hell this stuff might not be a bad cooking oil.


I want in.
By aliasfox on 8/1/2013 2:45:57 PM , Rating: 2
I'd love to have more information - profitability, scalability, barriers to entry, etc, but if this is profitable, scalable, and has high barrier to entry, I'd invest a few thousand if they become a publicly traded company.

Nothing is completely green, but it sounds like this is both greener and more domestic than a lot of other options, and that makes it very interesting - who would say no to a geopolitically secure fuel source that does minimal harm to the environment? If it's a one for one substitute for crude oil and can be produced for cheaper than say... $50-80/barrel, I can see it going very, very, far.




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By overlandpark4me on 8/5/2013 4:04:44 PM , Rating: 2
Anything to get some positive spin out there for one of the largest boondoggles in tax payer history.




davide
By davidecreagh on 8/1/13, Rating: 0
davide
By davidecreagh on 8/1/13, Rating: 0
davide
By davidecreagh on 8/1/13, Rating: 0
"There is a single light of science, and to brighten it anywhere is to brighten it everywhere." -- Isaac Asimov

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