Two Things I Learned During My Tour of Sapphire Energy

Sapphire Energy has tried to maintain a relatively low profile since it established its headquarters in San Diego—especially since last fall when the media seized on reports that Bill Gates’ Cascade Investment had joined a $100 million secondary round of venture funding for the algae biofuels startup.

So when Sapphire opened its San Diego headquarters for a public tour during the Algae Biomass Summit that was held here earlier this month, I jumped at the opportunity. The venture-backed company maintains a 70,000-square-foot facility on La Jolla’s Torrey Pines Mesa, and now has about 120 employees. The company’s labs look like a lot of other biotech labs in San Diego, aside from all the gyrating machines with flasks full of gently swirling emerald-green fluid. But there were two particularly interesting factoids about Sapphire that I learned during the tour.

The first was ironic: Sapphire officials explained that algae consumes 13 to 14 kilograms of carbon dioxide to produce a gallon of green crude oil, which is roughly equivalent to conventional petroleum-based crude—and just as suitable for making gasoline, diesel, or jet fuel. This is a good thing, as the fast-growing algae helps reduce atmospheric CO2.

So what’s ironic? Sapphire and other algae biofuel companies have to pump carbon dioxide into the algae they grow in their laboratories. Moreover, Sapphire spokesman Tim Zenk says one of the big problems that Sapphire is facing these days is getting enough CO2—at an affordable price—to support the company’s algae biofuels research and development efforts. The greenhouse gas is so crucial that Zenk says it limits the growth of algae if it’s in short supply.

Once algae-based crude is refined into a fuel like gasoline, though, it produces CO2 as a byproduct of combustion—just as any engine that burns gasoline, diesel, or aviation fuel produces greenhouse gases. Nevertheless, the argument is that algae biofuels are better for the environment because algae absorbs so much CO2 while it is growing, Sapphire officials estimate that algae-based fuels represent a 70 percent reduction in CO2 gases on a life-cycle basis compared to gasoline, diesel, or aviation fuel made from petroleum-based crude oil.

In the laboratory environment, however, CO2 gas is a valuable commodity. “You can buy carbon dioxide on the market,” Zenk says. “It’s heavily refined and used mostly by the food and beverage industry.” (The beverage industry uses dissolved CO2 to put the bubbly fizz into carbonated sodas.) But algae doesn’t need purified CO2. In fact, Zenk says the gas that goes up the smokestack at most utility power plants is 10 to 15 percent CO2—which is ideal for algal growth. As a result, some startups developing algae-based biofuels intend to capture CO2 and pump the gas into algae ponds or bioreactors that have been established nearby. Zenk tells me that provisions of carbon-reduction legislation wending its way through Congress would enable certain factories and power plant operators to meet their carbon sequestration requirements by transferring their CO2 to algae fuel producers.

How this will work at the scale required is still unclear. Zenk says Sapphire’s plans to grow algae in the desert as economically as possible (“Think rice paddies,” says Stephen Mayfield, a Sapphire co-founder and scientific advisor) would require pumping CO2 into the desert. Just how this would work without carbon dioxide escaping into the atmosphere isn’t clear, but Sapphire officials say it is one of many issues the company must address as it develops its 100-acre pilot facility near Las Cruces, NM.

I learned another bit of intriguing information during the tour from Sapphire’s president, Cynthia “C.J.” Warner, when I asked how the startup was addressing concerns raised about genetically engineering algae to maximize their production of naturally occurring oils called lipids. While many crops grown in the United States are genetically modified, a few speakers at the Algae Biomass Summit warned that introducing algae-based biofuels technology could be a non-starter in Europe because of strident political and environmental opposition to the introduction of GMOs, genetically modified organisms.

Warner said that’s not an issue with Sapphire, because the company has not genetically engineered algae in its R&D efforts so far. Sapphire has instead been using a different tool of modern biotechnology—high throughput screening—to test thousands of different species of algae daily.

Mayfield, an algae scientist who is moving to the UC San Diego from The Scripps Research Institute, says such screening is needed to specifically identify different types of algae that grow well in different climates, different seasons, and in different water conditions. One of the often-touted benefits of algae is that it can grow in brackish water that would otherwise be unfit for human consumption. Still scientists are evaluating how different species of algae react to variations in salinity, pH, temperature, humidity, and other factors.

Mayfield says domesticated corn plants was optimized over time, using modern agricultural breeding and hybridization techniques to produce corn corps of full ears with plump corn kernels. High throughput screening merely accelerates that process by helping scientists identify the strains that are best-suited to produce lipids under any given condition. As Mayfield puts it, “Wild algae is just not a very good industrial crop.”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at or call (619) 669-8788 Follow @bvbigelow

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