Xconomist of the Week: 5 Questions with Sapphire Energy CEO Jason Pyle

12/1/11Follow @bvbigelow

November was a big month for news in the algae-based biofuels sector.

On November 7, roughly four months after renewable fuels were approved for use in commercial aviation, United Airlines flew passengers from Houston to Chicago aboard a Boeing 737-800 powered by a mixture of algae-based jet fuel and conventional, petroleum-based fuel. Two days later, Alaska Airlines started 75 passenger flights (with its sister airline, Horizon Air) using a biofuel blend made from recycled cooking oil.

Ten days later, a decommissioned Navy destroyer arrived at the Naval Surface Warfare Center in Port Hueneme, CA, following a 17-hour cruise from San Diego, powered by a 50-50 blend of algal biofuel and a standard, petroleum-based military fuel.

A day later, Microsoft founder Bill Gates called for a massive boost in federal R&D funding for biofuels and other emerging energy technologies. In a guest editorial published in the May 18 issue of Science magazine, Gates urged the government to more than triple its funding for new energy technologies—from about $5 billion a year to $16 billion annually. Even during a time of economic crisis, Gates says it’s imperative to protect America’s interests.

Gates has moved to reshape the energy industry personally, by investing in several cleantech companies, including Sapphire Energy, a San Diego-based startup developing algal biofuels (although it wasn’t behind any of last month’s news).

Amid this fusillade of alternative energy news, I was eager to put a few questions to Jason Pyle, Sapphire Energy’s CEO and a San Diego Xconomist.

Xconomy: What is the next big milestone for the algal biofuels industry?

Jason Pyle: As an industry and at Sapphire, we’ve spent the last few years on R&D and proving that crude oil replacements like green crude from algae are possible and will scale with proper investment and government support. Although we’re still a few years away from reaching full commercial readiness, as an industry we’re scaling up at a pace that would be considered inconceivable by traditional oil and gas companies. Reaching commercial scale is critical. The next big milestone for Sapphire Energy is to complete construction and begin operating our commercial demonstration plant in Columbus, NM.

X: Do you see algal biofuels moving into aviation first, or does another sector make more sense to you?

JP: The great part about where Sapphire Energy finds itself as a producer of crude oil replacements is that demand for crude oil continues to rise significantly. Over the next 25 years as developing nations use more and more crude oil and we stretch the limits of the crude oil resource, all of the leading experts are projecting a 35-million-barrel-per-day gap between supply and demand. The U.S. military recognizes this gap as a major destabilizing issue—and as a serious strategic military issue in the years ahead—and is preparing our nation to not have to confront its consequences.

The U.S. military is making investments in the development of these technologies for strategic reasons because they understand a simple fact: that those nations who control energy resources maintain strategic advantage over those who do not. So soon, we will see the U.S. military as the leading customer for crude oil replacements. As pressure rises on … Next Page »

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

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