Sapphire Energy, Backed by Bill Gates, Tries to Tone Down the Hype as it Makes Gasoline From Algae

Sapphire Energy has not provided many details about its technology since CEO Jason Pyle stepped into the limelight six months ago to announce the San Diego startup has developed a revolutionary process for turning pond scum into high-octane gasoline.

“I have no intention of being secretive,” Pyle told me at the inaugural networking meeting of the newly formed San Diego Biotechnology Network, or SDBN. But after seeing the effects of the boom-and-bust cycle in two recent tech bubbles, Pyle says, “My goal is to maintain a serious and thoughtful approach in a frothy market. I don’t want Sapphire to get caught up in that hype.”

Keeping the media from hyperventilating, however, could be a tall order for a company developing technology with the potential to help the United States break its dependence on imported crude oil. And who can blame us?

At a time when U.S. gasoline prices were arcing beyond $4 a gallon nationwide, Sapphire said it had proven the feasibility of using algae to make “green crude” that can serve as an identical substitute for crude oil. Sapphire said its product, unlike other biofuels, could enter the pipeline at any petroleum refinery for processing into gasoline and other fuels.

The company calls it “the world’s first renewable gasoline.”

Sapphire’s process has been used successfully to make the three most important fuels, gasoline, diesel, and jet fuel, Pyle says, and all three products have been independently certified to meet fuel standards set by the American Society for Testing and Materials.

The prospects are electrifying, and interest in Sapphire has been extraordinarily high. Sapphire only added fuel to the fire, so to speak, when the company said in September it had raised $100 million in a second venture round from Bill Gates, Arch Venture Partners and others.

Aside from Sapphire’s corporate pedigree and the revolutionary potential of its technology, the company says its green crude is environmentally appealing because it will have no effect on global climate change. Sapphire says it’s technology is “carbon neutral” because its algae absorbs as much carbon dioxide as a car releases when its fueled by renewable gasoline.

In San Diego, Sapphire has been recruiting heavily for chemical engineers, lipids chemists, senior algal production scientists and other skilled workers at its headquarters on Torrey Pines Mesa. The startup currently has about 80 employees, Pyle said.

Sapphire’s CEO remained vague, though, about details of the company’s technology.

“We use genetic engineering, directed evolution, synthetic biology and (agricultural) breeding,” Pyle told me. But Sapphire’s approach specifically does not include fermentation, a technique adopted by some biofuels startups.

“All of our systems are photosynthetic,” Pyle says about a process in which algae “directly converts sunlight and carbon dioxide into hydrocarbon products.”

Sapphire already has demonstrated that its technology is feasible, and is now working to show it also can work on an industrial scale, Pyle says.

“We’ve proven this from sunlight-to-gasoline, from soup-to-nuts, so we don’t have any questions about whether the technology works. The only question is about the cost of production.”

He adds that Sapphire’s near-term goals “are to test our existing organisms and to grow those organisms in pilot plants into green crude on a scale larger than we have here in San Diego.”

The company has established a test facility in Las Cruces, N.M., and has been drawing on the scientific resources of New Mexico State University to help develop its fuels.

In an interesting twist, Pyle says the origins of Sapphire began two years ago as … Next Page »

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Bruce V. Bigelow was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Follow @bvbigelow

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20 responses to “Sapphire Energy, Backed by Bill Gates, Tries to Tone Down the Hype as it Makes Gasoline From Algae”

  1. Ok, to sum it up he says: “We can produce fuels from algae, but it’s too expensive”

    It’s so expensive that in spite of the excessive funding no more than one gallon of jet fuel from algae was available to test on the Japan Air Lines flight.


  2. Sorry, one gallon -> one jerrycan.

  3. PappaDaddy says:

    Sapphire Energy sounds like a scam. Sapphire says their “green crude” is chemically identical to gasoline. (Sirens going off!!!) GASOLINE is made up of varying chains of hydrogen and carbon. How does something chemically identical to gasoline not produce CO2 as a by-product? Any chemical engineers out there? As we’ve seen recently with the Maddow investment scam, because someone has money does not make them a good investor…or because Bill Gates knows software doesn’t make him a chemist.

    These companies are currently in business to milk up government funding and then disappear (or grab subsidies and disappear). There will be US government grants and loans pissed away soon under the new administration to anyone who sounds like they know anything about renewable energy. Banks are not going to loan these people money. The only place they will be able to get it is from our fearless leaders in government. There is NOT ONE independently verifiable algae fuel production facility on Earth. If there is please point it out and tell me where I can buy some “green crude”. Even a long-term pilot plant would do.

    That mental retard Rep Inslee from Washington state is a supporter of Sapphire. You can find his incoherent speech on the House floor on youtube.

  4. George says:

    Of course it produces CO2 when it’s burned. Of course any CO2 in it came from the atmosphere. It’s carbon neutral, not carbon negative. Every molecule of CO2 that’s released when it’s burned was sucked out of the atmosphere during the production process. Like all plants do. Do some research before you start making wild accusations.

    There’s a long term pilot plant for you. From algae.

    The science behind algae is sound. The only thing that Sapphire Energy did differently is tweak the output molecule in interesting new ways to create something that can turn into gasoline, not ethanol.

  5. PappaDaddy says:

    Hi George

    Do some research??? That’s funny. The science behind fuel cells and nuclear reactors is also sound, but a bit pricy. I won’t let economics get in the way of your fantasy though. The guy that Rep Inslee described is a venture capitalist, not the owner of the company. Did you listen to his speech? The man is a simpleton. That’s like me going to Congress and touting the virtues of all the companies I’m invested in.

    Interesting link and excellent “independently verifiable source”, but can you tell me where I can buy some of that PetroSun fuel? They say they make 5000-8000 gallons per acre per year and have several hundred acres leased. That post is a year old, so they should have some product available somewhere. Several articles say 4 million gallons per year and 110 million pounds of biomass. Maybe they just throw it away once they make it. Anything is possible for a company with a market capitalization of …put pinky to corner of mouth…”$1.28 MILLION DOLLARS!” That ticker is PSUD, but since you did so much research, you probably knew that. Certainly only every other person in my neighborhood has assets like that! That is coincidentally what PetroSun owes Shreveport Louisiana for reneging on the deal to sponsor a college football bowl game:–15964/

    On the “carbon neutral thing, I knew I would get that argument as soon as I posted. I wonder though if “every molecule is sucked out of the air” and none comes from the ground or whatever they are feeding it? Can you verify that no carbon is pulled from other sources and that “every molecule” comes from the atmosphere? They say they use the open pond method. Can you explain how their algae compete with the local strains? In a 2006 newsletter Mr Hung, owner of the fish farm (oops, I mean biofuels plant), mentions the local algae there:

    The Arroyo Colorado River, only four nautical miles upstream from the hyper saline Laguna Madre Bay. Our average salinity is around 5 to 15 parts per thousand and the water is rich in algae.

    This is SNAKE OIL pure and simple!

  6. PappaDaddy says:

    George?…anybody seen George?

    Well that fine example of an algae plant” Petrosun, Symbol PSUD, is now worth a whopping $810,000! I’m gonna invest that cash I had set aside for an up and coming jock strap recycling company to invest in this baby! Wait a minute, I can use the carbon in the old jock straps to feed the algae! It’s a scientific fact that scrotums contain 10,000 times more carbon than…well you never mind…this is a sure thing right George? George?

  7. nose2grindstone says:

    Chemical engineering is far more complicated then A + B = C; With the right catalysts, pressures, temperatures, separations, ect. We get A+B+Z = JP 8.

    I don’t know about Sapphire’s success specifically, but they could be doing it.

  8. Linda Dow says:

    I know about this, and all would be fine, as it is possible if you work really hard. What I want to know is the name of the company, that has been receiving government funding to ‘research algae production of fuel’ since the 1970’s, and all they have done is fund the establishment of over 1100 patents on different algae gene profiles, so that when someone ELSE finally makes some fuel, they will get some money.

  9. SanDiegoGreen says:

    Its not a scam, I recently interviewed there and I am a chemical engineer.

  10. PappaDaddy says:

    DanDiego Green

    I have no doubt you interviewed there, but can you please tell me where the company’s revenue is from? Could it be grants from the Feds?

    How much is this magic fuel per gallon?

    Soalzyme Corp in South San Francisco just won a contract for over $8 million for 20,055 gallons…do the math.

  11. Mike says:

    PappaDaddy get over yourself… seriously. Their revenue is not from profits, but from investors. Don’t forget the first computers had a fraction of todays PC power and filled a room or building. Or the first Plasm screen TVs cost around 10,000 and now are available at best buy for a 1/10 of the cost. Of course your probably believe there was never a man on the moon, so what’s the point. Bottom line is our future is unsustainable and we need companies like Sapphire and investors like Bill Gates to change the way we think…

  12. PDaddy says:

    Well here we are nearly 3 years after the original post and how’s that algae fuel working out? Anyone? Anyone? I haven’t responded to Mike’s suggestion on “getting over” myself until I did a retake of Economics classes. I saw no mention of investments being listed as revenues. Curious. Unlike Mike, I think for myself and do NOT require any swingin’ &^%$#* to tell me how to think. You should try it Mike…Very liberating.

  13. asdasdffasdasdf says:

    Sapphire = biggest scam company out there that seeks to milk government funds and investors’ money lol…

    No specie of known algae produce lipid composition that is identical to crude oil. Thats why majority of biofuels research is based on biodiesel – microalgae produce lipid in form of TAG, which undergoes transesterification to be converted into diesel.

  14. spin43 says:

    I am so glad our government is not in debt and has money to throw at these scams. Taxpayers lose again as crony capitalism prevails under BHO.