SG Biofuels, Emerging From Stealth, Aims to Make Biodiesel From Hardy Shrub

Another San Diego biofuel company is coming out of stealth mode today. SG Biofuels specializes in developing Jatropha, a hardy shrub found throughout Latin America that produces oval-shaped seeds that can be used to produce biodiesel and other petroleum feedstocks.

SG plans to make its public debut this afternoon in a presentation at the 2009 National Biodiesel Conference and Expo in San Francisco’s Moscone Center.

The company is the newest member of San Diego’s mini-cluster of startups that specialize in biofuel production. While the three-year-old company established its headquarters in San Diego, the job of collecting different Jatropha species and developing new hybrids has taken place throughout Latin America.

Jatropha fruit“With genetic improvement, it can be grown in California, and in some other areas where agricultural plants and food crops are not grown,” SG Biofuels’ president and CEO Kirk Haney told me Friday. The oil content of a Jatropha seed ranges between 30 and 40 percent, and current yields vary between 200 and 300 gallons per acre. Through additional genetic improvements, SG Biofuels says it’s possible to increase yields by 400 percent—to more than 800 gallons per acre. That’s much higher than the usual 30 to 40 gallons per acre of oil generated from soy, for example.

As part of SG Biofuels’ debut, Haney is set to speak about the company’s efforts in developing Jatropha curcas and other species at the biodiesel conference this afternoon. Haney says SG Biofuels has assembled the largest and most diverse “library” of Jatropha genetic material in the world. By genetically modifying the plant, he says it also should be possible to enhance the plant’s long-term sustainability and grow Jatropha at lower cost.

The startup’s chief scientist is Robert Schmidt, a professor of biological sciences at UC San Diego whose research has focused on the plant genes that control flowering in maize. The company currently has 19 employees, including three other UCSD scientists who round out SG Biofuels’ biotechnology team.

Haney says SG Biofuels has not genetically modified Jatropha yet. Because Jatropha oil is non-edible, even toxic (it causes vomiting and diarrhea), Haney says genetically modified strains will never cause scarcities of food. And because Jatropha can be grown in poor, sandy soil on as little as 10 inches of rain per year, Haney says Jatropha does not embody the food-or-fuel debate that has brought corn-based ethanol plants under strident criticism.

“One of the great things about this crop is that it grows on marginal land, some would even say wasteland,” Haney says. To grow Jatropha profitably, though, he says the plants, which can grow as high as 16 feet, must be grown on farms or plantations so the plants can be maintained and pruned to maximize the yield of seeds. “We are very focused on Latin America because the crop already grows there,” Haney says. “We also see opportunities in Africa and Asia with genetically modified organisms.”

jatropha-nurseryHaney joined SG Biofuels several years ago, after serving as president of Green Millennium, a sustainable forestry company he grew from a startup to more than 100 employees. Haney says funding for SG Biofuels was provided by a number of “high net-worth individuals,” and totals less than $10 million. Angel investor Georges Daou, who founded IT company Daou Systems in San Diego, is the company’s chairman and chief business development officer. The board of advisors includes former 3Com CEO Edgar Masri, former Gibbs Oil CEO Herb Sostek, and George Peat, a former general manager for Kellogg, Brown & Root in Saudi Arabia.

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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