Back to homepage

Sapphire secures USDA loan guarantee for NM algae demo facility

By Erin Voegele | November 15, 2011

The USDA announced this month that it had issued a loan guarantee to Sapphire Energy Inc. The guarantee will support the development of Sapphire Energy’s demonstration-scale algae production facility in New Mexico, which will produce “green crude” oil from algae that can be refined into transportation fuel.

“The Obama Administration is committed to providing support for renewable energy production, which will safeguard national security and create jobs in rural America,” said Agricultural Secretary Tom Vilsack. “This project represents another step in the effort to assist the nation's advanced biofuel industry produce energy in commercial quantities from sustainable rural resources.”

Sapphire Energy is constructing a $135 million integrated algal biorefinery (IABR) in Columbus, N.M. According to the USDA, the IABR will be capable of producing 100 barrels of refined algal oil per day, equivalent to at least 1 million gallons per year. The oil will be shipped to the Gulf Coast, where it will be refined into drop-in biofuels by Geismar, La.-based Dynamic Fuels.

According to Tim Zenk, Sapphire Energy’s vice president of corporate affairs, his company has been working to finalize the loan guarantee since late 2009. The $135 million project is under development using a $50 million federal grant, the recently finalized $54.5 million loan guarantee and $30 million matching funds contributed by Sapphire Energy.

Construction on the first phase of the project began in June, Zenk said. “The project will be built in three distinct phases,” he said. The first portion of the project will include 100 acres of algae cultivation. “We’ll do everything from cultivation to harvest and extraction,” Zenk said. “Then the oil will be refined in a typical refinery into diesel and jet fuel. At full capacity, once all three phases are built over the next three years, we’ll be producing a million gallons of jet and a million gallons of diesel per year.” The final stage of the project is scheduled to be operational by 2015. 

 

 

7 Responses

  1. anonymous

    2011-11-15

    1

    In order to get a loan guarantee you need a committment from a lender. USDA has issued a loan guarantee but there is no mention of who did the loan. Does any one know?

  2. D. Holeman

    2011-11-16

    2

    The recent flight by an airline using biofuel was successful mechanically. But as the biofuel used cost eight-times (8x) that of Jet-A, what is the cost of Sapphire's end product going to be? And, who lobbied for the $105-million U.S. government loan (guarantee) and grant of taxpayers' money? DH, Montrose, CA

  3. larry

    2011-11-16

    3

    Is this another solandra scam?? boerne, Tx

  4. Sean Heath

    2011-11-17

    4

    There was a similar debate in the early 1900's. New Yorkers were outraged by the huge subsidies paid to convert from a perfectly working system of natural gas to a new and unproven way to supply energy to the city. It was called Electricity! that investment paid off, this one will too. t. Boone Pickens said "We are witnessing the largest transfer of wealth in the history of the United States." I agree. Biodiesel, No war required. Energy security is the highest form of patriotism. S. Heath.

  5. Thai Tran

    2011-11-17

    5

    In order to get a loan guarantee you need a committment from a lender. USDA has issued a loan guarantee but there is no mention of who did the loan. Does any one know? -> It's the Federal Financing Bank!

  6. Douglas

    2011-11-17

    6

    What Sapphire is doing in fact represents the single renewable energy source that can possibly be scaled up to replace the 18 million barrels of oil per day that the US consumes. No other bio-feedstock is expandable to entirely replace fossil fuel. It is the kind of imaginative technological development that used to characterize this nation, and I for one am going to put some money into Sapphire stock as possibly the next big thing. A bio-fuel industry based in the American Southwest (not using arable cropland by the way) could ultimately make the US an energy exporting nation again and create millions of jobs.

  7. Concerned citizen

    2011-11-21

    7

    I don't think anyone has an issue with Government giving subsidies, but the issue is, $135 million is used to make 2 million gallons of fuel (1 million gallons of Jet A and 1 million gallons of Bio). That too after 3 phases of this project is complete. That's $67.5 per gallon of fuel. Now anyone in the right might will question, why would producing 2 million gallons of anything will cost $135 million?? Something's obviously out of sync here... they can claim when it is scaled it's going to be cheap, etc.. but please explain how can you get your costs down by 20 times?

    8.  

    Leave a Reply

    Biodiesel Magazine encourages civil conversation and debate. However, comments containing personal attacks, profanity, business solicitations or other advertising will be deleted.

    Comments are closed