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Summary:

San Diego-based startup Sapphire Energy said yesterday that it has squeezed ASTM-certifiable 91 octane gasoline — the premium stuff at the pump — from algae. That is to say, high-octane gasoline from pond scum. Founded a year ago this month, Sapphire has already raised $50 million […]

San Diego-based startup Sapphire Energy said yesterday that it has squeezed ASTM-certifiable 91 octane gasoline — the premium stuff at the pump — from algae. That is to say, high-octane gasoline from pond scum. Founded a year ago this month, Sapphire has already raised $50 million in venture capital from ARCH Venture Partners, the Wellcome Trust and Venrock.

But even with a press-release-fodder laboratory announcement and a pile of venture money, Sapphire tells Forbes its first facility won’t be operational for another three years. Still, the startup calls itself a leader in a new industry category is has titled “green crude production” (don’t worry they’ve already got the URL for it) and aims to produce 10,000 barrels (420,000 gallons) a day at its first facilitiy.

The idea is that by combining photosynthetic microorganisms, sun, CO2, and water through proprietary processes we can continue to get our greasy oil fix, but now off of algae. And Sapphire says it has a solution that can scale.

Sapphire isn’t alone in creating biocrudes. Emeryville, Calif.-based Amyris Biotechnologies recently partnered with Brazilian ethanol distributor Crystalev to develop jet fuel, gasoline and diesel fuel from sugar cane and has $90 million in funding from Kleiner, DAG Ventures, Khosla Ventures and TPG Ventures. Meanwhile, LS9, headquartered in South San Francisco, has raised $20 million from Khosla Ventures, Flagship Ventures and Lightspeed Venture Partners for its work to use synthetic biology to create “renewable petroleum.”

Renewable petroleum products act just like their petrochemical counterparts, meaning there’s no need for infrastructure or consumer-side retrofits. It is a promising approach to replacing oil. Sapphire’s got not a small amount of competition in the algal arena and the several well-funded competitors in the synthetic petroleum field. Still, there’s more than enough space in the market for multiple players thanks to the Energy Bill’s jacked-up biofuel mandates on transportation fuels.

Images courtesy of Sapphire Energy.

By Craig Rubens

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  5. Yeah right, if you want to invest money in this venture, might I remind you of the fat transvestite that came on the tube back in the 70’s. She, it, was starting a car company and was taking money from investers because it sounded like the answer to the gas crunch way back then. What happen to that? Is she, it, living it up somewhere on all the money from the investers that got nothing in return. If a fat transvestite can fool the people, surly a scientist could also, dont you think.

  6. Investors should invest in an algae company (Algae Biosciences Corporation) that can produce and sell a product immediately while developing the technology for decreasing the costs of producing a biofuel. This reduces the risk for investors.

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