Resource World Magazine

edi to r ' s com me n t s E l l s w o r t h Dick s o n Will Sapphire Energy be a major game-changer? Every so often a new technology comes along that changes the world – the electric light bulb, the miracle of flight, the invention of computers, and so on. One company that recently came to my attention is San Diego, California-based, Sapphire Energy, Inc., a private firm that makes fuel products from algae. The future implications of their technology could literally reshape the diesel, jet fuel and gasoline sectors. This is an idea that has already been successfully implemented. At its 2,200-acre facility in southern New Mexico, Sapphire Energy is currently producing about 100 barrels a day of what it calls 'green oil'; the oil is actually green. What convinced me that this is real is the major funding behind the company – over $100 million to date. In addition to the US government, financiers include Bill Gates and Venrock, the venture capital arm of the Rockefeller family. Since its inception in 2007, Sapphire has tested its green gasoline in a Toyota Prius that drove across the US, and powered a Boeing 737 with its aviation fuel. The beauty of this innovation is that Sapphire's green oil is completely compatible with the world's existing infrastructure. In the future, your local gas station could sell Sapphire's gaso- line (91 octane) and diesel fuel. At the company's New Mexico algaegrowing facility, 70 ponds, each about the size of a football field, grows geneticallyengineered, single-celled, algae that simply requires CO2 (from the air), water, and sunlight. The algae are ready for harvesting in only five days after which Sapphire recycles the water. Sapphire Energy has about 140 employees and, although current production is small, Sapphire is planning to produce 1 million US gallons of algae diesel and jet fuel each year for the next two years. The company also intends to produce 1 billion US gallons of fuel per year by 2025. Critics have stated that the sustainable algae fuel industry won't work because the fuels are more expensive to make than conventional petroleum-based fuel products. That may currently be the case; however, all technologies start out expensive with the costs gradually coming down. Sapphire Energy's CEO, Cynthia Warner, says that its technology means that any nation on earth can produce its own sustainable, green oil and related fuel products. Consider the possibilities. Despite recent increases in petroleum production, the US is still dependent on Middle Eastern oil and spends some $1 trillion per year to import it. When ramped up, Sapphire's technology could make a big dent in these import costs. In addition, various localities around the world, without petroleum pipelines, could make their own fuels. What about mining operations in remote locations? Presently, the diamond mines in Canada's Northwest Territories have to truck in diesel fuel over winter ice roads on the frozen lakes and tundra 300 km from Yellowknife, an expensive, tricky and time-limited procedure. This is pure speculation on my part, but perhaps Arctic mines could make their own fuel in greenhouses. It's dark in the winter, but the sun shines 24 hours a day in the summer with moderate temperatures prevailing. Making green oil would be that much easier at remote mine sites in hot climates. I would think that those concerned about conventional oil pipelines running through environmentally-sensitive areas would be pleased with the potential of locale-specific green oil production. Sapphire Energy isn't the only company interested in algae-based fuels, but it appears to be the most advanced. Others include Solazyne, Inc. Greenfuel Technologies, Open Algae, Joule Unlimited, Aragreen, Algae. Tec and SABRTech. The algae fuel industry is represented by the Algae Biomass Organization. The big question is whether the green oil technology of Sapphire Energy and other companies will spread around the world quickly enough and on a large enough scale to alleviate concerns of peak oil due to dwindling conventional petroleum deposits. Time will tell. n Ellsworth Dickson, Editor-in-Chief Email: editor@resourceworld.com T: 604 484 3800 | 1 877 484 3800 february 2013 www.resourceworld.com 7

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