Sapphire’s financing arrangement differed from the Solyndra deal. “I firmly believe loan guarantees and federal support are an absolute necessity to transition this nation to crude oil replacements and make our nation more energy secure,” Pyle said in the article. “There is healthy venture capital interest to fund the strongest science in our space. But venture investments must be augmented by government funding to reduce private capital risks, and to speed new technologies to market.”
Pyle left Sapphire a few months later, at the end of March, 2012. Cynthia “C.J.” Warner, a veteran oil industry executive who was Sapphire’s chairman and chief operating officer, succeeded Pyle as CEO.
Nevertheless, the advent of hydraulic fracturing, or fracking, used by the oil industry to increase oil and gas yields, has added new uncertainties to the economics of algae-based biofuels. As Sapphire moves forward with its technology, the company seems likely to look for support from the Department of Defense, which has made strategic arguments for reducing American dependence on foreign energy sources and encouraged the development of algal biofuels. In its statement, Sapphire also makes a case for the role algal biofuels could play in boosting rural economies by increasing domestic energy production and creating new jobs.
Sapphire now refers to its algae-growing facility and crude oil production facility in New Mexico as its “Green Crude Farm,” and says its integration of biotechnology, agriculture, and energy demonstrate the potential value of green crude production. “More than 600 jobs have already been created throughout its phase 1 construction, and 30 full-time employees currently operate the facility. The company expects to be producing 100 barrels of crude oil per day in 2015, and at commercial-scale production in 2018.
In any case, Sapphire has made an adroit move. By repaying its government loan guarantee, Sapphire has eliminated a potentially effective political issue that critics might use to attack government support for the company’s renewable energy technology.
