Sapphire Energy has built the world’s first large-scale farm to grow algae and produce crude oil. If all goes according to plan, commercial production of perhaps 10,000 barrels a day will begin in 2018.
Algae have major potential, even the U.S. military is looking into algae as fuel source. Algae grow fast, do not need food, and build up oil in their cells after being exposed to sunlight and CO2. Algae is grown is salty ponds, so algae farms can be built on land where not much else will grow – thus the land is readily available and inexpensive. Into each pond go genetically engineered single-celled algae that mature in five days. The mature algae is then taken from the pond and put through a thermo-chemical “wet extraction” process that separates the oil.
Sapphire Energy has spent $60 million on 70 algae ponds that are each the size of a football field and a refinery for oil separation. The site sits on 2,200 acres of land in Columbus New Mexico. Oil refining began in the summer of 2012 and the first barrels of oil have aired hit the market.
Sapphire Energy’s chief executive is Cynthia Warner. Ms. Warner’s previous job – head of global refining at oil giant BP. To date Sapphire Energy has raised about $300 million to fund their operation.
So what is the problem; why is algae oil not a mainstream product? Simply put, it is expensive to make. Reports say it costs around $5,000 to produce 1 ton of algae.