GreenBeat

Sapphire Energy, maker of an algae-based replacement for gasoline and jet fuel, unveiled its plug-in hybrid electric vehicle today in front of San Francisco’s city hall — combining several promising technologies aimed at slashing carbon emissions.

The car, aptly dubbed the “Algaeus” — built into the shell of a Toyota Prius — will take off today on a 10-day nationwide tour, stopping first in Sacramento, where governor Arnold Schwarzenegger is planned to pour a vial of algae into its gas tank. Sapphire’s algal biofuel, called “green crude,” is significant because it’s a drop-in fuel, meaning it works with current automotive technology, no newfangled advancements necessary.

The technology is relatively simple. Sapphire grows the algae in salt-water ponds at its facility in New Mexico. It adds a combination of carbon dioxide — trapped and sequestered from industrial sources, thereby limiting their emissions as well — and sunlight. And through a proprietary microbial process, it produces hydrocarbons capable of replacing gas. Unlike ethanol, the fuel is not alcohol based, and it’s not just an additive, emphasizes Sapphire CEO Jason Pyle.

The Algaeus, which supposedly gets 150 miles per gallon, was unveiled today to showcase Sapphire’s technology — though technically, the company has nothing to do with the building of cars, and certainly not the plug-in hybrid aspect of the model. The event also celebrated the debut of the film FUEL, a documentary about America’s addiction to oil and the damage it causes. It took director Josh Tickell, who also founded anti-fossil fuel nonprofit the Veggie Van Organization, 11 years to make the film, which will premiere on Sept. 18 in New York when the Algaeus finishes its trek.

The car is part of a caravan that includes several other green vehicles, including an all-electric motorcycle and a classroom-fashioned bus powered by rooftop solar panels. The latter contains models and materials showing how Sapphire’s technology works and why it’s important that viable replacements are found for fossil fuels. The plan is to have the caravan tour college campuses following its cross-country drive.

Sapphire has already proved its technology in several key arenas. Late last year, it signed deals with companies like Continental Airlines and Boeing to successfully test out algae-based jet fuel. And the San Diego-based startup says it will be building a larger demonstration plant (capable of producing 2 million gallons of diesel and 1 million gallons of jet fuel a year), also in New Mexico, in the coming months to refine its process even more. There’s no doubt that algae is capable of powering vehicles, it’s whether or not it can be scaled for commercial use that matters most. But Sapphire’s Pyle is confident on this count.

“I think algae is one of the only viable technologies for this,” he said. “What else can scale to 10 billion, 50 billion gallons? Very few sources.” Because algae doesn’t require arable land, or even potable water (salt water works just as well), it won’t suck up valuable resources needed by others, giving it room to grow rapidly and cheaply, Pyle adds.

These same characteristics also make algae important to surrounding communities where green jobs could go a long way. For example, Sapphire’s current facility in New Mexico — a state that could use agricultural revenue — employs 140. And its new demo plant will employ even more.

The only hurdle standing in algal biofuel’s way is government policy, Pyle says. In order for any alternative fuel of its kind to be widely adopted, renewable fuel mandates and emissions restrictions will need to be implemented and strongly enforced. The Obama administration is headed in the right direction, with its recommended changes for the country’s energy mix, but no major shift can happen until legislation like Waxman-Markey becomes a reality.

“The main challenge is not technical, it’s willpower,” Pyle says. “People told us this technology was impossible a year ago, but now here it is ready to go. It’s going to take a huge act of will for our government to effect a real change.”

In order to hasten this shift, Sapphire is in talks with corporate giants like General Electric, as well as government agencies like the Department of Agriculture, to convince stakeholders that algae-based solutions are set to become a reality.

It also has a healthy stream of funding, having raised more than $100 million in capital from Arch Venture Partners, the Wellcome Trust, Venrock, and, notably, Bill Gates’ Cascade Investment.

VentureBeat is hosting GreenBeat, the seminal executive conference on the Smart Grid, on Nov. 18-19, featuring keynotes from Nobel Prize winner Al Gore and Kleiner Perkins’ John Doerr. Get your early-bird tickets for $495 before Sept. 30 at GreenBeat2009.com.

Next Story: Report: Yoko Ono says the Beatles are coming to iTunes
Previous Story: 5 O’Clock Roundup: Sprint’s disappearing promo, stem cell breakthrough (sort of), search engine optimization

Tags: co:sapphire energy, inv:ARCH-Venture-Partners, inv:Cascade-Investment, inv:Venrock, inv:Wellcome-Trust