Algae Biofuel Startup Is Expanding Operations in New Mexico

A U.S. startup says it has raised enough funding to significantly expand what it calls the world’s first commercial-scale algae biofuel farm, a 300-acre project its developers say could produce 1.5 million gallons of algae-based crude oil by 2014. Sapphire Energy, which so far has received more than $300 million — including U.S. government funding — to develop its technology, has already begun building the plant in New Mexico. While many consider algae-based oil a promising fuel alternative since it can produce large amounts of oil without consuming fresh water supplies or farmland, the technology has not been shown to work on a commercial scale because of costs. Sapphire Energy hopes that by reducing the production costs at every stage of the process — from construction of the algae ponds to harvesting — it will be able to produce a product that’s competitive with oil priced at $85 per barrel within six years. Recent studies by the National Renewable Energy Laboratory found that the larger-scale production of algae-based diesel through scaled-up versions of existing technology would cost several times more than conventional diesel.