22 March, 2010
San Diego's Sapphire Energy is one of a growing number of biofuel companies nationally trying to turn algae oil into fuel. That may sound a little like alchemy, but it’s not. Algae is actually one of the fastest growing plants on earth and requires very little to do it—water (fresh, salt even brackish will work), carbon dioxide and sunlight. During photosynthesis, algae cells produce oil; in fact, as much 50 percent of the plant can be oil.
San Diego's Sapphire Energy is one of a growing number of biofuel companies nationally trying to turn algae oil into fuel. That may sound a little like alchemy, but it’s not. Algae is actually one of the fastest growing plants on earth and requires very little to do it—water (fresh, salt even brackish will work), carbon dioxide and sunlight. During photosynthesis, algae cells produce oil; in fact, as much 50 percent of the plant can be oil. Sapphire is working to genetically engineer algae so that it produces oil that is molecularly similar to light, sweet crude—the version of crude oil that becomes gasoline. The company’s work thus far has been
promising enough to attract the attention of heavy hitters like Bill Gates, who has invested in Sapphire via his venture firm Cascade Investment. And now James Lambright, the former head of the U.S. Export-Import Bank and, perhaps more famously in financial circles, the former chief investment officer of the Treasury Department’s Trouble Asset Relief Program—or TARP as we all know it—the program that bailed out all those banks and car companies.
Lambright joined Sapphire in March as its chief financial officer and will also head up international expansion efforts, because the need for green energy internationally is just as great as it is here in the U.S.
The company recently received $104 million in federal stimulus dollars, but Sapphire CEO Jason Pyle says Lambright wasn’t hired to help the company find more government money.
“We’re pleased with the amount we’ve gotten already,” says Pyle. He says Lambright’s role will be to increase the company’s access to all finance markets, which is right up his alley.
Between Lambright’s work with major banks through TARP, with a wide variety of entities at Export-Import, and with his investment banking background, he has, says Pyle, “One of the best overall finance backgrounds of anyone I’ve ever met.”
Lambright is also likely the largest dealmaker in history. “I think he said, at one point, he did $480 billion worth of deals in 90 days because of TARP," adds Pyle. "He personally did the AIG deal, the GM and Citicorp deals. His role here is to put that expertise and moxie to work.”
For his part, Lambright says he was looking for an opportunity to help build a business and address a meaningful challenge. “My role is to ensure Sapphire has the resources it needs to continue its momentum toward commercial production,” he says.
The company will need those resources. It will take billions of dollars to bring an algae fuel to market.
“These kinds of projects are not cheap,” says Pyle. “Right now we don’t need more funding, but Jim is bringing his expertise in large-scale project finance, and we’ll need it. The stimulus money the company received is being used to build a demonstration project—one that should be built and operating within three years. When it’s complete, it will generate millions of gallons of fuel for testing."
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