Algae on Front Lines of Search for Fossil Fuel Replacements

As America’s dependence on foreign oil continues to grow, investors are looking to alternative fuels to usher in a new age of energy usage.

And San Diego is emerging as a leader in the clean technology sector, with 672 companies focused on clean tech in the region.

The significant increase in activity was a highlight of an event last week kicking off the 2009 Algae Biomass Summit held in San Diego Oct. 7-9.

The event was hosted by CleanTech San Diego, a nonprofit organization focused on accelerating local leadership in the clean tech sector.

“San Diego has so many companies working on this problem that we’re establishing ourselves as a name in the clean tech sector,” said county Supervisor Ron Roberts during the opening press conference on the deck of the USS Midway. “The city has made strides to make itself more open to clean tech companies and I think we’re seeing the results.”

One solution to the search for alternative fuels highlighted during the event was algae.

La Jolla-based Sapphire Energy, a front-runner of algal-based biofuel research, is able to produce a low-carbon alternative to petroleum-based fuels such as renewable “green” gasoline, diesel and jet fuel.

Funded by venture capital firms Arch Venture Partners, The Wellcome Trust and Venrock, Sapphire’s research begins with determining the traits of more than 8,000 strains of algae a day. Once strains are identified that contain positive traits, they’re duplicated and left to grow.

When mature, the algae is dried and the oils are extracted and synthesized into fuel.

“Algae is ideal because it takes sunlight and some nutrients and through this process we’re able to turn that into liquid hydrocarbons,” said Cynthia Warner, president of Sapphire Energy. “And another selling point is the conversion between fossil fuels to algal-based ones is perfectly smooth, there’s no need to convert existing technology into something new to make it work.”

Sapphire’s research into algal-based fuels has yielded not only results but garnered significant attention from investors, which is partially due to California’s Low Carbon Fuel Standard, a policy Gov. Arnold Schwarzenegger asserted by an executive order in 2007.

The policy mandates that by 2020 fuels must have less carbon content in them, thereby fueling research in alternatives to oil and in emissions reduction.

Investors see operations like Sapphire as a much more secure investment due to the legislation that is indirectly backing their vision.