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Sapphire Energy unveils world’s first renewable gasoline

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Pioneering effort alters ‘food vs. fuel’ debate, supports American energy independence with revolutionary platform that harnesses microorganisms, sunlight, CO2

Leading investors commit over $50 million to scale effort; production innovator Brian Goodall hired, team leader behind first biofuel 747 flight

Sonoma, California – May 28, 2008 – Sapphire Energy announced today they have produced renewable 91 octane gasoline that conforms to ASTM certification, made from a breakthrough process that produces crude oil directly from sunlight, CO2 and photosynthetic microorganisms, beginning with algae.

“Sapphire’s goal is to be the world’s leading producer of renewable petrochemical products,” said CEO and co-founder Jason Pyle, speaking from the influential Simmons Alternative Energy Conference. “Our goal is to produce a renewable fuel without the downsides of current biofuel approaches.

“Sapphire Energy was founded on the belief that the only way to cure our dependence on foreign oil and end our flirtation with ethanol and biodiesel is through radical new thinking and a commitment to new technologies.”

The end result — high-value hydrocarbons chemically identical to those in gasoline — will be entirely compatible with the current energy infrastructure from cars to refineries and pipelines.

Not biodiesel, not ethanol. And no crops or farm land required.

The Sapphire platform offers vast advantages – scientific, economic and social – over traditional biofuel approaches.

Company scientists have built a platform that uses sunlight, CO2, photosynthetic microorganisms and non-arable land to produce carbon-neutral alternatives to petrochemical-based processes and products. First up: renewable gasoline.
Critically important, in light of recent studies that prove the inefficiencies and costs of crop-based biofuels, there is no ‘food vs. fuel’ tradeoff. The process is not dependent on food crops or valuable farmland, and is highly water efficient.
“It’s hard not to get excited about algae’s potential,” said Paul Dickerson, chief operating officer of the Department of Energy’s Office of Energy Efficiency and Renewable Energy “Its basic requirements are few: CO2, sun, and water. Algae can flourish in non-arable land or in dirty water, and when it does flourish, its potential oil yield per acre is unmatched by any other terrestrial feedstock."

Scalability key to success

Sapphire’s scalable production facilities can grow easily and economically because production is modular, transportable, and fueled by sunlight – not constrained by land, crops, or other natural resources.

“Any company or fuel that hopes to solve the biofuel conundrum must be economically scalable – and that requires conforming to the existing refining distribution and fleet infrastructure,” said Brian Goodall, Sapphire’s new vice president of downstream technology. Goodall led the team responsible for the highly visible, first-ever Virgin Atlantic “green” 747 flight earlier this year. In addition to a three-decade career in the petrochemical industry, he is a corporate inductee at the National Inventors Hall of Fame.

Domestic production a matter of national security, economic growth

A new domestic energy platform based on sunlight and CO2 has the economic potential to herald a tectonic market shift as well as make the country more secure. Last year, the nation imported over $200 billion of foreign oil, and, with oil prices reaching record heights every week, that number is expected to increase dramatically. Protecting these strategic overseas interests is an increasingly expensive proposition.

“It is imperative, both economically and for national security reasons, that American companies figure out ways to produce oil here at home,” said Sapphire co-founder Kristina Burow of ARCH Venture Partners, the company’s founding investor. “Imagine if even a portion of the $200 billion we spend on foreign crude stayed here: The payoff in new jobs, and domestic economic growth would be huge.”

Developments require new industrial category: Green Crude Production

In fact, Sapphire’s processes and science are so radical, the company is at the forefront of an entirely new industrial category called ‘Green Crude Production.’ Products and processes in this category differ significantly from other forms of biofuel because they are made solely from photosynthetic microorganisms, sunlight and CO2; do not result in biodiesel or ethanol; enhance and replace petroleum-based products; are carbon neutral and renewable; and don’t require any food crop or agricultural land.

The final products meet ASTM standards and are completely compatible with the existing petroleum infrastructure, from refinement through distribution and the retail supply chain.

Leadership team stars in their fields

Sapphire’s founders and leadership team includes top scientists in the fields of petro chemistry, biotechnology, algal production, plant genomics, and biogenetics. ARCH Venture Partners, with a long history of taking innovative life-science technologies to market, is the founding investor. ARCH is joined by the Wellcome Trust, the world’s largest biomedical research charity, and Venrock, one of the oldest and most respected venture capital firms in the country. The strength of the syndicate is unparalleled: between ARCH and Venrock, they have launched well over 500 companies. Sapphire is also collaborating with the leading scientists and organizations in the field including the DOE’s Joint Genome Project; University of California, San Diego; The Scripps Research Institute; and the University of Tulsa.

“Sapphire’s interdisciplinary team hit milestones within three months that everyone thought were impossible,” said ARCH managing director Robert Nelsen.

“We realized at that point we could change the world, so we sat them down and told them, ‘the checkbook is completely open; tell us what you need’."

“When the Wellcome Trust made the decision to invest in Sapphire, we evaluated the energy landscape to find a solution with the potential to realistically address the world’s current challenges in energy production,” said Danny Truell, Wellcome’s chief investment officer.

About Sapphire Energy

Sapphire Energy was founded to address the overwhelming inadequacies of current biofuel approaches and the profound costs of American dependence on foreign oil. The company has built a revolutionary platform using sunlight, CO2 and microorganisms such as algae to produce renewable, 91 octane gasoline that meets ASTM standards; it is not ethanol and not biodiesel. Sapphire is led by an interdisciplinary team of entrepreneurs and experts in cell biology, plant genomics and algal production, as well as investors with long histories of taking innovative technology to market, including co-founder ARCH Venture Partners, along with the Wellcome Trust and Venrock. Sapphire’s scientific supporters include Scripps Research Institute; University of California, San Diego; the University of Tulsa, and the Department of Energy’s Joint Genome Project. The company is located in San Diego. For more information, visit www.sapphireenergy.com and www.greencrudeproduction.com.

About ARCH Venture Partners

ARCH Venture Partners is a premier provider of seed and early stage capital for technology firms, with a special competence in co-founding and building technology firms from startup. ARCH invests primarily in companies co-founded with leading scientists and entrepreneurs, concentrating in innovations in life sciences, physical sciences, and information technology. ARCH enjoys special recognition as a leader in the successful commercialization of technologies developed at academic research institutions and national laboratories. The company manages seven funds totaling over $1.5 billion and has invested in the earliest venture capital rounds for more than 120 companies over 22 years. Portfolio companies where ARCH was a co-founding or early investor include Illumina, Aviron, Impinj, Xenoport, Alnylam, Ikaria, Microoptical Devices, New Era of Networks, Netbot, Trubion Pharmaceuticals, Adolor, Nanosys, Caliper Life Sciences, Ahura, Xtera, Array Biopharma, Everyday Learning Corporation, Nanophase Technologies, and deCode Genetics, among others.

About The Wellcome Trust

The Wellcome Trust is the largest charity in the UK. It funds innovative biomedical research, in the UK and internationally, spending around £650 million each year to support the brightest scientists with the best ideas. The Wellcome Trust supports public debate about biomedical research and its impact on health and wellbeing.

About Venrock

Venrock is a premier venture capital firm with offices in Menlo Park, New York, Cambridge, MA, and Israel. Originally established as the venture capital arm of the Rockefeller family, Venrock continues a seven-decade tradition of partnering with entrepreneurs to establish successful, enduring companies. Having invested $1.9 billion in 405 companies resulting in over 120 IPOs over the past 39 years, Venrock’s investment returns place it among the top tier venture capital firms that have achieved consistently superior performance. With a primary focus on technology, healthcare, and energy, portfolio companies have included Adnexus Therapeutics, Apple Computer, Centocor, Check Point Software, DoubleClick, Gilead Sciences, Idec Pharmaceuticals, Illumina, Intel, Millennium Pharmaceuticals, Sirna Therapeutics, StrataCom, and Vontu.

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