Sapphire Energy announced that the first phase of its Green Crude Farm, which it says is the world's first commercial demonstration algae-to-energy facility, is now operational.

Construction of this first phase, which began on June 1, 2011, was completed on time and on budget. When completed, the facility will produce 1.5 million gallons per year of crude oil and consist of approximately 300 acres of algae cultivation ponds and processing facilities.

By reaching this milestone, Sapphire Energy says it is on target to make algae-based Green Crude a viable alternative fuel solution, which will serve as the blueprint for scalable algae biofuel facilities globally.

Sapphire's products and processes for Green Crude differ significantly from other forms of biofuel because they are made solely from photosynthetic microorganisms (algae and cyanobacteria), using sunlight and CO2 as their feedstock; are not dependent on food crops or valuable farmland; do not use potable water; do not result in biodiesel or ethanol; enhance and replace petroleum-based products; are compatible with existing infrastructure; and are low carbon, renewable and scalable.

The Green Crude Farm, also known as an Integrated Algal Bio-Refinery, in Columbus, N.M., was funded with both private and public funds, including $85 million in private investment from Sapphire Energy backed by a U.S. Department of Agriculture loan guarantee and a $50 million grant from the U.S. Department of Energy.

The cultivation area consists of some of the largest algae ponds ever built with groupings of 1.1 acre and 2.2 acre ponds which are an 1/8 of a mile long. The initial phase also includes all the necessary mechanical and processing equipment needed to harvest and extract algae and recycle water for the 300-acre Green Crude Farm.

In March, the first seeding of ponds with algae, otherwise known as inoculation, took place and a series of "shakedown" tests began to ensure that all systems are working as planned. Currently, the farming operations are exceeding Sapphire Energy's internal productivity goals in terms of biomass yield, demonstrating that large-scale cultivation is possible and much larger cultivation systems can be implemented with the proper agronomic processes in place.

The company harvested its first crop in June without any system difficulties and has since harvested 21 million gallons of algae biomass totaling 81 tons. Next, the Green Crude Farm is preparing to transition its operations to a winter variety of algae while continuous cultivation, harvest and extraction activities continue.

"What was once a concept is now becoming a reality and model for growing algae to make a renewable crude oil for energy," says Cynthia 'CJ' Warner, CEO and chairman of Sapphire Energy.

Sapphire Energy will continue to conduct "shakedown" testing, as well as operate and expand farming operations over the winter, as the facility is commissioned into 2013. By the end of 2014, the Green Crude Farm will produce 100 barrels of Green Crude per day. The commercial demonstration project is expected to prove "commercial" techno-economics, and Sapphire's commercial scale Green Crude facility.