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Sapphire Energy CEO Jason Pyle’s Parting Thoughts on Big Biofuel

Bruce V. Bigelow, Xconomy

 After stepping down as the founding CEO of San Diego’s Sapphire Energy, Jason Pyle tells me he’s accomplished a number of key initiatives at the algae-based biofuels startup, and basically that it’s time to move on.

His departure surprised me. Founding CEOs don’t often walk away from startups that have amassed a $1 billion valuation and that have drawn nationwide attention for developing potentially transformational technology. But Pyle says it was no surprise internally, where plans for the changeover have been underway for the past six months or more.

“From my perspective, this is essentially a positive thing for me and it should be for the company,” Pyle says. “I feel like I’ve done what I came here to accomplish.” The former Sapphire CEO also says he’s been emphasizing the critical importance of reducing U.S. dependence on imported oil in meetings with top government officials. In the statement the company issued last week, Pyle says he’s moving on to his “next endeavor.”

“There’s probably never a perfect time to do it, but you try to come up with the best time for everybody and work out the details,” Pyle says. He tells me he’s “deeply involved with a new enterprise that’s in stealth mode” and that a large part of the work is being done in San Diego. But he was unwilling to say anything more.

Succeeding Pyle as CEO is Cynthia “C.J.” Warner, who was recruited to serve as Sapphire’s president and chairman three years ago from her post as group vice president of global refining for BP. Warner has spent more than 27 years in petroleum-based crude oil refining, transportation, and operations, and she is taking over as the company focuses on its near-term goal—of producing green crude oil from algae that is consistently and reliably comparable to petroleum.

“The next two to three years of the company’s existence is going to be built around the commercial demonstration facility” under construction in Luna County, New Mexico, Pyle says.

Warner’s expertise is in refining processes and production. In an interview last October, Warner said, “all the first principles [about making crude oil from algae] have actually been proved out. So we don’t have any lurking issue that we simply don’t know how to deal with. Now what it really is all about is scale-up.”

Pyle, in contrast, describes himself as a technology developer and entrepreneur who is focused primarily on transferring breakthroughs in academic research to industry. He says he specializes in such things that are critical to companies in the startup phase—research management, technical project planning, organizational development, intellectual property development, and R&D timeline and resource planning. Before starting Sapphire in 2007, Pyle was a co-founder and chief technical officer at Epoc, a medial technology company in Houston, TX.

Recruiting key people like Warner and others to the company’s board is one of the accomplishments that Pyle says he’s proud of. The new recruits are “exactly the kind of people the company needs,” he says.

Before leaving, Pyle says he wanted to make sure the company was “essentially on track for strategic purposes” and to complete the final tranche of a $144 million Series C round of investment funding, which Sapphire disclosed earlier this month. Pyle says the total for all three rounds of Sapphire’s financing is close to $350 million, which he says has translated into building “a billion dollars worth of value in the company.”

Sapphire’s investors include Bill Gates’ Cascade Investment, Arch Venture Partners, Venrock, Arrowpoint Partners, Monsanto, and the Wellcome Trust. The company also has established several partnerships, including collaborations with Monsanto and Seattle’s Institute for Systems Biology.

The ultimate goal, Pyle says, “is to produce green crude at volumes that are consistent with reducing the nation’s need for imported oil. That’s an enormous goal that really is a 10-year endeavor.”

Pyle says the fundamental importance of attaining this goal is something that he has emphasized at the highest levels of the federal government. “Energy, in general, is a national interest,” Pyle says. “So things that improve the energy mix are unquestionably a national interest,” especially in terms of reducing U.S. dependence on imported oil. Over the past two years, Pyle says he worked to deliver that message at the highest levels in Congress, federal agencies, and at the Pentagon.

“We’re not really talking about commercial ideology of what should be subsidized or what shouldn’t, or why there should be programs, but making sure that everyone—Republicans and Democrats understand that energy is a national interest and that new forms of energy [like biofuels] are absolutely critical for a country that is dependent on foreign oil. It is the responsibility of our government to support, nurture, and create new forms of energy that we can use,” Pyle says.

As Sapphire’s CEO, Pyle says his focus was on policy over regulatory matters.

“Being from biotech, we’re accustomed to interacting with some form or fashion of government,” Pyle says. “I would say in your average biotech, the regulatory burden takes up significantly more time of the senior executives than the policy initiatives at Sapphire.

“This has not been an unusually contentious issue,” Pyle adds. “It’s just really complicated.”

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