>>Khosla: Non-food biofuel coming soon, at $2 per gallon
May 12, 2008, 4:29 pm
Filed under: Investing

Saturday’s San Francisco Chronicle ran a solid interview with venture capitalist Vinod Khosla, a co-founder of Sun Microsystems and now a partner at Kleiner, Perkins. Khosla is now heavily invested in concentrated solar power and biofuels.

Vinod KhoslaAmong other topics, Khosla discussed the current panic over corn-based ethanol. He said the role of ethanol in driving up food prices is “overblown.” In fact, he attributed much of the fuss to a misinformation campaign by threatened oil companies:

I have no question that in 10 years, there’s no way oil will be able to compete with biofuels. Even in five years. Now it will take a long time to scale biofuels, but I’m the only one in the world forecasting oil dropping in price to $35 a barrel by 2030. I’ll put it on the record: Oil will not be able to compete with cellulosic biofuels. If you do it from food, the food will get so expensive you can’t make fuel out of it.

Food prices have been going up. Biofuels are a very minor contributor to that. But there are massive PR campaigns trying to ascribe most of the blame to biofuels. The fact is, by far the largest contributor to food-price inflation is oil prices. Biofuels are less than 15 percent of it.

Nonetheless, Khosla said, turning corn into ethanol makes no economic sense when cheaper, non-food feedstocks are available. He hopes, within five years, to sell a non-petroleum, non-food-based motor fuel that can retail at $1.99. He’ll distribute it through Wal-Mart, thus competing directly with the oil companies. –Seth Masia


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Mr. Kohsla may be right about cellulosic biofuels. However, he has mis-characterized the concerns about corn ethanol. They are based on many serious and well-considered issues, including land use being lost for for production, the end of crop rotation in many areas and concomitant increases in artificial fertilizer use, the resulting increased burden on fresh water that is damaging streams, lakes and rivers and making an impact by the ecosystem in the Gulf of Mexico, and concerns about drying up aquifers for absoluetly no reason (i.e. the production of corn ethanol, which makes no sense).

While trying to protect the baby from being thrown out with the bathwater, Mr. Khosla fails in his chance to distinguish intelligent energy proposals from the chaff of agricultural protectionism and cronyism, or, as others know it, corn ethanol.

Thanks for the story. I appreciate Mr. Khosla’s efforts to provide alternative fuels- I just wish he would not be so defensive about the indefensible.
Chemistry for a sustainable world

Comment by nearlynothingbutnovels

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