Vinod Khosla on Biofuels

Famed venture capitalist Vinod Khosla is interested in “thinking outside the barrel,” according to the Greater Democracy blog (via Dave Farber’s IP list). The blog has links to a google video of Vinod’s recent presentation on the subject, and to his slides. Vinod’s key points as reported by Greater Democracy: “We can do what Brazil has done [with biofuels] in less than 5 years — if we want to,” and “E85 plugin Hybrids, not hydrogen fuel cells, are our best future transportation choice.”

  • I watched it — a very interesting and persuasive presentation. The foreign policy case is of course very strong, but he also made some good economic points about costs. I note three question marks:

    (1) I am not convinced that the technology/cost curve is as far along as Khosla says, especially for cellulose. Other sources are more reserved.

    (2) He markedly avoided discussing transportation. Ethanol presents serious problems because it is unforgiving in terms of its interaction with water. I don’t think we could use the existing infrastructure for transportating petroleum for ethanol. Not does the pipeline part of that infrastructure run to the right places. And one hates to think of the cost of replacing the infrastructure — how many trillions of $$?

    (3) Brazil’s experience has been up-and-down. At present, ethanol is 20% of its transportation fuel. (WSJ- http://yaleglobal.yale.edu/display.article?id=6817)

    Disclosure: I did consulting for the petroleum industry in the 1980’s and 1990’s, though I have had no connection this decade.

  • How about starting an awareness campaign for this thing?
    I’m from Europe, but the proposals mode in the presentation relate very much to the EU as well.

    Ohh.. and being the cynic for a bit — 10% profit loss to the oil companies, 40+% gain for the whole rest of the world, will it ever happen?

  • J Burrell

    Brazil is presently building infrastructure including pipelines that will handle ethanol to transport it from the refineries to shipping ports. The technology is already available. But, there is infrastructure cost as you noted.

  • sandbuckeye

    Corn is not the answer, it takes 1 BTU to make 1.250 BTUs of corn ethanol.Not a very good tradeoff

  • william bolster

    I have lived in Brazil for most of my life and have accompanied the ups-and-downs of its ethanol program referred to. The fact is that it’s hard to see how its ethanol industry can fail to continue its long-time overall upward climb (in spite of Brazil now having discovered local petroleum reserves which make it the world’s most recent net exporter of petroleum products)1) because the simpler basic ethanol technology has got greatly more efficient and, thus, very competitive with petroleum, 2) the technologies now coming on stream at the industrial level to use (initially a small part of) the enormous volume of cellulose bagasse (over 350 million tons a year versus, for instance, Brazil’s total grain harvests in the range of 120 million tons), while probably primitive compared to what is to come, (as enzyme costs come down and other related technologies develop) promise a potentially huge increase in production and competitive edge for the product, 3) Brazil’s favorable tropical climate gives it and its sugar cane based ethanol industry an evident advantage in the “photosynthesis war” with corn grown in less sunny climes, 4) does anybody except the president of BP expect oil prices to drop below US$ 30 dollars per barrel – Brazil’s ballpark ethanol cost with minor tweaking of technology/other efficiencies practically under its belt- for any meaningful period of time. 5) Brazil’s very efficient ethanol industry (in the dominant Sao Paulo state at least) no longer depends on government subsidies and the country’s unreliable and corrupt politicians to survive, 6) the availability of arable land in Brazil (as in the USA) is enormously greater than that needed to feed its own and most if not all of the rest of the world’s population so there is no real rivalry between food and fuel (this “rivalry” is just another “Malthusian fallacy”): Brazil uses less than 30 million of its potential 90 million or more hectares of arable land and most of what is used is devoted to cattle grazing.

    In fact, the only problem facing Brazil’s ethanol industry is that the US Corn Lobby makes the USA prefer to buy arab oil than Brazilian ethanol. Bush should by all means as he sees fit subsidize corn all he wants to keep the mid-west voters happy and, hopefully, found a viable ethanol industry when cellulose/ethanol technology to use corn stove gets up to speed. The common sense of diversifying the USA’s sourcing of (auto) transportation fuels by boosting the ethanol industry and its development of technology worldwide seems evident, however.

    The fact that Brazil, hamstrung by political policy flip-flops, inefficient government bureaucracy, high taxes and astronomical financing costs, not to mention an, at best, tepid mentality in support of business and entrepreneurs could convert to a viable supply infrastructure for its co-habiting ethanol and gasoline transport fleet surely should indicate what entrepreneurial USA can do and a lot faster should the will exist.

  • Ray Lauzzana

    Corn & Soy are lousy source of sugar from which to make ethanol.

    A much better choice for temperate climates is sweet potatoes or yams. Even better a mixed crop of pumpkins & yams.

    They can be easily be harvested mechanically.

    What none of the previous posts seem to realize is that the real problem lies in the CO2 produced by fermentation. Its better to have the CO2 concentrated in one place instead of being spread around by every vehicle.

    But, you still have a lot of CO2. You could compress it and bury it. Or turn into ice and chip it to the North Pole. But, it would be a lot better if it could be broken down easily into its components C & O.

  • webb emc

    Vinod Khosla gave a seminar at i,s.u. in august
    I need a DVD of it. I viewed it on the internet
    but quality was bad so it was unusable. I was
    unable to obtain a phone number for Khosla
    Ventures to get the DVD,that is why I am
    contacting you.
    Thank you Please respond