Vinod Khosla on Ethanol

Wired has an article by Vinod Khosla:

While ethanol may not be ideal, Im convinced its the best first step on the biohol trajectory. Ethanol offers one thing no other oil substitute can: a clear path from where we are to where we hope to be.

There are other scenarios we can imagine say, wind-driven hydrogen generators powering our cars but they are just that: blue-sky flights of imagination from academics and dreamers with no notion of reality.

Ethanol is the first step on the biohol trajectory for three reasons. The first is economic: Ethanol can be produced and sold cheaper than gasoline. Most ethanol facilities can produce their fuel for about $1 a gallon almost half the production cost of gasoline. And innovative producers like E3 Biofuels claim to make it for 75 cents a gallon. Its true that American ethanol today benefits from agricultural subsidies for corn farmers. I would like to eliminate ethanol subsidies gradually in conjunction with the removal of tariffs on imported ethanol. For kicks, we might consider removing the substantial direct subsidies to oil, too. Free markets demand level playing fields.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.