Energy has never been too far away from any of our minds. Vinod Khosla discussed the advantages of using biofuels in general and ethanol in particular:
To me, it seemed ethanol and other biohols could eventually replace all our gasoline needs and they would not need subsidies to outcompete fossil fuels. Just because ethanol gets subsidies doesnt mean it needs them. Biohols were the only kind of alternative energy that I believed met two essential criteria: They would scale to solve a material problem, and they could economically compete with fossil fuels without subsidies.
When it comes to technology, the best way to change the world is not by revolution but by evolutionary steps. Change must follow from step to step, from innovation to innovation, as technology matures, each step justifying its economic viability and attracting investment. So 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. Then there are those tunnel-vision skeptics who refuse to believe that there is a trajectory to energy independence. I invite those folks to sit on the sidelines and watch the show or to go work on a better solution. Twenty-five years ago such doubters were dismissive of personal computing, the Internet, and biotechnology.
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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