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Tuesday, 05/30/2006 3:05:34 PM

Tuesday, May 30, 2006 3:05:34 PM

Post# of 1109
have you all seen this video? help me find an address for him and get him info on clme.
http://video.google.com/videoplay?docid=-570288889128950913&q=ethanol&pl=true

“I HAVE a religious belief in the power of ideas propelled by entrepreneurial energy,” declares Vinod Khosla. Coming from some businessmen such talk might sound self-serving or plain nutty. But Mr Khosla helped to found Sun Microsystems, a company that pioneered such essential bits of internet technology as network servers and Java, a programming language. He then made his name and his fortune as a partner at Kleiner Perkins, a Silicon Valley venture-capital firm famous for its early investments in AOL, Amazon, Compaq and Google.

His eyes have now turned towards a new target—the oil industry. He and Stephen Bing, a flamboyant Hollywood producer, are financing a campaign to get Californians to endorse clean energy in a state-wide vote next November. “Californians for Clean Energy” will need to get more than 500,000 signatures just to make it onto the ballot. If it were then passed, its effect would be to increase taxes on Californian oil production by up to $380m a year, eventually raising billions of dollars for investments in clean energy. The plan is to help California cut its oil use by one-quarter within a decade, thereby setting a powerful example for the rest of the world.


Mr Khosla is particularly enthused by “cellulosic” ethanol, a highly efficient way of making fuel from agricultural waste. President Bush touted this new technology in his recent state-of-the-union speech, suggesting that it may come to market in six years. In typically impatient form, Mr Khosla wants to halve that gestation period. Anyone who spends time with him is liable to be hit with his well-researched but mind-numbing PowerPoint presentation on ethanol—unveiled with the affection that some men reserve for pictures of their grandchildren.

Why is Mr Khosla taking on this particular crusade, when he could concentrate on the technology investments that have served him so well—or even opt for a gilded retirement? Like many very rich men, he now wants to improve the world: “Just starting another Sun doesn't do it for me any more.” As an engineer turned venture capitalist, Mr Khosla has a healthy respect for the power of new technologies to create disruptive innovations. And the free marketeer in him clearly relishes the prospect of really taking on the big, rich and well-entrenched firms that dominate the oil industry.

Another part of the explanation lies in his complex relationship with India. Like several of Silicon Valley's most successful people, Mr Khosla boasts a degree from the Indian Institute of Technology. When he tried to start a project to help the mother country, he was initially frustrated by its bureaucracy and corruption. His first attempt to start a traditional top-down charity failed, so he now funds only charities embracing micro-enterprise approaches. A lesson he learned from India, he says, is that one has to think big: “Unless you influence the lives of at least a million people, it simply doesn't matter.”

His plan is to use technology and entrepreneurship to tackle big social and environmental problems: “In venture capital, we fail far more often than we succeed,” he says. “I've decided that I'd better focus on taking on problems that really matter, so that when I win it makes a difference to the world.” He likens his need to get involved with worthy causes to a drug addiction.

It is easy to dismiss this enthusiasm as the irrelevant obsession of a rich hobbyist or the harmless utopianism of a capitalist who has made his pile. But the big oil companies are certainly not taking Mr Khosla lightly. The oil industry is funding a lavish counter-campaign to his ballot initiative called “Californians Against Higher Taxes”. Perhaps the best reason to take Mr Khosla seriously is that his professional success and Republican leanings mean that he has the ears of powerful people. He has been making the rounds, from the White House and Capitol Hill to the World Economic Forum at Davos and the TED conference (a big annual gathering for top venture capitalists), banging the drum for ethanol. Before Larry Page, Google's co-founder, attended a recent TED conference in Monterey, California, he was sceptical about ethanol. After hearing Mr Khosla, he decided to help fund the cause. “When have you ever seen greens, farmers and guys like me and Larry on the same page?” demands Mr Khosla.

The power of price
So will his grand plan really work? Mr Khosla is convinced that “this fuel is greener, cheaper, more secure than gasoline—and this shift won't cost the consumer, automakers or the government anything.” There are undoubted attractions to ethanol. But making the switch will surely not be as easy or cheap as he suggests. Retail distribution is one obvious problem: fewer than a thousand petrol stations in America sell the most desirable blend of ethanol fuel today. Expanding infrastructure will cost money and take time, and the oil industry is not exactly enthusiastic. And cellulosic technology, which seems so promising today, may take much longer than expected to achieve commercial scale, or might fail altogether.

What is more, the OPEC cartel is suspected by some of engineering occasional price collapses to bankrupt investment in alternative energy. Mr Khosla concedes that after he made his ethanol pitch at this year's Davos meeting, a senior Saudi oil official sweetly reminded him that it costs less than a dollar to lift a barrel of Saudi oil out of the ground, adding: “If biofuels start to take off we will drop the price of oil.”

Anticipating this problem, Mr Khosla is lobbying politicians in Washington, DC, to impose a tax on crude oil if the price falls below $40 a barrel to safeguard investments in ethanol. Even if—surprise, surprise—Congress refuses to raise taxes, Mr Khosla insists that alternative energy must ultimately prosper. Given his record as a venture capitalist, it would be foolish to dismiss his latest bet on the future.





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