Tuesday, January 23, 2007

Vinod Khosla : War On Oil

wsj.com : The War on Oil
Excerpts :

Corn ethanol can only supply about 10% of our gasoline needs.

We need cellulosic biofuels to win the war on oil.

My research has convinced me that the benchmark $1.25 per gallon or cheaper cellulosic fuels are less than three years away .

We have seen proposals to make ethanol from corn stalks, switchgrass and other grasses, woodchips, waste carbon monoxide from steel mills, municipal sewage, orange peels and other creative ideas from entrepreneurs.

We must encourage research on biomass feedstocks, tomorrow's "energy crops." Switch grass or miscanthus grass are economic for farmers at the yields of six tons per acre today, but we need even higher yields and "grass cocktails" to avoid the problems of monoculture agriculture. We need significantly more research in agronomy practices focused on energy crops. Miscanthus already yields 15 tons per acre in a wide variety of regions, including the U.K., and in Illinois test plantings.

We have found scientists working on energy breakthroughs at Dartmouth (Mascoma), in pipe-fitting shops in Denver (Kergy), using platforms developed for malaria drugs in Berkeley (Amyris), in other university labs (Gevo and LS9), in India (Praj), in New Zealand and in Brazil.

President Bush must set a very aggressive target for biofuels with an enhanced Renewable Fuel Standard (RFS). My analysis shows 39 billion gallons of biofuels production is possible in the U.S., at reasonable cost, by 2017 on 19 million acres; and 139 billion gallons by 2030 on 49 million acres. Soon we will replace all 150 billion gallons of gasoline that we use on a very small fraction of our agricultural lands while improving the environmental quality of our agriculture (through corn/soy and biomass crop rotation schemes) and improve our rural economy. Consumers can be protected by the RFS if prices get too high by including a price "relief valve" that will also protect livestock producers (who depend on reasonable corn prices).

Such a goal will ensure an attractive market for any company that meets its cost target for biofuels. If all the entrepreneurs fail, the relief valve will protect consumers and related agricultural markets. More importantly, Americans, both Democrats and Republicans, care about energy security. Many of the presidential candidates for 2008 will also support such policies.

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