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June 21, 2006

Khosla walking the talk with Ethanol

So far, Vinod Khosla has done a lot of deep thinking and powerful talking about using Ethanol to "replace all our (America's) oil imports and become the centre of our transportation fuels economy". (See here and here to find out how forceful Khosla can be in his arguments and presentations.)

So much so that Fortune magazine called him the "godfather of Ethanol".

Now, the godfather is putting his money - via Khosla Ventures - where his mouth is. Khosla Ventures has tied up with Western Milling, California's largest grain milling company, to form Cilion which will produce ethanol using a variety of innovations.

From the Press Release:
Cilion plans to have 8 plant units in production by 2008 for a total of 440 million gallons per year capacity. The first three plants are expected to be in California.

...California Governor Arnold Schwarzenegger recently issued Executive Order S-06-06 establishing targets for the use and production of biomass products. The executive order called for California to produce a minimum of twenty percent of its own biofuels by 2010 and forty percent by 2020. Of the 900 million gallons of ethanol currently consumed in California, only five percent is produced in California.

"Cilion will be able to single-handedly produce all of the ethanol that the Governor has ordered for 2010, based on current consumption," according to Vinod Khosla of Khosla Ventures. "Governor Schwarzenegger wants twenty percent of all ethanol consumed in California to be homegrown, and we are confident that Cilion can achieve that goal in its first three California plants, comprising four 55 million gallons per year units, that will be operational by early 2008."

(Notice how Gov. Schwarzenegger is being involved in the announcement.)

All of which makes Fortune's hyperbole - "there are venture capitalists, and then there's Vinod Khosla" - ring true.

Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.