Vinod Khosla

Khosla is a technology innovator and venture capitalist based in Silicon Valley.

Clarifying my position on lithium ion batteries

The limits of today’s electric car technology

Recently, there has been some blog chatter about my comments on the future of lithium ion batteries — my goal here is to clarify my stance. I do believe that these batteries have been over-hyped in terms of technology available today. However, little focus was given to my statement that Khosla Ventures is backing the technology because the “lithium-ion markets are here today. We’re investing because there are great markets.” So what kinds of technology are we investing in? I think the traditional approach to lithium ion battery making, such as A123, is going to be competing in an overheated, …

How biofuels are like drugs

Not all biofuels are the same; we can do biofuel well or poorly

To my surprise, recently I found myself the subject of an editorial by the Wall Street Journal which characterized me as a strong advocate of subsidies for food-based ethanol, and as a recipient of "federal dole" who ought to "take a vow of embarrassed silence." I have not advocated subsidies for food-based ethanol. In fact, I strongly believe any nascent technology that cannot exist without subsidies beyond an introductory period will not gain market penetration, and is not worth supporting. I do look forward to the WSJ's complaints about oil's subsidy bonanza, from tax breaks for drilling, loopholes that allow royalty-free or below-market offshore oil leases, manufacturing tax breaks, as well as roughly $7 billion in subsidies in the wake of the Katrina disaster. At a recent WSJ Conference, 75 percent of the erudite audience "voted" (rightly) that oil was more highly subsidized than ethanol. Were these not such serious matters, the WSJ editorial would be laughable. But there are serious issues at stake. Should we not look past our noses to the larger issues of dependence on oil? The alternative of biofuels raises serious questions deserving more depth than the entrenched, one sided views of the Wall Street Journal.

Biofictions

Wall Street Journal editorial mischaracterizes both my position and biofuels

To my surprise, on Tuesday I found myself cited by the Wall Street Journal as a strong advocate of subsidies for food-based ethanol, and as a recipient of "federal dole" who ought to "take a vow of embarrassed silence." While I appreciate the Journal's foray into fiction writing (and I'd love to discuss my status on the dole with my accountant, who recently filed my taxes), I would like to clarify a few facts and offer a more rounded view of biofuels and ethanol in general. A few facts:

Biomass, part III

The most critical assumption on cellulosic biofuels: yields

My most critical assumption with cellulosic biofuels is on land efficiency: tons of biomass per acre, and hence gallons of fuel produced per acre, and more accurately, miles driven per acre. I believe biomass yields per acre will multiply by two to four times from today's norms. The lack of genetic optimization and research on cultural practices, harvesting, storage, and transport with would-be energy crops -- miscanthus, sorghum, switchgrass, and others -- means that there is significant potential for improvement. The application of advanced breeding methods like genetic engineering and marker-assisted breeding, limiting water usage through drought resistant crops, and large-scale application of biotechnology (i.e., optimizing the process by which plants conduct photosynthesis, or reducing stress-based yield losses) will also contribute to increased yields with fewer inputs. More importantly, different energy crops are likely to be optimal for different climates -- jatropha makes sense on degraded Indian land, but not in the American Midwest. Rather than a single dominant energy crop, we are likely to see a variety of feedstocks that allow specialization to local conditions, mixes, and needs, while mitigating the risks.

Biomass, part II

Better agronomy for energy crops

I believe improved crop practices are a vital aspect in meeting our cellulosic feedstock needs. There are a few areas that offer significant potential: crop rotation, the use of polyculture plantations, perennials as energy crops, and better agronomic practices. We address all four issues here. Though none of these have been extensively studied, early studies and knowledgeable speculation point to their likely utility. Further study of these techniques is urgently needed, especially the use of grasses or other biomass-optimized winter cover crops. Crop rotation I have proposed the usage of a 10 year x 10 year energy and row crop rotation. As row crops are grown in the usual corn/soy rotation, lands lose topsoil and get degraded, need increased fertilizer and water inputs, and decline in biodiversity. By growing no-till, deep-rooted perennial energy crops (like miscanthus or switchgrass -- see below) for ten years following a ten year row crop cycle, the carbon content of the soil and its biodiversity can be improved and the needs for inputs decreased. The land can then be returned to row crop cultivation after ten years of no-till energy crops. Currently unusable degraded lands may even be reclaimed for agriculture using these techniques over a few decades. A University of North Dakota study highlights some of the benefits for food crops. I expect similar or even greater benefits for food crop/energy crop long cycle rotations, especially in soil carbon content:

Biomass, part I

Where will biofuels and biomass feedstocks come from?

When it comes to biofuels we have choices. We can do it poorly, using short-run approaches with no potential to scale, poor trajectory, and adverse environmental impact. Or we can do it right, with sustainable, long-term solutions that can meet both our biofuel needs and our environmental needs. We do need strong regulation to ensure against land-use abuses. I have suggested that each cellulosic facility be individually certified with a LEEDS-like "CLAW" rating, and that countries which allow environmentally sensitive lands to be encroached be disqualified from CLAW-rated fuel markets. We think a good fuel has to meet the CLAW requirements: C -- COST below gasoline L -- low to no additional LAND use; benefits for using degraded land to restore biodiversity and organic material A -- AIR quality improvements, i.e. low carbon emissions W -- limited WATER use. Cellulosic ethanol (and cellulosic biofuels at large) can meet these requirements. Environmentally, cellulosic ethanol can reduce emissions on a per-mile driven basis by 75-85% with limited water usage for process and feedstock, as illustrated later. Range, Coskata, and others currently have small-scale pilots projecting 75% less water use than corn ethanol, with energy in/out ratio between 7-10 EROI (though we consider this a less important variable than carbon emissions per mile driven). Sustainable land use The question about biomass production that arises first is about land use: how much will we need? What will it take? Is it scalable? For conservatism, I assume CAFE standards in the U.S. per current law, though I expect by 2030 to have much higher CAFE and fleet standards (hopefully up near 54mpg or a 100% higher that 2007 averages), which will dramatically reduce the need for fuel an hence biomass. Yes, this would include lighter vehicles, more efficient engines, better aerodynamics, low-cost hybrids, and whatever else we can get the consumer to buy that increases mpg.

Pragmatists v. environmentalists, part III

Hybrids and biofuels: The road ahead

Many people make the mistake of comparing apples to oranges. One has to compare futures to futures and current status to current status. All technologies improve, but some improve more than others. The Prius gets 46 mpg, while a similar-sized Toyota Corolla gets 31 mpg. One of our investments (Transonic) is trying to make an engine that (if it works!) can be placed in a Prius to produce a vehicle that will have lower carbon emissions than the hybrid Prius at below $1,000 in marginal cost. Other efficient engine efforts abound. If battery technology efforts like Seeo (one of our investments), EEstor, silicon nanowire batteries (or similar efforts that others have funded and many we are evaluating) are successful, we will get the same effect (better petroleum mpg) with a plug-in -- if we can also clean up our grid at the same time! From my perspective, if I have to pick between a 5-10 times lower cost/performance battery and a cleaned-up electrical grid in the next 5-10 years (or even 20-25 years), or pick cellulosic fuels in 50 percent more efficient ICE engines, I consider the latter lower risk and significantly more probable. I am confident that cellulosic biofuels without significant land-use impact or biodiversity impact can achieve costs of $1.25/gallon in less than five years and below $1.00 per gallon in 10 years (more details on that, especially on land use / biodiversity and sources of biomass, in a upcoming paper). At this price point, the technology will be adopted broadly and rapidly worldwide, even if oil prices decline substantially.

Pragmatists v. environmentalists, part II

Hybrid emissions: Facts and numbers

Having laid out my views in part I, let me turn to the actual data regarding hybrids -- both from an environmental and economic perspective. How do carbon emissions per mile driven compare for various cars? The Volt is expected to be "less than $30,000" with a 1.0L engine. Compare this to the Corolla, with a 1.8Lengine (peak hp of 126; 31 mpg) and a price of $14,400. It's worth noting that this is in the optimistic, no-gasoline-use scenario for the Volt, computed below along with carbon emissions for the Volt running on cellulosic ethanol and gasoline, and emissions for comparable-sized ICE cars. Questions on the Volt's actual usage patterns remain: how many people will recharge everyday? What percentage of total miles will be on the grid, and what percentage on gasoline?

Pragmatists v. environmentalists, part I

Prius: Green or greenwash?

I have been accused of dissing hybrids. I was mostly discussing Prius-type parallel hybrids and all the support they get, when one can get the same carbon reduction by buying a cheaper, similar-sized and -featured car and buying $10 worth of carbon credits. I was objecting to greenwashing (powered by a large marketing machine) that suggests hybrids can solve our problems. Corn ethanol, which has been heavily maligned in the mainstream media, reduces carbon emissions (on a per-mile-driven basis) by almost the same amount as today's typical hybrid. Despite the similar environmental profiles, one is a media darling and the other is demonized, despite its more competitive economics. My main complaint has been the lack of critical analysis in this space. Corn ethanol (which I don't believe is a long term solution) has been framed by the oil companies' marketing machine, farm policy critics, and impractical environmentalists (though the NRDC and Sierra Club support corn ethanol's transition role as I do, subject to certain constraints). The Prius and hybrids have been positioned by Toyota's marketing machine. The public is gullible. I am open and hopeful, especially longer term, on serial plug-in hybrids (a point I'll address in Part III). Price still remains a major issue. Even for serial hybrids, the ability to keep cost, or at least monthly payments, close to that of a regular ICE (internal combustion engine) car is unclear. Maybe another blogger with knowledge of practical automotive costs can detail the likely trajectory of serial hybrid costs (say, with a typical 40-mile "battery range"), as this remains the critical question. The Prius is the corn ethanol of hybrid cars, and we should recognize that. It has increased investment in battery development, but beyond that it is no different than Gucci bags, a branding luxury for a few who want the "cool eco" branding (70%+ of Prius buyers make more than $100k per year). In this series, I will try to lay out my views on hybrids as a whole -- what I believe hybrids are good for and what they are not. (My paper on Biofuels Pathways (PDF) delves into the details.)