[[editor’s note, by David Roberts] In addition to the updates below, I wanted to make it clear that this post does not meet Grist’s standards. Had I been around (I’m on vacation), I would not have published it. I’ve sent Khosla a personal apology, which he has graciously accepted.]

[UPDATE: Dave has requested that I update this post, which I have done below with some clarifications and added links.]

Vinod Khosla recently posted this comment titled: “Numbers Matter Here: Support your statements” over on Joseph Romm’s post.

There is nothing wrong with an individual investing in a product that he or she believes in. The problem arises when perversely wealthy individuals try to further line their pockets by putting their paws in our pockets, using our tax dollars to fund their get richer schemes. Get your hands out of our pockets and keep them out, you money-grubbing rascals.

When Vinod Khosla takes E-85 fueled car trips with the likes of Sen. Tom Daschle, he is quite obviously lobbying for support of ethanol. Our government process has become seriously compromised thanks to wealthy special interest seekers buttonholing politicians to line their own pockets. It is a two-way street of course, with the senator hoping to receive campaign donations from those who want his support of ethanol. There are almost 35,000 registred lobbyists in Washington. How many of those lobbyists get to ride in a car with a Senator?

Vinod, that may be how business has been done in India but that may also explain a lot of India’s past problems. We need to fix the problem here before we end up like India (the country you bailed from).

[UPDATE: The above comment has been taken by some to be xenophobic (and therefore racist). I am referring only to the Indian government’s low CPI score (corruption perception index). I should have been more clear that it is this political corruption that Khosla has left behind. Commenter pangolin read my intent correctly here:

The OP points out that the rise of ethanol as a motor vehicle fuel is the product of rampant political corruption and crony capitalism in the US Federal government. He vaugely mentions the well documented rampant political corruption and crony capitalism that has been widely acknowledged to be preventing India from solving it’s many problems.

All bloggers eventually get into hot water when what they write is misinterpreted or flat out wrong, as many of my fellow contributors can attest. It comes with the territory. And yes this is a harsh critique. Market distortions by special interests are wreaking havoc on the the environment. My apologies to anyone offended.]

As a self-professed life-long Republican, you helped put the most anti-intellectual, anti-environmental, ham-fisted president in the history of this country into office who for the first time in our history took us to preemptive war and on erroneous data at that, essentially by accident. We may never recover from his legacy. Based on that decision alone I would not trust your judgment any further than I could throw you.

Now let’s talk about your numbers and especially about the assumptions made to get them.

First, bloggers jump the gun without understanding the details of what one is saying. My paper on Biofuels Pathways (www.khoslaventures.com/resources.html ) explaisn the details. The key question is how many people will pay $5000 more for a basic hybrid car that reduces carbon emissions by 25% (about the same as corn ethanol by the way) versus …

The Prius, a commercially viable product spawned by market response to consumer demand, doubles average gas mileage. The Prius fleet saves more gas annually than all the ethanol produced in America in 2001. That is a greenhouse gas reduction of how much? Surely you are familiar by now with the study showing corn ethanol to be up to 50% worse for global warming than gasoline? Your 25% figure for GHG emissions is closer to -50%. Surely you have seen the numbers showing how the flex-fuel car campaign has cost Americans billions of gallons of gas by promoting SUVs and trucks?

a flex-fuel car that costs no more and can reduce emissions by 75% or more when run on cellulosic biofuels…

What flex fuel cars running on cellulosic? They don’t exist, or have you lost sight of that fact? Cellulosic ethanol does not exist in a commercially viable format.

A plug-in hybrid would cost $15000 more for the average buy and may reduce carbon emissions by a larger percentage today depending upon the location and source of your electricity (how much fossil fuel is used in your power grid). That might reach 100% reduction when we have all renewable power in a region and all cars are fully plug-in, but when might that happen?

All cars do not need to be fully plug-in. Your cost estimate is an educated guess based on what is known today. It will not withstand the test of time. When might that happen? I’ll make a guess. About the time cellulosic fuels become commercially viable? If we don’t find ways to make electricity without coal, it won’t matter what fuel we burn in our cars.

Even if we could get 50% of the cars in the US to be hybrids, reducing emissions by an immaterial 10-15%,

Average American gas mileage = 24 MPG. A 10% improvement would be 26.4 MPG. Average Prius = 48 MPG. Half of America’s cars as hybrids would produce an average gas mileage of 36 MPG. That’s an improvement of 50%, not an immaterial 10-15%.

could we get people in India and China, the fastest growing car markets, to ante up this much additional money when the biggest thrust in volume cars in India is to reduce the cost of the whole car to $2500?

The Chinese appear to be just as status hungry as Americans and are happily paying small fortunes to own SUVs which they perceive to be hip as they try to emulate those who they think are the cool kids. So, yeah, no problem. As for that $2500 car in India, well, it won’t be an SUV running on ethanol that’s for sure.

When can we get enough cars on the road? Battery costs will decline and performance increase but once one gets inside the technology one understands that the upside with known chemistries is limited to maybe 2-4x change in cost/performance – not nearly enough to change the hybrid or plug-in hybrid cost dynamic.

When will cellulosic ethanol become commercially viable? You just are not even trying to think out of the box. The internal combustion engine exists only because of cheap liquid fuels. The answer is to replace the internal combustion engine, not the source of liquid fuels, which is a physical impossibility.

Having said that we are investing in batteries to try and enable breakthroughs that might change this. Other technologists are doing the same but the outcomes look very uncertain.

Cellulosic looks pretty uncertain to me, considering that I’m already putting most of my mileage on a plug-in hybrid vehicle.

We will need 50-80% of the car buyers to pay for these new technology automobiles to make a material difference.

Didn’t you just say that a 50% market penetration would reduce emissions by an immaterial 10-15%?

When will that happen and at what cost point in the US? In the world? Add 10-15 years after new car sales to reach these percentages and you have a “low carbon fleet”! long term I still believe we can reach this laudable goals but probably not in the next decade or even two!

Don’t know Vinod. My crystal ball is in for repairs. I am fairly confident of one thing. Your attempts to further distort an already distorted market need to stop. You obviously are not smart enough to single handedly lead the world into a bright new energy future. Neither am I but I am smart enough to know that answers will come from the millions of entrepreneurs out there testing ideas in response to market forces, not from rich individuals begging money from public coffers. The ramifications of cellulosic fuel production on global warming are unknown. Studies are beginning to show that existing biofuels are worse for global warming than fossil fuels. What will future studies show for cellulosic?

You are an alpha male. Your sense of well being largely depends on a steady drip, drip of a hormone called serotonin. To get that fix, you need high status. Status seeking urges explain why people buy expensive cars, live in big houses. If the driver of a Hummer were mocked and laughed at instead of envied, he would never have bought his Hummer. What makes a Hummer a status symbol? A Hummer is a rolling billboard advertising that the owner has enough disposable income to afford one, just as the Prius is a rolling billboard suggesting that the occupant is a thinking, caring individual, who can also afford to drive a Prius. Toyota is already contemplating a cheap hybrid for those who desperately want one but can’t quite swing a Prius. In other words, people will continue to buy vehicles largely based on the status it will bestow and that status may be a function of the cars perceived environmental benign-ness, as is the case with the Prius. Smallish super efficient cars may very well eclipse the comical bloated SUV as a status symbol worldwide.

I hesitate to point this out to you because I fear you may shift gears and begin lobbying my government to drop its tariff on Brazilian ethanol and begin investing instead in the destruction of the Amazon to grow sugarcane. Ethanol made from sugarcane is less energy intensive and far, far, cheaper than cellulosic. The Amazon and the virtually free land it sits on is vast. Cellulosic does not stand a chance against Brazilian cane ethanol in the long haul. Using biofuels to feed internal combustion engines will eventually destroy the last great carbon sink if we don’t find a way to replace the internal combustion engine fed with liquid fuel.