Name: Khosla bullish on biofuels
Uploaded: 2014-04-10
Duration: 4 min 47 s
Description: Venture capitalist Vinod Khosla says technology to make fuel from wood waste and sugar cane is close to viability.

[ MUSIC ] Could you explain what your investment thesis has been on ethanol and has it been successful. First, be careful because our investment thesis was on bio fuels not on ethanol. We have a couple of [ UNKNOWN ] of capital investments, we have a couple of investments that turn sugars in to carbons directly. And then, we have investments that turn bio mass directly in to crude oil. So, we have a wide array of bio fuels investments. And, one of the mistakes people make is presume that there is only ethanol. Having said that I think I'm pretty bullish today. That there's half a dozen technologies that today have proven enough of the technology to build a full scale plant in biofuels. I'm not talking about one but half a dozen. That would take something like wood waste or grasses or others, the grass left over from sugar cane and turn them into liquid fuels. I would say, you'll see many of them appear more publicly over the next year. Today the issue isn't is the technology to be deployed at large scale. Because, like I said, I believe half a dozen technologies are ready to build commercial appliances. The financial markets that won't capitalize on them, and so entrepreneurs are getting very clever about it. And I'd say there's probably three or four really interesting companies that have eliminated the capital intensity problem in bio fuel. [ UNKNOWN ] is a [ UNKNOWN ] that converts sugarcane plants. And, we can just assume if you mention it you're invested in it, right? Both, I'll talk about things I haven't invested in I sort of treat them all the same if you're compiling. sure. Either, we have got to invest in them or we are too dumb to do it. It doesn't matter. But in fact, Amyris takes sugarcane, ethanol plants, and says why not produce a jet fuel or an alkane or some, some other kinda fuel out of it. And, I make a simple proposition, we'll convert your plant over. Any increase in [ UNKNOWN ] earnings over what you're making with what you're producing today which is either sugar or ethanol. We'll share fifty, fifty. It eliminates the capital intensity problem and they built a pretty successful company out of it. This is Ameress's pitch to a commercial business partner? Yeah. the, the, there's been press releases on. The, their relationships in Brazil which they're. Well. This will. This is all public information. There's nothing new here. Gevo, another company has done the same with corn ethanol plants. Increased the value of corn ethanol plants, not by producing corn ethanol, but by producing butanol and higher value chemicals from it. So, there's a lot of clever stuff going on. The people don't understand, and we'll become more visible. I will say the following a company like Kior can directly, one of our investments in Houston, takes wood chips, pine waste from sawmill operations, in fact they're using wood, Houston city wood waste today. To produce a, a, decent scale there, it's ready to commercialize. Directly produce a crude oil. Nature takes a million years to take wood biomass and turn it into crude oil. They can do it in some fraction of a second. It, it feels like saying well the capital markets can't support this is a cop out. The capital markets will support anything that works. And nothing, that doesn't work. And it, it doesn't really matter if there's a recession or not, does it? You know, look. During a recession. If people aren't building power plants or refineries, they're not gonna build other large facilities. So, I would say, the treatment for biofuels, because they're first of a kind, is slightly more risk averse than you would for some other infrastructure. Whether that's building a chemical plant or building a power plant. But it's not dramatically different. Remember, these things take time. It takes a couple years to build these commercial facilities, so people will say well, you talked about it a year ago, where is it? Well refineries take seven years to build, a power plant takes f, four, five years to build. Any chemical facility will take a few years to build, and they are in process, and will come along.

Venture capitalist Vinod Khosla says technology to make fuel from wood waste and sugar cane is close to viability.