Cleantech venture capitalist Vinod Khosla used his penchant for writing long editorials in the media this week to weigh in on the future of the U.S. biofuels mandate, the portion of the energy bill that calls for the production of 36 billion gallons of biofuels annually by 2022. His thesis in the Washington Post op-ed: Reducing the country’s biofuels mandate “could be disastrous for energy security and the environment.”
With food prices rising along with concern over the sustainability of corn-based biofuels, a growing chorus of critics has been calling for a rethinking of the biofuel regulation. Just last week the Food Before Fuel Campaign (made up of environmentalists and retail groups including grocery stores and restaurant chains) urged Congress to “revisit” and “restructure” the policy.
But a reduced biofuels mandate could also be ruinous to Khosla’s portfolio, which is more than enough motivation to fight the backlash. He fully acknowledges the potential conflict with his investments:
I have many investments in biofuels companies. Some say I believe in biofuels because I have invested in them. The truth is that I invest in biofuels because I believe they can help our environment, economy and national security.
But that conflict is understated. Khosla has what he himself has referred to as “the largest cleantech portfolio on the planet,” and a very large portion of which consists of more than a dozen startups looking to develop both corn-based and next-generation biofuel technology. If the biofuel mandate is reduced Khosla could lose significant money.
So while we believe that cellulosic flex-fuel vehicles will play a part in the future of transportation, any article written by Khosla on the subject, particularly one placed in the mainstream press, should always be read through the lens of his investments. Period.
Notably, Khosla continues to claim “the only cost-effective option (measured in cost per ton of carbon emissions avoided or grams of carbon emissions per mile driven) likely to achieve broad market acceptance in the next 20 years is cellulosic-fuel cars.” We don’t disagree, but a longer-term, costlier play, (no matter how much better for the planet) isn’t good for return on his investment.