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Vinod Khosla Debunked

Update: Vinod Khosla and I have discussed his claims. That conversation is documented here.

Who is Vinod Khosla?

When an influential person begins to affect energy policy decisions – decisions that will have a huge impact on all of our lives – we better take a critical look at the claims that person is pushing. You can’t discuss ethanol for long with an ethanol proponent without having them mention the endorsement of Vinod Khosla. If you don’t know who Khosla is, here are a couple of blurbs from his Wikipedia biography:

Vinod Khosla is an Indian American venture capitalist who is considered one of the most successful and influential personalities in Silicon Valley. He was one of the co-founders of Sun Microsystems and became a general partner of the venture capital firm Kleiner, Perkins, Caufield & Byers in 1986. In 2004 he formed Khosla Ventures.

Vinod was featured on Dateline NBC on Sunday, May 7, 2006. He was discussing the practicality of the use of ethanol as a gasoline substitute. He is known to have invested heavily in ethanol companies, in hopes of widespread adoption. He cites Brazil as an example of a country who has totally ended their dependence on foreign oil.

Why Khosla Must be Challenged

I have previously made the case that Khosla’s claims don’t stand up to scrutiny. However, I recently got an e-mail from a reader who had watched a video presentation by Khosla. He had been referred to the video by a blog, where a poster wrote “this is actually starting to sound like a rational plan to me.” The presentation may be seen at:

Khosla Talks Ethanol

The accompanying slides may be downloaded at:

Biofuels: Think outside the Barrel

In addition, another e-mail recently called my attention to a coast-to-coast road trip being fueled by E85: Kick the Oil Habit Road Trip

In one of the blog entries from the trip, there is a conversation between the driver of the E85 car (Mark Pike), Tom Daschle, and Vinod Khosla. The conversation is archived at:

Sen. Tom Daschle & Vinod Khosla talk Ethanol

I documented my impressions of the exchange at:

RR Critiques the Road Trip

For me, the most disturbing part of the exchange came when Mark Pike said: “If the technology is good enough for Mr. Khosla, it’s good enough for me. I know that guy has done his research, so I trust him. I will leave all of the scientific data and research to him.”

There we come to the crux of the matter: People trust that he knows what he is talking about. The Wikipedia biography says he is “successful and influential”. Make no mistake; he is influencing people in this ethanol debate, including political leaders. Khosla is convincing people that his projections are viable. Yet, are they carefully scrutinizing his claims? No, because they trust him. Yet claims like his, will dampen conservation efforts, and Americans will not be prepared for Peak Oil. After all, Khosla, a guy they trust, says we are going to produce enough ethanol to replace our oil imports.

Become a Billionaire in 3 Easy Steps

In fact, Khosla’s slide 78 shows very optimistic growth projections in all of the following areas: crop yield per acre, ethanol yield per ton, and acres of biomass planted. It shows cellulosic ethanol growing from 0 gallons produced in 2006 to 173 billion gallons produced in 2030. We will need that ethanol to get to our condos on the moon. Fortunately for us, he has cellulosic ethanol scaling up just as corn ethanol starts leveling off. The result is an exponential curve of ethanol production that he extends out to the year 2030 (slide 17, shown below), at which time he has the U.S. producing almost 200 billion gallons of ethanol (versus the current 4 billion gallons). Because after all, we all know that crops don’t fail, droughts don’t happen, and technology always delivers on its promises. That’s why I don’t worry about bird flu. I know a vaccine will be produced in plenty of time. Here are Khosla’s projections:


Figure 1: Vinod Khosla’s Ethanol Projections

By the same logic, I can offer you an easy plan for becoming a billionaire in the year 2030. Here’s what you need to do. Increase your salary each year, increase the amount you save each year, and increase your return on investment each year. You will find that your wealth chart looks just like Khosla’s ethanol chart. Of course I could point out that it is extremely difficult to accomplish all of these things in practice, but then you might not buy my new book: “Become a Billionaire in 3 Easy Steps”.

The Debate Challenge

Before the debunking commences in earnest, I want to reiterate a debate challenge I made to Khosla. Following his essay at The Huffington Post entitled The Big Oil Companies Have Been Ripping Californians Off — And Not Just at the Pump, I issued a challenge to Khosla to debate his claims. I repeat that challenge here. We can engage in a written debate (so claims can be referenced and verified) hosted at The Oil Drum, or at the venue of his choice. The focus will be on various ethanol claims that he has made. I will show that many of his claims are simply incorrect, and a lot of it is propaganda.

Debunking Selected Claims

Let’s focus on some specific claims that Khosla made in his presentation, and see if they hold up to scrutiny. If they don’t, then I want to ask why anyone takes his claims seriously, and why we are allowing him to influence energy policy. I want to ask those who encounter him to vigorously challenge him on his exuberant claims (and make sure he knows about the debate challenge). Because if he is wrong, and political leaders are betting that he is correct, we will be throwing good money away and wasting time while we could be going after real solutions.

During the video presentation, at the 3:50 mark Khosla makes the following claim:

Vinod Khosla: Brazil has replaced 40% of their petroleum use with ethanol already.

So, is this true? No. As I documented in the article on ethanol that I wrote for Financial Sense:

According to BP’s recently released “Statistical Review of World Energy 2006”, Brazil consumed 664 million barrels of oil in 2005. In 2005, Brazil produced 4.8 billion gallons of ethanol, or 114 million barrels. However, a barrel of ethanol contains approximately 3.5 million BTUs, and a barrel of oil contains approximately 6 million BTUs. Therefore, 114 million barrels of ethanol only displaced 67 million barrels of oil, around 10% of Brazil’s oil consumption. In other words, Brazil’s energy independence miracle was 10% ethanol and 90% domestic crude oil production.

Therefore this claim, despite being constantly repeated, is false. It presents a very misleading picture of Brazil committing to ethanol, and then farming their way to energy independence. In fact, they drilled their way to energy independence. It also doesn’t hurt that they use 1/7th of the per capita energy that the U.S. uses. If you note Khosla’s slide 4, you see the qualifier “for light cars and trucks”. That is an important qualifier (even though he didn’t mention it), but it still presents a misleading picture. According to a March 2006 presentation by the Brazilian Ministry of Mines and Energy, the actual breakdown of vehicle fuels in Brazil at the present time (by volume) is 53.9% diesel, 26.2% gasoline, 17% ethanol and 2.9% natural gas.

At the 5:10 mark, Khosla says “Unlike here, ethanol [in Brazil] has a dramatic reduction in greenhouse gases”. His slide 4 claims a 60-80% reduction of greenhouse gas emissions for Brazilian ethanol. Here he admits that ethanol in the U.S. does not provide a dramatic reduction in greenhouse gases. Why then, on slide 7, does he answer the question “Why Ethanol?” with “Significant Carbon Emission Reduction”? Did he lose track of what he said on slide 4? No, that appears not to be the case. I have heard him make the “significant reduction” claim before. It seems that he is basing this projection on his hope that cellulosic ethanol will deliver according his optimistic projections above. And if we allow him to influence policy, and cellulosic ethanol doesn’t deliver as promised? We are in deep trouble, as you all know.

At the 6:10 mark, he is talking about E85 in California. He says:

Vinod Khosla: We don’t have E85 pumps. The ethanol is there, the cars are there, we just don’t have any distribution because the oil companies won’t do it.

This one left me a bit speechless. The ethanol is there? The spot price of ethanol in California has recently hit $4 a gallon. You can see an 18-month price graph here. Here you have a fuel that is more expensive than gasoline (despite Khosla’s claim to the contrary) while delivering less energy. Why should this be? Because the ethanol supply is not really “there”; not in the quantities needed to justify E85 pumps. You could probably get more ethanol in California, while driving the prices even higher. And “oil companies won’t do it”? Give me a break, Mr. Khosla. You can’t provide enough ethanol to justify them. But I have an idea. You are a billionaire. Put a couple of your own E85 stations in. The oil companies can’t stop you. Based on the logic you have laid out, it will be like printing money. But you will have no scapegoat to blame when things don’t work out according to your unrealistic projections.

At the 6:30 mark he says:

Vinod Khosla: Even in the U.S., and this is a conservative number, ethanol costs – most of the plants I look at – costs are about $0.90 a gallon to produce. [In contrast, slide 5 says gasoline costs $1.60 a gallon to produce.] Compared to any price you can imagine for gasoline, down to about $35 a barrel, ethanol is cheaper.

This is really an extraordinary claim. Khosla is on the record complaining about record gasoline prices. He has used very inflammatory language in criticizing oil companies. He says you are being gouged and ripped off, and that Big Oil is lying to you. So what are we to make of this graph?


Figure 2: Historical Rack Price of Ethanol Versus Gasoline

Source: http://www.neo.state.ne.us/statshtml/66.html

Ethanol prices have been consistently higher than gasoline prices for 25 years. Let’s just look at the CBT closing from 7-21-06. Ethanol closed at $2.80 a gallon, and gasoline closed at $2.29 a gallon. (The ethanol companies get to sell their ethanol at $2.80, but the purchaser receives a $0.51/gallon credit in an attempt to bring it to parity with gasoline). According to my math, if ethanol producers are making ethanol for $0.90 a gallon, and selling ethanol for $2.80 a gallon, they are making a lot more per gallon than gasoline producers. So, who is ripping off whom? Why does Khosla insist that oil companies are gouging, but doesn’t say a word about what appears to be even worse gouging by ethanol companies? This reeks of hypocrisy, but perhaps it can be explained by referring back to Khosla’s Wikipedia biography: “He is known to have invested heavily in ethanol companies, in hopes of widespread adoption.”

Say what you want about me. I work for an oil company. You can suspect my motives all you want. But I acknowledge up front that gasoline should not be the basis of our future energy policy, and I acknowledge the problems from wide-scale use of fossil fuels. I advocate conservation and alternatives that make sense. And at the end of the day, I support my arguments. Khosla, on the other hand, is guilty of using some pretty unsavory tactics and making a lot of bald assertions in promoting ethanol (coincidentally, boosting his chances of making money).

Note that we are now just 7:00 into the video, and so far we have seen false claims, misinformation, and now hypocrisy. Need I go on? I have listened to the video presentation twice now, and this continues throughout the presentation. He presents facts that are fictitious, and he runs down oil companies every chance he gets in order to win support for his argument. I won’t address the entire presentation, but there are two more common arguments that he makes that warrant debunking. At the 21:30 mark, Khosla makes the following claim:

Vinod Khosla: Ethanol has a subsidy, but the farmer doesn’t get any of that. What I heard, is that well past midnight when this was being debated in the conference committee, the oil companies inserted 2 words into the language, calling this subsidy a blender’s credit. So the person who is blending it with gasoline gets it. All $2 billion of it last year was collected by the oil companies. Like they needed more money. It’s unfortunate, but that’s the way the system works. I talked to one of the senator’s aides who was in the conference room, and he said they got to 1 a.m., and were still negotiating, and oil guys were willing to stay there.

This one is chock full of lies, hearsay, and innuendos. First of all, what of the claim that “oil companies inserted 2 words into the language”? Doesn’t he realize that oil companies can’t insert language into a bill? Does Khosla realize that this blender’s credit has been in existence since 1980? Did he talk to a senator’s aide who was in the room 26 years ago when this bill was passed? Does he feel bad about passing on hearsay? (Wait until I tell everyone what I heard about Khosla).

Here’s the funny thing about the blender’s credit: Who does it really benefit? You answer that question by looking at the groups who are lobbying to keep the credit: Ethanol producers, farmers, lobbyists for both groups, and farm-state politicians. Oil companies have argued that the subsidy be ended. The credit is designed to make ethanol competitively priced with gasoline. If the blender is getting the credit, they can buy ethanol at $3.50 a gallon, sell it at $3.00, and break even. The credit is being passed on, which is the only reason E85 blends are ever less expensive than gasoline. (However, lately the price of ethanol has been so high that even the credit can’t bring the price into parity with gasoline). If the subsidy was going to the ethanol producers, then instead of selling the ethanol at $3.50 a gallon, they would have to drop the price to $3.00 a gallon in order to move product. In that case, they would pocket the subsidy. Either way, they made the same amount of money, and the cost to the oil companies was exactly the same. Yet Khosla has to paint this as one more way that the big, bad oil companies are ripping people off. I suppose we should just trust him.

At the 34:10 mark, Khosla brings up another old canard:

Vinod Khosla: Corn ethanol has 1.2 to 1.8 the energy compared to the energy in. By the way, petroleum is 0.8, so ethanol is about twice as good as petroleum. Because they always forget to mention that petroleum doesn’t produce a unit of energy out for every unit in. There’s transportation, there’s refining, there’s all those costs.

If Khosla’s credibility wasn’t already in tatters, then it should be now. The energy balance of corn ethanol is significantly worse than for gasoline. The 1.2 for ethanol versus 0.8 for petroleum is comparing apples and oranges. They are looking at an efficiency in the case of petroleum, but an EROEI in the case of ethanol. If you want to compare apples to apples, the EROEI for petroleum, even in a poor field, is 10/1 or better. Throw in the refining step, which is also 10/1, and you have an EROEI of 5/1 or better for gasoline, compared to 1.2 or so for corn ethanol. On the other hand, the efficiency of corn ethanol is 20-30% (versus the 80% he mentions for petroleum). If you doubt this, do a simple experiment. Let’s say you have 1 BTU of energy to invest. Tell me how many BTUs you will end up with if you invest into ethanol, versus investing into petroleum. Work the problem out, and you will see why Khosla’s claim, repeated by ethanol proponents everywhere, is completely bogus.

Something Smells Fishy

Let’s recap. Khosla says that ethanol is significantly cheaper to produce than gasoline, that Brazil has shown us the way, that there are “significant carbon emission reductions”, and oh, by the way, it has an energy balance twice as good as petroleum. Yet despite all of those supposed advantages, he is requesting legislation and funding an initiative in California, in order to level the playing field. Who is he kidding? Khosla is trying to hedge his bets. He invests in ethanol producers, and then tries to influence legislation to help out those producers. Yet with all of those claimed advantages, if Khosla believes what he is saying he should spend less time lobbying, and more time building his own cellulosic ethanol plants and E85 pumps. One wonders why he doesn’t. Seriously, if you had a product that is as good as claimed, would you spend any time lobbying for even more advantages? No, unless the product really isn’t as good as advertised.

My Position

I am a staunch advocate for energy independence. But the core problem is that we use far too much energy. We can legislate and mandate E85 all we want, but we can’t mandate it into existence. Forcing nation-wide adoption of ethanol makes about as much sense as mandating that all 50 states grow mangoes: Yeah, it could be done, but at what price? And is it sustainable?

Despite my harsh assessment of Khosla in this essay, I do believe that he deeply cares about energy independence. He is enthusiastic about his product, and charming in his delivery. I just believe he has let his enthusiasm (and possibly his investments) cloud his judgment. I would like to see him take a more critical examination of the claims he is repeating. His presentation slides were slick, but his research, as I documented in this essay, was shoddy. The only reason he has gotten away with it with so many people is because of his reputation, which was forged in an entirely different industry. If oil companies lobby against windfall profits taxes, they are “evil”, and “standing in the way of progress”. But Khosla is lobbying, and his efforts promise to put money in his pocket. Personally, I find this behavior unethical, especially when he criticizes the lobbying efforts of his opposition.

I strongly support heavily funding research into cellulosic ethanol. It has the potential, with some technological breakthroughs, of making a contribution toward energy independence. However, counting on it to deliver, while more viable options are pushed to the background, is incredibly foolish energy policy. This is too serious an issue to allow someone like Khosla, who is clearly misinformed (and has a vested financial interest), to dominate the debate. I will not quietly allow that to happen. None of us can afford to.

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July 25, 2006 - Posted by | cellulosic ethanol, E85, energy balance, ethanol, ethanol subsidies, Vinod Khosla

35 Comments

  1. <> Pike said: “If the technology is good enough for Mr. Khosla, it’s good enough for me. I know that guy has done his research, so I trust him. I will leave all of the scientific data and research to him.” <>I’m sure Khosla has done research, but not research on the feasability of ethanol from a thermodynamcis or process perspective.His research (and that of his financial advisers) has no doubt been from the perspective of whether ethanol is a good business investment. And the answer to that has to be, “Yes.”Any business that has almost complete support from our politicians, and that is propped up with tax credits, subsidies, protective tarriffs, and mandates, is a business that no doubt will be profitable. (No matter the thermodynamics of ethanol.)Khosla and Bill gates have attracted undue attention for theie wisdom in investing in ethanol. They are wise to nvest un ethanol, but not for the reasons the ehtanol lobby wants us to think.It would be difficult for any businessman interested in making money to ignore the potential profit in a business that is dependent on tax credits, subsidies, and political mandates.If I owned a widget factory and could somehow persuade politicians to pass a mandate requiring everyone to buy my widgets, Khosla and Gates would probably want to invest money in my factory too. Best,Gary Dikkers

    Comment by Gary Dikkers | July 25, 2006

  2. “….the actual breakdown of vehicle fuels in Brazil at the present time (by volume) is 53.9% diesel, 34.9% gasoline, 17% ethanol and 2.9% natural gas.”Adds up to 108.7%, a little more and the Brazilians will truly be giving 110% toward fuel independence!

    Comment by Anonymous | July 25, 2006

  3. <>Adds up to 108.7%, a little more and the Brazilians will truly be giving 110% toward fuel independence!<>That’s pretty good! I got that directly from a presentation from the Brazilian Ministry of Mines and Energy. When I was writing them down, I actually thought “better check and make sure those numbers add up.” But with all of the edits and drafts, I forgot to do that.I have the presentation at home, so I will look at it when I get home and see if I can figure out the discrepancy. I suspect there is some mixing of volumes and BTU equivalent volumes, but I will try to confirm later today.Cheers,RR

    Comment by Robert Rapier | July 25, 2006

  4. <>Adds up to 108.7%, a little more and the Brazilians will truly be giving 110% toward fuel independence!<>I found the problem. I looked up the presentation, and the error is in the gasoline number. The ethanol has been counted as ethanol, but then the gasoline volume also contained ethanol. I need to back the ethanol out of the gasoline number. Thanks for the heads up. I will make the correction in the essay.Cheers,RR

    Comment by Robert Rapier | July 25, 2006

  5. Incidentally, there are two additional things I should mention about the statistics from the Brazilian Ministry of Mines and Energy. The ethanol number of 17% includes both anhydrous and hydrated ethanol in approximately equal proportions. If I am not mistaken, they allow their hydrated ethanol to contain up to 5% water. So, the 17% is not pure ethanol. Second, since the energy content of ethanol is lower than for the fossil fuels, the actual amount of fossil fuels displaced by the 17% ethanol is about 10%.Cheers,RR

    Comment by Robert Rapier | July 25, 2006

  6. What is the EROEI of biodiesel derived from snake oil?

    Comment by Robert McLeod | July 25, 2006

  7. <>What is the EROEI of biodiesel derived from snake oil?<>I think it is equivalent to 2.5 Khoslas. 🙂Cheers,RR

    Comment by Robert Rapier | July 25, 2006

  8. FYI, I have gotten a pair of e-mails from Mr. Khosla, and will have the opportunity to argue my case with him by e-mail and phone. Cheers,RR

    Comment by Robert Rapier | July 26, 2006

  9. <> I have gotten a pair of e-mails from Mr. Khosla, and will have the opportunity to argue my case with him by e-mail and phone. <>Good on you. Go get him.Gary Dikkers P.S. What if he converts you? 😉

    Comment by Gary Dikkers | July 26, 2006

  10. <>What if he converts you? 😉 <>Oh, I am a tough nut to crack. Besides that, I have the facts on my side. 🙂Cheers,RR

    Comment by Robert Rapier | July 26, 2006

  11. Great article, BTW. Very convincing.You might want to be aware of an interesting result from game theory and economics. It is immpossible for two rational, honest individuals, who each view the other as rational and honest, to knowingly and willfully “agree to disagree.” This result is due to Robert Aumann, Annals of Statistics, 1976.The formal statement of the theorem is that if the beliefs of two (rational, honest) parties on a factual matter are common knowledge, then the beliefs must be the same.The formal proof is short but obscure. An informal justification goes something like this. Since he is rational and honest, he will be pursuaded by evidence; and my own steadfast refusal to accept his position ought to be evidence that I have strong grounds for my own view. The fact, then, that he is not persuaded even in the face of such good evidence must mean that his own grounds for his position are even stronger than I thought. And since he can reconstruct this reasoning on my part, my own refusal to switch positions must offer even yet stronger evidence to him that my stance is well founded, hence his refusal to switch must force me to give his views even more credence.In this way we get an infinite regression, at each step the implication being that each person’s independent views that justify not switching must be stronger and stronger. In the end the only way that people can knowingly disagree is if the independent evidence for both of them is infinitely strong, and this is impossible both because infinitely strong evidence doesn’t exist, and if it did, two people couldn’t have infinitely strong evidence for different positions.Anyway, this little-known result means that you and Khosla cannot end up disagreeing if you respect each other as honest and rational. You might keep this in mind while debating with him.

    Comment by Hal | July 26, 2006

  12. <>It is immpossible for two rational, honest individuals, who each view the other as rational and honest, to knowingly and willfully “agree to disagree.”<>My concern is that he is in too deep to change his position. He is one of most visible ethanol proponents in the country, having made many TV and legislative appearances. I just hope to convince him to take a more critical look at the issues.Cheers,RR

    Comment by Robert Rapier | July 26, 2006

  13. Maybe it is because I am from Indiana where I’ve seen a lot of corn, but it pretty evident to me that growing corn is more sustainable than pumping oil.And, I am told that switchgrass takes a lot fewer inputs and produces more outputs–once the enzyme price comes down.I believe the Dept of Agriculture / Dept of Forestry study suggests 30% of petroleum can be replaced by bio-based ethanol.If you accept that we can conserve at least 50% of current use simply by moving to high-efficiency hybrids like the plug-in Prius, then I think we are very close to total indpendence from foreign oil.Therefore, your argument is rejected in part and accepted in part.

    Comment by Original_Jeff | July 26, 2006

  14. I think you did a good job of debunking ethanol.But most people forget to mention or choose not to mention the moral reasons for not using ethanol.We know that Brazilians are chopping down the rainforests to plant more sugar cane. Do we realize that this can have more severe repercussions long term for the entire planet.Thousands of people die from starvation in a day. In addition, we are yielding less and less corn and grain. Does this mean we should use corn for ethanol for our cars or feed people.Lastly, I am not using these arguments to support oil. I believe in sustainable energies, but ethanol is a hoax.

    Comment by Anonymous | July 26, 2006

  15. Robert, in light of your latest excellent piece, I thought I’d pass this one along.“Corn Rush — ‘Ethanol Fever’ Needs a Reality CheckNew America Media, Christopher D. Cook, Jul 13, 2006Editor’s Note: Political, corporate and media support of corn ethanol as an alternative fuel can’t hide serious problems with this energy source, the writer says. New America Media contributor Christopher D. Cook is the author of “Diet for a Dead Planet: Big Business and the Coming Food Crisis” (New Press). He has written for Harper’s, The Economist, The Christian Science Monitor and elsewhere. SAN FRANCISCO–America has a bad case of ethanol fever. Amid soaring oil prices and concerns over global warming and national security, corn ethanol has been anointed as the magic bullet for America’s energy troubles. Fueled by bipartisan support and bushels of good press, U.S. agriculture is plowing unprecedented harvests of maize into fuel. Ethanol firms are going public, corn futures are selling like hot cakes, and on May 30, Renewable Fuels Association president Bob Dineen rang the New York Stock Exchange’s opening bell.At first glance, corn ethanol’s appeal is compelling. It’s a homegrown energy source that reduces fossil fuel consumption. From Wall Street to Main Street, the ethanol boom has sparked new markets, padding some farmers’ wallets (and, more considerably, those of industry leader Archer Daniels Midland). Roughly 18 percent of America’s corn goes to fuel today — up from just 8 percent in 2000 — making ethanol the second-leading use of corn, after livestock feed. It’s cheaper and cleaner than petroleum gasoline, so demand and production are skyrocketing.But despite this allure, ethanol is not a free ticket out of our oil addiction. While production has ballooned to 4 billion gallons a year — slated by U.S. energy law to reach at least 7.5 billion by 2012 — there are critical, unresolved questions about ethanol’s benefits and costs. In fact, this headlong Corn Rush risks considerable collateral damage to the environment, American farmland and food production — and to all who drive and eat.Most pressing are the environmental and energy-draining impacts of large-scale ethanol production. The industrial farming deployed to meet the growing demand for corn relies on petroleum-based fertilizers and pesticides, ironically adding to fossil fuel consumption. Corn is also a gas-guzzler: It takes six gallons of diesel, nearly five gallons of liquid petroleum gas, and more than 380 gallons of natural gas to farm a single acre of corn, according to USDA data. Although technological efficiency is improving, ethanol processing plants gobble up vast quantities of water, electric power, and, at some facilities, coal. All told, there is considerable debate among researchers about whether ethanol uses up as much or more energy than it saves: Estimates vary widely, from a 29 percent net energy loss to a 67 percent gain.Even if one concedes that corn biofuel is an energy winner, there are important environmental and sustainability impacts to consider before taking the ethanol plunge. As production becomes increasingly industrialized, pressures to squeeze more corn from already depleted Midwest soils are intensifying — requiring more petroleum and chemicals. Some 98 percent of corn farms use chemical herbicides, applying more than 200 million pounds annually. More than 65 million pounds of toxic Atrazine spray, a likely carcinogen whose residues are found in rivers and streams across America, are dumped on corn crops each year.The inherent tensions between farming for energy and farming for food also must be factored into the ethanol equation. While ethanol narrowly trims greenhouse gas emissions and dependency on foreign (not to mention domestic) oil, coaxing fuel from America’s already-taxed farmlands is neither a sufficient nor sustainable means of meeting currently bloated energy demands. There is simply not enough farmland to supply America’s fuel, and efforts to milk the land of every possible drop could impoverish future food production. As more corn and farmland goes to fuel production, experts like Lester Brown of the Earth Policy Institute have raised important concerns that diminished food grain supplies could hurt low-income consumers. According to Brown, one person could be fed for an entire year on the amount of grain used to fill a 25-gallon SUV gas tank with ethanol.Furthermore, more corn for fuel means less farmland for fresh local food, which could reduce fossil-fuel consuming shipments that currently average roughly 1,800 miles per item found in our grocery stores. Experts such as Cornell University’s David Pimentel have found that U.S. farms already gobble up some 400 gallons of fossil fuels each year just to feed every American. Expanding corn ethanol will, for any of its benefits, only increase agriculture’s petrochemical footprint.We need an energy policy and agriculture that guzzle less, not more. Corn ethanol could be one small ingredient, along with a healthy mix of cellulosic biofuels that turn plant residues into clean energy. But proven renewable sources such as wind and solar energy offer promising returns with fewer ecological side effects, and ought to be key ingredients in our future energy supply.Ultimately, with well-documented global warming trends breathing down our collective necks, we cannot simply replace oil-powered cars with the lesser evil of those run by corn fuel. Far greater changes are needed in production and consumption if we want sustainable energy and agriculture in our future.”Original article here:http://news.newamericamedia.org/news/view_article.html?article_id=2329e6f5b7aeea555cf71cdc2f0c1329

    Comment by fallout11 | July 26, 2006

  16. <> Original_Jeff said, “Maybe it is because I am from Indiana where I’ve seen a lot of corn, but it pretty evident to me that growing corn is more sustainable than pumping oil.” <>Jeff,If you still live in Indiana, you haven’t been paying attention when your farmers grow corn. The unfortunate truth is that with modern, industrial farming methods, growing corn is neither renewable nor sustainable.At every step of modern agriculture, growing corn requires the continuous use of fossil fuels to generate a crop.When farmers plant their corn on the same fields year after year, they deplete the soil, and then must apply prodigious amounts of nitrogen fertilizer each spring to acheive any kind o yield. And the problem with that of course is that over 90% of that nitrogen is made from natural gas. Take away natural gas and we could still grow corn, but we would have to do it as my Grandfather did: By rotating crops, sometimes letting a field lay fallow, and using waste from the livestock as fertilizer. My Grandfather did that and ran a susatinable farm, but he also achieved yields of only about 60 bushles/acre instead of 200+ as today’s farmers do. But to get those yields, today’s farmers MUST use synthetic nitrogen fertilizers made from natural gas.Today’s farmers must also use pesticides, fungicides, and herbicides made from fossil fuels, and then use more fossil fuels to apply those chemicals.Modern corn farmers do little more than drive fossil fuel-burning tractors while spraying fossil fuel-based fertilizers and chemicals on their fields. That is solely dependent on fossil fuels, and is NOT renewable argiculture.One of the biggest con jobs modern agribusiness continues to pull on us is their continual claim that corn ethanol is green and renewable. (A claim that Vinod Khosla has apparently fallen for hook, line, and sinker.)The truth is that modern corn farming and corn-based ethanol cannot be considered “renewable.”Call corn ethanol “renewable” only leads to a thorny paradox that too many overlook: How can a fuel that is utterly dependent on unrenewable resources be considered “renewable?”Best,Gary Dikkers

    Comment by Gary Dikkers | July 27, 2006

  17. Thanks, Gary, your post was informative. In virtually all the stories I’ve read on ethanol, the scientists always say that corn is not a desirable feedstock for ethanol production, and now I understand why!

    Comment by Original_Jeff | July 27, 2006

  18. Gary dikkers said: “But to get those yields, today’s farmers MUST use synthetic nitrogen fertilizers made from natural gas.”Not true. Study after study shows organic yields match synthetic fertilizers (one example: http://whyfiles.org/shorties/182organic_ag/). Synthetic fertilizers do not produce more bushels per acre, but they DO produce more bushels per labor hour. That’s why organic costs more. Should energy costs rise dramatically relative to labor costs, organic could become cost effective.

    Comment by Anonymous | July 27, 2006

  19. <> Anonymus said, “Not true. Study after study shows organic yields match synthetic fertilizers. Synthetic fertilizers do not produce more bushels per acre, but they DO produce more bushels per labor hour. <>Anon,We don’t disagre, I just didn’t phrase things very well.I was talking about modern agribusiness corn farming — the industrial corn farmers who drive a tractor burning 25 gallons of diesel fuel per hour and spray and spray natural gas-based fertlizers and petroleum-based pesticides, fungicides, and herbicides on the depleted soils in the same fields year after year.The “drive and spray farms” where one farmer can handle 1,000 to 1,200 acres by himself. Those industrial farms are dependent on fossil fuels — in fact, they are just as addicted to fossil fuels as everyone else in our nation.I am aware that sustainable, organic farms can acheive yields that equal or better industrial farms — especially small organic fruit and vegetable farms where the farmer loves his work and is a true steward of the soil.But when you drive acorss Illinois, Indiana, and Iowa and see mile after mile of corn planted fence row-to-fence row you aren’t looking at sustainable, organic farms. Those are factory farm operations completely dependent on fossil fuels.As I said, my Grandfather ran a sustainable farm growing corn, oats, alfalfa, and timothy in rotation. He also kept cows and hogs — feed them with some of his corn and oats and used their manure as fertilizer. (He never bought a pound of nitrogen fertilzer in his life.) He wasn’t deliberately an organic farmer, that’s just how farming was in the 1940’s and 50s.He also got corn yields of about 60 bushels/acre, and I don’t know what else he could have done to increase his yields to the 200+ bushels/acre of today other than plant the corn rows closer together. (I remember as a kid walking through his corn between the rows. No way anyone can do that today because corn is planted so closely together.) Something caused the difference between his 60 bushels and today’s 200+ on an industrial corn farm. Some is no doubt due to hybrid genetics, but I suspect natural gas-based nitrogen fertilizer is most responsible.Regards,Gary Dikkers

    Comment by Gary Dikkers | July 28, 2006

  20. <>I believe the Dept of Agriculture / Dept of Forestry study suggests 30% of petroleum can be replaced by bio-based ethanol.<>A recent study by the National Academy of Sciences placed that number at only < HREF="http://www.pnas.org/cgi/content/abstract/0604600103v1?ijkey=a487c3831ae6939a9bb711a8c0e82a72a227fe48&keytype2=tf_ipsecsha" REL="nofollow">12% <> of the current gasoline demand and that would require converting all available farmland to ethanol production, something that will never happen as people will still need to eat.

    Comment by Bob | August 4, 2006

  21. This is all a very interesting discussion. but let me ask a question:What if all the oil industry subsidies and military protection of our oil supplies were eliminated? To be intellectually honest, should not these government protections and expenditures of military oil usage be included when the costs and energy return on investment are calculated?Also, I have read SAE publications of Diesel engines running on dilute ethanol. Dilute ethanol costs less to refine allows the engines to run cooler and produce more power. The cooler combustion process also reduces NOx emissions below 2010 standards.If this technology, which can easily retrofit Farm tractors, is adopted by the corn growers, would not a significant portion of petroleum usage in growing energy crops be eliminated?Also, due to the lower costs of production, the farming of energy crops become more cost efficient and profitable for the farmers.This SAE data also shows increases in efficiency that allows one gallon of dry ethanol equivalent to almost match the net work done by a gallon diesel fuel. If wet 130 proof ethanol can burn more efficiently, cost less to produce and replace petroleum use in the farming of energy crops, then this form of fuel does become truly renewable, right? It just seems prudent to put all our intellectual capital into American made sustainable energy. This is good for our children, our country, and our industry.

    Comment by Anonymous | November 18, 2006

  22. <>What if all the oil industry subsidies and military protection of our oil supplies were eliminated?<>First of all, I do not believe in subsidizing oil. Do you know how much I detest the fact that soldiers are dying so we can presumably maintain a stable supply of oil? A lot.However, the status quo in the ethanol industry is that ethanol relies heavily on fossil fuels. So not only is it directly subsdized, it is indirectly subsidized as well by oil subsidies. After all, if they had to pay true costs for gas, diesel, etc. their costs would rise dramatically.<>This SAE data also shows increases in efficiency that allows one gallon of dry ethanol equivalent to almost match the net work done by a gallon diesel fuel.<>I have never heard this, and frankly I am pretty skeptical. A gallon of dry ethanol only has half the BTUs of a gallon of diesel. A gallon of 130 proof will only have 1/3rd the BTUs. Do you have a link for the claim?Cheers, RR

    Comment by Robert Rapier | November 18, 2006

  23. I went to the SHEC labs Energy Equivalence Calculator (http://www.shec-labs.com/calc/fuel_energy_equivalence.php) and it list the BTUs in a gallon of ethanol as 78789.802995 (don’t think they need that many significant figures) and the BTU in a gallon of Diesel as 138205.06427 which calculates to 57%. So theoretically, assuming that the conversion of ethanol to useful work was the same as the Diesel, than you would consume 1.754 gallons for every gallon of Diesel previously used.

    The SAE paper said that on Diesel fuel the thermal efficiency at 1750 RPM and full load for that RPM was 27%. This means that of the 138205 BTUs in a gallon, 37315 BTU of mechanical work were measured at the flywheel.

    When this engine was run on homogeneous (multiport fuel injected in the manifold – no direct injection) 130 proof ethanol the thermal efficiency was 42% Now, water flow into the engine does not provide any BTU to the combustion process, so we treat the water content of the fuel kinda like a sophisticated water injection system and therefore subtract the water portion out of the fuel consumption rate.

    Therefore on a dry gallon of ethanol equivalent, of the 78789 BTUs, 42% of those BTUs were measured at the flywheel, or 33091 BTUs of mechanical work.

    So when you compare the Diesel baseline of 37315 to the 130 proof ethanol of 33091 per dry gallon equivalent, you are at 88.6% of the Diesel’s work output per gallon rather than the 57% that would be expected on ethanol.

    The SAE paper hypothesis is that the high water content changes the engine into an internal combustion steam engine of sorts. The phase change of the water to steam making the conversion of chemical energy into pressure more efficient and lowering the combustion temperature to avoid the formation of NOx.

    Comment by Anonymous | November 19, 2006

  24. I think you are mixing apples and oranges, though. A 130 proof alcohol solution is 65% ethanol. That would only have 0.65* 78789 BTUS, or 51213 BTUs. 42% of that number is 21,509 BTUs. This would be the relevant comparison to the diesel’s 37315 BTUs. So, in this case, the usable work from 130 proof ethanol is 58% of the diesel’s.

    However, I think the thermal efficiency of a diesel is actually quite a bit higher than the number you quoted. In fact, if you Google “thermal efficiency diesel” you will see many references to thermal efficiencies of over 50%. In fact, when I was poking around, I found this link that describes designs in the 60-65% range. This is a design, but many diesel engines have exceeded 40% efficiency in practice. This is why I favor biodiesel as our best alternative fuel option.

    Cheers, RR

    Comment by Robert Rapier | November 19, 2006

  25. Yes, you are correct, per gallon of 130 proof, you would only see 58% of the work done by a gallon of Diesel, but more dilute fuel is used so that the desired work is accomplished.

    At the same horsepower setting, you would consume 1.7 times the volume of 130 proof ethanol as diesel at that same setting, but the dilute fuel costs roughly $0.60 per gallon or $1.02 per equivalent work of 1 gallon of Diesel. Cost per Hp/Hr is the advantage. Over the road requires more tank volume to travel the same distance, but it will cost less per mile driven.

    The SAE paper discusses a 3 cylinder 1 liter diesel. As a rule of thumb, the larger the bore of the diesel, the more efficient it becomes due to the reduction in volume to surface ratio and therefore reduction in heat rejection. Needless to say, 42% thermal efficiency in a 1 liter diesel is a very impressive number. It is expected that it will be much higher in large bore diesels.

    Comment by Anonymous | November 20, 2006

  26. Concerning the EROEI figures, the 10/1 figure you claim may be true in the Middle East, but it is NOT true in the United States (it is like a third off that here). In addition, you fail to mention that this number has been decreasing ever since the first oil fields were tapped, and it WILL ONLY CONTINUE TO DECREASE. Also, you completely fail to take into account the very real instability of the supply of fossil fuels from the area where it is easiest to get it–which puts this country, as well as everyone else on the planet, in real danger. If Mr. Khosla is guilty of overselling ethanol, you are at least equally guilty of a lack of perspective about oil. We can not possibly conserve fossil fuels enough to make the precarious situation we are in go away.

    Comment by Anonymous | December 28, 2006

  27. I think it is important to questions claimed by any one who comes out making them especially when they are concidered experts.

    Where I think the debate trying to be entered into here falls short is that the angle is more on that Mr. Khosla is out to make money from his promoting of ethanol.

    Well what is wrong with that? The fact that he is out there trying to make a difference in the quality of life for us all through the reduction of carbon emmissions is a good thing, wheather he is going to make out of it or not. I can assure you if makes billions of dollars out this so will a lot of other people as well.

    So it is likely he won’t enter a debate with you because your topic is trite and you should ask your self this question. If I was Mr. Khosla what would I be doing different?

    Comment by Anonymous | January 6, 2007

  28. Ah, but ethanol from corn does NOT reduce carbon emissions! See these articles for why….“Carbon cloud over a green fuel”http://www.csmonitor.com/2006/0323/p01s01-sten.html“Ethanol-blend auto emissions no greener than gasoline: study”http://www.cbc.ca/canada/manitoba/story/2007/03/30/ethanol-emissions.html/“Corn ethanol does not reduce greenhouse gas emissions – report” http://biopact.com/2007/03/corn-ethanol-does-not-reduce-greenhouse.html “Top UK scientist calls biofuels scam:”http://www.timesonline.co.uk/tol/news/uk/article1909827.ece“Environmental warning on biofuels:”http://news.bbc.co.uk/2/hi/science/nature/6650743.stm“Dumber By The Day”http://article.nationalreview.com/?q=NDE2NmE2ZTUzOTM3MzNiZjhmN2VhZmMwN2IwOTMwY2E=

    Comment by fallout11 | July 3, 2007

  29. Ethanol is just another combustible fuel. Combusting hydrocarbons produces water and CO2 (ideally) which compounds the greenhouse effect. To solve the larger problem at stake, I believe we need to achieve 2 goals:a) Develop sustainable, zero-emission methods for producing and distributing electricityb) Convert all terrestrial vehicles to electric (zero CO2 emissions)If we achieve these two objectives, we have a chance at evading the hockey stick. Does ethanol agree with these objectives? Obviously not.

    Comment by Anonymous | July 22, 2007

  30. How about like the State of California we just buy the FFV’s and claim they are good for the environment even though there is virtually no E85 available in CA?State Senate hearing to focus on `flex-fuel’ vehicle purchases (52%)07/10/2007 – SACRAMENTO – Two state Senate committees on Monday scheduled an investigative hearing to examine why Gov….http://www.mercurynews.com/ci_6338520?IADID=Search-www.mercurynews.com-www.mercurynews.com

    Comment by Anonymous | July 28, 2007

  31. “The 1.2 for ethanol versus 0.8 for petroleum is comparing apples and oranges. They are looking at an efficiency in the case of petroleum, but an EROEI in the case of ethanol.”No. Khosla is neither looking at efficiency nor EROEI. It’s energy out/energy in, but not counting the sun’s energy in because it’s free. 1.2 looks like EROEI of ethanol but it’s actually 1 BTU ethanol / (0 BTU solar + .78 BTU fossil processing energy). .8 looks like production efficiency of gasoline but it’s actually 1 BTU gasoline / (1 BTU crude oil + .2 BTU additional fossil processing energy).EROEI is not a good financial metric for gasoline because it does not take into account the nearly $100/barrel paid for crude oil before the process even begins. The crude oil may be free for Saudi Arabia or for a US oil company (you work for) after finding some oil offshore, but to the US consumer, we want a metric that takes into account the crude price that’s passed on to us. Khosla is using such a metric.

    Comment by bostoncbr | December 6, 2007

  32. “No. Khosla is neither looking at efficiency nor EROEI. It’s energy out/energy in, but not counting the sun’s energy in because it’s free.”It was also free in the case of crude oil, which is captured, ancient sunshine. But, you wish to not count it in the case of ethanol, but count it as an input in the case of crude oil. So, as Robert said, the comparison is apples and oranges. The real question is how much energy was consumed to produce the energy you have after processing. Ethanol loses that by a mile, even though proponents try to muddy the waters with these apples and oranges comparisons.

    Comment by Storm Trooper | December 29, 2007

  33. “It was also free in the case of crude oil, which is captured, ancient sunshine”.It WAS free at one point for the US. Now our oil wells have been pumped dry and we rely on $100/barrel foreign oil. The real question to the US consumer is how much $ is needed to produce a BTU of automotive fuel. Since today’s sunshine is free and coal is cheap, ethanol wins. Electric cars are even better, but that’s another topic.

    Comment by bostoncbr | January 2, 2008

  34. That’s what everyone thinks, but it isn’t accurate. Ethanol is simply recycled natural gas. The recipe is to take 1 BTU of natural gas, create a dead zone in the Gulf of Mexico, erode the soil, drive up corn prices, and then create 1 BTU of ethanol, plus a few tenths of BTUs of animal feed (which of course can’t be burned). Subsidize the process. Sound like a winner?Why not just use natural gas directly? Did you know that Brazil, the ethanol poster child, uses about 10 times the amount of natural gas in vehicles that the U.S. does? They know better than to use it to make ethanol.

    Comment by storm trooper | January 2, 2008

  35. Corn ethanol plants have started to smarten up and switch from natural gas to coal. .78 BTU cheap coal : 1 BTU ethanol, not 1:1. Yes, natural gas should be used in cars directly, such as the Civic GX NGV. Yes, the ethanol subsidy should be temporary and stop as soon as possible. So should oil subsidies. Yes, the faster soil erosion needs to be addressed. I have no problem with higher food prices. The poorest Americans are also the fattest.

    Comment by bostoncbr | January 3, 2008


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