The Oil Drum | Vinod Khosla Debunked: Ethanol is NOT the Answer

216 comments on Vinod Khosla Debunked: Ethanol is NOT the Answer

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Don Sailorman on July 25, 2006 - 3:58pm

You have me convinced, RR.

Khosla did not do his homework.

Though an ethanol advocate, I do not see it as more than a niche fuel; like you I'm a big booster for geting alcohol out of biomass. (Sun chokes, also called jerusalem artichokes are my particular interest and area of expertise.)

One thing that puzzles me still (and seems also to puzzle you): VK is not stupid, nor is he a lazy man. Why then did he not do his homework? To me, this is very odd, but that is probably because there are some things I do not know about the man.

Tactically speaking, however, I think it is a mistake to question the man's integrity. Who knows, maybe he had a series of silent strokes and cannot any longer concentrate. Perhaps trusted subordinates lied to him. Who knows?

Thus, I question the relevance of the fact that if ethanol gets subsidies, then VK gets richer. He is already rich beyond the dreams of avarice, and to me it seems unlikely that further self-enrichment is his main motive.

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klee on July 25, 2006 - 4:31pm

"One thing that puzzles me still (and seems also to puzzle you): VK is not stupid, nor is he a lazy man. Why then did he not do his homework?"

He may simply be operating outside of his area of expertise. Engineers w/ PhDs are no less susceptible to cognitive dissonance than anyone else. As Paul Simon put it so succinctly, "Still a man hears what he want's to hear and disregards the rest."

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IFeelFree on July 25, 2006 - 5:07pm

A good example of what happens when engineers, self-deluded and operating outside of their area of expertise, is the cold-fusion fiasco of the late 80s. Two highly knowledgeable electrochemists didn't know how to make calorimetric or nuclear measurements properly, and thought they were getting much more energy from their devices than they were. The rest is history.

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Robert Rapier on July 25, 2006 - 5:23pm

One thing that puzzles me still (and seems also to puzzle you): VK is not stupid, nor is he a lazy man.

It puzzles me as well. I am not sure I understand what he is really thinking. Part of it is surely what klee mentioned: "He is operating outside of his area of expertise." But this is exactly why his claims have to be challenged. If he convinces everyone that we are going to transition to ethanol, and politicians support this vision, we are in deep trouble. We are going to hit Peak Oil with absolutely no backup plan, and a main plan that can't deliver on its promises. Meanwhile, Khosla will shrug his shoulders and say "It's all Big Oil's fault".

Cheers,

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Dave Cohen on July 25, 2006 - 9:21pm

Re: "puzzles me as well..."

See below, Mr Bubble.

There is a personality type that despite great worldly success and many millions or billions of dollars, can not stop. Matt would say they have a high level of fitness and I would just label them obsessive-compulsive and very highly acculturated. These in themselves rest atop genetic success. Which is why I am not a rich man. They were, in the immortal words of Bruce Springsteen, Born to Run.

How boring is that? Where's the intellectual spirit? Learn new things -- see the world, understand it! Ah, that's the challenge.

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Dave Cohen on July 25, 2006 - 9:42pm

I might as well go all the way. From Ecclesiastes

9. What has been will be again,
what has been done will be done again;
there is nothing new under the sun.
10. Is there anything of which one can say,
"Look! This is something new"?
It was here already, long ago;
it was here before our time.
11 There is no remembrance of men of old,
and even those who are yet to come
will not be remembered
by those who follow

And so with Mr. Khosla and his ethanol bubble. One can argue (I'm sure he would) that he is trying to change the world. If you or your minions are reading here, Mr. Khosla, I think you are just trying to make more money and you have fooled yourself into thinking that your actions will change the world. There is nothing new under the sun.

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AlphaMaleProphetOfDoom on July 26, 2006 - 12:32am

RR,

Two things:

#1: I hope you guerilla press slam him as mentione above.

#2: Remember the crowd in any venue outside of TOD will be on his side. You're saying "hey crackheads, time to get off the pipe!!!" He's saying, "hey crackheads, time to switch to some 8-balls and new dealers!!!" Who's the good guy and who's the villian from the persective of the crowd? Keep in mind you work for (insert dark ominous drum beat) BIG OIL!!! . . . so obviously you're on the payroll.

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fleam on July 26, 2006 - 1:49am

Praising a Vinod type for fitness is like the other cells in the tumor praising an especially rampant cancer cell for being successful. It only makes sense from the perpective of a cancer cell participating in a tumor.

In terms of normal cells or normal human existance, we're all cancer cells.

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Will on July 26, 2006 - 2:24am

I dunno Matt.

The fact that RR has been contacted suggests to me that Khosla is concerned about the situation. It indicates:

RR's case is too compelling to ignore or discredit.
These blogs have more influence than we realize.

And so... an excellent opportunity to present credible information and get MSM coverage has presented itself.
It's a natural David vs. Goliath, speaking truth to power... story.

A rumble won't do.

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LevinK on July 25, 2006 - 5:28pm

"Why then did he not do his homework?"

The cinic in me says this is nothig else than a well-thought marketing operation to convince the public and the policy makers most of which understanding too litlle of science.

So I think just the opposite - he did his homework, but the homework was not on that subject you were assuming here.

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TN Granny on July 25, 2006 - 9:53pm

I think Khosla has a cognitive problem. He has always dealt in an area that has few limits other than imagination and where exponential growth is possible and expected. Nothing in his life experience has prepared him for dealing with real, hard and fast physical world laws of nature. Therefore he `feels' that ethanol is no different and if we need it, then by golly, he is going to made it happen! In order to sell his idea, he may have the `stretch the truth' a little bit. Anyone here ever had an IT project a little(lot) late, over budget and not exactly what you were promised it was going to be?
Geologists, petroleum engineers, and even farmers know all too well, that no amount of trying is going to find oil where there is none nor grow a crop on rocks. So for those people who have been constrained in their professions by physical reality all of their careers can see the difficulties with ethanol production. (thank you RR for an excellent analysis). All farmers know about the capriciousness of the weather and the random unpredictability of nature. Most of our attempts to circumvent these problems have been to throw oil in some form at food production. Even the much vaunted GE crops really have only produced two basic new adaptations and one of those is simply to allow the plant to survive an oil-based herbicide!
Of course we are all products of our individual life history and I have been subjected to many, many team building courses over the years in which one of the principles instilled in me was `Assume Innocence' and look for the underlying reason.
The really big danger, as others have pointed out, is that Mr. Khosla has the ability to lead us down the wrong path thinking that we do not need to conserve and develop more energy-efficient transportation methods. Most of us(myself included) would prefer to keep driving our personal vehicles if we think that is an option and this is the danger.

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Dave Cohen on July 25, 2006 - 9:59pm

The sainted Daniel Yergin has made the same argument, believing that high-tech toys like cell phones are akin to new sources of energy. And see my remarks above.

Re: "physical world laws of nature"

Ooops!

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LevinK on July 25, 2006 - 11:05pm

Don't start me on software projects - the primary reasons I am a pessimist by nature is my experience in environments where people don't know what they want and what they are doing. If achieving energy independance is going to be handled like a typical software then we'd rather head for the hills right now... and we'd beware of the bugs :)

On topic - IMO opportunistic VC like Mr.Khosla does not have the power to lead us down either the right or the wrong paths. I'm pretty sure the more or less wrong and right paths are already known pretty well within policy makers, but in order to be implemented a much more long-viewing leadership would be required. Until we get that we're going to see govts going around the problem with boondoggles like ethanol as a best case. The worst case would be going to wars...

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Nate Hagens on July 25, 2006 - 5:58pm

He is already rich beyond the dreams of avarice, and to me it seems unlikely that further self-enrichment is his main motive.

On this I have some experience, and must disagree. Most very wealthy people I know (I used to be a high net worth broker) don't ever consider the fact that they have enough money for them and their families forever. Not only do they continue to invest, but the bar gets higher and higher. Its not about the money, its about the feelings one gets by the process of making the money, whether its $5 mil to $10 mil or $1 bil to $2 bil. There are execptions, but they are just that. Maybe Mr Khosla is immune to our societal signals of fitness, but that would be rare.

Its like driving backwards in an Avis rental car lot - you can go forwards but if you go backwards your tires burst.

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Don Sailorman on July 26, 2006 - 11:50am

With all due respect and weight given to your experience with wealthy people, I have known some of the hyper-ultra rich since the age of thirteen, when I went to a private school. Also, with all due respect to both Hemingway and F. Scott Fitzgerald, they got it 100% wrong about the "very" rich.

I'm not talking millionaires or multimillionaires or even families with a paltry few billions. Take a look at the Bill Gates family or that of Warren Buffett--those are the magnitudes I'm talking about. Based on the limited sample of those I'm on a first name basis with (and of course this is a biased sample) not a single one gives a flying fig about money or the accumulation of greater wealth. After first five billion, most people just stop counting. The Buffett children are some of the nicest people in the world, and talk about naive: Until they went away to college, none of them knew that Dad was one of the richest people in the world; it had never ocurred to him to tell them, and none of them (Dad included) is interested in accumulating wealth for the sake of wealth.

Thus I think it is highly highly questionable to assert that VK is motivated (or primarily motivated) by the desire to accumulate more wealth.

Herewith is my WAG: I think he sees himself as a prophet and a "savior," and that is his primary motivation.

But I am still puzzled by his failure to do his homework--UNLESS (and here comes another WAG) he thinks he can create a self-fulfilling prophecy. This last conjecture makes sense, and I always like my conjectures to at least sound reasonable.

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Mike Hearn on July 26, 2006 - 12:16pm

The other alternative is that there's more to this story than meets the eye of course ...

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Nate Hagens on July 26, 2006 - 1:12pm

I never said anything about VK. I said wealthy people in general and there are exceptions. Also, its the feelings one gets that are pursued - usually wealthy people cant get the dopamine and other feel good reactions by doing other things they can by making $50 million by lunch. Some, perhaps as you mention Bill Gates, and your other friends, can. But the social fitness meter can VERY rarely be turned off. Perhaps Vinod would like to be viewed as a savior, I dont know. And its not just my experience, much neuroscience is pointing to these same conclusions - read the link I posted above or "American Mania" by Peter Whybrow.

My personal view is that we all have dopamine (which led to resource acquisition and fitness in the past) amplitude meters -say from a scale of 1-10. Those that never really experience too much higher than a 3 are completely content to live in a small rural house and plant potatoes. Those that through, money, drugs, sex, wild experiences, travel, consumption, etc that have their amplitude turned up to a 7 or 8 will still be seeking 'more'. Its the wanting thats hurting society. I have nothing against Vinod Khosla (other than him being wrong and misleading people he looks like a sincere, caring fellow), but rich successful people CAN'T just turn this mental machinery off when they quit/retire/switch careers -and the thing that has been proven to produce dopamine in the past (your friends notwithstanding) is making money.

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R W Reactionairy on July 26, 2006 - 8:51pm

Don, both Gates and Buffet are strange birds, but if they were not interested in more money based on whatever motivation they would not be where they are.

If Microsoft had "worked and played well with others" it would not be the company that it is.

If Buffet had played money games only to satisfy his own needs, he would have been out of day to day stuff at Berkshire Hathaway at least twenty years ago [he probably could have quit at the bottom of the great bear market in 1974 ... and never needed to look back. Incidentally, his father [a conservative] was IIRC a congressmen, so Warren was hardly under priveledged as a chils.

It very much irritates me that while both of these men are putting their money into trusts [which keeps them from being subject to death taxes] they advocate imposing death taxes on the estates of if not eh "little people" at least the "littler people." What gives with that bit of nonsense?

Maybe you are correct in asserting that there are more than a few of the very wealthy who see their role as being the saviors of the masses. No thanks, I'll take religion as religion and megolamania as a fact of life.

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Gunga2006 on July 25, 2006 - 9:35pm

I think he did his homework and realized he could make a helluva lotta money if he palyed his cards right.

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Gunga2006 on July 25, 2006 - 9:38pm

I think he did his homework and realized that he could make a helluva lotta money if he played his cards right.

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ET on July 26, 2006 - 12:06am

I haven't read Mr. Khosla's stuff, but, judging by the debate, he reminds me of Amory Lovins and his advocacy of hydrogen/fuel cells as a 'solution' for our energy problems. It seems like some people are inveterate snake-oil salesmen. They grab onto something that sounds real good and tout it to the skies with lots of VC money and a raft of purchased 'scientists' to back them up.

Funny, come to think of it, Lovins and his hydrogen scam haven't gotten much play on TOD, or maybe I just missed it.

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enduse on July 26, 2006 - 2:55am

Lovins' main story is conservation, not fuel switching, as far I see it.

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ET on July 26, 2006 - 12:10pm

I don't get that impression at all looking at his web site stuff on hydrogen:

http://www.rmi.org/sitepages/pid985.php

In fact, in this section:
3. Making hydrogen uses more energy than it yields, making it impractical.

he does the same bogus calculations showing how much more 'efficient' it is to produce hydrogen and use it in fuel cells than it is to produce gasoline. He also talks about the entire car fleet running on fuel cells. He is obviously a visionary like Khosla :-P

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tstreet on July 27, 2006 - 10:49am

Lovins is brilliant and has done some incredible expositions of the power of conservation. His expertise in the energy field is is unsurpassed. I find it amazing that he is so enamored with hydrogen and ethanol. The man knows what he is doing. Now a debate with him is something I would rather see than one with Khosla. Khosla is out of his league and/or he is just another run of the mill charlatan. Khosla is just another person who is part of the group of politicians, uninformed citizens, neocons, and others who have joined the wishful thinking of the ethanol bandwagon. Sadly, when this wagon crashes, it is the rest of us who will have to pick up the pieces and pay the bills. Meanwhile, the clock is ticking.

At the end of the day, it doesn't really matter what Khosla's motivation is. The fact is he is wrong and is just one of many people who are misleading the public. Too bad he has the blow horn.

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216 comments on Vinod Khosla Debunked: Ethanol is NOT the Answer

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“The aim of every political constitution is, or ought to be, first to obtain for rulers men who possess most wisdom to discern, and most virtue to pursue, the common good of the society; and in the next place, to take the most effectual precautions for keeping them virtuous whilst they continue to hold their public trust.”

—James Madison, FEDERALIST #57 (1787)