Khosting on Fumes

Our old friend Vinod Khosla is back in the news, this time with something to show for his efforts: the world’s first commercial-scale cellulosic ethanol plant, just given regulatory approval in Georgia:

The company [Range Fuels Inc.], owned by Sun Microsystems co-founder Vinod Khosla, plans to break ground on its 100-million-gallon-per-year factory in Soperton this summer. Cellulosic ethanol has not yet been produced on a commercial scale.

“This is an innovative new technology, and we believe we will be the first in the United States, and possibly the world, to build a profitable plant,” said CEO Mitch Mandich. “We believe the [technology] will be — and is — feasible.”

I also have great confidence in the ability of Khosla, Mandich et al. to turn a profit, especially given that their company is producing a product that both receives taxpayer subsidies and the use of which is mandated by federal law. Oh, and there is the small matter of the grants and abatements they’re receiving from the state and federal government to build the plant:

Range Fuels is in line to receive $76 million in construction and production grants from the Energy Department. Georgia, which has 24 million forested acres, is giving Range Fuels tax abatements, cheap land and grants that could top $10 million.

Here’s my standing offer to advocates of alternative fuels: if you arrange $86,000,000 in seed money and concessions, I’ll build an ethanol plant myself. Not by hand, of course, but I’ll definitely walk around the construction site with a safety helmet and some rolled-up blueprints. Someone’s got to supervise.

For an excellent take-down of Khosla’s cynical rent-seeking, read Shikha Dalmia’s open letter. She even plays the “we’re both Indian émigrés” card. Fantastic.