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Monday, April 23, 2007

Vinod Khosla bets on with clean fuel tech

I had earlier affirmed in my post here how clean fuel technologies are becoming a rage with VCs. That was about VC Vinod Khosla’s investment as a part of $60 m VC round in Celunol, a cellulosic ethanol technology venture based out of Cambridge, Mass and his exit later when Celunol was acquired by biotech company Diversa for $ 182 m.

Now Larry Fisher of NYT reports that Vinod is backing yet another ethanol venture LanzaTech, based in Auckland, Newzealand – that produces ethanol from an untapped source – carbon monoxide gas.

As per report, LanzaTech had developed a fermentation process in which bacteria consume carbon monoxide and produce ethanol. Ethanol can be used as an alternative fuel or an octane-boosting, pollution-reducing additive to gasoline.

Sean Simpson, LanzaTech’s co-founder and chief scientific officer, is reported to have said the company would use the $3.5 million investment from the venture firm, Khosla Ventures, to establish a pilot plant and perform the engineering work to prepare for commercial-scale ethanol production.

Vinod Khosla, a co-founder of Sun Microsystems who formed Khosla Ventures in 2004, has invested in more than a dozen start-ups involved in “clean fuel” technologies. It seems LanzaTech stood out from the scores of proposals he sees each day for both its ability to scale up to industrial proportions and the credibility of the company’s founding scientists.

Regardless of how it is made or what it is made from, ethanol as a fuel has its detractors. Some plastics and rubber materials commonly used in fuel lines are degraded by ethanol, and depending on the blend of ethanol and gasoline, ethanol may raise levels of nitrogen oxides produced. Ethanol also contains less energy than an equivalent amount of gasoline, so mileage may be reduced.
But then for Vinod Khosla, it's still a weapon to use in the all out war on oil.

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