Ethanol – The next BIG thing??

If you drive a vehicle that runs on fossil fuel (read: petrol, diesel, gasoline) this should interest you.

A fuel called E85 is catching the fancy of investors, environmentalists, oil, and agribusiness giants alike. It contains 85% contains ethanol hence the name. It is slated to be the next big thing in society’s quest to get the ultimate “Clean Fuel”.

Till recently “Clean Fuel” looked like more hype and less substance. But now having caught the fancies of maverick VC Vinod Khosla and bootstrapper extraordinaire Richard Branson,it is gaining some attention.

CNN Money captured some interesting facts regarding ethanol and buzz surrounding it, in an article titled “How to beat the high cost of gasoline. Forever!“. You can find a short version of the article here.

The last paragraph of the article caught my attention….

…..“Of course, the timing of when ethanol goes from dream to reality isn’t just a matter of an investment here or a subsidy there. It took decades of ferment in Brazil before serendipity in the form of high gas prices and flex-fuel engines made ethanol an everyday choice for consumers. But the sooner we start, the greater our ability to shape a future that’s not centered on increasingly expensive oil and gas. It’s not as if gasoline demand is going to go down: As long as the Chinese and the Indians want our lifestyle–and they do–you can forget about oil at $10 or even $20 a barrel. Whatever the technological challenges, a world of abundant, clean ethanol is suddenly looking a lot more realistic than a return to the days of cheap, inexhaustible oil.”

Mr. Khosla’s white paper should be an interesting read to explore the phenomenon further.(from www.khoslaventures.com)

Your take on this?

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