Quest for alternative fuels: Vinod Khosla

Washington, July 9 (UNI) One of the Silicon valley's best-known venture capitalists, Vinod Khosla has set up a new company, Cilion, to research and develop ''clean fuel'' technologies, such as making ethanol a viable substitute for much of the petroleum now used to fuel cars.

Mr Khosla said he is particularly enamoured with technologies that help produce ethanol from sources other than the edible part of corn, the main technique now in use in the US.

By using cornstalks, grasses and even woodchips -- as President George W Bush suggested in his speech -- large-scale ethanol production would pose less of a threat to food supplies, Mr Khosla said.

Mr Vinod Khosla, 52, who co-founded Sun Microsystems Inc in the early 1980s is one of the world's most successful venture capitalists and a self-made multi-billionaire.

He came to the US from India in 1976, and over the next 25 years, has created new jobs for every day he'd been in the country. Though not a household name, Mr Khosla was a co-founder of Sun Microsystems and renowned in business circles for his meticulous research and ability to spot the kind of innovative technology that can revolutionise an industry.

Three years ago, Mr Khosla, turned his attention to alternative fuels. He however, declines to discuss any of his investments in detail.

Recently his company, Khosla Ventures and Western Milling, California's largest grain milling company, formed Cilion-a company that would operate modular, standardised 55 million gallons per year ethanol plants.

Using a variety of innovations these plants will be cheaper and greener than standard corn-to-ethanol plants, substantially reducing the need for fossil fuels in ethanol production.

Cilion plans to have 8 plant units in production by 2008 for a total of 440 million gallons per year capacity. The first three plants are expected to be in California.

The ethanol production, grain handling, logistics and feed expertise of Western Milling combined with the company building and financial expertise of Khosla Ventures will provide Cilion with a unique advantage, according to a company press release.

According to Western Milling President Kevin Kruse, ''Cilion will be able to produce environmentally friendlier ethanol in California at a lower cost than ethanol produced in the traditional Midwest corn ethanol plants and delivered to California. When fully operational, ethanol produced by Cilion is expected to be priced competitive per mile driven with gasoline even if oil prices drop to 40 dollar per barrel, assuming normal gasoline distribution margins.'' MORE UNI XC AD VC1146