By Amy McCullough
Quite the heated exchange on the Wall Street Journal editorial page between the editors and venture capitalist Vinod Khosla. In a previous editorial, “The Range Fuels Fiasco,” the WSJ used Khosla’s failed Range Fuels business to say that government shouldn’t get involved with startups. (WSJ is now locked down. Most of the editorial can be found at an earlier MBJ post.)
Khosla thinks otherwise.
Relevant to Mississippi is that Khosla’s firm is backing three of three green energy startups — Stion, Kior and Soladigm — for which the Mississippi legislature, at the urging of Gov. Barbour, has committed tens of millions of dollars of taxpayer dollars within the past year.
An energy blogger Robert Rapier, who has quite the resume, seems to share the WSJ’s view: “Broken Promises from Range Fuels.”
Rapier describes the Range situation this way: “So I went from claiming $5 million for a 10 million gallon ethanol plant to $20 million for a 1 million gallon methanol plant. I still have not delivered. I am asking for more money. You still trust me, don’t you?”
From Khosla’s WSJ letter to the editor:
“Though most legislation is imperfect, let’s not throw the baby out with the bath water and throw out all government efforts. There are abuses, and as an example I have written against continuing corn ethanol, biodiesel and even wind subsidies. There is a balanced position between ‘support every green thing’ and the bigotry of ‘government shouldn’t do anything.’
“I may be wrong often, but over the last 25 years my efforts have generated about $14 billion in profits from under $1 billion from investors. In biofuels we have generated hundreds of millions in profits for our limited partners. I started in this country with less than $300 in my bank account and no other support. I would like to compare this record with your editor’s accomplishments before he chooses to trash my efforts and classify me derisively as the superrich. I will keep taking large risks and shoot to solve large problems.
“When we first invested in biofuels, I expected up a 70% to 90% chance of failure (and went on record saying so), and today I’m pretty confident that 50% to 60% of the technologies will succeed. Those are better odds than wildcatting for oil. Intelligent dialogue about when government support is for the social good and when it is a gravy train is necessary. But bigotry only shuts down intelligent dialogue.”