Putting ethanol in the fast lane

Famed venture capitalist calls for four policy changes to help put the plant-based fuel back in the spotlight.

NEW YORK (CNNMoney.com) — Despite falling oil prices and a corresponding drop in the stock price of various ethanol companies, famed venture capitalist, Sun Microsystems co-founder and ethanol investor Vinod Khosla outlined four steps he said would help the country use more of the plant-derived fuel.

Speaking at a Cleantech Venture Forum conference in New York City, Khosla told a roomful of fellow venture capitalists that a couple of government mandates and a shift in the subsidy policy would go a long way in helping bring more ethanol to market.

Specifically, he called for a government mandate that 70 percent of all cars sold in the U.S. be flex-fuel – which is having the ability to run on gas, ethanol or other alcohol-based fuels – by 2014, and that 10 percent of all major-branded gas stations in the U.S. sell E85, a fuel that contains 85 percent ethanol.

The move is an attempt to allay concerns by the oil industry that there aren’t enough ethanol cars to make installing E85 pumps worthwhile, and simultaneous concerns by the auto industry that people won’t buy ethanol cars because there’s no place to fill them up.

CNN/Money