Vinod Khosla forms Cilion to produce ethanol in California
PRNewswire: Super VC Vinod Khosla who is a big backer of cellulosic ethanol has formed a company called Cilion to produce Ethanol in California. This is something to keep an eye on as they are not going to use Corn to make ethanol and they are claiming that the Ethanol they produce will be cost effective with gasoline even if oil is trading at $40/barrel. It would be interesting to see if they take Cilion public anytime soon to take advantage of the Ethanol boom.
From the news release, Western Milling, California’s largest grain milling company, and Khosla Ventures, a venture assistance and venture capital firm, today announced the formation of Cilion. Cilion will operate modular, standardized 55 million gallons per year ethanol plants.
Highlights:
- 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 Western Milling President Kevin Kruse, “Our technology and years of experience will allow our plants to have an energy balance
advantage that is 2X that of gasoline. In addition we expect a greater than 90% reduction in petroleum use.
- When fully operational, ethanol produced by Cilion is expected to be price competitive per mile driven with gasoline even if oil prices drop to $40 per barrel, assuming normal gasoline distribution margins.
- California Governor Arnold Schwarzenegger recently issued Executive Order S-06-06 establishing targets for the use and production of biomass
products. The executive order called for California to produce a minimum of twenty percent of its own biofuels by 2010 and forty percent by 2020. Of the 900 million gallons of ethanol currently consumed in California, only five percent is produced in California.
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