Vinod Khosla, the billionaire Silicon Valley venture capitalist, told Bloomberg TV in 2010 that "there'll be ten Googles in the next ten years in energy."
While Khosla made no such sweeping predictions when he visited Bloomberg News's San Francisco bureau Oct. 17, his energy investment strategy remains focused on transformative technologies. Two high-profile IPOs have failed so far to live up to the "energy Google" hype. Gevo, a high-tech maker of diesel and jet fuel, closed yesterday at $1.92, down 93 percent from its high of $25.55 in April 2011. Kior, which manufactures oil from biomass, traded at $4.97, down from its September 2011 high of $21.55. "We don't mind failing, but if we succeed, it better be worth succeeding," Khosla said.
The firm's sustainability portfolio covers a wide spectrum of investments, from utility scale energy and distributed generation, to efficiency, batteries, biofuels, building materials, plastics and food.
President Obama and Gov. Romney probably disagree over energy policy with each other less than either White House occupant would disagree with Congress, according to Khosla. "The fact is, I think Governor Romney is much more of a moderate and a clean-energy supporter than he is willing to talk about today, if you look at his record in Massachusetts," he said.
"The single biggest issue in clean energy today is the position the oil companies are taking," he said. "If they can control the Senate, it will absolutely change the clean tech investments."
To expect vast differences between the candidates on energy is to misunderstand the forces that tend to influence administrations. "You can't tell from the candidates positions which policies they'll actually advocate. Having heard enough, seen enough, talked to enough people, I'm pretty sure it's hard to tell who will advocate what policies… In the end, priority is usually driven not by policy but by markets," he said. Khosla Ventures investments can be helped by policy, he said, but aren't dependent on it.
Overuse of federal subsidies earn Khosla's ire. Even when the government does use them to help ramp a new technology up to scale, phase-outs should be built into the program structure, ending in no more than five years.
Khosla, a registered Republican, breaks with inside-the-beltway Republicans most significantly over the significance of climate change risk. "I'm fiscal hawk. I vote against all taxes, but I do believe the environment, and climate change, is a bigger issue than fiscal deficits are as a risk to the nation."
Khosla likened climate change risks to property risks, a comparison popularized by the late Stanford University climate scientist Stephen Schneider (pdf). "Most of you probably have home insurance," Khosla told reporters at Bloomberg. "There's probably a one in 500 chance that your house will burn down. You still get it because the consequences are catastrophic."
Climate change, Khosla said, is "a hundred times larger as a risk" than "the risk of your home burning down."
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