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Vinod Khosla Buries 60 Minutes With Clean Tech Facts

| Friday January 17th, 2014 | 4 Comments

Vinod Khosla rebuts 60 Minutes The CleanTech CrashA major CBS 60 Minutes story on the clean tech sector has been picked apart mercilessly for playing fast and loose with the facts about public and private investment in new energy technology since it first aired on January 5. If you’ve been following along you may already be very familiar with most of the rebuttals, but it’s still well worth reading an open letter to CBS written by venture capitalist Vinod Khosla, which he posted on the Khosla Ventures website on January 14.

Aside from rebutting the distortions, misrepresentations and errors in the 60 Minutes story point by point, Khosla’s letter provides a concise rundown of the the state of clean tech investment today, and you’ll be hearing a lot more about clean tech investment in the coming months.

Clean tech investment: the global picture

Clean tech investment is going to be making more news this year partly because the green investor organization Ceres just launched a major new clean energy investment campaign called the Clean Trillion Campaign, at its biannual Investor Summit on Climate Risk on January 15 at the United Nations.

Clean Trillion refers to closing the gap between where we are now and the estimated $36 trillion needed in new clean energy investment, that will enable the transition of the global economy out of fossil fuels and into a more sustainable energy platform.

The campaign was launched to marshall investor support in advance of two key United Nations milestones, the Climate Summit this September, and the Millenium Goals conference in 2015.

Vinod Khosla: just the facts

The script for the 60 minutes story, The CleanTech Crash, is available on the CBS website if you’d like to follow along with Khosla’s letter.  He comes out swinging at the beginning:

The pontificators at 60 Minutes, with their agenda-driven bastardization of news reporting, failed to do the most elementary fact checking and source qualification, as was the case with your Benghazi reporting. No wonder one major media outlet wrote that you have been “widely criticized for leaving out crucial information about the state of the clean tech sector.” Is this the new CBS standard?

Having said that, Khosla proceeds to correct 60 Minutes on a wide range of details (did they get anything right?), including numerous errors in their characterization of the Department of Energy loan program.

Khosla also raises key points about the subsidies enjoyed by the domestic fossil fuel industry, which he puts at $502 billion in 2011 alone. That figure includes tax breaks and the failure to price in externalities – a timely reminder in light of last week’s West Virginia chemical spill, in which a coal-washing chemical entered the entire water system over a nine-county area.

Another one of those externalities is the cost of protecting oil shipping lanes by the US Navy. Khosla totals up the figure to $7 trillion, with $80 billion spent last year in the Arabian Gulf alone.

In that regard, although Khosla does not bring up the Iraq war, you can factor that in, too. As early as 2006, then-President George Bush affirmed that oil was the motivator for launching an unprovoked attack on the country. The Iraq war-oil connection has also been voiced by other members of his administration as well as leading Republican pundits.

It’s rather difficult to imagine wars being fought over wind and sunlight. As for the argument that the unpredictable global market for rare earths and precious metals plays a key role in the clean tech sector, the Obama Administration has been aggressively pursuing research initiatives to develop domestic substitutes and sources.

We really encourage you to go ahead and read Khosla’s letter, but if you don’t have time for the full version linked above, here’s a link to the abridged version at khoslaventures.com.

[Image: CBS logo by swanksalot]

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  • Cl1ffClav3n

    “Don’t know much biology . . . .”

    Khosla’s track record of backing biofuel companies that have not delivered on their promises speaks volumes about his lack of understanding of biology, chemistry, and energy: Cello, Range Fuels, Mascoma, Amyris, Lanza, Coskata, LS9, Gevo, KiOR, and non-fuel “green chemistry” companies including Virdia and Calera. These investments have absorbed more than a billion in private and public investment capital, and the ones that are still afloat have no prospects for positive ROI.

    Khosla is almost as good at selling snake oil as Cool Planet, who have hoodwinked Google and GE. 2014 will continue to reveal how expensive ignorance of the laws of thermodynamics can be to investors who follow self-proclaimed geniuses without doing their own due diligence.

    • TinaCasey

      Hi Cliff Claven, haven’t seen you around here for a while. Read Khosla’s letter and you’ll see that you just proved his point: risk is by nature a feature, not a bug, of investment in any new technology, no matter what form of energy is involved.

      • Cl1ffClav3n

        Yes, Tina, it is always good to learn the facts before forming an opinion. I have read Khosla’s letter, the 60-Minutes transcript, and the comments of Robert Rapier on his EnergyTrendsInsider.com website. I suggest you learn how to perform stoichiometry and trace the energy and mass balances of chemical processes and apply that knowledge to the processes behind each of Khosla Venture’s biofuel start-ups.

        Wasting taxpayer money is neither a feature nor a bug — it is a crime. I wouldn’t care so much if it was just ignorant millionaires being cheated out of their cash for failiing to perform due diligence and believing a pied-piper, but Khosla has solicited and been granted hundreds of millions of dollars of taxpayer money from a government $16 trillion in debt already spending our grandchildren’s birthright.

        By your comment about risk, I see you happily advocate gambling with our nation’s energy security and national security, which is an indictment of your judgment in itself. But what Khosla is doing is not even gambling because it has no prospect for success. A high school chemistry teacher can show that Khosla’s biofuel projects simply repackage fossil fuel energy as “green” energy at great thermodynamic energy loss. He is accelerating the use of finite fossil fuels, not displacing them. The federal government supporting his schemes with taxpayer money is criminal negligence in both national security strategy and fiscal policy.

        • Ajay Saxena

          u r right