MIT Energy Conference: Focus on Ethanol and Plug-ins

19 May 2006

by Joe Adiletta

The recent 2006 MIT Energy Conference brought together a broad mix of students, Venture Capitalists, Industry gurus, and scientists to hash out the direction of the future global energy crisis, and to explore the possibilities for a more sustainable course.

Although the conference topics ran the gamut from “The Nuclear Renaissance” to “Building Efficiency,” the centerpiece was the standing-room only, afternoon keynote by Vinod Khosla, one of the world’s leading venture capitalists and the leading voice in the VC community on the urgency of widespread adoption of ethanol in the US.

Khosla argues that the US could rapidly and effectively transition its transportation infrastructure to an ethanol-based one, similar to Brazil’s rapid historic transition of a similar nature.

In his arguments, Khosla leveraged work done by Argonne National Labs and summarized in The Debate on Energy and Greenhouse Gas Emissions—Impacts of Fuel Ethanol Khosla claimed this work is the most comprehensive study on the effects of ethanol on the US.

Moreover, he fervently disagreed with some of the major recent works touting the downside to a US ethanol movement. Khosla called upon lawmakers to provide three simple ”solutions“ to support this movement:

1. A requirement that 70% of new cars produced be Flex Fuel Vehicles (FFVs);

2. Mandate that 10% of all fueling stations carry E85; and

3. If oil falls below $40 per barrel, provide a “cheap oil” price support structure.

Moreover, Khosla made the pitch that based on the technology that he has personally seen in labs around the world, there is no reason to believe that substantial advances won’t be made in all of the following:

• Yield of biomass per acre
• Cost per ton of biomass
• Yield of ethanol per ton of biomass
• Cost per barrel of ethanol
• Productivity of cellulosic-based techniques

Given these expected advances, and an already proven ethanol economy in Brazil, Khosla made a compelling argument that the time for national transition is, in fact, now.

Transportation and Plug-ins. Professor John Heywood of the MIT Auto Lab led the Transportation in 2020 panel at the conference, with panelists from General Motors, Shell, A123Systems (earlier post) and Scientific American.

The representative from Shell maintained that while the immediate future appears to be focused on oil and gas, they are maintaining an agnostic approach to future fuel demands, as no clear winner technology has yet emerged. That said, the Shell rep did maintain that a shift to a more renewable fuel infrastructure was in the national interest, and a probable outcome.

Reinforcing the market’s lack of clarity around a winner, Ric Fulop of A123Systems noted that in all probability (and given past history in any number of industries) the “best” technology would not win.

Rather, the technology that has the potential to grab the market, create a full-scale supply chain and provide significant customer benefit stands to carry the day. In his opinion, this is going to be PHEVs, and further along, flexible-fuel PHEVs.

Further highlighting this point, Hymotion (earlier post) brought a converted plug-in Toyota Prius to the conference. (General Motors also brought its third-generation HydroGen3 Fuel Cell vehicle, and Vectrix an all-electric cycle for a ride and drive.)

Hymotion’s solution is compact and efficient. With the spare tire removed from under the lift gate in the rear of the Prius, the Hymotion battery console slides neatly into place, and provides up to 30 miles of non-fossil-fuel driving.

Both the volume required and, potentially the range, ought to be significantly improved when Hymotion drops in a set of A123 batteries, which they said they plan to test in the near future.

Of particular curiosity surrounding Hymotion—and PHEVs in general—was the apparent lack of immediate knowledge of the technology within the Venture Capital community. Routinely, there were conversations describing the immediate benefits of PHEV technology to VCs, who by and large stood amazed by what could be accomplished.

[Joe Adiletta is an MIT Sloan Alum and one of the organizers of the MIT Energy Conference.]

Resources:

• Vinod Khosla: Biofuels: Think Outside the Barrel

• Archived video of Khosla’s “Think Outside the Barrel” presentation at a Google TechTalk (A hat-tip to James Lyons!)

• Argonne National Labs: The Debate on Energy and Greenhouse Gas Emissions—Impacts of Fuel Ethanol

• Energy and Greenhouse Gas Emissions Impacts of Fuel Ethanol