Western Milling, California's largest grain milling company, and Khosla Ventures, a venture assistance and venture capital firm have formed Cilion. Cilion will operate modular, standardized 55 million gallons per year ethanol plants.
Using a variety of innovations these plants will be cheaper and greener than standard corn-to-ethanol plants, substantially reducing the need for fossil fuels in ethanol production.
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, " Cilion will be able to produce environmentally friendlier ethanol in California at a lower cost than ethanol produced in the traditional Midwest corn ethanol plants and delivered to California. 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 an executive order calling 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.
"Cilion will be able to single-handedly produce all of the ethanol that the Governor has ordered for 2010, based on current consumption," according to Vinod Khosla."
Vinod Khosla founded Khosla Ventures in 2004. Vinod has been labeled the #1 VC by Forbes and Fortune recently labeled him as one of the nation's most influential ethanol advocates, noting "there are venture capitalists, and then there's Vinod Khosla." The firm's capital comes entirely from its own partners and a portion of all profits are donated to charitable causes, with an emphasis on micro-finance, education, and the environment. Khosla Ventures is based in Menlo Park, California.
The press release does not say what grain they are going to use for feedstock. California has very little corn production, although the Pacific Ethanol plant, under costruction, will use corn for feedstock. Khosla has championed cellulosic ethanol, so it is a fair bet that they could be using the cellulosic portion of the grain, such as rice straw which is in plentiful supply in California. He has advocated the use of miscanthus previously:
In Khosla's simple arithmetic, with irrigation and other inputs, it would be possible to grow 20 tons of crops per acre and each ton of crop would yield 100 gallons of ethanol. Thus 50 million acres would generate as much as 100 billion gallons. Corn was expensive as the choice of crop; it would do only in the short run. He recommended switching over to a tall grass called miscanthus in the US, which would yield a higher profit.
While I think his math is a little too simplified, you can see his enthusiasm for ethanol.
Western Milling and Khosla Ventures Join Forces to to Form Cilion, Khosla Ventures press release, June 21, 2006
As a High School environmental teacher in the city of Santa Clara, I seem to recall that one of the first 'ethanol' factories is going to be built in Santa Clara or San Jose. Is that true and if so when will it be built and where. We would like to visit the factory, or provide any assistance (teachers and students) that you may need to expedite the construction of this 'new' industry.
Dennis
Posted by: Dennis Dowling | September 21, 2006 at 06:45 PM