Vinod Khosla speaks out against corn ethanol subsidies

Venture capitalist and biofuel supporter Vinod Khosla wrote, "The time has now come for us to stop subsidizing corn ethanol" arguing that "subsidies should be a short-term, and not a permanent measure, used for five to seven years after a technology first starts scaling in order to allow it to transition down the cost curve until it can compete on its own merits." Khosla's column, titled "Time to Move On," appeared on the Green Tech Media site and outlined his belief that it's now time for corn and the ethanol fuel created from it to stand on its own.

Khosla's remarks often stir up controversy, but this time around, we couldn't agree more with his take on subsidies. Khosla's answer to this question, "Why should the corn ethanol subsidy expire?" succinctly sums up the belief that there's a time and place for government aid and, at least for corn ethanol, that time has passed on by. Khosla's response to that question reads like this:

From a technological and economic standpoint, corn ethanol production has little potential upside left in process cost reduction; public interest subsidies should be used to introduce new competition to markets or support new technologies to get down the early cost curve, not to support mature technologies.

Additionally, the subsidies that are in place have enabled some very large businesses to collect hundreds of millions of dollars per year of taxpayer cash without truly fostering, with rare exceptions, new technology development from non-food crops that can scale enough to help wean America off of foreign oil. Corn ethanol has become a dead-end street with little public benefit. The same money could be more effectively spent on emerging cellulosic, non-food biofuel technologies that are in fact being suppressed by corn ethanol's maturity and subsidies for both the corn and the ethanol.

Good, no? To read Khosla's column in its entirety, click here.

[Source: Green Tech Media | Image: Jan Tik – C.C. License 2.0]