…just like any other business, and you measure those risks. I believe these things are very competitive all the way down to $40 a barrel of oil. Can it go to $30 or $35? Yes, it can — you judge the risk of that happening.
It's the same as saying that there's a slight chance Intel will come out with a Wi-Fi chip that costs $3. Sure, it can be done. In fact, they're probably working on it. So you're taking these risks every day, and there's no one reason to invest or not invest. It's usually a portfolio risk management, even within one venture.
The way I look at a typical chip venture is there's financial risk — can we fund it? There's marketing risk — can we be competitive in the marketplace? Who else can come out with what? There's a technical risk — can we develop it? What are the likely delays? And then there are people risks. And you balance those risks. Clean tech is absolutely the same — you balance all the risks.
You say that people aren't asking the right questions when they are doing comparisons between different transportation fuels [such as ethanol and gasoline]. So what are the right questions?
Energy balance [the amount of energy required to produce a unit of fue] is a silly question to ask. Why does it matter? It's really a substitute for two questions that are real questions that can be objectives at the personal level and at the national level.
First, well, of course, cost is always a question. You don't sell it if it's not cost-competitive. Period.
The more important question is: does it cause a reduction in petroleum use? Petroleum use is a big problem. That is a national objective. So the national debate should be focused on petroleum-use reduction. Even the worst ethanol plant has about a 90 percent reduction in petroleum use.
The second question is: what are the greenhouse gas emissions reductions per mile driven?
Those are relevant questions because you know those are the things you are trying to control as a country, as a planet, as a city, as a state. You want less petroleum use.
So ask those questions, and answers to those are very different than trying to measure some academic, hypothetical — some academic paper done some years ago [by Pimentel & Paztek analysing ethanol energy balance]. And people keep using it when it's not relevant to what we are trying to achieve.
Are you concerned that government interest will wane?
You know there's always a danger. I'm very optimistic that this will be a key issue in the 2008 presidential election.
Do you mean energy policy overall?
Yes, energy policy, energy security and greenhouse gases. So it's fortunate for my point of view that every presidential candidate has to go through Iowa [an agriculture-intensive state which has an economic interest in ethanol]. It forces them to address the issue of the environment.
I'm not just talking about biofuels. You can't have a presidential candidate not take a position, one way or the other, on energy policy and environmental issues — energy and greenhouse gas emissions. So I think this will be a serious debate over the next two years, and I think that's a really good thing. It will stay in the public spotlight. Now the politics of this [are] the Democrats love it and the Republicans love it. That's really good news.
So can they lose interest? Sure. We could have an Iran instead of an Iraq in the next few years and spend our time worrying about North Korea or Iran. And there are people who would love to see us doing that, instead of talking about the economy, or the environment, or whatever else we should be talking about.
