Ethanol: Khosla is at it again

Khosla Ventures has staked claim to a leadership position among VCs active in the emerging fuels, particularly ethanol. (Not this is any big secret: see founder Vinod Khosla's article in Wired.)

To reinforce the point, Khosla just put $3.5 million into LanzaTech, a New Zealand-based developer of a process that uses fermenting bacteria to convert carbon monoxide into ethanol. From the press release:

"The technology could produce 50 billion gallons of ethanol from the world’s steel mills alone. The technology will also contribute to the production of biofuels from cellulosic feedstocks, as it can convert syngas—comprising hydrogen, carbon monoxide, and carbon dioxide—into ethanol."

The Khosla money will be used for several purposes, most interesting of which is production of a pilot production facility.

Frankly, it's encouraging to see funding support for ethanol production in areas other than corn, which is of questionable value (see earlier post). The LanzaTech solution has a nice closed loop feel to it, and appears to have an experienced group working on the technology (including the former senior scientist from Genentech.)

Should be an interesting one to watch.