ethanol2.jpgHere’s our Mercury News story today about how ethanol is all the rage (free registration), especially “cellulosic” ethanol, which could begin to transform our fuel economics within the next three to five years.

It is just one possible way to reduce the nation’s dangerous dependence on foreign oil, and to respond to the now overwhelming consensus view — finally — that the environment is at risk because of greenhouse gases.

Everyone is getting into the act. Microsoft billionaire Bill Gates is plowing money into a Fresno company, Pacific Ethanol. Virgin’s Richard Branson has moved on this. The human genome guy, Craig Venter, is rolling up his sleeves. And you’ve got a host of guys here in Silicon Valley, including well known venture capitalist, Vinod Khosla, and various Stanford professors. John Doerr, of Kleiner Perkins, has talked about it, and tells us his firm is looking to make an investment.

Here’s the table showing how ethanol matches up to gasoline.

Here’s a brief description of the production process. (The secret sauce is the sun. Plant leaves and stalks take energy from its rays, and cellulosic production unlocks that energy)

As usual, we had limited space for the print article. Ethanol is controversial, because there are widely divergent views on how to calculate costs. There are plenty of skeptics. We hope we didn’t take too many shortcuts. (If we did, feel free to add comments below).

There are ethanol stories we didn’t get to. Neil Kohler, who is chief executive of Pacific Ethanol, was co-founder or otherwise involved in two other ethanol companies in California, which for a while were the only two ethanol producers in California, according to this story.

There’s not much written up about Neil. But his brother, Tom Koehler, Pacific Ethanol’s spokesperson, told us about Neil’s activities. Here are the two companies:

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Parallel Products in Rancho Cucamonga, Calif., makes ethanol out of the refuse of beer or soda production (Tom tells us there are tons of cases of this stuff that would otherwise be thrown away because the liquid has exceeded expiration dates or otherwise not met quality specs). Here’s the company’s page on ethanol; it has some useful links at the bottom.

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Golden Cheese Co, based Corona, Calif., which extracts ethanol from cheese whey residue left from cheese processing.

Here’s the California Energy Commission site on ethanol.