Clinton’s Efforts on Ethanol Overlap Her Husband’s Interests

NYT ^ | 02/28/2008 | Mike McIntire

[USSR Didnt Fall]

To big rounds of applause, three of the world’s richest men — Richard Branson, Ronald W. Burkle and Vinod Khosla — trooped onto a New York ballroom stage with former President Bill Clinton to pledge support for renewable energy projects to combat global warming and create jobs.

It was September 2006, and the Clinton Global Initiative, the annual star-studded networking event for philanthropists and investors, had generated commitments to spend billions on ethanol and other alternative fuels. Cast as good works, many were also investments by businessmen hoping for a profit.

And sitting in the audience was an influential public official who had also taken an active interest in renewable sources of fuel: Senator Hillary Rodham Clinton.

Several months earlier, Mrs. Clinton had sponsored legislation to provide billions in new federal incentives for ethanol, and, especially in her home state of New York, she has worked to foster a business climate that favors the sort of ethanol investments pursued by her husband’s friends and her political supporters.

One potential beneficiary is the Yucaipa Companies, a private equity firm where Mr. Clinton has been a senior adviser and whose founder, Mr. Burkle, has raised hundreds of thousands of dollars for Mrs. Clinton’s campaigns. Yucaipa has invested millions in Cilion Inc. — a start-up venture also backed by Mr. Branson, the British entrepreneur, and Mr. Khosla, a Silicon Valley venture capitalist — that is building seven ethanol plants around the country. Two are in upstate New York.

A Cilion executive said Mrs. Clinton’s office had been helpful to the company as it pursued its New York projects. More broadly, by steering federal money, organizing investor forums and offering the services of her staff, she has helped turn the upstate region into an incubator for ventures like Cilion’s, while providing a useful showcase....

[Free Vulcan]

I would say the mandates go farther for creating demand than the subsidy. A 45 cent subsidy doesn’t have the punch it used to when gasoline was less than $1 per gallon when the subsidy was created.

Bottom line is this - ethanol won’t be around forever. What you will see is either something like butanol or an ester fuel ultimately made, with the protein, oil, and valuable pharma and nutraceuticals extracted up front, with a near 100% carb composed of relatively simple sugars in the fermenters.

What I can tell you is that the days of cheap, subsidized meat (the original ethanol) and grain going overseas on barges is over. The farmer isn’t going to take it in the shorts anymore to kowtow to govt policy goals.