Khosla Responds to “60 Minutes” Clean-Tech Takedown
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Prominent Silicon Valley investor Vinod Khosla has responded to the “60 Minutes” segment last week that many characterized as a clean-tech hit piece, arguing the program “grossly misrepresented the state of the sustainable energy sector.”
The main thesis of the “Cleantech Crash” report was: “Despite billions in taxpayer dollars invested by the U.S. government in so-called ‘Cleantech’ energy alternatives to fossil fuels, Washington and Silicon Valley have little to show for it.”
As we wrote previously, environmental groups criticized the CBS program’s piece for overlooking successes in the sector, conflating the failures of Silicon Valley venture capitalists with fumbled public funding bets and minimizing the broader challenges of climate change.
The segment took special aim at Khosla, who appeared on the program. His namesake firm, Khosla Ventures, has been one of the most prominent investors in the space, laying bets on a broad array of sustainable plays, including Amyris, EcoMotors, LightSail, Soraa and many, many more.
In an open letter to 60 Minutes and CBS that will be released today, Khosla asserted a series of factual errors in the piece:
Fact: I have not invested over a billion dollars of my own money into cleantech. It is substantially less, and a simple query to us would have corrected this error. We manage a balanced portfolio, and it has not “crashed” nor is it “dead.” In fact, our returns are significantly above the venture capital average.
Fact: The DOE loan program, despite your implications, has a 97% success rate. The former program head, Jonathan Silver, expects it to make money, not be a subsidy.
Fact: There is $51 billion remaining in DOE loan money. The amounts in the CBS report are far from “spent” or allocated. You seem to want to cite big numbers, whether they are true or not!
Fact: A substantial portion of DOE loans is allocated to nuclear energy, not just cleantech segments like biofuels, solar or wind, a fact conveniently left out despite your being aware of it.
Fact: The U.S. spent $502 billion subsidizing fossil fuels in 2011. This is the result of directly lowered prices, tax breaks and failing to properly price carbon’s negative externalities. You ignored the fact that energy is far from being a level playing field. Many other subsidies are hard to account for like MLP partnerships, accelerated depreciation and below-market royalties that are never categorized as fossil fuel subsidies that disadvantage cleantech.
The full letter is here. (Full disclosure: NBCUniversal News Group, a competitor of CBS, is an investor in Re/code.)
In response to the letter, a 60 Minutes spokesman said in an email: “While we respect Mr. Khosla’s view, we are not in agreement with the points he makes about our story, which we began and ended with him and devoted much of to his ideas and to one of the companies he backs.”