Western Milling and Khosla Ventures Join Forces to Form Cilion

Cilion to Produce Environmentally-Friendly Corn Ethanol

Jun 21, 2006, 01:00 ET from Khosla Ventures

    MENLO PARK, Calif., June 21 /PRNewswire/ -- Western Milling,
 California's largest grain milling company, and Khosla Ventures, a venture
 assistance and venture capital firm, today announced the formation of
 Cilion. Cilion will operate modular, standardized 55 million gallons per
 year ethanol plants. Using a variety of innovations these plants will be
 cheaper and greener than standard corn-to-ethanol plants, substantially
 reducing the need for fossil fuels in ethanol production. Cilion plans to
 have 8 plant units in production by 2008 for a total of 440 million gallons
 per year capacity. The first three plants are expected to be in California.
 The ethanol production, grain handling, logistics and feed expertise of
 Western Milling combined with the company building and financial expertise
 of Khosla Ventures will provide Cilion with a unique advantage.
     According to Western Milling President Kevin Kruse, "Our technology and
 years of experience will allow our plants to have an energy balance
 advantage that is 2X that of gasoline. In addition we expect a greater than
 90% reduction in petroleum use. The bottom line is that Cilion will be able
 to produce environmentally friendlier ethanol in California at a lower cost
 than ethanol produced in the traditional Midwest corn ethanol plants and
 delivered to California."
     Added Kruse, "When fully operational, ethanol produced by Cilion is
 expected to be price competitive per mile driven with gasoline even if oil
 prices drop to $40 per barrel, assuming normal gasoline distribution
     California Governor Arnold Schwarzenegger recently issued Executive
 Order S-06-06 establishing targets for the use and production of biomass
 products. The executive order called for California to produce a minimum of
 twenty percent of its own biofuels by 2010 and forty percent by 2020. Of
 the 900 million gallons of ethanol currently consumed in California, only
 five percent is produced in California.
     "Cilion will be able to single-handedly produce all of the ethanol that
 the Governor has ordered for 2010, based on current consumption," according
 to Vinod Khosla of Khosla Ventures. "Governor Schwarzenegger wants twenty
 percent of all ethanol consumed in California to be homegrown, and we are
 confident that Cilion can achieve that goal in its first three California
 plants, comprising four 55 million gallons per year units, that will be
 operational by early 2008."
     About Khosla Ventures
     Khosla Ventures offers venture assistance, strategic advice and capital
 to entrepreneurs. The firm helps entrepreneurs extend the potential of the
 Internet to new markets such as mobile and supports breakthrough scientific
 work such as bio refineries. Vinod Khosla founded the firm in 2004. Vinod
 has been labeled the #1 VC by Forbes and Fortune recently labeled him as
 one of the nation's most influential ethanol advocates, noting "there are
 venture capitalists, and then there's Vinod Khosla." The firm's capital
 comes entirely from its own partners and a portion of all profits are
 donated to charitable causes, with an emphasis on micro-finance, education,
 and the environment. Khosla Ventures is based in Menlo Park, California.
     Press Contacts:
     For media inquiries, please email info@khoslaventures.com

SOURCE Khosla Ventures