industries for hundreds of years. Similarly, he seemed unaware that peak oil was an illusion advocated by prejudiced lobby groups who dismissed the importance of the constant technological advancements which were spurring the extraction of additional oil. He appeared equally unaware of the political manipulation by many oil-producing nations to deny the major oil-exploration corporations access to their vast untapped reserves. To some, his ingenuity reflected his eye for another commercial opportunity. Others believed that for once he had failed to balance the financial risk against his customary self-promotion.
The immediate consequence of the biofuel producers’ demand for corn was a dramatic increase in prices for the crop. The cost of grain for animals and poultry rose, and food prices in supermarkets followed. The IMF estimated that the increase in ethanol production in America raised the price of maize acrossthe world by 60 per cent and threatened to cause starvation in the poorest countries. Paradoxically, producing more corn for ethanol generated additional greenhouse gases, undermining the environmentalists’ arguments. American motorists also complained: cars which drove sixteen miles on a gallon of petrol could cover only twelve on the ethanol mixture. The environmentalists’ enthusiasm was defied by another statistic: filling a car’s tank with bioethanol required 250 kilogrammes (550 lbs) of corn – the amount consumed by a single family in a year.
Branson seemed oblivious to those ambiguities. He rarely read scientific briefs and appeared not to fully understand the science of producing ethanol from corn. His staff also disliked delivering bad news. Like his sidekick Weiss, he did not question why George Soros and Bill Gates were producing ethanol from sugar cane in Brazil rather than investing in Khosla’s factories in America.
Branson had relied on Khosla’s assumption that producing ethanol would be uncomplicated. Khosla had purchased the equipment for his factories from India and hired experienced engineers formerly employed by BP. Among them was Lawrence Peck, an American chemical engineer. Peck soon realised that ‘Khosla was just throwing darts at the dartboard to see which would stick. His group seemed to have little idea how to produce ethanol. He wasn’t impressive.’ Branson discounted the problems. His millions of dollars had bought a ticket to the top table with Clinton and Gore, and proximity to Governor Schwarzenegger, who had assumed importance in his ambitions in the US, especially to launch his new airline.
Since 2003, Branson had been battling to create Virgin America, a new airline based in California. To successfully break into the world’s biggest airline market would, he hoped, secure huge profits. However, vested interests were frustrating his efforts: in particular, the established airlines opposed the entryof a new competitor. His would-be rivals complained to the Department of Transportation in Washington DC that Branson was breaking American laws. As a foreigner, he could own a maximum of 49 per cent of an American airline but control only 25 per cent of the votes. The majority of Virgin America’s shares, Branson was told, must be owned by American citizens. To obey, Branson sold 77 per cent of the airline to two American investors, Mark Lanigan of Black Canyon Capital in Los Angeles and Nicholas Singer of Cyrus Capital Partners in New York. Both received lawful guarantees from Branson that they would recover their whole investment plus 8 per cent profit. The US government could only acknowledge that Branson’s choice of financiers complied with the statutory requirement, but he was compelled to dismiss his American chief executive as one more condition for allowing the airline to take off. The executive was criticised for being too close to Branson.
To finally succeed, Branson needed Schwarzenegger’s support, and that materialised in 2006, during the governor’s
The immediate consequence of the biofuel producers’ demand for corn was a dramatic increase in prices for the crop. The cost of grain for animals and poultry rose, and food prices in supermarkets followed. The IMF estimated that the increase in ethanol production in America raised the price of maize acrossthe world by 60 per cent and threatened to cause starvation in the poorest countries. Paradoxically, producing more corn for ethanol generated additional greenhouse gases, undermining the environmentalists’ arguments. American motorists also complained: cars which drove sixteen miles on a gallon of petrol could cover only twelve on the ethanol mixture. The environmentalists’ enthusiasm was defied by another statistic: filling a car’s tank with bioethanol required 250 kilogrammes (550 lbs) of corn – the amount consumed by a single family in a year.
Branson seemed oblivious to those ambiguities. He rarely read scientific briefs and appeared not to fully understand the science of producing ethanol from corn. His staff also disliked delivering bad news. Like his sidekick Weiss, he did not question why George Soros and Bill Gates were producing ethanol from sugar cane in Brazil rather than investing in Khosla’s factories in America.
Branson had relied on Khosla’s assumption that producing ethanol would be uncomplicated. Khosla had purchased the equipment for his factories from India and hired experienced engineers formerly employed by BP. Among them was Lawrence Peck, an American chemical engineer. Peck soon realised that ‘Khosla was just throwing darts at the dartboard to see which would stick. His group seemed to have little idea how to produce ethanol. He wasn’t impressive.’ Branson discounted the problems. His millions of dollars had bought a ticket to the top table with Clinton and Gore, and proximity to Governor Schwarzenegger, who had assumed importance in his ambitions in the US, especially to launch his new airline.
Since 2003, Branson had been battling to create Virgin America, a new airline based in California. To successfully break into the world’s biggest airline market would, he hoped, secure huge profits. However, vested interests were frustrating his efforts: in particular, the established airlines opposed the entryof a new competitor. His would-be rivals complained to the Department of Transportation in Washington DC that Branson was breaking American laws. As a foreigner, he could own a maximum of 49 per cent of an American airline but control only 25 per cent of the votes. The majority of Virgin America’s shares, Branson was told, must be owned by American citizens. To obey, Branson sold 77 per cent of the airline to two American investors, Mark Lanigan of Black Canyon Capital in Los Angeles and Nicholas Singer of Cyrus Capital Partners in New York. Both received lawful guarantees from Branson that they would recover their whole investment plus 8 per cent profit. The US government could only acknowledge that Branson’s choice of financiers complied with the statutory requirement, but he was compelled to dismiss his American chief executive as one more condition for allowing the airline to take off. The executive was criticised for being too close to Branson.
To finally succeed, Branson needed Schwarzenegger’s support, and that materialised in 2006, during the governor’s
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