Sausalito, Calif.--UPDATE: Tony Blair, the former Prime Minister of Britain and one of the all-star names on the public speaking circuit, has joined Khosla Ventures as a senior advisor.

Blair and Vinod Khosla made the announcement at a conference sponsored by Khosla Ventures taking place in Sausalito. (It's taking place now, in fact, as I type. Bill Gates just popped in. Looks like he's looking for the breakfast pastries.) Blair will advise on public policy issues. Khosla underestimated the importance of policy five years ago, he said.

"China and India will industrialize, but can they industrialize in a way that is sustainable and compatible with the challenges facing the environment?" Blair asked.

Khosla, meanwhile, predicted that the cost of oil would drop to $30 a barrel by 2030. Not because more oil fields will be discovered, mind you -- the cost will decline because of competition.

But perhaps more important for you readers, several of the portfolio companies at Khosla Ventures provided more details about their products. Here are some early tidbits:

--Kior, which has created a catalytic process to convert biomass into synthetic crude oil in a matter of minutes, is producing about 15 barrels of synthetic crude a day. That's up from a few liters per day a year ago. Company president Fred Cannon showed off a vial of oil.

"A few weeks ago, this was a tree," he said. "We will fit into the existing infrastructure."

At commercial scale, Kior can produce oil at around $75 a barrel, he added. The process can work with a variety of feedstocks.

--EcoMotors, which has created an efficient opposed piston/opposed cylinder engine, has signed a deal with a Chinese car maker. Another deal may get signed in June. The engine weighs about half as much as a regular diesel engine, but gets double the mileage. It costs about 25 percent less to make than a regular engine. (Opposed piston/opposed cylinder engines were designed by Junkers before World War II, but early models weren't particularly efficient.)

The exact nature of the relationship between EcoMotors and the Chinese company will be worked out over the next 90 days, but it will likely be a joint venture, he said in interview afterward. The engine can burn diesel, gas or natural gas, he added, and the final engines from EcoMotors will be modular. Two 100-horsepower engines will be stacked together to effectively become a 200-horsepower engine. When a car or truck accelerates, both engines will work. At cruising speed, one may shut off to economize fuel.

It's a type of hybrid, but with two gas or diesel engines instead of an electric motor and a gas engine. EcoMotors' engines could also be combined with an electric motor to form a "tri-brid."

"This is modular displacement," he said, adding that a single module would be ideally suited to serve as a generator in a series hybrid like the Karma coming from Fisker Automotive. Fisker currently uses an engine originally designed for a Pontiac to serve as the gas half of its hybrid drive train.

--Soraa and Kaai, two lighting and laser companies out of UC Santa Barbara, have merged. The combined company will produce green lasers for projectors and LED light bulbs that use 75 percent less energy than conventional bulbs. They may sell the bulbs under rental contracts.

Off the stage, execs at Soraa (the name of the combined company) explained that its LEDs will be made from gallium nitride. Conventional LEDs rely on sapphire. The bulbs will contain a single LED, but with multicolored phosphors. I've been following Soraa and Kaai since they were just a jumble of vowels on a PowerPoint, so I hope to bring you all more soon.

Soraa will also build a fab in the Bay Area for making laser and LED chips, similar to what Bridgelux is doing -- another sign that manufacturing may return to California. The fab will be bigger than Bridgelux's demo plant. It is unclear if it will be larger or near the same size as the commercial-scale fab Bridgelux is building. Both companies will retrofit existing chip facilities to create their new factories.

--Calera, the controversial cement company, says it can make carbon sequestration profitable. "We can go into any venture and make the sequestration of CO2 a profitable venture," said CEO Brent Constantz. 36 billion tons of aggregate and limestone get mined a year. Calera can help get rid of that by mixing seawater to make calcium carbonate. Constantz told us some more on how the technology actually works, so look for an explanatory article soon.

--Skybox Imaging has created microsatellites that will capture images of earth. They won't be powerful enough to see your face, but will be sensitive enough to study traffic patterns in detail. Good for congestion planning. "We can maintain [records of] what is going on on Earth on a daily basis," said co-founder John Fenwick.

--New Pax, which specializes in designs that mimic functions found in nature, has created a air conditioner that uses 75 percent less energy than a conventional one. The refrigerant is water, so say goodbye to crazy cooling chemicals if this works.

--Gilad Almogy, who once oversaw the technical development of LCD tools for Applied Materials, is the founder of Cogenra, which will create a system that generatessolarelectricity and solar hot water. Other companies, such as SunDrum, are producing solar power and hot water by attaching water-filled heatsinks onto the back of PV panels. Not only does this combination increase the efficiency of solar panels by eliminating unwanted heat, it effectively cuts down on gas consumption because the sun heats a lot of a home's water. While SunDrum makes a residential product, Cogenra is making a product for commercial-scale power. It is unclear what technology or what combinations of technology the company is using; Almogy was vague on this point.

--Meanwhile, Point Source Power is showing off a solid oxide fuel cell that fits inside an Altoids tin. It costs $4 and can charge a phone. It will be sold in developing nations. Individuals just toss it into a fire. It can be scaled up to a multi-kilowatt device. More on this in a bit.

--And finally, Bob Lutz, the former vice chair of General Motors, has joined the board of Transonic Combustion.