Honolulu Weekly

The environmental group Life of the Land has accused the Hawaiian Electric Company and its partner of using word games to avoid a legally required environmental review of their planned $61 million biodiesel plant at Waena on Maui. The state Public Utilities Commission has been asked to intervene and require an environmental assessment or a full environmental impact statement.

The challenge could knock the project off its planned fast track just a month after Gov. Linda Lingle signed a bill into law authorizing $59 million of special revenue bond financing.

According to Life of the Land Executive Director Henry Curtis, HECO and BlueEarth Biofuels LLC have suddenly dropped the word ‘refinery’ from descriptions of the Maui plant. The move comes despite months of publicly touting the project as a ‘biodiesel refinery’ that will eventually be one of the largest in the U.S. with a projected capacity of 120 million gallons per year.

The BlueEarth website now presents this question and answer:

‘Q: Are Biodiesel Plants considered ‘oil refineries?’

A: No, they are correctly defined as Transesterification Facilities. Transesterification is a catalytic process of converting fatty acids into methylesters. An oil refinery on the other hand, fractunates crude petroleum oil into many various [petroleum] fuel ‘cuts.”

Elsewhere on the website, terms like ‘Continuous Process Biodiesel Plant’ and ‘biodiesel manufacturing facility’ now appear in place of ‘refinery,’ according to Curtis.

Life of the Land says the change in terminology signals the partners’ intent to violate state law ‘by building a non-refinery to refine feedstock in order to ignore state law requiring environmental review of refineries.’

In a letter to the PUC, Curtis said the Maui project triggers provisions added to state law in 2004 that require an environmental assessment to be done ‘at the earliest practicable time to determine whether an environmental impact statement shall be required’ for certain specific projects, including ‘oil refineries.’

Curtis said Hawai’i law uses the term ‘refinery’ for industrial plants, regardless of size, that process fuel oils from other sources, whether from petroleum products, coal, ‘vegetable ferments’ or ‘fuel alcohols.’

Curtis said this is consistent with several dictionaries, which define refinery as an industrial plant ‘for purifying a crude substance, such as petroleum or sugar.’

If the companies claim their Maui plant isn’t a refinery, Curtis questions whether they can still qualify to use bond financing, pointing to language in the authorizing legislation referring to planning and building ‘a biodiesel refinery.’

‘They can’t have it both ways,’ Curtis told Honolulu Weekly. ‘Either it’s a refinery and they have to do an environmental review, or it’s not a refinery and they can’t use the bond money.’

The legal question on use of the bonds may be less clear-cut than envisioned by Life of the Land. Different sections of the authorizing legislation, SB 1718 CD1, refer variously to ‘transesterification plants’ and refineries, which seem to be treated as interchangeable terms.

But objections recently raised by five environmental organizations to HECO’s proposed sustainability criteria for the purchase of palm oil as the feedstock for the BlueEarth plant could eventually pose an even greater hurdle to use of the bonds.

According to SB 1718, the Maui plant ’shall be required to import fuel stock produced only from sustainable sources’ in order to utilize the bond financing.

The provision was included in response to legislative testimony critical of the impact of large scale palm oil production in parts of the developing world, where expansion of palm plantations has led to deforestation, major increases in emissions of greenhouse gasses and has had devastating impacts on native communities.

The five groups–Environmental Defense Hawai’i, ‘Ilio’ulaokalani Coalition, KAHEA-The Hawaiian Environmental Alliance, Life of the Land, and the Sierra Club, Hawai’i Chapter–called HECO’s standards for judging whether palm oil comes from sustainable sources ‘outrageous’ because they fall far short of emerging international standards.

HECO spokesman Peter Rosegg acknowledges the proposed criteria may not meet the Roundtable standards.

The full analysis of HECO’s sustainability criteria and other information can be found on the Life of the Land website ([www.lifeofthelandhawaii.org/Palm_Oil_for_Electricity_Generation.html]).

For more reports from Ian Lind, visit [www.iLind.net].