SunFuels / The banner headline in the Nov. 11 edition of the Hawaii Tribune-Herald read, “37,000 Acres Eyed for Biodiesel.” But the second sentence of the story added a qualifier: it said that SunFuels Hawaii wanted to lease “up to” 37,263.87 acres on Hawai’i Island’s North Hilo/Hamakua Coast. The land would be used to grow eucalyptus trees and possibly other crops to feed a proposed factory in Hamakua that would turn the trees into diesel fuel.

The next day, the Department of Land and Natural Resources’ decision-making board issued an “approval in principle” for SunFuels to lease up to 32,263.87 acres from the state–including acreage currently leased for pasture and agricultural purposes. But the company was required to work out individual agreements with those leaseholders, and would have to secure financing commitments for the project in order to get the leases. The board specifically stated that the approval in principle did not guarantee that the leases, which still required negotiation, would be approved.

Few would argue against reducing the Big Island’s dependence on imported petroleum. But the specter of still more eucalyptus trees taking up land previously used for growing food has already raised some criticism from local residents.

By early this month, both the DLNR and SunFuels were already talking about the project on a much smaller scale. Roger Imoto of the DLNR’s Forestry and Wildlife Division said that since the Nov. 12 meeting, the principle approval had been scaled back to about 8,000 acres. SunFuels spokesman Rory Flynn maintained that the company had never wanted the full 37,000 acres and would “consider a lease of 6,000 to 8,000 acres a success.” The company had sent letters to current leaseholders assuring them that SunFuels had no intention of taking their leases away. Flynn said that the Tribune-Herald headline had “mushroomed into massive misunderstanding.”

Fast track

“We were kind of put under the gun by the state against our wishes,” Flynn maintained. “We were simply asked on very short notice to submit a list of properties. We never even formally requested the lands. We just gave them the list. There was never an application protocol. They simply took that as actionable.”

If SunFuels can deliver on its proposals, the result could be a major improvement to the island’s energy situation–and to the smell of its trucks and tractors.

The company calls its product “second generation biodiesel,” “synthetic diesel” or simply SunFuel to distinguish it from what company employees call “first generation biodiesel.” It’s derived from vegetable oils using a multi-step process with technology licensed by the German company Choren Industries, in partnership with Royal Dutch Shell. One company on Maui already manufactures such biodiesel from used cooking oils.

Anyone who’s ever followed a semi down a highway knows what conventional diesel exhaust smells like. Exhaust from a vehicle powered by biodiesel derived from cooking oil smells like french fries. But according to Choren engineer David Henson, SunFuel has no smell at all, because its unique processing method removes almost all impurities.

Since the heating and burning takes place within closed chambers, the plant has no smokestack. According to Henson, the chief byproducts are ash (which can be turned into fertilizer), water, a little salt, and carbon dioxide–which is, of course, a greenhouse gas. Choren officials say its multi-phased gasification process is such that emissions remain so low that the process can be described as “carbon neutral;” as long as more trees are grown, the overall level of carbon dioxide in the atmosphere stays nearly the same. On the other hand, when using coal and petroleum for energy, carbon that has been stored underground for tens or hundreds of millions of years is added to the atmosphere. The company trumpets test results from the U.S. Deptartment of Energy’s Argonne National Laboratory, which found that SunFuel’s biodiesel was cleaner than conventional diesel fuel, with “significantly lower” levels of regulated emissions including nitrous oxide, carbon and other particulate matter.

How big?

The positive impact is the potential availability of sustainable, home-grown fuel for the island’s vehicles, while drawbacks are still unclear, as SunFuel Hawaii is still very early in its planning stages.

The company doesn’t know how big a production plant it will construct. Flynn says that the company’s goal is to “meet current highway diesel use on this island.” To do that, he believes that the company would have to put up a processing facility about twice the size of Choren’s plant in Germany, which produces about 16.5 million liters annually–but he says the company can’t make that determination for sure at this point.

The footprint for the plant could be fairly small–according to Henson, even a facility such as the “Sigma” plant that Choren is building in Schwedt, Germany–which would produce 250 million liters–could be engineered to fit on five acres and have a noise level of about 80 decibels, described as quieter than a lawnmower but louder than a vacuum cleaner. A much bigger question is how much land would be needed to feed the plant, and how much of that land might have been used to feed people.

According to Imoto, the DLNR doesn’t have statistics on the amount of food produced on the lands that SunFuels Hawaii has expressed interest in. Even if SunFuels worked out agreements with the landowners to mix pasture with woodlots, Imoto said, “The cattle production will definitely go down.” One particular area of concern is the dairy industry, since milk-producing operations in the state are already an endangered species.

“Especially the milk, we don’t want to see that go away.” he said.

Rescuing beef and dairy operations, however, may take more than just keeping eucalyptus trees away. Right now, ranchers and dairy farmers face a host of problems, from the high cost of imported feed to the competition from mainland feedlots and milk factories. Keeping them in operation here may take an effort similar to the one the state has launched on the energy front.

“We have no interest at all in inhibiting anything that’s a food crop, in competing with crop,” maintained Flynn. He noted that since SunFuels Hawaii owner Michael Saalfeld (who also owns a controlling interest in Choren) moved to the Big Island about two years ago, Saalfeld had also opened an agricultural park in Kohala. But he also noted that “in the large scheme there’s only so much land that’s a likely candidate for different types of biofuel ventures.”

Eucalyptus fatigue

Saalfeld may face a challenge in convincing Hamakua residents that more eucalyptus is a good thing. Eleven years ago, Kamehameha Schools (then called Bishop Estate) leased out tens of thousands of acres for the planting of eucalyptus on former sugar land, with the intention of sending wood chips to Japan. But Oji Paper Co. and Marubeni Corp., the companies that had teamed up to buy the wood chips, pulled out after angry residents filled the Honoka’a Gymnasium to persuade the DLNR’s board not to lease 8,000 more acres of public land to grow eucalyptus. Residents were irate about planned aerial pesticide spraying, and they pointed out that the same land that had employed more than 1,200 sugar workers would generate only 120 or so jobs under the tree-growing plan.

In 1997, DLNR tried to jump-start an industry by offering a contract to manage and harvest existing stands of trees on state land–if the company that got the contract would build a mill to process the trees here in Hawai’i. The low bid went to a company called Tradewinds Forest Products–which promptly lost its financing when its backer went bankrupt. Tradewinds has since gotten a series of extensions while attempting to put together a new financial package. Meanwhile, the trees, which were supposed to have been thinned after six years, are still in the fields. When he toured the Big Island’s forestry resources, Henson said, “What I saw there were very unhealthy forest that were past their commercial prime.”

Could some of those trees be used to feed the SunFuels plant?

“For the time being that acreage is committed to another company,” said Flynn.

Board members at the DLNR have already declared that SunFuels won’t need to conduct an environmental impact statement for its timber operations. But at the request of Hawai’i City Councilman Dominic Yagong, the company has agreed to discuss its plans with the public on the evening of Dec. 18 at the Honoka’a People’s Theatre.