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Which energy source will rule Hawai'i's future--biofuels or renewable energy?

If you think the standard of living is high now, wait till peak oil gets here.

Peak oil refers to the point at which production of oil reaches its highest point. The term is gaining currency amongst the forward looking these days, and while it may be tempting to predict that peak oil will be a dud like Y2K, make no mistake, it is coming–and fast. And big changes will come with it.

While some say that it might be 75 years away and others claim we’ve already passed it, most informed guesses are that peak oil will be reached sometime between 2010 and 2020.

Hawai’i currently relies on fossil fuels for approximately 90 percent of its power generation needs. (State reports indicate that the total for all energy needs is 94.5 percent). We’re the most oil-dependent of the 50 states, with no natural fossil resources; 87 percent of our fuel oil comes from notoriously nasty foreign sources. Though there are initiatives currently underway to move to 20 percent renewables and green energy by 2020, by that time we could be on the downward slope of oil production, with record high prices deriving from a confluence of increasing demand and decreasing availability.

For anyone here struggling to pay the rent and keep the gas tank full, this is a scary situation. Currently 85 percent of the gasoline sold on O’ahu is supposed to contain 15 percent ethanol. If you start looking at the long term, however, 15 percent ethanol and 20 percent renewables seem like baby steps.

The big deal is the big deals. HECO is currently cutting through the red tape to build a 110-megawatt peak hour power plant at the Campbell Industrial Park. This plant would boast HECO’s peak generating capacity and provide a cushion for emergencies. The new plant would run primarily between 5-9pm, peak generating hours.

HECO spokesperson Peter Rosegg told us that HECO’s current capacity is sufficient for normal needs, but the new plant would allow HECO to meet all of its demand even if its main plant were down for one reason or another. The recent threat of rolling blackouts is evidence for the need for some spare capacity. For planning purposes, HECO says the plant will last for 20-30 years, but the practical reality, according to Rosegg, is that the plant will probably last longer than that.

HECO recently agreed to let the plant be powered by ethanol and biodiesel. Eventually, explained Rosegg, the goal is for the plant to be powered 100 percent by local production. ‘The sooner we can get to local grown the better, but it doesn’t just grow overnight,’ Rosegg says, admitting that the plant would have to start out importing biofuel. HECO is currently searching for local providers for biofuel and recently closed a request for proposals aimed at finding local production.

There is still a lot up in the air, though. Rosegg says that HECO prefers biofuel, since it is greener, but the plant would be the first of its kind if it does go with biofuel only, which means there are a lot of questions to be answered. The other option is ethanol, which is currently in vogue, but requires more inputs in terms of fossil fuels to produce. Says Rosegg, ‘We think biodiesel is 3.5 times more effective than ethanol.’

Environmental groups say there is more to the agreement than meets the eye, though, and there is cause for concern. First of all, the source of the so called ‘clean fuels’ is somewhat ambiguous; plans are for the fuel to be ‘locally sourced,’ but beyond that there are no firm details. And doubts are starting to emerge about the availability of fuel when the proposed plant goes on line in 2008-’09.

Another environmental argument against the HECO plant: Even if the plant uses ethanol or biodiesel, and even if it is locally produced, it requires fertilizers, tractors and transport, all of which are heavily reliant on fossil fuels. Moreover, dedicating agricultural land to raising sorghum and other fuel-friendly crops can take away from ag land devoted to food production, which we’ve already seen is in very short supply.

As Henry Curtis of environmental activist group Life of the Land asserts, ‘If you devote one hectare of land to the production of solar energy, it produces 100 times more energy than anything you can produce on that land.’ These are seeds for land conflict.

HECO’s Rosegg counters that HECO’s biofuel will be sourced from land that is currently fallow and that it probably will come primarily from the neighbor islands. ‘Rather than see the land go to housing and urbanization, we’d rather see it go green,’ says Rosegg. He also suggests that in addition to providing new agricultural opportunities, growing biofuel would inject new life into some flagging sectors of the ag economy.

It’s not all jeremiad, though. The way it stands now, oil and food expenditures are essentially a money jet out of the local economy. We import $3 billion in food and $4.62 billion in fuel annually. There is no multiplier effect, no trickle-down and no grassroots entrepreneurialism. What would happen if even some of that money were captured in the state? As Curtis explains, the state spends a great deal more on imports than it makes off of exports. ‘Currently tourism and the military make up the deficit,’ Curtis says. ‘But do we really want to have our plans dictated by the tourism industry and the military?’

The optimistically minded among us should see tremendous opportunity here. There is room for substantial growth in the agricultural sector, providing jobs and tapping into a stream of revenue that would help the island economy.

On the power side, it’s well known that the islands have tremendous potential for green power generation. We live in a world of sun, wind and waves. HECO estimates that there is the potential to generate 500 megawatts of added electricity from renewable sources in the next five to 10 years.

Others are even more optimistic. In December the state of Hawai’i updated its catalog of potential sites for renewable energy. The report indicates high potential for renewable energy on O’ahu, especially solar power. Reliable wind is available at several sites (including Kahuku, where there was a wind farm in the 1980s and where HECO is exploring the possibility of building a new wind farm), and as one might expect, the potential for wave-generated electricity abounds, though for practical considerations this is still considered an emerging technology.

Perhaps the most ambitious vision is harnessing the energy stored as heat in the ocean. A local ocean engineering firm has submitted a proposal to the state and HECO to build a 100-megawatt generating plant offshore. Ocean Engineering and Energy Systems claims to have $500 million in financing lined up and is ready to build a revolutionary plant that they say will save O’ahu consumers hundreds of millions of dollars, with virtually no environmental footprint.