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Editor’s note: Civil Beat asked Robert Rapier, a Big Island resident who blogs about global energy issues at R-Squared, to share his views on Hawaii’s energy situation. We agreed he would do so in the form of responses to questions.
Civil Beat: What would be the most cost-effective options to reduce our reliance on oil if political challenges in Hawaii weren’t an issue?
Robert Rapier: First we need to understand why we are so dependent upon oil. The Energy Information Administration (EIA) recently estimated the percentage of each state’s energy dependency on petroleum. In their report, they estimated that more than 89 percent of Hawaii’s energy usage is petroleum. No other state was over 55 percent, and the average across all states was under 40 percent. But those states that used less petroleum weren’t any less dependent upon fossil fuels; they just use coal and natural gas for electricity production where Hawaii mostly uses petroleum.
So every state really has a fossil fuel dependency problem, and in Hawaii that manifests itself almost exclusively as a petroleum problem because that infrastructure has been in place for a very long time and we don’t have easy access to natural gas or coal. And the reason every state has a problem with fossil fuel dependency is simply that it is usually still the cheapest retail option.
In any location, you have to look at the available resource base. Expansion of geothermal in Hawaii would likely be the most cost-effective means of reducing dependence on oil. Some solar thermal applications – such as solar hot water heaters – are also competitive options that can displace fossil fuels. Wind and solar power are more competitive here than in many locations due to the high retail price we pay for electricity. As far as displacing transportation fuels, those options are going to generally cost more than the current price of oil. There are some transportation fuels that can compete head-to-head with oil in many situations, but they become less economic when they have to be transported long distances, and sometimes the environmental implications are undesirable (e.g., expansion of palm oil production by clearing rainforest).
How should Hawaii residents evaluate the cost of potential alternative energy solutions that would lower dependence on oil but might raise electricity costs over their current levels, even dramatically? Is it necessary to pay more in the short term to reduce our reliance on oil in the long term?
We have to look at the big picture. As I always say, every energy option has trade-offs. When we turn on a light switch or get in our cars to drive somewhere, there are trade-offs that we usually never stop to consider. Where did that oil come from? Did it help to enrich a dictator? Did it pollute the environment on the trip from the Niger Delta to my local service station? Do we have military forces overseas to make sure the oil continues to flow?
The point is that there are costs that we don’t pay at the pump. One of those costs is that we are maintaining dependence on a resource that is depleting, and is in heavy demand in growing economies like China and India. So the question we have to ask is, “What do we risk by not reducing our dependence on petroleum? The answer to that is that we risk becoming poorer and weaker as oil exporters like Saudi Arabia and Russia become richer and more powerful. We risk creating conditions in which life will be more difficult for our children than it has been for previous generations that grew up in an era of cheap, abundant energy. And because of Hawaii’s much higher dependence on petroleum, those impacts are going to hit us earlier and harder than they do the other states that have easy access to other energy options. We are the canary in the coalmine, but the canary suffers consequences as it warns others of impending danger.
As to whether it would cost more, I think that depends on the level of independence you were trying to achieve. To achieve 100 percent independence from oil, it would certainly be more expensive and we would almost certainly have to use a lot less oil. But we can achieve some reductions in our dependence at potentially less cost (e.g., increased efficiency, more geothermal power, more mass transit, etc.) One thing to consider though. If we could drastically reduce our dependence on petroleum, but we had to use energy sources that are more expensive – consider the benefit to the economy if that energy was sourced internally. For example, if all Americans had to pay $5 a gallon for fuel – but that money remained within the country instead of contributing to our trade deficit – the benefit to the economy through job creation and additional tax revenues may be greater than the incremental cost of the fuel.
Where should Hawaii be looking for models of how to address its reliance on oil? Which countries, states or cities are doing the best job implementing cost-effective clean energy solutions?
Hawaii should look to places that have similar resources. Iceland in some ways is a good model, because they are an island nation with good geothermal resources. But they also have very good hydropower resources; so much so that the majority of their electricity comes from hydropower and not from geothermal power. They are also in a very northerly climate, so they are only a partial model for Hawaii. Tropical countries can provide a good model. What do they do well and why? Ample sunshine is an important part, but again many tropical countries also have very cheap land. That is of course why – despite the fact that Hawaii could probably be self-sufficient in food production – the vast majority of our food is imported. This is why Brazil and India produce cheap ethanol from sugarcane, which we burn in our cars here instead of producing it ourselves and keeping the money circulating within the local economy. So you have to look at countries that are similar, but you also have to clearly understand where they are different.
How would you characterize the current regulatory and business climate in Hawaii when it comes to changing the energy equation for the state? Is the structure of a Public Utilities Commission and a regulated utility adequate to the challenge?
I don’t really know enough about the PUC’s workings to know if they are up to the challenge. But I do know that it can be a challenge to do business in Hawaii. No matter which energy option you consider, someone is going to be against it for one reason or another. This is because – as I said – there are tradeoffs. Wind power is great until the wind farm is built too close to your home. So as we try to move away from petroleum, there are going to be some who are inconvenienced in one way or another. Nobody wants to the one to be inconvenienced. But the option to that is the status quo, which is inconveniencing everyone at the moment through high energy prices – and poses the risk of much higher energy prices long-term.
Is there any way of moving the state away from fossil fuels for its electricity needs without bringing energy to Oahu from the neighbor islands (ie. through cables, or in the case of biofuels, shipping it over)? Oahu has the majority of the population, but the fewest amount of resources for renewable energy.
I think that due to the high population density in Oahu, they are going to have to import energy of some kind. The best thing Oahu could do in my opinion is to take measures to decrease the number of commuters. This could be done by some combination of increased mass transit, telecommuting, ride-sharing, walking, biking, etc.
All big cities suffer from the same problem; there are just too many people for energy self-sufficiency. You just have to consider some of the things that big cities can do to address the demand side.
About the author: Robert Rapier’s career has been devoted to energy issues. (See his resume for specifics). He has worked on cellulosic ethanol, butanol production, oil refining, natural gas production, and gas-to-liquids (GTL). He grew up in Oklahoma, and received his Master’s in Chemical Engineering from Texas A&M University.
He is presently the Chief Technology Officer for Merica International, a renewable energy company (more details on that can be found at this interview with earth2tech). The company is involved in a wide variety of projects, with a core focus on the localized use of biomass to energy for the benefit of local populations.