WASHINGTON — Hawaii’s energy costs could drop by as much as $2 billion a year if natural gas not oil was used to generate electricity, according to the head of Hawaii’s gas company.

Hawaii Gas CEO Jeff Kissel traveled to Washington, D.C., to bolster political support for his company’s proposal to import liquefied natural gas to the the state in coming years. He spoke to energy insiders at a luncheon on Thursday.

“If we can build customer loyalty, build community support and hopefully build some industry and legislative support, which is the thing that we’re doing here in Washington, D.C., we can cost justify the infrastructure necessary in our state to gradually on a low-risk basis build out this project and take Hawaii’s energy costs down by about $2 billion a year,” Kissel told a few dozen people at the Natural Gas Roundtable‘s monthly lunch at the University Club a few blocks north of the White House.

Kissel outlined what he said was a three-phase approach.

The first phase is shipping in LNG on Matson or Horizon ships as an emergency backup fuel.

“That’ll help us because the refineries and the rest of the infrastructure is weak in Hawaii,” Kissel told Civil Beat after his speech. “You need to have redundant capabilities.”

The second phase is using LNG to displace synthetic natural gas. Kissel said the hope is that the first two phases can be done within three years, and they will benefit Hawaii Gas’ 70,000 customers.

The third phase is “industrial, commercial power” available to the entire population, according to Kissel.

“We’re not actively trying to solicit HECO’s customers away from them,” he told Civil Beat. “We want HECO as one of our customers for our gas for their power generation.”

Kissel said LNG could provide about 400 megawatts of HECO’s load, with the rest being made up by renewables. LNG could also be used for transportation and marine purposes.

He told the luncheon crowd that the plan is to collaborate with a shipping company to dedicate a boat solely to regular transport between the West Coast and Hawaii.

Conservation groups are opposed to a switch to LNG because it perpetuates the state’s reliance on fossil fuel and could encourage more natural gas production through hydraulic fracturing, or fracking, a process that is raising environmental concerns.

Still, natural gas could play a key role, Kissel said, adding:

  • LNG gives Hawaii energy diversity so that its not so singularly reliant on imported oil. Even the synthetic natural gas the company’s producing now requires petroleum.
  • The stability offered by burning gas for electricity balances out more variable technologies like wind and solar.
  • The money saved by using gas rather than imported oil means there’s more money to be invested in renewable energy technologies without driving up electricity prices even further.

Kissel closed his 20-minute speech by explaining the strategic value Hawaii provides.

“We were the only state to take a direct attack in World War II. We stand poised, in conjunction with what the Obama administration has announced in terms of its Asian strategy, to look to Asia again as a possible threat, whether it’s economic or physical. We need to have energy security in order to do that. It is in the national interest to develop this resource. It is in the national interest to make it a robust development, and that’s one reason that we as a company support the efforts to develop the export capability that we think is essential in order to cost justify the development of this resource.”

Check out the slides that Kissel distributed to luncheon attendees Thursday:

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