Asia Matters: Singapore’s Liquefied Natural Gas Lessons for Hawaii
Renewable energy sources and an energy model from Southeast Asia might help Hawaii diminish its addiction to oil.
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The island of Oahu is tops in the nation when it comes to the number of solar energy systems installed per capita.
That fun fact emerged on Friday, according to a group called “Environment America,” which also notes that Honolulu ranks fifth in the nation for total solar capacity.
Hawaii is grinding toward the goal of providing 40 percent of our energy needs through renewable sources by 2030.
Earlier this month, Hawaiian Electric trumpeted its progress in the chase for cleaner energy, reporting 18.2 percent of the energy it supplies now comes from renewable sources, ahead of the state’s mandated level of 15 percent by 2015.
Each week seems to bring the announcement of new clean energy projects in the state. Earlier this month, officials at Parker Ranch on Hawaii Island said they are considering wind, solar and other renewable sources as well as a possible micro grid. This week came word of a projected 20-megawatt solar energy project on land in Mililani owned by Castle and Cooke.
And yet, electricity rates in Hawaii remain by far the highest in the nation. And among the products used to generate electricity in the state, oil remains the undisputed leader.
In the words of the federal government’s Energy Information Administration, “about four-fifths of Hawaii’s energy comes from petroleum, making it the most petroleum-dependent state in the nation.”
And that brings us to another news event from earlier this month: the first delivery of liquefied natural gas to Hawaii. Hawaii Gas brought in a containerized shipment of LNG, the first of a limited amount that will be used as a backup to synthetic natural gas the company produces in Honolulu.
Backers hope the process leads to broader use of LNG, including its eventual partial substitution for petroleum in the generation of electricity. Supporters say it burns cleaner and is much cheaper than oil, and could help bridge the gap until renewable energy is ready for full adoption.
Detractors point out LNG is still a fossil-based fuel, and that switching from oil to LNG is like shifting an addiction from heroin to opium, merely swapping one toxic habit for another. Opponents, including the Blue Planet Foundation and the Sierra Club, say that using LNG will delay the use of alternative energy. They fear its adoption in Hawaii will dissipate the push for truly cleaner and more sustainable options.
A different perspective comes from another Pacific location starved for energy resources: Singapore.
Many years ago, leaders of the Lion City placed a heavy bet on natural gas for electricity generation. Eight years ago, the government doubled down with additional investment in facilities to handle liquefied natural gas, so that it could unload tankers from around the world, rather than simply relying on natural gas pipelines extending to Malaysia and Indonesia.
Two months ago, Prime Minister Lee Hsien Loong announced the country would expand the capacity of its existing LNG terminal, and build a second one.
In 2005, slightly less than three-quarters of Singapore’s electricity came from natural gas. By last year, the figure was more than 90 percent. One result of the extended use of natural gas for years is that while oil prices have quadrupled since 1995, electricity prices in Singapore have gone up by just 40 percent over the same period.
Clearly, Hawaii is not set up for an exact copy of the Singapore strategy. The cost of a similar infrastructure alone would be prohibitive; and the use of public money would be a difficult sell to a voter base that would not immediately see the benefit of cheaper energy.
Nor is LNG a perfect solution for Hawaii: all agree on the importance of pursuing sustainable renewable energy sources over the long term.
But this is not a choice between natural gas and solar, wind, or any other renewable energy source. It’s a question of reducing reliance on imported oil as a “hard” energy source over the medium term. LNG may turn out to be an inefficient choice, and that’s why the economic risk should go with a company rather than the local taxpayer. But the option at least seems worthy of further exploration.
Another characteristic of energy markets and pricing is uncertainty; and the arrogance of faulty assumptions can be costly.
Consider the straight-ahead reporting of the New York Times from the turn of the century. In writing about record oil prices in the year 2000, the reporter observed: “If oil prices, which recently surged to 10-year highs, remain above $30 a barrel, it will crimp East Asia’s impressive rebound from the financial crisis and recession of 1997 and 1998.”
The cost of Brent crude oil currently hovers around $109 a barrel. A further price spike would be costly to Asia, but under our current energy infrastructure, it might be disastrous for Hawaii.
Listen to Bill Dorman’s “Asia Minute” every morning on Hawaii Public Radio, HPR2.
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