Category Archives: Biofuel

National Research Council: Biofuels Costly, Impacts Questionable

October 12, 2011 Richard Ha

Cellulosic biofuel projects have been a financial disaster for U.S. taxpayers.

NRC Report to Congress: Cellulosic Biofuel Mandates Unlikely to Be Met

A congressionally requested study by the National Research Council — an arm of the National Academy of Sciences — concluded that next-generation biofuels are costly, and their impacts questionable. “Absent major technological innovation or policy changes, the … mandated consumption of 16 billion gallons of ethanol-equivalent cellulosic biofuels is unlikely to be met in 2022,” the report stated. This conclusion should come as no surprise to readers of R-Squared Energy, as its author Robert Rapier covered this in a recent article: Cellulosic Ethanol Targets: Mandating the Nonexistent. Read the rest

You can learn about this and other important liquid fuel subjects at the Association for the Study of Peak Oil (ASPO) conference, which will be held November 2 – 5 in Washington, D.C. I highly recommend decision makers send people to this conference.

I’ll be representing the County of Hawai‘i at this year’s conference, my fourth time attending. Mahalo to Mayor Billy Kenoi. He knows what is going on.

Biofuel, Food Security, Renewable Energy Sources, Sustainability

Kudos to the PUC!

October 10, 2011 Richard Ha

The recent PUC decision denying a HECO/Aina Koa Pono biofuel contract was a landmark decision. Kudos to the PUC for understanding precisely what was at stake. Very impressive!!

See this Big Island Video News story about the decision.

My observations:

The process was not transparent, and people had a difficult time understanding the issues.
Cellulosic biofuels is not proven technology, so it’s high risk.
Filling oil tanks with long term biofuel contracts would block cheaper alternatives, like geothermal, from gaining critical mass.
Ratepayers would have financed the risk. And ratepayers are not venture capitalists.
Businesses would have seen their electricity rates go higher than they were with electricity generated by oil, making their products even less competitive to mainland competition. And food security would have suffered.
Social consequences would have included fewer government services, less charitable giving and more working homeless. It would have put stress on our spirit of aloha.

We can and must do better for our future generations. As Steve Jobs always said, “We need to think different!”

Not, no can, CAN!

Biofuel, Renewable Energy Sources

Compliments to Gov. Abercrombie for Selecting Wise PUC Commissioners

October 3, 2011 Richard Ha

The PUC’s decision Thursday, which denied Aina Koa Pono’s biofuel contract with HELCO, is significant for several reasons.

To me, most significant is that the PUC is not going to let HECO force ratepayers to be the bridge financier.

Hawaii PUC denies HECO, Aina Koa Pono application

September 29, 2011

HONOLULU, Hawaii: In a decision that was handed down today, the Hawaii Public Utility Commission voted to deny the HECO companies’ application for approval of the biodiesel supply contract with Aina Koa Pono, rendering moot the application to establish a biofuel surcharge to help cover costs. Read the rest

Farmers take the commonsense approach – We look for others that have solved the technical problems, and just copy. Save money, less risk.

Biofuel, Food Security, Geothermal, Iceland, Renewable Energy Sources

Iceland, In Conclusion

August 15, 2011 Richard Ha 1 Comment

I want to conclude my “Iceland Series” by pointing out something very simple and straightforward that they have learned in Iceland and put into practice, but that we in Hawai‘i have not:

Cheap and proven technology, and clean energy projects, protect an economy from oil crises.

If what the International Energy Association says is true – that we have come to the end of cheap oil – then the bottom line is that by decoupling from expensive oil, we protect ourselves. It is the cost that’s important, not the color or anything else.

In Hawai‘i, we are trying to replace fossil fuel oil with biofuels. But if the replacement is as expensive as oil – which biofuels for electricity generation is – this doesn’t do us any good.

Geothermal, on the other hand, would totally disconnect us from the high cost of energy. It’s the cost that is the most important. And because it’s safer to diversify, we should also maximize our other energy sources, such as wind and solar, without destabilizing the electric grid.

When you go over to Iceland, you see that they have inoculated themselves from rising oil prices. In doing so, they have also made themselves food secure, because their electricity is cheap relative to other sources of energy. For instance, when they export aluminum, which is electricity-intensive, as long as their electricity costs are lower than that of their competitors, they will always have money coming into their economy.

Iceland’s economy depends on cheap energy and fishing as its base. (And Iceland’s tourism increased when the country devalued its currency, so cheap energy had a double benefit.) Hawai‘i’s economy depends on the military and tourism. We need a third leg to give our economy some stability and security.

It was interesting for me to see how a native people, left to their own devices, coped. As of today, Iceland is more energy and food secure than Hawaii! This is why Ku‘oko‘a needs to purchase HEI. The rubbah slippah folks all know this to be true.

Cheap electricity makes an economy competitive in the world. This is where the people’s needs and the utility’s needs should coincide.

Everybody knows that Iceland’s economy crashed in 2008. That happened because they privatized their banking industry, the banks went crazy, and they got caught by the downturn. But because the country has cheap energy, they are pulling out of their recession and the excesses of their banks – while we are struggling to forestall a double dip recession.

This shows us that if you’re in a competitive position relative to energy, and you don’t do anything stupid, you can withstand any oil-induced depression or recession, which is where the world is headed.

Iceland is also concerned about its dependence on fossil fuel for transportation. It has a commercial hydrogen refueling station, and I rode in an SUV powered by methane from municipal waste. They are even looking into making liquid fuels from geothermal electricity and CO2.

Iceland is like a little lab. You go over there and look at the country and say, “Holy smokes! It can be done.”

Now to do it here.

Biofuel, Geothermal, Iceland, Travel, Water

Still in Iceland, Still in Shorts

August 3, 2011 Richard Ha 5 Comments

We landed in Iceland, where the temperature is mild – it’s in the mid 50s. My shorts and a jacket are working very well, so far. I’m going to stay in shorts as long as it makes sense.

We took a cab into Reykjavik. My first observations were that there are hardly any trees, and that the lava base is very familiar to those of us who live on the east side of the Big Island.

My most significant observation was that there are no overhead electric lines. Everything is underground.

We passed an aluminum manufacturing company on our way in.

I expected it to be belching black smoke, but there wasn’t even a wisp of steam. It looked very benign. We have to visit those folks.

We checked into the hotel. Here’s the view from the hotel.

Then we got a car and went down to the Blue Lagoon. We went in the water and stayed in for maybe two hours; I’m not sure, because I lost track of time. It felt good to relax and get the kinks out after that long trip.

It was sea water with a very slight smell of sulfur, and you could open your eyes under water. People had silica mud spread all over their faces for its therapeutic value. I imagine the silica had the consistency of the stuff women put on their faces at a spa. It was very fine and actually felt kind of good. But I bet it would raise all kinds of problem in the geothermal pipes when it hardens and coats the surfaces.

That’s a geothermal well in the background.

There is a live webcam at the Blue Lagoon!

After that, we explored downtown Reykjavik.

We walked up and down the old city, which has a European feel.

It’s very nice and clean, and things were hopping on a Sunday night. We had to wait more than an hour on our third attempt to get a seafood dinner.

David Stefansson (the project manager at Reykjavik Geothermal) and his wife Olga Fedorova (an international trade lawyer and Russian translator) took us for coffee. They are very nice, friendly and fascinating people and we had a wide-ranging conversation. They told us a lot about the history of Iceland and its people in the context of moving from coal to geothermal many years ago. And in that conversation, we learned that the island’s trees had been cut down many years ago for fuel.

Of course, this all makes a lot of sense. It kind of makes me think of what can happen with biomass.

I want to learn more about the leaders who forced the change that has made the Icelandic people one of the most prosperous people in the world (notwithstanding the disaster that the banking industry recently placed upon the people. They apparently confused capital with energy.)

People here reserve Sundays for family time. It’s kind of like the old plantation days in Hawai‘i. Monday was a national holiday and so we went exploring.

One of many waterfalls in Iceland.

And another one. Iceland has incredible amounts of water from the glaciers.

I happened to be looking through the lens and saw this starting, so I recorded it. This kind of thing happens at random here:

Here’s one of the few products grown in Iceland.

Most are brought in from Europe or the Middle East.

Stay tuned. Much more to come!

Read Part 1 of my Iceland trip here.

Biofuel, Geothermal, Peak Oil

Defining Terms & Why Oahu’s In Trouble

July 20, 2011 Richard Ha

Base Power: Eighty percent of the feed source (oil, geothermal energy, biofuels) that an electric utility uses to produce electricity must result in what is called “base load” power. Base Load Power is the power that keeps electricity flowing smoothly to customers, so there aren’t rolling blackouts and flickering lights.

Because 80 percent of the utilities’ power must be base load power, one should pay close attention to the cost of that base load power.

Intermittent Power: The other 20 percent, made up mostly of sun power and wind power, is “intermittent power.” Big Wind falls into the 20 percent category.

O‘ahu depends overwhelmingly on oil for its base power. The utility could import biofuels, but biofuels are much more expensive than oil.

The International Energy Association, which represents the “rich” countries of the world, warns that the era of cheap oil is over.

In Jan 2011, the cost to generate electricity from oil was approximately 16 cents per kWh. By June (when oil was close to $100 per barrel) this had increased to 22 cents/kWh.

Barrons and Goldman Sachs predict that oil will cost $150/barrel within two quarters, and so we can guess that the cost to make electricity from oil may be more than 30 cents/kWh.

And Lloyds of London warns of $200 oil by 2013 – so 40 cents/kWh to make electricity? That’s less than two years from now, and almost double what it costs now.

By contrast, electricity from geothermal is estimated to cost around 10 cents/kWh and this would not change much over the years. Jim Kauahikaua, the chief scientist at the Hawaii Volcano Observatory, told me that the Big Island would be over the hot spot that generates geothermal activity for 500,000 to a million years.

Below is one estimation of the world’s future oil supply. In spite of rising prices, world oil supply has not increased since 2004. Keep in mind that we may not have started to drop down the backside of the world oil supply curve – YET.

Oahu is in trouble!

Big Island, Biofuel, Community, Geothermal, Peak Oil

Hawaiian Perspectives in Support of Geothermal

May 30, 2011 Richard Ha 2 Comments

Over the weekend I was on the panel of a Hilo Community meeting called “Hawaiian Perspectives in Support of Geothermal Development.” It was held at the UH Hilo, and I estimate that about 50 people attended. By far the majority of the folks there were in favor of geothermal development, provided it is done in a pono way.

Each panel member spoke about his/her area of interest.

From left to right, this is Wallace Ishibashi, co-chair of the Geothermal Working Group, and member of the Royal Order of Kamehameha; Robert Lindsey, Big Island OHA trustee, Geothermal Working Group member; Mililani Trask, Hawaiian legal rights attorney and consultant to Innovations Development Group.

I talked from the point of view of a banana farmer who, five years ago, found his operating costs rising, and attended three Peak Oil conferences to learn how to position his business in a future of rising oil prices.

I talked about how there are serious outside forces at work. The world has been using twice as much oil as it has been finding, and has been doing so for the last 20 years. The winds of change will soon be blowing and oil prices will be rising. It is very serious, and we cannot afford to insist on individual agendas. It is no longer about us now; it is about future generations.

There are many ways that we can deal with depleting oil.

HECO’s plan of fueling with biofuels will cause electricity rates to rise. Rising electric rates means that folks on the lowest rungs of the economic ladder will be the first to have their lights shut off.

There are people who advocate small scale, individual solutions to energy independence. This approach will encourage those who are able to leave the grid to do so, and leave the folks that are unable to leave to pay for the grid.

Another, much better, alternative is to bring more geothermal on line. Geothermal is proven technology, clean and lower in cost than other base power solutions. The more geothermal we use, the more we protect ourselves from future oil shocks.

I told the group what I had asked Carl Bonham of the University of Hawaii Economic Research Organization: If we can maximize geothermal as our primary source of base power, will we become relatively more competitive to the rest of the world as oil prices rise? He said yes.

I told the group that we are lucky to have the options that we have, especially geothermal. Very few in the world are as lucky.

In modern Hawaiian history, our economy has taken, taken, taken and the culture has given given given. We are at a unique time now when the economy can give and the culture can receive.

Do we dare dream of prosperity for future generations? I believe that most felt that geothermal was the way to get us there.

There are a thousand reasons why “No can.” We are looking for the one reason why “CAN!”

Biofuel, Geothermal, Renewable Energy Sources

Mopping the Deck of the Titanic

May 23, 2011 Richard Ha 1 Comment

In October 2008, the Hawai‘i Clean Energy Initiative (HCEI) – which aims for 70 percent of the State’s energy needs to be met by renewable energy by 2030 – was outstanding for its ambitious approach to the challenges facing Hawai‘i’s future. It anticipates a 30 percent reduction in oil dependency through efficiency improvements, plus a 2 percent/year reduction in fossil fuels over 20 years.

Now we are realizing that 40 percent less oil dependency in 20 years is not ambitious enough. And as we move to implementation, we are finding that some of our assumptions may not work out as planned. A key question is whether or not we are flexible enough to react to the rapid changes taking place.

It is clear to me that we are furiously sweeping and mopping the deck of the Titanic.

The Hawai‘i Clean Energy Initiative was enacted into law in April 2010. But by then, the world oil supply situation was changing rapidly. Two months later, Lloyd’s of London advised its business clients to be prepared for $200/barrel oil by the year 2013. Economists at the University of Hawai‘i Economic Research Organization told me that $200/barrel oil would devastate our tourist industry.

I asked, “Is it fair to say that if we used geothermal as our primary base power, Hawai‘i would become relatively more competitive to the rest of the world as the price of oil rises?” The answer was “yes.”

In a report last week, the Economic Research Organization at the University of Hawai‘I (UHERO) pointed out that the State’s current weak recovery is being fueled by the tourism industry—which is dependent on future oil prices.

Hawaii has liquid fuel, transportation and electricity problems. The mainland fixed its liquid fuel electricity problem, after the oil shocks of the 1970s, by switching to natural gas and coal.

This past October, when I attended a Peak Oil conference in Washington D.C., they pointed out that the U.S. mainland is less than 9 percent dependent on petroleum oil. A large part of that 9 percent, they then said, was due to the Hawaiian Electric Company (HECO) in Hawai‘i. I was shocked!

To think that we have done nothing about this for the last 20 years. And now we hear the excuse that, since nothing has been done, it will take 10 years to ramp up geothermal, so we cannot wait for geothermal.

Here is a comparison of Energy Return on Investment (EROI) for fossil fuels: In the 1930s, to get 100 barrels of oil, it took the energy of just one barrel. In the 1970s, one barrel would get you 30 barrels. Now, the average EROI is that one barrel will get you 10. Clearly, the trend is not good.

The ratio for geothermal is also around 10 to 1. The difference, though, is that this ratio will not decline for a very long time. Jim Kauahikaua, Scientist-in-Charge of the Hawaii Volcano Observatory, told me that the Big Island will be over the hot spot for 500,000 to a million years.

Instead of fossil fuel, HECO wants to use biofuels to generate the electricity for most of its base power. The problem is that the EROI for biofuels is close to 1 to 1. And it should also be a warning that SunFuels, a company that actually knows about green diesel, is closing up shop in Hawai‘i. Not to mention that farmers knew three years ago that they would not grow biofuels, because it was obviously a money loser for them.

I am not against biofuels, but I think if we are to grow liquid fuel it should be used for jet fuel or transportation fuel—not electricity. I support biofuels through Pacific Bioldiesel. These folks use waste oil to support their capital costs. To the extent they can integrate feedstock from farmers, I think that their model has a reasonable chance of success. I also support UH Hilo’s College of Agriculture and Forestry’s initiative to study palm oil cultivation. This, too, is proven technology.

Geothermal is cheap, proven, gives off no carbon emissions and occupies a very small footprint. And through the generation of NH3 from its off peak power, which can fuel internal combustion engines, geothermal can put future generations into a position so they can win.

NH3 can also help with food security. Eighty percent of NH3’s present use is as fertilizer.

Furthermore, electricity generated from geothermal to power electric cars is clean and cheap.

So geothermal both takes care of us today and can take care of future generations. To farmers, this is not rocket science. It’s just common sense.

We can and must use every renewable energy option available to us, and to its maximum potential. By diverting excess electricity production to alternatives such as NH3 (ammonia), geothermal offers a safety valve that can allow more renewable energy in.

Can we imagine prosperity, instead of doom and gloom? Not, no can. CAN!

The Hawaii Clean Energy Initiative:

On October 20, 2008, an Energy Agreement was signed by the State of Hawai’i, the Hawaiian Electric Companies, and the State Consumer Advocate to accelerate the accomplishment of Hawai’i’s energy objectives in the regulated electric utility sector.

In April, 2010, the Hawaii Clean Energy Initiative Program was added to State law, in Chapter 196 of the Hawaii Revised Statutes.

The Challenge

Hawai’i relies on imported petroleum for nearly 90% of its primary energy

Up to $7 billion flows out of the state annually to meet Hawai’i’s energy needs

Hawai’i’s economy is extremely vulnerable to fluctuations in global oil prices

Hawai’i residents pay among the nation’s highest prices for electricity and fuel

The Solution

The Hawai’i Clean Energy Initiative is helping transform Hawai’i from the most fossil-fuel dependent state in the nation to one run on Hawai’i Powered clean energy within a generation

Its goals and objectives:

Hawaii is the most fossil fuel dependent state in the nation.

This can be explained in large part because of our dependence on tourism and the military – together, they make up roughly 50% of our total economy. That’s a dangerous scenario for the future because of the finite nature of fossil fuel and the fact that our state is more and more vulnerable to fluctuations in oil prices and availability.

Biofuel

HECO on County of Hawaii & Aina Koa Pono

May 16, 2011 Richard Ha 1 Comment

HECO is protesting the right of the County of Hawai‘i to participate in the start-up biofuel company Aina Koa Pono’s contract before the PUC.

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF HAWAI’I

In the Matter of the Application of HAWAII ELECTRIC LIGHT COMPANY, INC. HAWAIIAN ELECTRIC COMPANY, INC. MAUI ELECTRIC COMPANY, LIMITED

For Approval of the Biodiesel Supply Contract with Aina Koa Pono-Ka’u LLC and for Approval to Establish a Biofijel Surcharge Provision and to Include the Biodiesel Supply Contract Costs in the Companies’ Respective Biofuel Surcharge Provision and Energy Cost Adjustment Clause.

Docket No. 2011-0005 HAWAII ELECTRIC LIGHT COMPANY, INC.’S, HAWAIIAN ELECTRIC COMPANY, INC.’S AND MAUI ELECTRIC COMPANY, LIMITED’S MEMORANDUM IN OPPOSITION TO COUNTY OF HAWAII”S MOTION TO PARTICIPATE WITHOUT INTERVENTION…

Read the rest here

First, HECO wanted to keep the details secret. Now it’s saying that the County is late, so it should not participate.

What about the County’s responsibility to look after the best interests of the people? That should count for a lot.

HECO says that the County has not stated the specific type of expertise, knowledge or experience it holds, now how it relates to the issues on this docket.

How about common sense?

The problem with this contract is that HECO is allowing Aina Koa Pono (AKP) to pass on its costs, over and above the oil cost it replaces, to the rate payer.

Sun Fuels, the most experienced company in Hawai‘i in terms of biofuel to liquid, has closed its Hawaii company because it does not think it can be competitive with diesel. One of the main issues is the company does not feel the process is scalable in Hawai‘i.

Sun Fuels’ principal, Michael Saalfeld, a Waimea resident, has actually put this process into production via a company he owns in Germany. He knows how this process works. There is no one in Hawai‘i more experienced.

So we have the most knowledgeable company in the state closing up shop because it knows it’s uneconomical to do biomass to liquid fuel here – while the company with no experience in the field gets a contract allowing it to pass on its costs of operation to Hawai‘i’s people.

AKP has settled on a Napier grass feedstock after proposing all kinds of others, which left people with the impression that they were like drunken sailors bouncing off the walls.

And HECO is protesting Hawai‘i County’s right to participate?

What is up here?

Biofuel, Food Security, Renewable Energy Sources, Zero Waste

Biofuels and Feedstock

March 25, 2011 Richard Ha

One of the main stumbling blocks to making biofuels is the cost of the feedstock. And feedstock frequently involves farmers farming.

For example, it is said that making an industrial-scale biofuel operation work requires feedstock that costs between $45 and $60/ton. Since farmers were making $100/ton for making hay, a $45/ton subsidy was put into place. This makes growing feedstock for cellulosic biofuels competitive with making hay—on the mainland.

But here in Hawai‘i, making hay costs $300 per ton, instead of the $100 per ton on the mainland. Farmers won’t do it for $100 per ton.

Who will pay the difference? If the biofuel is being used to make electricity, it will obviously be the rate payer.

Will oil prices rise so high that eventually the biofuel will be cost competitive? Farming inputs and logistic costs are fossil fuel related and rise as oil prices rise. This effect is called “the receding horizon.”

But when waste products are used as the feedstock, the economics change. A good example is Pacific Biodiesel, which uses waste cooking oil. If they asked farmers to grow extra virgin olive oil to make biofuel, obviously it wouldn’t work.

There is a limit as to what can be produced. That limit is the amount of used oil available.

The same is true of the oils potentially developed from the USDA’s Zero Waste project. Its biofuel production is limited to the waste that can be converted to making oil.

The advantage of using the waste stream is that the cost of the feedstock is very low. And in the case of the Zero Waste project, it supports food security for Hawai‘i.