Category Archives: Biofuel

Biofuel, Government, Renewable Energy Sources

Dept. of Ag & Dept. of Navy on Biofuels

I attended a U.S. Department of Agriculture/Department of
Navy forum yesterday called the Hawaii Renewable Energy and BioEnergy Industry Forum.

Goal of the sessions are to provide information to the public on the development of a biofuels industry in Hawaii, potentially utilizing the purchasing power of the USN as a “pull” for production.

This hearing was held at the Officers Club of the U.S. Marine Corps Air Station at Kane‘ohe. It was a high-level meeting, where
speaker after high-level speaker emphasized how committed they are to supporting biofuel production in Hawai‘i.

The Navy folks emphasized that they would commit to
converting most of their fossil fuel J8 and J5 jetfuel and their ship fuel to biofuels because it is a national security issue.  Someone said that by the time a gallon of fuel gets to the front lines in Iraq or Afganhistan, the gallon cost $40. And that gallon sometimes comes from people who do not even like us. They emphasized how serious this situation was. They said that they would commit to buying from local sources – big numbers in the millions of gallons.

Speaker after speaker talked about the commitment to make
things happen. From 9 a.m. to noon, everyone talked about how they were committed to cellulosic ethanol as well as biomass to liquid. The objective was to get the kind of biofuel that could fuel fighter jets and war ships. The USDA talked about programs that would help farmers get financing, etc.

Toward the end of the day, someone asked about the price a refiner could expect to get and the speaker said about $1.95 per gallon. I thought: $1.95 times 42 gallons in a barrel equals $82 per barrel. That is pretty near what it costs in the market today. This sounded to me like oil prices need to go much higher to get this industry up and running. Right now, there isn’t any stage 2 or 3 biofuel on the market that I know of.

There were just two small and three large farmers in the audience. None of us farmers are going to run out to see how we start growing biofuels. In total, there were nearly 300 people present. It was larger than I had expected. But no one had an answer as to how much the farmer could expect to get paid.

It feels like something is going to happen, though. The government wants biofuels to be the solution. So it seems to me that they need
to figure out what it will take to get farmers to produce feed stock for the biofuels.

Tim O’Connell, Assistant to the State Director of Rural Development with the U.S. Department of Agriculture, helped organize this forum. In closing remarks, he said he detected a tension in the room between the desire to produce biofuels and the price at which this would happen.

I’ve said before: If the farmer makes money, the farmer will farm. It is not easy to see just how farmers will make money in this scenario.

Biofuel, Geothermal, Renewable Energy Sources

HECO: Don’t Let Us Get Flattened By The Wild Bull

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When I was growing up we lived in Waiakea Uka, close to the end of a gravel road that was maybe a mile long. Most of the parcels were fairly large – 40 acres in size – and four other families lived there on Alaloa Road, too.

We kids used to go exploring a lot. The land was mostly abandoned sugarcane, tall California/guinea grass with guava trees, waiawi and an occasional ‘ohi‘a or African tulip tree.

One day when I was in the 6th grade, my younger brothers and I overheard someone say there was a river in the pasture at the end of the road. And in that river, he said, there were gold fish red, black and whites, and combination of colors up to 12 inches long. It really got our attention—gold fish. Wow!

The four of us decided to go explore one day and see if we could find that river. We got a bucket, several fishing poles and some
earthworms, and we were off. We never thought to tell Mom and Dad that we were going.

We walked to the end of the road and came to a barbed wire fence. We could tell by the tracks alongside the fence that there were cattle inside. We assumed there was at least one WILD BULL in there, too.

From where we stood, we could see that this was a very large pasture and the far end, maybe two miles ahead, ran into the Waiakea forest reserve. By the description we’d heard, we guessed that the river was straight ahead, somewhere in the middle.

The grass was shorter in the pasture than it was outside, and there was a lot of fountain grass. The visibility for us small kids might have been 50 feet at best. So we had to figure out how we were going to find the gold fish and not get hooked or flattened by the WILD BULL.

 We could tell there was a series of rock piles on the left, where we could run from one to the other as we made our way to the river. Or we could go straight ahead to a rock pile that was quite a ways in the distance.

Nobody needed to tell us that we did not want to get caught out in the open by the WILD BULL. We didn’t see him, but we knew that when he got mad, he would paw the dirt and dust would fly. Steam would come out of his nostrils and his eyes would be red. Then he would charge and hook all of us on one horn, and then stamp us flat. We imagined the worst.

So we walked along the inside of the fence line to the left, until we came to the shortest distance from the first rock pile and we headed for it. We were very clear – if the bull came, we would either run back to the fence or forward to the rock pile, whichever was closest and safest.

So far so good. No shaking of bushes, snorting of steam or thundering of hooves. We climbed up the rock pile, which was maybe 6 feet higher than the surroundings. We looked all around, listened intently, checked for cow flies and even tried to see if we could smell him. No sign.

We continued on to the second rock pile, which was not straight ahead but took us diagonally closer to the river. From there, we
headed for the third rock pile, which had us going cross country, closer to the river but back to the center.

Someone thought he heard a noise, and we all froze and strained our ears. If the bushes shook, if we heard or felt hooves or even
smelled anything we would have been gone to the safety of the nearest rock pile.

Nothing, so we quickened our pace and scrambled up the rock
pile. We stayed there for a little bit, trying to get up the nerve to make it to the last rock pile. In a short time, we were on top of that rock pile looking back from where we came.

We decided we were doing the right thing. Had the WILD BULL
caught us out in the open, we were sure we would have been flattened.

On top of that last rock pile, we could see the river’s outlines. Once we were sure nothing was moving, we climbed down and headed for the stream. When we got there, we started to walk alongside and peer into the water.

One of us yelled, “Eh look, gold fish!” We all put our lines in. We had earthworm for bait and hooks we made from Mom’s pins.

Some excitement. As I recall, we caught about nine fish. Then we headed back with our live catch in the bucket.

That is the story of how the pond at the end of one of our chicken houses came to be stocked with gold fish.

And it comes with a simple lesson: Better to be safe than sorry. Don’t get caught in the open by the WILD BULL!

Do not take the dangerous, biofuel path to expensive electricity on the Big Island. We need to hedge our bets and use geothermal as one of our “rock pile-safe harbors.” If we do not hedge our bets, there is a good chance that we will be flattened by the WILD BULL.

Even small kids understand that.

Biofuel, Geothermal, Renewable Energy Sources, Where We Live

Oahu Owns Us

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O‘ahu owns us!

In a HECO press release yesterday:

Hawaiian Electric Co. is looking for long-term suppliers of biofuels derived from Hawaii feedstocks for its generation sites statewide.

The company’s request for proposals includes land or water-based crops, waste animal fat or yellow grease feedstocks that can be converted to liquid biofuel for power sites on Oahu, Maui, Molokai, Lanai and the Big Island.

“This call for proposals sends a clear market signal to landowners and agricultural interests that if they plant today they will be able to sell their products for a reasonable return on their investment and effort tomorrow,” said Robbie Alm, Hawaiian Electric executive vice president, in a prepared statement Thursday.

A reasonable rate of return on their investment? What about the goals of the ratepayer to get cheap electricity? Everyone knows that biofuels are expensive – more expensive than oil and way more expensive than geothermal. In New Zealand, geothermal electricity is produced for 5 cents per KWH.

Again O‘ahu is making decisions for the Big Island, and the people here resent it very much. Lots of folks I talk to feel that we would be better off with our electric company being a co-op, like on Kaua‘i. At least they make their own decisions.

The view from Bishop Street is very different than the view from Kino‘ole St.

I attended the first meeting of the Hawaii Clean Energy Initiative (HCEI) steering committee Wednesday. I think that the HCEI steering committee will serve a good function. But I raised these concerns:

I said that I do not believe that we should use a one-size fits all approach – after all, each island has a different set of resources. I
said that I worried that the subsidies floating around would prevent the Big Island’s use of geothermal, which we know to be the cheapest source of electricity. The Big Island has the lowest median family income and it’s the folks on the lowest rung of the economic ladder whose lights will be turned off first.

We cannot afford to be separated into the haves and have-nots. If we go down that road, it will tear our society apart. Hawaiians complain all the time that the game is rigged in favor of those who have the money.

But choosing geothermal is not the same as giving charity to the rubbah slippah folks. Cheap electricity means people will have discretionary income to spend, businesses will flourish and folks will have jobs by which to raise their families. It benefits us all. And besides low electric cost, it is the only renewable energy source that gives royalties to Hawaiians.

I am not surprised by HECO’s announcement. I was just waiting for it to happen. And it happened before the HCEI steering committee was able to make decisions.

The world has changed. Now, when we have the ability to make the right choice, we must not go down that road where we separate into have and have-nots. If we do that, we put our society in danger of coming apart. In that case, we would be better off to be a co-op like Kaua‘i.

Biofuel, Government, Renewable Energy Sources

USDA & Navy To Meet About Hawai‘i Energy Initiative

On April 6, 2010, there will be an all-day forum about the Memorandum of Understanding between the U.S. Navy and the U.S. Department of Agriculture.

WASHINGTON, March 18, 2010 – The U. S. Department of Agriculture and the Department of Navy are co-hosting an all day forum in Hawaii on April 6, 2010, to share information about a recently announced collaborative energy opportunity. Among those providing remarks are
Agriculture Deputy Secretary Kathleen A. Merrigan and Jackalyne Pfannenstiel, assistant secretary of the Navy for installations and environment. The program is taking place on the Marine Corps Base-Hawaii in the Kaneohe Bay Officers Club.

Earlier this year, Secretary of the Navy Ray Mabus and Secretary of Agriculture Tom Vilsack signed a Memorandum of Understanding (MOU) to support President Obama’s initiative to reduce energy consumption derived from fossil fuels and increase energy production from renewable energy sources. This energy initiative in Hawaii is a direct result of that MOU.

Hawaii has been selected as the location for the initial collaboration between USDA and the Navy because Hawaii’s energy costs are among the highest in the nation and imported oil supplies 90 percent of the State’s energy. A viable agricultural sector in Hawaii can enhance Hawaii’s energy security, and energy projects like those anticipated by the Navy’s needs can help rural economies.

There may be some job opportunities associated with growing biofuels to supply the U.S. Navy.

We need to go into this with our eyes wide open, though. It will probably be expensive, or else it will be highly subsidized. Right now, biofuel does not make money on its own.

Two years ago there was a discussion about biofuels, and farmers decided then, “No sense lose money.” Here is how the economics look from a farmer’s point of view:

A barrel of oil consists of 42 gallons, and each gallon weighs approximately 6.8 pounds. Therefore, each barrel of oil weighs 286 pounds. At $80 per barrel, each pound of that oil is worth 28 cents.

Say it takes four pounds of stuff in order to squeeze out one pound of liquid. Then the farmer can expect to get no more than 7 cents per pound for the stuff. No sense, lose money.

If the farmer wanted to get 28 cents per pound to grow the stuff, then the price of oil would have to be 4 times $80 —or $320 per barrel.

There was an article in the Honolulu Star-Bulletin about the plant jatropha. In the article, the farmer said it takes 100 pounds of jatropha to make 1 gallon of biodiesel. At $80 oil, this translates to 2 cents per pound. To make just 5 cents per pound, oil would need to be $400 per barrel. If the farmer wanted 10 cents per pound, oil would need to be at $800 per barrel to give the proper price signal.

So the oil resulting from farmer-grown biofuels would either be very expensive or highly subsidized. I don’t have a problem with that, if the Navy will use all the biofuel for fuel. It would result in jobs, and that’s fine.

But we just cannot allow biofuels to find their way into HELCO’s oil-fired plants. None of us want higher electricity rates, especially when we have a stable source of geothermal power here. It’s as if we had Niagara Falls and cheap, abundant hydropower, but were asked to instead use expensive or highly subsidized biofuels to make our electricity.

I know there is lots of research going on around advanced biofuels. And that’s good. We can integrate new developments when they become proven technology. Wishing and hoping is not an energy policy.

The world has changed and we must be street-smart about what we do. We need to ask:

•    How much going cost?
•    Who going make money?
•    What is effect on future generations?

Biofuel

What’s Up With Biofuels?

What’s up with biofuels?

All biofuels are not the same.

Biofuel like the kind Pacific Biodiesel makes is made from used kitchen grease. It is actually recycling; they don’t need to grow the stuff they use to make the fuel. Recycling is good.

But there just isn’t that much waste kitchen grease. In an emergency that biodiesel would be valuable, and reserved for public safety vehicles and for food production.

What about farmer-grown biofuel? Two years ago, farmers sat in discussions that HECO sponsored on the Big Island and Maui. Farmers quickly figured out their return and stopped going to the meetings.

Farmers knew that a barrel of oil weighed 286 pounds. When oil was $80 per barrel, 1 pound of that oil was worth 28 cents. They figured they would have to squeeze at least 4 pounds of stuff to get 1 pound of liquid.

That meant that the most they could get for growing any kind of biofuel stock would be 7 cents per pound. No sense lose money. Better plant cucumber.  Small farmers wouldn’t do it.

If they did do it, it would have to be very expensive—more than $320 per barrel expensive. And as oil prices rise, the cost of growing the biofuel would rise too.

What about cellulosic ethanol? It is still just an idea. Lots and lots of federal money went down the drain trying to force this to work. And as fossil fuel prices go up, the cost of this process goes up too.

And how about algae-to-biofuel? We all hope this will work. But it is still very far off and may never be scalable. “Wishing” and “hoping” is not an energy policy.

Biofuels, except for the kind made from kitchen grease, have an Energy Return on Investment of less than 2 to 1. Dr. Chas Hall says that a modern society needs an EROI of more than 3 to 1 to sustain itself.

Biofuel, Geothermal, Peak Oil

More Thoughts on Peak Oil – And Our Solution

I thought that I would revisit a post I did on my first impressions of the Peak Oil conference in Denver this past October. I have added comments to the post I did back then. My new comments are in italics.

Examining Energy Alternatives

I learned something interesting at the Peak Oil Conference I’m currently attending in Denver. It’s about a pattern. When U.S. oil costs exceed four percent of the gross domestic product – so, when the price of oil hits $80 per barrel – we go into recession. (Note that this does not mean oil prices won’t go even higher than $80 per barrel.)

I think that investors are very reluctant to bet against the pattern above. They know that at some point above 4 percent GDP, they will be playing with fire. Last July’s oil price of $147 and the immediate collapse is fresh in their memories as something that can happen. So we watch as the stock market and oil prices twist themselves into a pretzel, according to the strength of the U.S. dollar, the strength of the Chinese economy, the cold winter, the status of Iraq, the riots in Iran, and on and on.

We should be paying attention to the actual supply situation. The natural decline rate of the oil supply is between 5 and 6 percent. That means we need to find 4.5 million gallons per day of new oil supplies — every year — or we are going to be short.

Right now, we have more than enough oil. But Jeff Rubin, former chief economist of CIBC, predicts $225 per barrel oil by 2012 and with it the end of globalization, a movement towards local sourcing and a need for massive scaling up of energy efficiency.

We need to move to geothermal now, not thirty years from now.

David Murphy talked about Energy Return on Investment (EROI), and I asked him what he thought the EROI is for geothermal. He said around 10 to 1, and he agreed with me that it is an attractive alternative energy to pursue for Hawai‘i. This was the consensus of everyone I asked about geothermal. Because geothermal costs are stable, it’s a no-brainer.

Terry Backer, a panel member and long-time Connecticut legislator, pointed out how he sees the economy unwinding. He said that people in his state had been doing okay. In early 2007, although things were tight, people had around a $400-500 per month cushion. But then the price of heating oil was high in the winter, and then the price of gas went to $4.50 per gallon, and food prices went up too. It just stripped people of their “cushion.”

If the consumers have no extra money they cannot buy things. Elizabeth Warren gave this speech that says it all. (Coincidentally her base year is 1970, the year that oil peaked in the U.S.).

The question is, how do we give the middle class disposable income? Choosing the low cost alternative to fossil fuel can help. We have geothermal, which is this.

It’s exactly why we need to move to geothermal. It will stabilize costs, and protect folks forever from ever-higher electricity and water bills that result from rising oil prices.

We need to force that change, not give a thousand reasons why “no can.” Sure we can try other alternatives. But as farmers always say: “What works, works.” Geothermal works.

We must be careful not to end up like Iceland. Fishing and geothermal worked. But instead they started chasing after finance matters, whose foundation rested on sand. Their economy collapsed and now they are left with fishing and geothermal—the things that still work.

And when people start buying electric vehicles, this will protect them from gasoline costs, too. As for businesses, their customers will have more discretionary income to spend. The government will see fewer folks fall through the cracks.

We probably are going to be dependent on gasoline for transportation for a long time. One practical way for Hawai‘i people to protect themselves from high gasoline costs is to buy hybrid vehicles. In Japan, hybrids are a hit. On the Big Island, the more “base power” that comes from geothermal, the more discretionary income people will have. The more discretionary income people have, the more business prospers and the more jobs are available for people who are raising their families.

In the final analysis it is about the consumers. Consumers drive the economy. We tend to forget that.

For native Hawaiians, the use of the geothermal resource will generate revenues in royalties and possibly rents as well. They are consumers, too.

Biofuels, on the other hand, are not expected to be cheaper than oil, and may even need subsidies from consumers. Why would we do that, when we can instead save consumers money by using geothermal?

By now, everyone must be aware that biofuels are wishing and hoping. We wish it would work. Farmers know that it will be very expensive and that it will take money away from consumers.

We need to put in a cable to O‘ahu. They need base/dispatchable power over there, on top of which they can put solar and wind. Without that, O‘ahu will be hopelessly dependent on oil.

All that is true. But we need to take care of the people on the Big Island before we even consider another option. That point was made abundantly clear at a presentation on geothermal I did for the Keaukaha Community Association.  Done right, with community input and community benefit, I’m confident that the people would look favorably on sending power to O‘ahu. But it is a Big Island discussion.

As a farmer, I am concerned about where we are going to get the fertilizer to feed ourselves. Nitrogen, the building block of protein, is extracted from air using high heat and pressure. Oil and gas are what is used now, and that process takes lots of power. But if oil and gas prices rise enough, geothermal power can be substituted. We need to place ourselves in a position to win.

Again, geothermal would generate a lot of royalty money for the Hawaiian people. Without this revenue source, we will see more and more cuts to social services.

I am very encouraged to see that Hawaiians are leading this discussion. This is the right thing to happen.

Geothermal can be a blessing for the Hawaiian people.

If we can maximize its use as a resource for the native Hawaiian people, we will also strengthen our middle class. If we do that our businesses will flourish, everybody will benefit and our future will be hopeful

Biofuel

2009 Was A Bad Year For Biofuels

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Last month, I wrote that instead of a 20 cents/pound subsidy for
biofuels, I would rather see a 20 cents/pound subsidy go to
farmers.

Soybus

2009 was a very tough year for biodiesel. Robert Rapier wrote, at The Oil Drum: “The wheels came off the biodiesel wagon.”

How disastrous was 2009?

Per the National Biodiesel Board (NBB), here are the statistics from the past 6 years of biodiesel production:

2004: 25 million gallons
2005: 75 million gallons
2006: 250 million gallons
2007: 450 million gallons
2008: 700 million gallons
2009: 300-350 million gallons (estimate)

The NBB also reports that domestic biodiesel capacity is now operating at only 15%. There have been a number of stories in the past few days covering these developments.

That’s a bad start to 2010, after a “rough year” for the entire biofuel industry.

Biofuel, Geothermal, Renewable Energy Sources

Study: U.S. Should Reconsider Biofuel Policy

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Now there’s a study out saying it is basically wrong to pursue our present biofuel policy. I agree with it completely.

In the 1930s, you could get 100 barrels of oil with the energy from one barrel. In the 1970s, this had decreased to 30 to 1. Now, oil’s Energy Return on Investment (EROI) ratio has decreased to 10 to 1, and it will steadily decline as oil is more and more difficult to harvest.

To sustain our society, we must have an EROI of at least 3 to 1. Biofuels only have an EROI of 2 to 1.

Geothermal, however, is 10 to 1, and that ratio will stay steady for centuries.

Rice University’s Baker Institute for Public Policy took a strong stance in the following article, and it goes against everything that is taking place in Hawai‘i today. Lots of the biofuel companies are benefitting from the new stimulus money, which is pushing biofuels that have ex-HEI folks in their organizations.

HOUSTON (Dow Jones)–The U.S. government needs to rethink promoting ethanol as a way to enhance energy security as production of the fuel is costly for taxpayers and poses economic and environmental risks, according to a study released Wednesday.

The report by the Rice University’s Baker Institute for Public Policy notes that in 2008 the U.S. government spent $4 billion in biofuel subsidies to replace 2% of the U.S. gasoline supply. The average cost to the taxpayer of those substituted barrels of gasoline was roughly $82 a barrel, or $1.95 per gallon on top of the retail gasoline price, according to the study.

“We need to set realistic targets for ethanol in the United States instead of just throwing taxpayer money out the window,” said Amy Myers Jaffe, a senior fellow in energy studies at the Baker Institute and one of the report’s authors.

Here are the names of leaders in the Baker Institute for Public Policy. I especially trust Colin Powell, who seems balanced and credible to me.

Personnel
•    James A. Baker, III Honorary Chair,
•    Edward P. Djerejian, Director (former American Ambassador to Israel and Syria and Assistant Secretary of State for Near Eastern Affairs).

Board of Advisors
•    William Barnett
•    David Leebron
•    Colin Powell
•    Madeline K. Albright

Biofuel, Geothermal, Renewable Energy Sources

Biofuels & Geothermal

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In Saturday’s Honolulu Advertiser, there was an article about a $25 million Department of Energy grant to UOP, LLC. That’s a Honeywell company that will test biomass feedstock at Tesoro’s refinery in Kapolei.

In Denver this past October, prior to the Association for the Study of Peak Oil conference, I asked my friend Gail Tverberg if she would introduce me to Robert Rapier. He is a well-respected chemical engineer and a frequent contributor to The Oil Drum blog. I wanted to ask him about next-generation biofuel projects.

Gail forwarded my email to Robert, and he wrote back that he was sitting in an office in Waimea, and that he had moved to Hawai‘i to work on just these kinds of projects.  It’s very fortunate for us, as he can explain these complex processes in a very clear way.

From his September 2009 post at The Oil Drum. There is a reference to UOP.

There are a number of companies involved in pyrolysis research. Dynamotive Energy Systems has been working on this for a while (I first wrote about them in 2007). UOP – a company that specializes in product upgrading for refineries – has teamed with Ensyn to form a joint venture called Envergent Technologies. The company intends to make pyrolysis oils from biomass for power generation, heat, and transport fuel (this is where UOP’s skills will come into play).

When I asked him about this specific project, Robert responded that: “…Pyrolysis is not too difficult unless you are trying to upgrade to transportation fuels. Then it gets expensive. But for stationary power generation, it is a pretty promising option in my view.”

And in this post he talks about pretenders, those technologies that are not working:

To summarize, the biofuel pretenders fall into several broad categories. The big ones are:

  • Hydrogen
  • Most would-be cellulosic ethanol producers
  • Most would-be algal biofuel producers
  • Most first generation biodiesel producers

This isn’t to say that none of these will work in any circumstances. I will get into that when I talk about niches. But I will say that I am confident that none of these are scalable solutions to our fossil fuel dependence. Frankly, I wish the algae story was true. I love the idea of getting renewable fuel from brackish waterways. But I try not to let a hope get confused with what I believe is realistic.

I agree with Robert that first generation biofuels, farmer grown, will not scale without major subsidies. If we were to give 20 cents/pound subsidies to grow biofuels, I would rather give the farmers a 20-cents/pound subsidy to grow food!

“Base power” is proven technology that is dependable 24/7 and makes up 85 to 90 percent of a utility’s power. There are only few options for base power. The first option is fossil fuels. The second is biofuels. And the third is geothermal.

Other options, like wind and solar, are nice to talk about. But they are only a tiny part of the mix. Biofuel, grown by farmers, doesn’t break even until approximately $320 per barrel; oil is in the high $70s today and we all know it will keep on climbing.

Geothermal breaks even at less than $60 per barrel oil. And it will stay that way for centuries!

On the Big Island, unless someone can show that the electricity cost to regular folks will be cheaper with biofuels than with geothermal, then we should go with geothermal.

Biofuel, Geothermal, Renewable Energy Sources

Geothermal Is Our Best Choice

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Back on November 16, I attended a workshop to review work plans being considered by the Hawai‘i Greenhouse Gas Emissions Reduction Task Force to recommend to the legislature at year’s end.

I was struck by the fact that geothermal was not chosen as an alternative. Geothermal has no greenhouse gas emissions, and it results in lower electricity rates.

Why was it not included?

The utilities plan to transition to biofuels instead of continuing to use fossil fuels, but consider this: Biofuels involve farming. At today’s prices, a farmer would get 6 cents per pound for growing jatropha or palm oil. They obviously would not do it for that price. When oil is at $200 per barrel, they would get 18 cents per pound. Still not enough. I believe farmers might become interested when biofuel feed stock pays 24 cents per pound, which is the equivalent cost of $270 per barrel oil.

So we can probably assume that we would not see very much local biofuel farming in the near future. Instead, the biodiesel would probably come from Indonesia. It would be certified as eco-friendly by a third-party, green organization. Whether or not the oil is brown or green, though, the bottom line is that it will be costly.

The legislation requires that adverse effects on small businesses be considered. It is fair to say that fossil fuel costs will rise and, therefore, electricity rates will rise too. When oil hit $147 last summer, it was disastrous for small business folks.

On the other hand, the estimated break-even price of geothermal is approximately $57 per barrel and it will stay stable for as long as we can see.

Why is geothermal not being considered?

I submitted the following comments:

My name is Richard Ha. I am testifying on behalf of myself and the 60-plus employees who work with us at Hamakua Springs Country Farms at Pepeekeo, here on the Big Island.

Why is geothermal energy not considered?

  1. Geothermal energy does not give off any greenhouse gas emissions.
  2. Geothermal energy has an Energy Return on Investment (EROI) ratio of 10 to 1—and, unlike fossil fuels and bio fuels, the EROI will not decline in the future.
  3. Geothermal breaks even at an oil price equivalent of $57 per barrel.
  4. It is available in abundance on the Big Island.
  5. Unlike 20 years ago, there is only a handful of opponents.
  6. Unlike the other two alternatives for base power—fossil fuel and biofuel—geothermal is much cheaper.
  7. There will be a huge benefit to small businesses if geothermal is sourced right here on the Big Island. It will give the Big Island a competitive advantage to the mainland at some future time.
  8. The EROI for geothermal is 10 to 1 and will never decrease; unlike oil, which was at 100 to 1 in the 1930s. It is in the 10-15 to 1 range today. It will steadily decline — that is not in dispute. How soon will it hit 3 to 1 is the issue.
  9. Since geothermal is base power, we can potentially source up to 80% of HELCO’s power from this source. On the other hand, wind and solar can be depended upon for only 20% or so.
  10. Because geothermal is the cheapest source of base power, it will have the biggest positive effect on discretionary income for lower income folks.
  11. Choosing the high cost alternative for base power will send a message that the utility does not care about the situation of the lower income folks. And, the native Hawaiian community.

EROI is calculated in energy units, not dollars. It gives one a sense of direction and causes us to  question solutions that have low or declining EROIs. For example, shouldn’t we question biofuels as a solution when the EROI is less than 2 to 1?

I recommend that EROI should be included in all energy studies. It is a fundamental shortcoming of this study.

In the 1930s, we got 100 barrels of oil from the energy in one barrel of oil. In the 1970s, we got 30 barrels from one barrel. Now, we get 10 barrels from the energy equivalent of one barrel of oil.  This is understandable, and it will continue to go down as oil becomes more and more difficult to access. At some point before the last drop of oil is sucked from the ground, the EROI will be 1 to 1 and there will be no point in going further.

Charles Hall authored a paper: What is the minimum EROI that a sustainable society must have?  In it, he says that the EROI ratio must be no less than 3 to 1 in order to maintain a sustainable society.

Fossil fuel oil EROI is approximately 10 to 1 and dropping steadily, while geothermal is 10 to 1 and will not decline further. Bio fuels have an EROI of less than 2 to 1. Clearly, geothermal is the best choice.  

Aloha,
Richard Ha