Category Archives: Peak Oil

Government Says ‘Plenty, Cheap, No Worry!’ But Others Say, ‘Worry’

January 1, 2015 Richard Ha

Richard Ha writes:

This is a really good graph that shows three projections for future gas production through the year 2040. Click on this postcarbon.org graph and you'll see the black line shows a University of Texas study, the red line shows David Hughes's projection and the blue line represents the government's EIA projection.

The government projection shows nothing to worry about. Plenty, plenty, plenty!

But the others show an entirely different story. They suggest we better start making some other plans.

Conventional oil, which is our regular oil supply like from Russia and OPEC, hit its max in 2005. It's shale gas and oil that has increased our oil and natural gas supply in the last few years. But it appears that shale gas and oil will start to decline soon and if so, we need to start down the road to adapting to what will soon be again-rising oil prices.

On the Big Island, geothermal can replace oil and LNG. Not many other places are as fortunate. We just need to be smart and figure out what works.

Geothermal works. We don't have to get there tomorrow, and we don't have to get there in a straight line. We just have to get there.

We have a way to do this on the Big Island: Geothermal. It's a gift.

This podcast with David Hughes, author of the recent report Drilling Deeper for the Post Carbon Institute, talks more about this.

It's all common sense. It’s about data and science—water does not flow uphill, no matter how much we wish it would. Nothing about this is beyond the average person. I find that rubbah slippah folks understand all this in a few minutes.

Peak Oil

Why LNG is Such a Bad Risk

December 29, 2014 Richard Ha

Richard Ha writes:

We are getting ready to make huge liquified natural gas (LNG) decisions, and LNG is a big risk. We need to understand the risk and who’s going to be left paying the price.

The first time I heard about shale oil and gas was at an Association for the Study of Peak Oil (ASPO) conference. I attended five of those conferences, the only person from Hawai‘i to do so. Hawai‘i County paid for the trip to the 2010 ASPO conference, held in Washington D.C., and is still benefitting from that small investment.

That discussion about shale oil and gas though was at the 2009 ASPO conference, in Denver, and it turned into a sharp discussion between the geologist Art Berman and a drilling company executive.

Art said he had studied data from 4,000 wells in the Barnett Shale and found that the average well gave off 72 percent of its production in the first year.

The executive countered that his figures showed a hyperbolic curve indicating that production lasts for 22 years.

Somebody was wrong. Later I learned that hyperbolic curves only mean that the following year is less than the one previous.

I didn’t know the definition then, but common sense told me that at the end of 22 years, maybe just a gallon might be coming out per hour. I felt like the executive was just trying to sell stock.

Later, a study of 19,000 wells showed that the average well gave more than ninety percent of its production in its first five years. This was not rocket science – even a banana farmer could tell that you would need to replace one-fifth of the wells each year just to stay even. More if production is higher in the first few years.

As of 2010, it was common knowledge that the average shale oil and gas well depleted in a short time, and it was a subject of intense discussion among those of us who attended the ASPO conferences.

In the meantime, some of the folks out there trying to sell stocks were using the terms “resource” and “reserves” interchangeably in describing what was available. The phrase “Saudi America” started to be thrown around.

The U.S. Energy Information Administration (EIA) finally estimated that the U.S. had an economically accessible shale oil supply of about 100 more years.

But David Hughes, a Canadian geologist, challenged the availability of the Monterey Shale oil due to its geological characteristics. Instead of being flat, the resource rock was wavy and squished. It was hard to access via horizontal drilling.

And then this March, the EIA quietly changed its estimate. In a low-key announcement, it readjusted its estimate of Monterey Shale oil availability – which was two-thirds of our national recoverable supply – downward by an amazing 96 percent.

I saw the announcement and realized its significance immediately. Readjusting the estimate of the US supply of oil downward by two-thirds was a huge, huge deal. But the news kind of just slipped by.

Shale gas has the same characteristics of shale oil – it depletes rapidly. If you ask me who I believe about shale oil and gas? Based on his track record, I believe the data and conclusions of David Hughes.

He based his studies on the same historical data and information the U.S. EIA used, but analyzed it in a more meticulous and targeted way. His data shows natural gas declining much, much faster than does the EIA. A recent University of Texas study agrees more with David Hughes than with the EIA.

This Peak Prosperity podcast features an interview with David Hughes talking about shale production and how he did his analysis. It’s a good interview (47:24). Alternately, you can read the transcript here.

On p. 300 of his report, in figure 3-116, Hughes shows an interesting graph of the EIA’s forecast for shale gas projections and how, in the long term, they are greatly overestimated.

At the end of Hughes’ study on natural gas, he cautions (click to enlarge) :

Here on the Big Island, based on the precautionary principle, I would rely on geothermal rather than liquid natural gas for our electricity generation. A faster decline probably means a faster rise in natural gas price. If we rely on LNG, the rate payer will assume that risk.

And in Hawai‘i we do not have methane underground. So the bad effects of fracking does not apply to us at all. We have drilled 85,000 wells by now. It’s a mature industry that deals with H2S routinely.

In the future, geothermal could also help us solve our transportation problem by providing hydrogen for fuel-celled vehicles. The cost of hydrogen comes from either natural gas or from passing electricity through water. Eventually, the cost of making hydrogen from natural gas will pass the cost of making hydrogen from electricity from geothermal. Then we will have a permanent advantage over the rest of the world. That’s what we want!

Geothermal is climate change-friendly and as infinite as we can get—we will sit for 500,000 to a million years over the “hot spot.” And we are one of the few places in the world with these circumstances and this opportunity.

We have truly come to a crossroads in our history. We must put our personal agendas behind us and do the right thing for ourselves and future generations.

Community, Lowering Electric Rates, Peak Oil, Sustainability

Great Info Meeting on How Kaua‘i Formed its Electric Utility Co-op

December 21, 2014 Richard Ha 1 Comment

Richard Ha writes:

We had an interesting presentation Friday from two executives from Kaua‘i’s electrical utility, the Kaua‘i Island Utility Cooperative (KIUC). David Bissell is CEO, and Dennis Esaki was a founding member who only recently left the KIUC board.

It was amazing to hear what KIUC went through to purchase Kaua‘i Electric Company and form the utility cooperative. The Kaua‘i County Council and mayor were originally against the purchase, and the PUC turned down its first purchase bid as not being in the best interest of the users. But the founding group continued to rework its plan and was ultimately successful the second time it presented a bid.

In total, it was about a two-year process and the group purchased Kaua‘i Electric Company in 2002 for $215 million. And, Esaki said, referring to the county administrators, “they’re all on board now.”

This month, Kaua‘i’s electricity rates are lower than any of the islands but O‘ahu’s (mostly because of the oil price decline). Most months, its rates are a little lower than the Big Island's and a little higher than Maui.

Since 2003, ratepayers have received $30 million in refunds and patronage capital — the amount of money left after all the bills are paid, and the co-op has met its lenders’ requirements. This is money that circulates back into the community.

Members have $80 million in equity, which is what they own of the co-op. When the utility was purchased 12 years ago, it was 100 percent debt-financed, so the equity at that time was zero.

KIUC has gone from about five percent renewable energy in 2009 to 18 percent today. It will be at about 40 percent by the end of next year.

From the KIUC 2013 Annual Report (click to enlarge):

The organization of the co-op also reflects what the people of Kaua‘i want, because its board is selected by the people. Esaki and Bissel said that at first there was almost total, and repeated, board turnover as ratepayers regularly voted out board members who weren’t doing what they wanted. Eventually, they said, the board has stabilized.

Projects are financed through national co-op financing, which results in much lower financing costs.

You can watch a video of the meeting below. Thanks to Chester Lowrey for videotaping!

There was a lot of community interest in the KIUC presentation, with a good turnout from various community groups. The presentation was sponsored by three organizations:

The Big Island Community Coalition, the steering committee of which is made up of David DeLuz, Jr., Rockne Freitas, Michelle Galimba, myself, Wallace Ishibashi, Kuulei Kealoha Cooper, Ka‘iu Kimura, D. Noelani Kalipi, Robert Lindsey, H. M. Monty Richards, Marcia Sakai, Ku‘u Lehua Veincent, and William Walter.

The board of the Hilo-Hamakua Community Development Corporation, which is President Donna Johnson, Judi Steinman, Glenn Carvalho, Eric Weinert, Jason Moniz, Gerald DeMello, Colleen Aina, and Richard Ha.

And Hawai‘i Farmers and Ranchers United, which represents more than 90 percent of the farming goods produced on the Big Island.

Ed Olson donated the use of his Wainaku Executive Center for the meeting.

We have formed a steering committee to discuss this further. The committee consists of Gerald DeMello, Michelle Galimba, Wally Ishibashi, Donna Johnson, Eric Weinert, Vincent Paul Pontieux, Marco Mangelsdorf, Russell Ruderman, and myself. I’ll keep you posted on further developments.

Edited 12/21/14 at 10:45 pm; 1/5/15; 1/30/15.

Current Affairs, Geothermal, Peak Oil, Renewable Energy Sources, Sustainability

Aren’t the Falling Oil Prices Great?

December 8, 2014 Richard Ha 1 Comment

Richard Ha writes:

Isn’t it great that the price of oil has dropped so low all of the sudden?!

Wait – is it??

In the short term, for maybe five years, we’re going to be pretty happy here in Hawai‘i. More tourists will travel here, food and electricity costs will drop, and we will have more consumer confidence. We’ll feel like everything’s fine.

But everything is interconnected in our big world now, and could there be any problems with such a sudden and steep drop in oil prices?

Gail Tverberg, the former insurance actuary I sometimes refer to here who is very knowledgeable about such things on a macro level – and who writes the blog Our Finite World – just wrote about this.

In her post Ten Reasons Why a Severe Drop in Oil Prices is a Problem, she writes about the big picture.

From Our Finite World:

Let me explain some of the issues:

Issue 1. If the price of oil is too low, it will simply be left in the ground.

The world badly needs oil for many purposes: to power its cars, to plant it[s] fields, to operate its oil-powered irrigation pumps, and to act as a raw material for making many kinds of products, including medicines and fabrics….

Issue 2. The drop in oil prices is already having an impact on shale extraction and offshore drilling.

While many claims have been made that US shale drilling can be profitable at low prices, actions speak louder than words. (The problem may be a cash flow problem rather than profitability, but either problem cuts off drilling.) Reuters indicates that new oil and gas well permits tumbled by 40% in November…

…

Issue 4. Low oil prices tend to cause debt defaults that have wide ranging consequences. If defaults become widespread, they could affect bank deposits and international trade.

With low oil prices, it becomes much more difficult for shale drillers to pay back the loans they have taken out. Cash flow is much lower, and interest rates on new loans are likely much higher. The huge amount of debt that shale drillers have taken on suddenly becomes at-risk. Energy debt currently accounts for 16% of the US junk bond market, so the amount at risk is substantial.

Dropping oil prices affect international debt as well. The value of Venezuelan bonds recently fell to 51 cents on the dollar, because of the high default risk with low oil prices. Russia’s Rosneft is also reported to be having difficulty with its loans….

Tverberg writes about some pretty extreme consequences of nearing the limits of our finite resources. I’ve said many times that I cannot disagree with her. My approach, though, is to look for workarounds for us here in Hawai‘i.

I’ve also said plenty of times that we are so lucky to have geothermal. It’s not quite “infinite,” but the Big Island will be over the geothermal “hot spot” for 500,000 to a million years, and that’s close enough.

We’ll see where all this takes us. It’s uncharted waters. On the state level, it will be good for us in the short term, but on a higher level – where Gail Tverberg operates and what she writes about – we need to pay serious attention to what’s going on. Have a look at her post. It’s important and enlightening.

It’s been a very interesting week in terms of energy and other issues affecting the Big Island and all the rest of it. Stay tuned. I have more to say!

Current Affairs, Geothermal, Lowering Electric Rates, Peak Oil, Renewable Energy Sources, Sustainability

Thoughts on the NextEra Purchase of HEI

December 4, 2014 Richard Ha 2 Comments

Richard Ha writes:

NextEra Energy’s purchase of Hawaiian Electric Industries (HEI), just announced yesterday, will be very good for Hawai‘i.

Here’s what we know about NextEra: It’s a publicly traded company headquartered in Florida. Its principal subsidiaries include Florida Power & Light Company, which was recognized by Market Strategies International earlier this year as the nation’s most trusted electric utility, and NextEra Energy Resources, which together with its affiliated entities (NextEra Energy Resources), is North America’s largest producer of renewable energy from the wind and sun.

NextEra says it will spin off HEI’s American Savings Bank, which makes a lot of sense.

NextEra has the balance sheet and other resources to support significant investment in Hawai‘i’s transmission and distribution system to enable much higher levels of renewable energy sources.

Most of all, this change in ownership of our electrical utility will finally make much needed new and different approaches possible. What we all want is a lower cost of electricity.

And each island needs to take advantage of its own resources. One size does not fit all.

For example, the Big Island and Maui each have the options of using wind, solar, and possibly geothermal and some biofuel.

O‘ahu has wind, solar and biofuel but no proven geothermal and so limited opportunities to lower rates. Solar is a possibility. Coal is cheap, but unacceptable. LNG is possible as a bridge fuel.

Maui has its own issues, which are different from both O‘ahu and Maui.

We are unique on the Big Island. Beside solar, wind and biofuels, we have proven geothermal. Once it’s developed, geothermal wants to run 100 percent of the time, and the more it runs, the cheaper it is to the rate payers.

What if we guaranteed the geothermal developer, say, 25MW, and put no restriction on generating electricity for hydrogen manufacturing over and above the 25MW. If, for instance, the geothermal company installed a 30MW generator, they could sell 25MW to the utility and sell the excess 5MW cheap to make hydrogen. That would solve our liquid transportation problem, via hydrogen fuel cells, and we could make nitrogen fertilizer so as not to be dependent on petroleum byproducts. That’s only one example of what we could do with new thinking.

I would resist the temptation to advocate for a cable going from the Big Island. We need to see demonstrated results first.

This sales is an unexpected but very interesting turn of events. We welcome NextEra.

Big Island, Food Security, Hawaiian Role Models, History, Maku‘u Stories, Peak Oil, Sustainability

Maku’u Stories, Part 5: What Uncle Sonny Kamahele Taught Me About Business

November 18, 2014 Richard Ha

Let me tell you something really interesting I learned from my Uncle Sonny Kamahele. He had 20 acres in Maku‘u, in Puna on the Big Island. There was a rare kipuka there with soil that was 10 feet deep, no rocks or anything. There was a spring in one corner of his property.

I was just out of college with an accounting degree and lots of ideas about business. So I looked at his land and wondered if he would lease me 10 acres to grow bananas. I scratched my chin and thought about how I could grow 35,000 pounds per acre on those 10 acres. Maybe 300,000 pounds a year if I took into account turn around space.

And yet on the other 10 acres, Uncle Sonny was making his living with just 10 or 20 hills of watermelons, with maybe four plants on each hill. People would come from miles around to buy his watermelons. It provided him with enough income to support himself and to send money to his wife and son in the Philippines.

Here’s the lesson I learned from him: It’s not about how big your farm is. Your business is successful if it supports your situation. I learned a lot from Uncle Sonny, but I think that’s the most important thing I learned from him.

That’s what I always look at when I visit a farm. Not how big it is, or how much money it makes, but how it operates, and whether it solves the problem it is trying to solve.

Here’s why I’m telling you this right now. We have a real energy problem looming. I think the situation with oil is very serious, and there are definitely going to be winners and losers in the world. We need to position ourselves to be winners, and it’s going to take all of us, big and small.

How are we going to feed Hawai‘i?

Every one of us is going to play a role in it – from the largest farmers to the small folks growing food in their backyard. Do you remember in the plantation camps, especially the Filipino camps, how the yards were always planted with food? Beans, eggplants, the whole thing. I don’t see it so much anymore, but we can do it again.

We are lucky on the Big Island. We’re not crowded and everybody has room to grow food. You know how you can tell we have plenty space? Everybody’s yard is too big to mow! We have the ability to do this.

It’s going to take all of us. It’s not just about any one of us, it’s about all of us, from the biggest to the smallest.

I’m lucky to have had my Uncle Sonny Kamahele to learn from when I was younger. I spent a lot of time with him and I got a real feeling for how he made decisions, which was old style.

His lifestyle was a real connection to the past, too. His lawn and the whole area were always immaculate, practically manicured. He lived pretty close to the old ways with a lot of remnants from the past. His red and green house had stones from down the beach under the pillars, and lumber over the dirt floors. He built beds on those floors and then had five or six lauhala mats on the beds instead of mattresses; old style. There was a redwood water tank.

He listened to the County extension folks, and I learned from that, too – to pay attention to the people who know something.

But one of the most important things I learned was that your business, big or small, is a success if it supports your particular situation.

Peak Oil

‘Peak Cheap Oil’ & Slaves in the Basement

November 9, 2014 Richard Ha 1 Comment

Richard Ha writes:

Have you looked at the free Crash Course series I’ve been posting? It's from Chris Martenson's blog Peak Prosperity and it's excellent. This chapter by Adam Taggart is on “Peak Cheap Oil,” and you can watch the current video (19:30) or read this chapter.

Here’s a random bit I pulled from it, but it’s all this interesting:

In order to understand why oil is so important to our economy and our daily lives, we have to understand something about what it does for us.

We value any source of energy because we can harness it to do work for us. For example, every time you turn on a 100-watt light bulb, it is the same as if you had a fit human being in the basement pedaling as hard as they could to keep that bulb lit.

That is how much energy a single 100-watt light bulb uses. In the background while you run water, take hot showers, and vacuum the floor, it is as if your house is employing the services of at least 50 such extremely fit bike riders.

This “energy slave count” if you will, exceeds that of some kings in times past. It can therefore truly be said that we are all living like kings. Although we may not appreciate that because it all seems so ordinary that we take it for granted.

And how much ‘work’ is embodied in a gallon of gasoline, our most favorite substance of them all? Well, if you put a single gallon in a car, drove it until it ran out, and then turned around and pushed the car home you’d find out.

It turns out that a gallon of gas has the equivalent energy of 500 hours of hard human labor, or 12-and-a-half 40 hour work weeks.

So how much is a gallon of gas worth? $4 $10? If you wanted to pay this poor man $15 an hour to push your car home then we might value a gallon of gas at $7,500.

Here’s another example. It has been calculated that the amount of food that average North America citizen consumes in year requires the equivalent of 400 gallons of petroleum to produce and ship. At $4/gallon that works out to $1600 of your yearly food bill is spent on fuel, which doesn’t sound too extreme.

However, when we consider that those 400 gallons represent the energy equivalent of 100 humans working year round at 40 hours a week, then it takes on an entirely different meaning.

This puts your diet well out of the reach of most kings of times past. Just to put this in context, as it is currently configured, food production and distribution uses fully 2/3rds of our domestic oil production. This is one reason why a cessation of imports would be, shall we say, disruptive….

How easily could we replace the role of oil in our style of consumer-led, growth-based economy? Not very.

We currently use oil mainly for transportation, sitting at right around 70% of all oil consumption. The next biggest block is for industrial purposes followed by residential which means heating oil….

Biofuels and coal could potentially fill some of these functions but certainly not without a massive reinvestment program and not anytime soon….

Mostly hidden from us in plain sight is Key Concept #10: The amount of work that oil performs in service to the average person is equivalent to having hundreds of slaves….

The next key concept of the crash course is that oil is a magical substance of finite supply but of unlimited importance. This cannot be overstated.

Transitioning from one fuel source to another is a devilishly expensive proposition posing enormous challenges with respect to cost, scale and time.

Our species transitioned over many decades from wood to coal because coal was a better fuel source.

And we transitioned over several decades from coal to oil for the same reason. In both cases this happened because the new fuel source was plentiful, cheap, and higher-yielding in terms of energy output per unit of weight compared to the older fuel.

Nobody has been able to advance any candidates as our next source of transportation energy that is better than oil on all three counts.

A common pushback to this point is a firm belief many people hold that new technological breakthroughs will ride to our rescue here.

I’ll explain in a future chapter why this is very likely to prove a false hope.

All I’ll do here is remind you that technology is not a source of energy – it may well help us to better exploit our existing energy sources by extracting them more easily, or consuming them more efficiently – but technology can’t create energy for us.

Read the rest

Hawaii is no longer isolated from the rest of the world, and it’s important we know what’s going on out there. This isn’t rocket science, and there are going to be winners and losers.

We know that two-thirds of our economy is made up of consumer spending – so how about we set a goal of increasing the discretionary income of the rubbah slippah folks?

We can do this by advocating for cheaper electricity, and for affordable locally grown food close to home.

The Big Island’s electricity rates have been 25 percent higher than Oahu’s for as long as anyone can remember. And yet we “curtail,” or throw away, many megawatts of electricity every day.

Geothermally-generated electricity costs half that of oil, and the Big Island will be sitting over the “hot spot” for 500,000 to a million years. The flanks of Maunakea could hold as much geothermal heat as the entire East Rift. The Department of Hawaiian Home Lands (DHHL) sits on top of a large portion of that geothermal heat. If the DHHL chooses to act decisively, it could improve its beneficiaries’ lives, as well as the rest of ours, in unimagined ways.

The Big Island Community Coalition fights for lower cost electricity. Here is a Huffington Post article about one of its successes.

From a risk assessment point of view, the rising oil price is much more dangerous than perceived GMO dangers. Trillions of meals have been served without one negative incident that can be attributed to GMOs.

The reason we see so many young people hitchhiking nowadays is not because of environmental protest. It’s because of lack of jobs! The average age of farmers is getting older every year and it’s because young farmers are having a tough time making money.

Lower electricity rates will give farmers’ customers more discretionary income to support the farmers. Technology that helps farmers to farm will lower farmers’ costs. The effect of banning GMOs is to force farmers to rely more on oil for the production of food. We should know that this is a dangerous path and will not help future generations.

If we agree on our final destination, we can get ourselves to a place where our future generations are winners, and not losers.

Peak Oil

The Declining Oil Price

November 3, 2014 Richard Ha 3 Comments

Richard Ha writes:

From a 40,000-foot view, a declining oil price is good for the U.S. and Hawai‘i in the short run because it gives us time to adapt.

A lower oil price makes oil-exporting countries vulnerable if they cannot maintain their domestic budgets and take care of their people in the manner in which they have become accustomed.

From PeakOil.com:

Financial reserves of oil-producing countries vulnerable to depletion

A specialized economist said that the financial reserves and surpluses of oil-producing countries are vulnerable to depletion in the event of continuing decline of global oil prices and with the pace of public spending remaining around the current high levels.

Professor of economics at the College of Administrative Sciences, Kuwait University, Dr. Mohammed Al-Saqqa said in an interview with Kuwait News Agency (KUNA) on Sunday that the economies of oil-producing countries (including Kuwait) are facing a real challenge represented in the growth of public spending without “control” to high levels amid the decline witnessed in oil prices in global markets approaching the level of USD 80 per barrel (bd).

Read the rest

The world works on net energy plus technology to extend that net energy. When that net energy starts to decline, there are going to be winners and losers.

The GMO debate going on all around us is a big distraction from the real danger, which is declining net energy!

Bananas, Big Island, Hydroelectric, Lowering Electric Rates, Peak Oil, Renewable Energy Sources, Sustainability, Tomatoes

Yes, We’ll Have No Tomatoes

October 23, 2014 Richard Ha 10 Comments

Richard Ha writes:

I haven’t mentioned this yet, but we have been phasing out production of our tomatoes.

This came about because of what I’ve been saying here for years: The price of oil has raised farming costs substantially. The pluses of growing our hydroponic tomatoes were no longer exceeding the minuses.

When we started growing tomatoes back in 2002, we had been banana growers. Oil prices were low and banana prices were also low; it was hard to make a living that way. We needed to diversify, which is one of the reasons we went into tomatoes. It was a good decision.

But costs have been increasing drastically, and our tomato growing infrastructure is getting old and will start falling apart soon, so we had to make a decision. Do we take it apart and rebuild the tomato houses? Or do we replace them? Replacing them would cost an eye-opening three times what it cost 12 years ago when we put them up.

It’s a real-life consequence of what I keep saying here: The price of oil is four times higher than it was 10 years ago and there are significant consequences. Everything costs so much more now. We are in the middle of major changes and most people don’t even realize it.

We took into account that our customers are under increasing economic pressure, as well—meaning they have less disposable income—and that our tomatoes are a high-end product. We also knew, as we made this decision, that oil and other costs are expected to keep rising.

Our plan had always been to take our tomato farming to the next step, which would have been to leverage our excess hydroelectricity in a controlled environment that allowed us to exclude insects and optimize light and temperature. Unfortunately, it just took too long to get our hydro plant operating.

It’s been a very difficult decision, and one that we’ve been carefully considering and making for quite some time, taking not only all these conditions into account but also our next generation. As hard as it’s been to make this decision, we all agreed it was the right thing to do. It allows us to continue farming.

We’re definitely not closing up shop; just refocusing our farming efforts based on economic factors.

We will stay in bananas. They do well in our rain and deep soil and other conditions. The banana infrastructure we have in place, such as the coolers and concrete, is good for another 20 years. The pluses exceed the minuses.

I continue to be very interested in producing a cost-effective protein source here on the farm, such as tilapia and other fish. We are currently working on the problems of protein feed and oxygenation of water, which we can do with gravity and electricity. We’re always thinking about where we need to be in 10 or 20 years.

And I’ll let you know what other interesting projects crop up along the way.

In the meantime, you’ll see our Hamakua Springs Country Farms tomatoes until the end of November; that’s when the last of them will come off the vines, go through our packing houses, and hit the supermarkets.

We thank you for supporting, and enjoying, our tomatoes all these years.

Hamakua Springs tomatoes

Geothermal, Peak Oil, Renewable Energy Sources

Charles Hall on Fossil Fuels & Economic Growth

October 16, 2014 Richard Ha

Richard Ha writes:

This Scientific American article talks about fossil fuels, economic growth, and why I'm always talking about the importance of our (much cheaper) geothermal energy here.

It looks at the work of Charles Hall, who talks about how the energy it takes to obtain energy, minus the energy you use to get your food, equals your lifestyle. That formula – energy return on investment, or EROI – lets us compare how we live now with how Hawaiians lived in older times. It allows us to compare apples to apples.

I know Charlie Hall very well. I brought him to Hawai‘i to give talks about this at UH Hilo and Manoa, as well as to visit Puna Geothermal Venture and our farm.

From the Scientific American article Will Fossil Fuels Be Able to Maintain Economic Growth? A Q&A with Charles Hall:

Q. What happens when the EROI gets too low? What’s achievable at different EROIs?

A. If you've got an EROI of 1.1:1, you can pump the oil out of the ground and look at it. If you've got 1.2:1, you can refine it and look at it. At 1.3:1, you can move it to where you want it and look at it. We looked at the minimum EROI you need to drive a truck, and you need at least 3:1 at the wellhead. Now, if you want to put anything in the truck, like grain, you need to have an EROI of 5:1. And that includes the depreciation for the truck. But if you want to include the depreciation for the truck driver and the oil worker and the farmer, then you've got to support the families. And then you need an EROI of 7:1. And if you want education, you need 8:1 or 9:1. And if you want health care, you need 10:1 or 11:1.

Civilization requires a substantial energy return on investment. You can't do it on some kind of crummy fuel like corn-based ethanol [with an EROI of around 1:1].

A big problem we have facing the alternatives is they're all so low EROI. We'd all like to go toward renewable fuels, but it's not going to be easy at all. And it may be impossible. We may not be able to sustain our civilization on these alternative fuels. I hope we can, but we've got to deal with it realistically.

Do you think we're facing limits to growth now?

I think if you correct the U.S. GDP for debt—in other words, the debt is some kind of not-real growth—then I think the GDP hasn't grown at all since 2005. It's just grown through debt. I think clearly growth has declined; it's possible that growth has either stopped or may soon stop.

Read the rest of the article