Category Archives: Peak Oil

Community, Food Security, Geothermal, Peak Oil, Renewable Energy Sources, Schools, Sustainability

Surviving Without Sacrificing Values

A couple years ago I gave a speech to the graduating class of the Hawai‘i Community College. I talked about survival. I told them stories that my Pop told me when I was a small kid. And how they could make short-term decisions without sacrificing their long-term core values. It was very well received and it was good fun.

That was in May, 2007. That October, I went to the Association for the Study of Peak Oil (ASPO) conference in Houston. There I learned that world oil supplies are depleting faster than new discoveries are coming online. And that there are fewer giant oil fields being discovered, and that the world’s population was increasing at the rate of 70 million new people a year.

This was important information and, although not complete, it was enough to make me start to position our farm for five and 10 years in the future. If we were wrong? No harm, no foul. If we were right, we would be survivors.

After that conference, I could think of three things that would help the Big Island move in that direction, too.

The first was to let people know they were not alone. The E Malama ‘Aina sustainability Festival would help do that.

The second thing was to help get the Thirty Meter Telescope (TMT) sited on Mauna Kea. This would help to lift up and educate our keiki and future generations. And, it would provide a safe, steady income and stabilize our economy.

The third was to get as much geothermal energy as possible into HELCO as base power. It is the cheapest source of renewable energy and the discretionary income saved would benefit the low income folks, since they were the ones who would get their lights turned off first. It would also benefit the island’s small businesses, because their customers would have money to spend. That is what I mean when I go around saying: “If the most defenseless among us are safe, we are all safe.”

All of these things could be done without sacrificing our core values. We just need to do the right things, local style. We need to take our time and go talk story. If the folks believe that we have their and their keikis’ well-being foremost in our minds, then we can all go do this together.  It’s not rocket science!

By the way, I went to the ASPO conference again last month in Denver – yet again, the only person from Hawai‘i to attend. After that conference, I am more convinced than ever that we are moving in the right direction.

It’s the same as what I told the graduating HCC students – about survival, and about making short-term decisions without sacrificing our long-term, core values.

Geothermal, Peak Oil, Renewable Energy Sources

Geothermal Aloha

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Did you know that geothermal energy is one of the cheapest sources of renewable energy? On top of that, it is steady power – just what the electric utilities need to be able to deliver dependable service. This Wall Street Journal blog post compares different renewable energy sources, and says that geothermal’s break-even point is when oil hits $57 per barrel.

Oil is close to $80 per barrel now. This means that if most of our electricity were coming from geothermal now, our electricity and water rates would hardly rise from here forward – while who knows where oil could take us.

We need to get off oil.

This Hawaii Business article, titled Big Island Big Ideas, with the subtitle “Local leaders chart six ways to revitalize the economy,” takes an optimistic point of view, and that is important.

We must realize, though, that the world has changed because of rising oil prices. We must be wise enough to take every opportunity to prepare our keiki for a future that is going to be very different from our past. If we take the long-term view, and focus on where we need to go, we can all get there together.

The Hawaii Business article discusses the Thirty Meter Telescope (TMT). We believed in and followed the process Judge Hara directed us to follow in developing a Comprehensive Management Plan for the care of Mauna Kea. And if, subsequently, the TMT is built on Mauna Kea, the benefits to our people will be greater than we can imagine.

In the meantime, we know that we will soon be in a new world of declining world oil supplies. In the 1930s, it took one barrel of oil to get 100 barrels. And in the 1970s, it took one barrel of oil to get 30. Nowadays it takes one barrel of oil to get 10. This is happening as oil becomes increasingly more difficult to harvest.

We know that oil prices will rise even more than they have; how fast and how high are the only questions. Net energy minus the amount of energy it takes to grow our food gives us our lifestyle, and the more energy it takes to get that energy, the more our lifestyle will shrink. We are already seeing this happen, and it will get worse.

Fortunately, here on the Big Island we have geothermal. Geothermal energy costs are stable and, unlike oil, they will not rise. Geothermal is a resource and a special gift that very few in the world are blessed to have. We must use this gift wisely.

The state of Hawai‘i owns the geothermal resource and receives revenues from its use. Of that revenue, 20 percent goes to the Office of Hawaiian Affairs (OHA) for its social services programs. Currently, Puna Geothermal Venture pays $3.5 million annually to the state of Hawai‘i, and $700,000 a year goes to OHA. As we expand geothermal, these entities will receive more money.

This is an important consideration, because our own people have the lowest median family income in the state of Hawai‘i. We all know that lower income folks are hit first and hardest when oil prices rise. Putting more geothermal on-line will help the most defenseless among us (and the rest of us, too). And it means more money going to OHA for its programs.

The cost of geothermal energy will remain stable as oil becomes more and more difficult to harvest and its price steadily rises. This means we will all have more discretionary income. More spending money means businesses will flourish, which means more jobs so that folks can take care of their families.

And, as oil costs rise and rise, we with our stable geothermal energy costs will become increasingly more competitive in terms of cost of living. Although airfares may be very high, once here, folks will find it relatively less expensive than other places. So we can probably anticipate fewer visitors but those who come would likely stay longer and spend more money.

I can imagine those folks would engage with the community in Ag and other specialty experiences. I can see many more opportunities for regular folks to interact and offer custom services. There could be more individual entrepreneurs than exist in the current tourism model.

If we plan for our future, engaging with each other in a respectful manner, I can see our greatest asset, the aloha spirit, flourishing. And that aloha spirit, more than money, is what will make all of us rich.

Peak Oil, Renewable Energy Sources, Sustainability

Positive Changes and Energy Solutions

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A few days after the Peak Oil conference has ended, things are starting to become clear.

We have the oportunity to both make positive changes and also solve our energy problems. But we will need help from the University of Hawai‘i at Hilo to analyze Big Island energy options from a holistic point of view.

The distribution curve of median family income is skewed heavily toward low income folks on the Big Island. The median family income in the state is $56,000. On the Big Island, it is $46,000.

Here on the east side of the Big Island, it is in the mid-30,000s. True aloha requires us to fix this, for all our sakes.

Last year when the oil price spiked, gasoline prices spiked as well. For the first time some of my workers asked me if they could borrow money for gas to come to work! The lower income folks were hurt bad.

It is no secret that I believe that biofuels are no solution to our energy problems, because return to the farmers would be too low.

But biofuels would also be as or more expensive than fossil fuels to the final customer. My workers would still have to borrow money for gas. What good is that?

The state of Hawai‘i legally owns our geothermal resource. So any royalties from its use must be paid to the state and to the Office of Hawaiian Affairs (OHA).

Right now, Puna Geothermal Venture pays the state $3.5 million a year, and OHA gets 20 percent of that. That’s $750,000 a year generated from geothermal en to OHA.

Also, the cost to consumers is less than that of fossil fuel and it will not go up when fossil fuel prices go up.

We need to put in more geothermal, not less. More money would go to the state and to OHA. Geothermal has low and stable costs, which results in more discretionary income left in people’s pockets. When they spend that money, businesses can hire workers, who can then take care of their families.

Taking care of people, this is true aloha. The tougher it gets, the more we need to take care of each other.

Geothermal energy is a gift of true aloha.

Peak Oil

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.)

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 concensus 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.”

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.

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.

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?

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.

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.

Geothermal can be a blessing for the Hawaiian people.

Peak Oil

At The Peak Oil Conference

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I am in Denver right now for the Peak Oil conference. It’s the same Association for the Study of Peak Oiland Gas conference I  attended two years ago in Houston. That was the one that convinced me that the amount of oil the world uses is such that oil production won’t be able to keep up. And that means oil prices will keep rising.

This video The Crash Course By Chris Martenson explains the basics of Peak Oil very nicely and I recommend it. It’s all common sense. From the introduction:

Energy is the lifeblood of any economy. But when an economy is based on an exponential debt-based money system that is itself based on exponentially increasing energy supplies, the supply of that energy deserves our very highest attention.

Oil is a miracle, working tirelessly in the background to make our lives easy beyond historical measure. Oil represents over 50% of US total yearly energy use, while oil and natural gas together represent over 75%. How easily could we replace the role of oil in our style of consumer-led, growth based economy? Not very.

Peak Oil is simply a fact. Peak Oil is NOT synonymous with “running out of oil.” But the most urgent issue before us does not lie with identifying the precise moment of Peak Oil. What we need to be most concerned with is the day that world petroleum demand outstrips available supply. It is at that moment that the oil markets will change forever – and probably quite suddenly.

Saturday was a pre-conference day for people who wanted to discuss things on a community and personal level. I wanted to see if there was anything I could apply to my business.

Gail Tverberg talked to the group for 15 minutes. In her estimation, when we start on the downside of the oil supply curve it is equally possible that we could be in for a steady decline or that it could be a steep drop off.

That is why the Thirty Meter Telescope, and a serious increase in geothermal energy, are important for us on the Big Island and in Hawai‘i in general.

Food security was top of mind. In cold parts of the country preserving things will be an important activity. Co-op and community gardening, much like was done in Cuba after the Soviet Union collapsed, are also seen as solutions. I get the impression that Hawai‘i is quite a bit more advanced than the mainland in this area.

It is apparent to everyone that you must adapt to the place you are at. “Hoping” is not a plan.

Many of the folks complained that it is very difficult to make people aware of Peak Oil. Gail Tverberg pointed out that she felt that Hawai‘i is more aware than the mainland. This is my sense as well.

But we are far from being as aware as we need to be.

Peak Oil, Renewable Energy Sources

Sustaining a Population

What is the Minimum EROI [Energy Return on Investment] that a Sustainable Society Must Have?

by Charles A. S. Hall, Stephen Balogh and David J. R. Murphy
Program in Environmental Science, State University of New York – College of Environmental Science and Forestry, Syracuse NY, 13210, USA

…Every plant and every animal must conform to this iron “law” of evolutionary energetics: if you are to survive you must produce or capture more energy than you use to obtain it, if you are to reproduce you must have a large surplus beyond metabolic needs, and if your species are to prosper over evolutionary time you must have a very large surplus for the average individual to compensate for the large losses that occur to the majority of the population. In other words every surviving individual and species needs to do things that gain more energy than they cost, and those species that are successful in an evolutionary sense are those that generate a great deal of surplus energy that allows them to become abundant and to spread. While we are unaware of any official pronouncement of this idea as a law, it seems to us to be so self-obvious that we might as well call it a law – the law of minimum EROI – unless anyone can think of any objections.… Read the rest of the article here

A mother cheetah must chase and catch a gazelle or rabbit and obtain enough energy from it not only to feed her kids, but also to be able to chase another one down and even survive some days without catching anything.

Hawaiians understood this concept very clearly. It’s why in the Hawaiian culture there is such a close affinity to the land, the ocean and all things in nature: That is where the surplus energy came from to sustain the population.

The move to populate Hawai‘i probably came from a need to find surplus energy (food) caused by overpopulation or similar in the navigating Polynesians’ home islands.

We all know there are clouds on the horizon now, and that our surplus energy supplies are again threatened.

In the 1930s, it took one barrel of oil to obtain 100 barrels. In the 70s, that ratio had decreased to 1 to 30. A few years ago, it was estimated to be 1 to a little more than 10.

When it finally dawns on all of us that our oil supplies will never increase, people will get frightened. But at that point, it will be too late.

Most of us Hawaiians look upon our geothermal resource as a gift. And even more so now, when it can be a matter of survival of the species.

We’ve done it before and we need to do it again. Pau talk, ‘nough planning. We go!

Peak Oil, Renewable Energy Sources

Envy Of The World

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Here is an easy-to-understand video that explains Peak Oil, and it’s well worth watching.

It isn’t a theory of when oil will run out. Rather, it’s a description of what happens to oil wells as they age, and it makes simple collective observations and assumptions about all the oil wells in the world. It is simple and easy to predict that oil will become more and more costly.

When that happens, we will need to get out of the line of fire. It’s not complicated.

We are incredibly lucky here on the Big Island, because we have a geothermal resource beneath us at many locations all around the island. The State owns this resource. They should go map it out and contract out the energy production to the highest bidder. Part of the rents and royalties would go to the Native Hawaiian people, on whose land it sits, and the actual energy would benefit all of us.

Geothermal energy can also be used to make hydrogen. In the future we will run our cars and trucks on hydrogen, using the internal combustion engine. Here’s a clip of a hydrogen car that was shown on Good Morning America.

The electric utilities are using internal combustion engines — just larger  than most. Could we run it all on hydrogen? If hydrogen can be used in regular car engines, could it be used in the diesel engines that the electric utilities use to generate electricity?

Can you imagine it? The biggest and the best telescope in the world located on the Big Island. And most of the state’s electricity needs powered by geothermal wells on the Big Island. Rents and royalties would go to Native Hawaiian people and the rest of us would have the benefit of being free of Middle East oil.

We would be the envy of the world.

Not, no can. CAN!

Big Island, Peak Oil, Sustainability

Hawaii In The Time Of Peak Oil

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In June of last year, Gail Tverberg wrote this post at The Oil Drum Blog, and just a few days ago she reposted it:

Hawaii seems to come up often in the thinking of people aware of peak oil. On one hand, it seems like an ideal place to relocate after peak oil – no need to worry about heating a house; clothing is mostly for protection from the sun; and crops can be grown year around. On the other hand, it produces no fossil fuel itself, and it is at the end of the supply line for both food and fuel. Hawaii’s biggest industry, tourism, is already declining, and with rising fuel costs, can only decline further.

When the Kohala Center started planning its energy conference a while back, I recommended they invite Gail to be the featured speaker. I had met her at the Peak Oil conference in Houston and was very familiar with her writing on The Oil Drum. As an insurance actuary, she assesses risk for the insurance industry. I like what she writes because it is clear and easy to understand.

She gave two talks in Hilo. The first was at the energy conference itself and the second, a free presentation to the Kanaka Council that I arranged.

I took her sightseeing around the Big Island over that weekend, so I got to chat with her quite a bit about oil supply matters.

Here is a very interesting post she did at the Energy Bulletin in March 2009. She wrote:

Nearly all of the economic analyses we see today have as their basic premise a view that the current financial crisis is a temporary aberration. We will have a V or U shaped recovery, especially if enough stimulus is applied, and the economy will soon be back to Business as Usual.

I believe this assumption is basically incorrect. The current financial crisis is a direct result of peak oil. There may be oscillations in the economic situation, but generally, we can’t expect things to get much better. In fact, there is a very distinct possibility that things may get very much worse in the next few years.

Whether or not one believes Gail is right — that the current financial crisis is caused by Peak Oil — it is prudent that we plan for the worse and hope for the best. I think our most reasonable path is to actively pursue geothermal energy. We must help HELCO figure out how to decommission their oil-fired plants — put them in moth balls, in standby mode, and replace them with geothermal plants, preferably ones that are geographically diversified. At the same time, we need to figure out how to leave their stockholders whole. We can do this.

The reason we need geothermal is that geothermal energy costs are stable. With geothermal, our electricity and water bills would not go up as oil prices rise. And our transportation costs could stabilize, as well. We could have a successful economy here in Hawai‘i in spite of rising oil prices.

If we don’t go geothermal, rising foreign oil costs could bankrupt us. Our society could come apart.

Switching to geothermal is not an option; it is a necessity. We all know this.

Biofuel, Peak Oil, Renewable Energy Sources

Following In The Footsteps of Easter Island?

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If we keep chasing after oil as the price keeps rising – if we keep at it long enough – we will end up like Easter Island, unable to sustain ourselves.

I have been asked to be a board member of the Hawaii Biofuel Foundation, a HECO nonprofit that is tasked with exploring biodiesel production for Hawai’i. We are trying to determine if biofuels will work here in Hawai’i.

From the Wall Street Journal:

US Biofuels Boom Running on Empty

BY ANN DAVIS AND RUSSELL GOLD

The biofuels revolution, which promised to reduce America’s dependence on foreign oil, is fizzling out.
       
Two-thirds of U.S. biodiesel production capacity now sits unused, reports the National Biodiesel Board. Biodiesel, a crucial part of government efforts to develop alternative fuels for trucks and factories, has been hit hard by the recession and falling oil prices.
       
The global credit crisis, a glut of capacity, lower oil prices and delayed government rules changes on fuel mixes are threatening the viability of two of the three main biofuel sectors – biodiesel and next-generation fuels derived from feedstocks other than food.

Biofuel production is farming and it requires farmers. As we all know – “If the farmer makes money, the farmer will farm.”

As a board member, I will tell the rest of the board that when oil is $200 per barrel, that’s the same as 70 cents per pound liquid. It would likely take at least 4 pounds of stuff to squeeze out one pound of liquid. It does not matter if it’s mac nuts, kukui nuts, jatropha or palm nuts. If that’s the case, a farmer can expect to get no more than 18 cents per pound for his or her crop. No sense. Lose money. Better to grow cucumber or eggplant.

And since the input cost to grow, squeeze and transport the stuff is all oil-related, the price the farmer needs to get also rises as oil price rise. It’s kind of like chasing the mechanical rabbit at the dog race track. The dogs never catch the rabbit.

One way of evaluating an energy source is by analyzing the Energy Return On Investment (EROI). In the 1930s, the EROI ratio for a barrel of oil was 100 to 1, meaning it took one barrel of oil to get 100 barrels. In the 1970s, it  dropped to 30 to 1. A few years ago it was only about 10 to 1.

Professor Charles A. S. Hall, of State University of New York, is the leading expert on EROI analysis. He estimates that the minimum EROI needed to maintain a sustainable society is 3 to 1.

Experts say that biodiesel production is less than 2 to 1. The excess energy that results is not enough to maintain a functioning society.

On the other hand, the EROI for geothermal energy must be higher than 10 to 1. And it will not decline in the near future.

We are incredibly lucky to have this resource here on the Big Island. In addition to its energy-producing potential, it can be a valuable resource for the betterment of the native Hawaiian community. Sited on Hawaiian Homes or OHA lands, the benefits of rents and royalties go to the Hawaiian people.

Peak Oil, Sustainability

Families of Farms: An Introduction

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I wrote in a recent post about how much I admired Uncle Sonny’s ability to grow great watermelons in a very effective and efficient way. Over the years, I have noticed that this is a characteristic I see all the time in small farmers’ operations.

So how are we going to supply food for Hawaii’s people, in the variety that the community will need, so they won’t need to travel so often? And on the community scale, how will we have enough variety to feed the community around us?

This is how the concept of “Families of Farms” came to me. I asked myself, What happens if we lease lands and hydroponic houses to area farmers?

Our idea is that we would each bring certain resources to make the whole more than the sum of the parts. We believe that this will help each of us make more money together than if we operated independently. So it’s in all of our interests to stay together.

•    We would get effective and efficient farmers working with us. Small farmers do not waste anything. And we would get more production than what we could do ourselves
•    We would get more variety than we could do ourselves
•    We would get more young farmers into farming
•    We would bring the water and electricity resource that we have
•    We would bring our technical expertise
•    We would bring our marketing and distribution system
•    We would bring our cooling facilities

We will need to adapt to a new normal. Necessity is the mother of invention.

When oil spiked to $147 per barrel last July, the world changed.  It was such a shock that it threw the world economy into a tailspin. The financial system unwind was probably triggered by this event.

Until then, we had assumed that “big volume” was better and “market share” was everything. But when the oil price spiked, so did everything to do with agriculture. Fertilizer, chemicals, cooling, transportation and packaging – all of these things rose in price with oil.

But our selling price could not go up, because people’s incomes shrank as they paid more for gas, water, electricity as well as other oil-related components.

Knowing that oil is a finite resource and that the world’s population is growing at the rate of 70 million per year, it is clear that oil prices will eventually go up again, and probably higher than before. So we asked ourselves: What will the world look like in five and 10 years, and where do we want to be in that world?

In 10 years we expect that oil prices will spike higher than $147, but that time when it throws us into recession, the oil prices will probably not drop back to this cycle’s low prices.

And we do not expect that HELCO will have reacted to protect us from rising electric and fresh drinking water prices by putting more geothermal on line. We expect that people will try to save money by driving less. So there will be a new normal to adapt to.

Coming soon: Some of the ideas we are working on.