Category Archives: Peak Oil

Energy & the Future of the Big Island

Richard Ha writes:

This past Friday I participated on an energy panel at the Hapuna Beach Prince Hotel called “Energy: Facing the Reality of Renewables.” Panel members were Jay Ignacio, President of Hawaii Electric Light company; Mike Kaleikini, who is General
Manager of Puna Geothermal Venture; and myself, as steering committee member of the Big Island Community Coalition.

From the Kona-Kohala Chamber of Commerce: “The 2013 Summit will further explore those initiatives via ‘panels of conversation’ on each topic. Three guests per topic have been invited to participate on panels to discuss their work with the Summit audience, ideas that inspire them and what they see as the future for Hawaii Island. Each panel will have 45 minutes of discussion followed by questions from the audience. We are pleased to have Steve Petranik, Editor of ‘Hawaii Business Magazine’ as our moderator again this year.”

There were five panels: Education, Sustainability, Employment, Energy and Health Care.

West Hawaii Today wrote about it in an article called Prospects of an All-Geothermal Isle Unlikely.

I started out by saying mixed messages are being sent out. Some say that the U.S. has enough oil and gas that we will soon replace Saudi Arabia as a world energy supplier. Using data and scientific methods, the Association for the Study of Peak Oil-USA (ASPO) has come to different conclusions. Its agenda is merely to spread the best information it has on this topic. You can learn more by viewing video at the ASPO-USA.org website.

I described the Big Island Community Coalition’s mission, which is to achieve, for the Big Island, the lowest-cost electricity in the state. Striving for a low cost solution hedges our bets. It is better to be safe than sorry. I told them that those interested in supporting this group can get on the Big Island Community Coalition mailing list.

I related how food and energy are inextricably tied together. Food security has to do with farmers farming. And if farmers make money, the farmers will farm! But while only two percent of the mainland’s electricity comes from oil, more than 70 percent of the electricity in Hawai‘i does. The mainland, of course, is our main supplier of food and our biggest competitor. As oil prices rise, Hawai‘i becomes less and less competitive.

As oil prices rise, and electricity prices rise, and farmers and other businesses become less competitive, local families have less spending money.

The answer is to find the lowest electricity cost solution. For if people have extra money, they will spend it. Two-thirds of our economy is made up of consumer spending.

Provided that the expensive and ill-advised Aina Koa Pono biofuel project does not go forward, we have a bright future ahead of us. In the pipeline is Hu Honua’s 22MW biomass burning project, and
next is 50W of additional geothermal. Add to that 38MW of present geothermal, and, assuming the old geothermal contract is renegotiated, that would amount to 110MW of stable affordable electricity. This would be more than 60 percent of the peak power use on the Big Island. Even if we do not count wind and solar renewables, this would put the Big Island on a trajectory of achieving the lowest cost electricity in the state.

What would happen if our electricity costs were lower than O‘ahu’s? We can’t even imagine it.

  • It would change our economy.
  • It would help our County government preserve services.
  • Fewer of our kids would have to go to the mainland to find jobs.
  • More of our money could be used for education, instead of paying for oil.
  • More people would have money to support local farmers.
  • Single moms would have less pressure than they do now.
  • Folks on the lowest rungs of the economic ladder would not be pushed over the edge.
  • There are lots and lots  of younger folks who want to farm. Maybe they could actually make money so they could farm.

I told the audience that we on the panel were all friends. But there is too much at stake for the BICC to give ground on our goal to make the Big Island’s electricity the cheapest in the state.

During the Q & A, someone asked what we each thought about an undersea cable to connect all the islands. I replied that our primary objective is to bring low cost electricity to the Big Island before we do anything else.

The audience liked that a lot and spontaneously applauded.

Dr. Charles Hall Speaking at UH Manoa Today & Tomorrow

Richard Ha writes:

Professor Charles A.S. Hall is giving two free lectures on O‘ahu. One is today at the University of Hawai‘i at Manoa. It’s at 3:30 p.m. in the Architecture Auditorium.

The second is tomorrow, January 10, 2013, from 4:30 – 5:30 p.m., also at UH Manoa. It’s at Holmes Hall 244.

His talk is titled “Peak Oil, EROI and Your Financial Future in Hawai‘i.”

Screen shot 2013-01-09 at 12.34.17 PM
We’ve been going around. I took Charlie and his wife Myrna up to see the sunset at Maunakea.

Here is Dr. Hall talking with Mike Kaleikini, general manager of Puna Geothermal Venture, as we toured the Puna Geothermal plant.

With mike kaleikini

Professor Hall is a hands-on guy. At the farm, he took off his shoes and got into the flume. He started turning over rocks in order to evaluate the health of that environment. It is relatively impoverished, he said.

Hands on

At ‘Imiloa Astronomy Center, he talked to Master Navigator Kalepa Baybayan, who has captained voyages to the South Pacific and back using traditional navigational methods. Kalepa was describing how certain star clusters move in the sky as your position changes.

At Imiloa

We had coffee with with Monty Richards at his home. He is a wealth of information and history. He told us about the possibility of combining wind and 600′ pump storage using sea water, so one is not limited by the availability of fresh water. Although the soil is porous and cannot hold water, his reservoirs are lined with cheap plastic, which is common on the Big Island.

Monty Richards

World-Renowned Systems Ecology Expert Charles A.S. Hall Speaks in Hilo

Richard Ha writes: 

On Friday, Professor Charles A. S. Hall gave two free lectures at UH Hilo. Hall is a world-renowned systems ecology and biophysical economics expert, and is considered the father of modern day Energy Return on Investment (EROI).

Here is a video, approximately 30 minutes long, from a previous talk of Professor Hall’s.

At UHH, he talked about a systems approach to energy issues here in Hawai‘i.

A “systems approach” is a fancy way to say: Use what you have to come to a good result. It’s about using all we have available to us, in a commonsense way, to move in the right direction. It’s not rocket science.

For a long time now we have known that the resources supporting our world population are finite. Professor Hall approaches these issues from a scientific point of view, i.e., one based on data. His analysis and conclusions can be duplicated by others.

Friday night’s audience was made up of legislators, environmentalists, proponents of Hawaiian culture, University of Hawai‘i staff and students, etc. When Professor Hall advocated for a “systems approach” to our resource issues, they broke into spontaneous applause.

He was startled by the response, but the folks in the audience knew that if we do not start working on commonsense solutions, we’re going to be in deep Kim Chee in the future.

We’ve begun a conversation now about bringing together multiple disciplines, such as agriculture, engineering, energy and more. The idea is to cut to the chase and work on solutions.

For example, in food production, we know that the micronutrients that might be deficient are zinc and boron, and the macronutrients that might be limiting are nitrogen and potassium. Phosphorous
is there; it’s mainly tied up in the soil. So, as we attempt to solve energy issues, how can we simultaneously address issues of food production?

And maybe we should be teaching this to our keiki, so that by the time they are ready to run things, they have a true view of the world.

We all need to be on the same page, solving real problems for all of us—not just for a few of us.

The folks in Professor Hall’s lecture were all realists. This is why I say that I am optimistic about our future here on the Big Island.

What I Gleaned From This Year’s Peak Oil Conference

Richard Ha writes:

I’ve found it takes about a month for me to assess what I learn at Association for the Study of Peak Oil (ASPO) conferences. And it’s been about a month now since I returned from the most recent conference, my fifth one.

As we start a new year, I can say that I am very optimistic about our prospects on the Big Island. Our new County Council is thinking about the whole island, not just East vs. West. The Big Island Community Coalition has shown that people can indeed draw a line in the sand and make a difference on electricity price issues.

This is truly about all of us; not just a few of us. Instead of focusing on the thousand reasons why “No can,” we need to form into communities of people who agree on the one reason why CAN:

For the greater good.

The U.S. shale, gas and oil boom will not last forever. But it does give us some time to position the Big Island to be a better place for future generations. It is about utilizing low cost options, and it is about taking care of our community. Doing these things will make all of us more prosperous.

Navigating a New Energy Reality

Richard Ha writes:

Here in Hawai‘i, Robert Rapier is probably our foremost resource for energy knowledge, and I tell that to as many policy people as I can. He’s a good friend of mine.

Robert rapier

He has the important ability to break down complex issues so the average person understands it. He was the lead speaker on the second day of this year’s Association for the Study of Peak Oil (ASPO) conference.

Robert is fearless. He calls it like it is.

The 2011 ASPO conference video is still current and it makes common sense. In it, Robert talks about why field-grown biofuels are likely not a solution to our energy problems. The video is well worth watching:

Robert Rapier: Navigating a New Energy Reality – Concepts and Principles

Robert has three main tenets.

  1. We must transition from fossil fuel with urgency. For electricity, the Big Island’s best bet is geothermal and biomass-firewood.
  2. We need to develop systems with a much lower fossil fuel dependency. That is why field-grown biofuel crops are such a problem. They depend on fossil fuels so much that their breakeven point moves further away as oil price rise. People who analyze field-grown biofuels call that “the receding horizon.
  3. We must take care of our topsoil.

It sounds simple, but there is a lot of deep thought behind what Robert says.

Read more detail about his three tenets here: Setting the Ethanol Record Straight

Food and energy are intimately intertwined. What solves our electricity problems are biomass and geothermal; both result in stable, low-cost electricity that is not tied to fossil fuel. Low-cost base power for electricity beats high cost electricity every time.

Things may change in the future. But for now we need to remember that proven technology is proven.

Free UH Hilo Talk from Expert on the Economics of Energy

Richard Ha writes:

Professor Charles A.S. Hall will give a free lecture on “Peak Oil, EROI and Your Financial Future in Hawai‘i.” It will be at UH Hilo on Friday, January 4th at 6:30 p.m.

Professor Hall received the Matthew R Simmons/M. King Hubbert Award for excellence in education at the 2012 Association for the Study of Peak Oil (ASPO) conference, mostly for his work on Energy Return on Investment (EROI).

From UH Hilo Chancellor Donald Straney’s blog:

Dec.13, 2012

 


Charles A. S. Hall

The University of Hawai‘i at Hilo College of Agriculture, Forestry & Natural Resource Management and Chancellor Don Straney will sponsor a free public lecture on the economic impact of rising energy costs by New York State University Professor Charles A.S. Hall.

The address, “Peak Oil, EROI and Your Financial Future in Hawai‘i,” is scheduled for Friday, Jan. 4, 2013, at 6:30 p.m. in University Classroom Building room 100.

Hall, the author of Energy and the Wealth of Nations: Understanding the Biophysical Economy, will explain how high energy prices reduce discretionary incomes by using the concept of Energy Return on Investment (EROI).The lecture is free and open to the public. For more information, contact Alyson Kakugawa-Leong.

He will also speak on O‘ahu on January 10th; details of that free lecture to be announced.

You can read more about Professor Hall in this post Economics & a Hawaiian Way of Thinking.

Hawaii Contingent at the Peak Oil Conference

Richard Ha writes:

The most important thing about this year’s Association for the Study of Peak Oil (ASPO) conference was that we had a whole Hawai‘i contingent. I believe we made the point that Hawai‘i is serious.

Neil Hannahs, Senior Assets Manager for Kamehameha Schools (KS), is a visionary. Any thought about Kamehameha Schools being a slow-moving institution mired in inertia is not true in this area. In fact, KS is making major changes across a wide front.

I was especially pleased that Giorgio Calderone, Regional Asset Manager for KS, pointed out how impressive the academic rigour of the conference presentations was. I thought so too, and it was good to hear confirmation.

Big Island Community Coalition steering committee member Noe Kalipi is a smart, action-oriented young leader who knows what is going on. I cannot be happier that she made the decision to attend on her own.  Photo

Noe Kalipi and Giorgio Calderone. Not pictured: Jason Jeremiah, Kamehameha Schools Cultural Resource Manager.

I attended the first annual ASPO conference because my farm costs were rising, due to oil. I wanted to learn about oil so we could position our farm for the future. It was a matter of survival.

But by the second ASPO conference, it was apparent that this situation was bigger than me or Hamakua Springs farm. I learned that for the past 30 years, the world had been using two to three times as much oil as it had been finding—and there were going to be consequences.

More than just being talkers, we need to be doers. What can we do?

  1. There are a thousand reasons why no can. We must find the one reason why CAN!
  2. It is about cost! We need to find the lowest-cost, proven technology, environmentally responsible solution to our problem.
  3. It is about all of us—not just a few of us.
  4. The energy our society has available to use is what’s left over after energy is used to obtain the energy in the first place. Another way to phrase this: the net energy left over from the effort to get energy, minus the energy to get our food, equals our lifestyle.
  5. The Big Island Community Coalition’s goal – of lowering the Big Island’s electricity rates so they are lowest in the state – accomplishes our mission. This is the most important thing we can do.

View descriptions of this year’s conference topics.

Best Possible Odds & How To Determine Them

Richard Ha writes:

I just attended my fifth Association for the Study of Peak Oil (ASPO) conference, which was at the University of Texas at Austin. I attend these conferences in order to figure out how to give our farming operation the best possible odds of succeeding in this world of finite resources.

Determining this requires understanding the main drivers in the world energy situation, how it all affects the U.S., and then how it affects Hawai‘i’s unique situation. When we understand that, we can determine how we need to move our farm to be relevant in a rapidly changing future.

Presentations at the ASPO conference are data-driven. None of them are based on any predetermined philosophy. It’s all about adapting to physical change and resisting B.S. Good data and a little bit of common sense keeps everything in its proper perspective.

In one sense, this is like a chess game. There will be winners and losers. The rules of physical science determine how things operate. Warren Buffett once observed that nine women cannot each have a baby in one month.

But unlike in chess, not everything is clear.  As Robert Hirsch said about Saudi Arabian oil reserves on Friday, some of the information is unknowable, and in those situations we must operate on best available information.

This is when we must use common sense. Even small kids know that when you’re in a pasture picking guavas and you hear hoofbeats, you don’t gather and have a meeting. You run!

Stay tuned and I will be writing about what makes sense for us, living out in the middle of the Pacific, and on the Big Island in particular. 

The International Monetary Fund & Peak Oil

Richard Ha writes:

I’m at the Peak Oil Conference at the University of Texas at Austin right now.

Energy expert Kurt Cobb (you can always get to his blog, Resource Insights, from a link at right) writes for the Christian Science Monitor, among other outlets, which indicates how far the topics discussed at these ASPO conferences have moved toward the mainstream.

His article about this particular International Monetary Fund study shows some grim possibilities. We don’t have time to waste.

SUNDAY, NOVEMBER 11, 2012

Does the IMF believe we have a peak oil problem?

Does the International Monetary Fund (IMF) believe we have a peak oil problem? The precise answer is that the IMF is currently studying how constraints in world oil supplies might affect economies around the world in two so-called working papers, “The Future of Oil: Geology versus Technology” and “Oil and the World Economy: Some Possible Futures.”

We are admonished by the IMF that opinions expressed in working papers are “those of the author(s) and do not necessarily represent those of the IMF or IMF policy.” But the fact that the organization has produced two papers on the subject this year gives some indication of how seriously it is taking the issue….

Read the rest

Kurt Cobb also wrote the book Prelude, a novel about secrets, treachery and the arrival of Peak Oil.

Kurt cobb

This next picture is of Robert Rapier and me. Robert was the lead speaker on the second day of the conference.

Robert rapier & richard ha

These horse statues are at the conference center. The University of Texas at Austin is the home of the Longhorns. It has 65,000 students and is an expansive and impressive campus.

Horses

Speak Up By Friday & Make an Important Difference

Richard Ha writes:

Regarding the Aina Koa Pono (AKP) biofuel project, and despite its full-page newspaper ads, Hawaii Electric Light Company (HECO) has clearly shown that it does not have the public interest at heart.

The utility kept secret how much AKP would be paid – $200 per barrel – and manipulated that information to estimate that the average rate payer would pay $1 per month and make us feel like this was a small thing.

This is grossly unfair. There are many different ways HECO could have informed the public without compromising proprietary information. Instead, behind our backs, it was applying to pass through the cost of $200 per barrel oil.

It’s unconscionable to do this to the “rubbah slippah” folks.

Now, week after week, HECO continues to run its full page newspaper ads to wash our brains and tell us how much it is trying to lower our rates. Hmmmm.

This Friday, November 30, 2012, is the deadline to submit testimony to the PUC opposing the Aina Koa Pono project.

Email your letter to: hawaii.puc@hawaii.gov and reference this in the subject line: PUC Docket #2012-0185; Application for approval of biofuel supply contract with Aina Koa Pono.

Here’s the testimony I sent:

To: PUC <hawaii.puc@hawaii.gov>
Subject: PUC Docket #2012-0185; Application for approval of biofuel supply contract with Aina Koa Pono

Aloha Chair Morita and commissioners:

I am strongly against the AKP biofuel supply contract.

I am president of Hamakua Springs Country Farms, which is a family farming operation. We farm 600 fee simple acres of bananas and tomatoes at Pepe‘ekeo on the Big Island. We have more than 35 years of farming experience. I am a committee member of the Hawaii Clean Energy Steering Committee. I was co-chair of the Geothermal Working Group. I have attended four Association for the Study of Peak Oil conferences, so I have a fair understanding of energy issues.

My testimony relates to the effect that the AKP biofuel contract will have on my workers and on my farm, as well as on food security in general and the Big Island’s economy in particular.

The AKP/HECO fueling arrangement contemplates AKP being paid approximately $200 per barrel of biofuel. The $200 per barrel payment to AKP will begin in 2015, when AKP is anticipated to deliver the specified quality fuel. The contract will then last for 20 years. HECO points out that the rate subsidy will only begin when AKP delivers fuel, as if to say that there will be minimum economic effect on rate payers. Nothing could be further from the truth.

The AKP fuel purchase contract of 20 years precludes utilizing potentially lower cost alternatives. Geothermal, for example, is 11 cents per kilowatt hour less than oil for generating electricity. If geothermal were used instead of oil at the 60 MW Keahole plant, it would save $58 million annually compared to oil at today’s price. And oil today is nearly half the cost of AKP’s fuel oil at $200 per barrel.

It appears that the AKP contract tracks the AEO 2012 high price scenario instead of the reference case scenario. During the last few years, knowledgeable commentators such as Jeff Rubin point out that rising demand and rising oil prices contains the seed of its own destruction. The last four recessions, dating back to 1970, indicate that oil price spikes cause recessions. And recessions cause oil prices to fall back. Global economic growth is grinding to a halt when oil is close to $100 per barrel. So it is more prudent to follow the reference case of the EIA’s AEO 2012 oil price projection – instead of the high rate case oil price path that HECO chose.

The PUC should not approve as just and reasonable that the utility should be allowed to establish a Biofuel Surcharge provision that will allow the pass through of the cost differential to the consumer as well as the actual cost pass through itself.

Rate payers will subsidize the difference between the actual oil price and the $200 that AKP will be guaranteed for 20 years. It is more than possible that actual oil prices would be substantially below $200 for the whole contract period. That will result in a heavy subsidy that rate payers must bear. The $200 per barrel rate is much too high. And the cost differential that is anticipated to be passed through to the rate payer is unconscionable.

On the Big Island, electricity rates have been 25 percent higher than Oahu’s rate for as long as people can remember. It has contributed to the Big Island having one of the lowest median family incomes in the state and the attendant social problems that come with a struggling economy.

Rising electricity rates act like a regressive tax – the folks on the lowest rungs of the economic ladder suffer the most. But it is worse; as electricity prices rise, folks that can afford to leave the grid will do so, leaving the folks unable to leave to assume more of the grid infrastructure cost.

Oil price has quadrupled in the last ten years. People and businesses have made necessary adjustments, but there is just no more to cut. Farmers have cut back on employee benefits, and they have cut back on capital improvements to survive. But this is false economy; sooner or later, maintenance foregone will catch up. Farmers are especially vulnerable because they are price takers rather than price makers. It is our food security that is at stake.

Hawaiian farmers’ and food manufacturers’ main competition is U.S. mainland producers. Oil costs make up less than 2 percent of the electricity costs on the mainland. Oil is more than 70 percent of the cost of electricity in Hawa‘ii. Any mainland food product that has substantial cheap electricity costs imbedded in it becomes relatively more competitive to Hawai‘i products as oil prices rise. AKP’s price subsidy will make Hawai‘i food producers even less competitive to their mainland counterparts. Allowing cost differential pass through will threaten our food security.

Higher electricity costs from the AKP project will affect fresh food costs. Farmers, wholesalers and customers of locally gown food all pay for the electricity that it takes to maintain the “cold chain.” That raises food cost and takes away discretionary income from consumers. Consumer spending makes up two thirds of our economy. Allowing cost differential pass through threatens our economy.

Rising electricity rates act like a regressive tax – the folks on the lowest rungs of the economic ladder suffer the most. But it is worse: As electricity prices rise, folks that can afford to leave the grid will do so. This leaves the folks unable to leave to assume more of the grid infrastructure cost. These are the very people who are most affected by rising electricity rates. Allowing cost differential pass through is not in the public interest.

In this particular project, HECO has shown that it does not have the public interest at heart. Worse, it kept secret the $200 per barrel amount that AKP would be paid and then manipulated that information to come up with an estimate of $1 per month for the average rate payer. That was grossly unfair. Passing on the high biofuel cost to the rubbah slippah folks while making it seem that there would hardly be an effect is unconscionable. There were many different ways they could have informed the public without compromising proprietary information. Instead they chose this way. It speaks for itself.

Richard Ha