Richard spoke at the recent TEDx event in Hilo, and his talk is now available for viewing in its entirety (17:15) on YouTube.
Have a look. Pass it on. Let us know what you think!
Category Archives: Renewable Energy Sources
Mayor Kenoi Asks Why We Aren’t Using Our Geothermal Resource Better
Hawai‘i Island Mayor Billy Kenoi addressed the Kona-Kohala Chamber of Commerce the other day. He asked, “If we have the most productive geothermal in the world, how come we are not using it?”
The Mayor is serious! He is organizing a trip to Ormoc City, Philippines, which has an economy similar to the Big Island’s. Its populationis close to the population of the Big Island. They produce 700MW of geothermal, which they share by cable with other islands. We only produce 30MW.
The mayor wants to see how they do it. Since “if they can do it, we can do it.” Mayor Kenoi understands energy issues very well.
People do not say that 100 percent renewable is a dumb idea, but some say it can’t be done. I agree with the Mayor – it can be done, and it will be done. Not no can. CAN!
And the beneficiary of cheap, proven-technology, environmentally benign geothermal electricity will be all the folks and businesses here who are struggling to make ends meet. Perhaps we will see jobs develop that keep our children from leaving Hawai‘i.
Right now, there are more Hawaiians living outside of the state than in the state. What’s wrong with that picture?
From a West Hawaii Today article:
How, Kenoi then asked the crowd, can the island have the most productive geothermal hotspot in the world and not use it?
“It’s not intermittent,” he said. “It’s cheap, renewable, clean power. How can we not have this opportunity to encourage investment and fully develop the island of Hawaii as a 100 percent renewable energy island?”
He said with excess geothermal electricity, “we can have hydrogen to power buses.”
On both the renewable energy issue and keeping Kona’s international airport designation, Kenoi said he is also working with Sen. Daniel Inouye’s office, seeking federal assistance….
How to Predict What Your Life Will Look Like in the Future
For about 100 years (except for a few spikes in the 70s and 80s), oil cost about $20/barrel. One hundred years!
What’s happened to the price of oil lately is significant. And since oil is a finite resource, the price will likely keep on rising.
In 2002, everything was fine. And then in 2003, 2004, 2005 parents started telling their kids: “Hey, go turn off the lights.”
If the price of oil was just tracking inflation, it would be about $35/barrel right now. Instead, it’s $108/barrel.
We could almost use this type of a graph as a consumer price index for Hawai‘i. If I’d had this information before, I wouldn’t have needed to go to the Peak Oil conference to figure out what was going to happen.
This graph, which I prepared, predicts what your life will be like in the future. You can look at it and see, depending on how closely you’re tied to the electric grid and how much you drive your car, the direction in which your life will go.
We are lucky, though, to have an indigeous resource available to us here in Hawai‘i. Geothermal – which is low-cost, a proven technology and environmentally benign – is a gift that can help take care of all of us.
A Visit to Kauai Island Utility Cooperative
I was invited to visit the Kauai Island Utility Cooperative (KIUC) by its Board Chairman Phil Tacbian. He and Dennis Esaki, who is Vice President of the founding Board, gave me an orientation.
Kauai Island Utility Cooperative (KIUC) is a not-for-profit generation, transmission and distribution cooperative owned and controlled by the members it serves. Headquartered in Lihue, Kauai, Hawaii, the cooperative currently serves more than 32,000 electric accounts throughout Kauai. Committed to reinventing how Kauai is powered, KIUC is aggressively pursuing diversification of its energy portfolio to include a growing percentage of hydropower, photovoltaic, bio-fuel, and biomass.
It was my first visit and I had a very favorable impression of their corporate culture. This is a model that aligns the interest of the people with the interest of the utility. It’s evident that the employees are proud of their organization. They are coming up on their 10th anniversary celebration.
I toured the Kapaia Power Station. It includes a General Electric LM2500PH steam-injected combustion turbine. The unit can burn either naphtha or No. 2 fuel oil. Steam is injected at approximately 10,000#/hr for NOx control and 56,000#/hr for power augmentation. It appeared to me to be unique in its use of steam injection to enhance power generation. A small part of the CO2 was transported next door to an open raceway algae farm.
Back in 2002, KIUC agreed to pay Citizens Communications of Connecticut $215 million for Kauai Electric’s assets. The National Rural Utilities Cooperative Finance Corporation (CFC) had approved loans to KIUC for up to the total purchase price, plus they had a $25 million secured line of credit and a $60 million disaster recovery line of credit, which was from FEMA following Hurricane Iniki, which had happened 10 years earlier.
The combination of having a very willing seller, plus a line of credit from FEMA, was very helpful.
It did not appear there was much funding for infrastructure upgrades.
It’s clear to me that it took countless hours of volunteer time, plus careful analysis and implementation, to bring KIUC to this place it is at 10 years later. It was certainly not easy then, nor now, and the work continues. I was very impressed.
Fascinating Comparison Chart on Energy Solutions
This chart was created by Tom Murphy, who is an Associate Professor of Physics at the University of San Diego. He writes big picture physics analyses of energy solutions.
The chart points out that biofuels, of all sorts, are misspent if they are used for electricity. That’s because there are many ways to make electricity, but there are very few ways to make liquid transportation fuels. Click chart to enlarge.
Notice geothermal. It has the most positive attributes when one considers available hot spots such as we have here on the Big Island.
On top of that, geothermal is a low-cost alternative, says a September 2009 Wall Street Journal blog Environmental Capital. That article asks:
…What price would oil or gas have to be for each technology to be break-even without subsidies, using combined-cycle gas turbines as the low-cost yardstick?
Geothermal is the cheapest: It is competitive with natural gas at $5.16 per million BTUs or oil at $57 a barrel. Nuclear power breaks even at $6.26 and $69.
Traditional, onshore wind power breaks even with gas at $8.33 or oil at $92. Offshore wind still needs a push: It requires gas at $17.14 or oil at $189.
In contrast, solar thermal needs to see natural gas at $35.66 or oil at $393. And good old photovoltaic solar, like the kind on rooftops? Natural gas needs to be at $59.61 or oil at $657 a barrel.
Tverberg: ‘Businessweek Gets It Wrong’
Here is a link to an article by Gail Tverberg. As I’ve said before, I cannot find fault with Gail’s analyses.
Businessweek Gets it Wrong—Everything You Know About Peak Oil is ‘Not’ Wrong
Posted on February 6, 2012
On January 26, Bloomberg Businessweek printed an editorial by Charles Kenney titled, “Everything You Know About Peak Oil Is Wrong.” This editorial reflects several common misunderstandings.
According to Kenney:
Titled Limits to Growth, their report suggested the world was heading toward economic collapse as it exhausted the natural resources, such as oil and copper, required for economic production. The report forecast that the world would run out of new gold in 2001 and petroleum by 2022, at the latest.
Limits to Growth gives a table that might be interpreted to show that oil and gold new extraction will be exhausted by the dates indicated. The book is careful to explain that the situation is more complicated, though.
I agree that it is about the cost of oil and its consequences. I try to find workarounds that can help us here in Hawai‘i. Geothermal is one of those workarounds.
More from Gail Tverberg’s article:
…With high oil prices, people cut back on discretionary goods, resulting in layoffs among people who work in those industries. For example, fewer people have jobs in vacation industries (for example, in Greece and Spain) if oil prices are high. This leads to recession and debt defaults. If one country defaults, ripple effects can spread to banks around the world.
Our economy has a high level of debt. We need economic growth in order to repay that debt with interest. If oil supply remains flat, or worse yet, falls, it will be difficult to produce the level of economic growth needed to prevent debt defaults.
Are Undersea Cables to Transmit Electricity Feasible?
As I continue to look at ways to decrease our reliance on fossil fuels for our electricity generation so we will be free from the volatility of oil prices – particularly in this time where we know most of the “cheap oil” has already been found and processed, and global demand for oil exceeds its supply – I keep bumping up against the idea of undersea cables.
People are always questioning whether undersea cables are technologically feasible, and I thought you’d be interested to know that there at least 14 such undersea cables in operation today, transmitting electricity.
Some were built as far back as 1965, such as the Cook Strait submarine cables in New Zealand, which transmit electricity between the North and South Islands.
There is a very interesting history of the debate that went on in New Zealand before the cables were installed. What struck me is that the debate was in the 1950s and 1960s.
Some very modern cables have just been commissioned, such as the BritNed cable that connects the United Kingdom to the Netherlands and can transmit up to 1000MW. A short video on the BritNed web site details the making and laying of this cable.
Cables are currently being manufactured to be laid at depths up to 2000 meters, which is deeper than our Alenuihaha Channel (1900 meters) between the Big Island and Maui.
People used to believe that undersea cables couldn’t work in Hawai‘i because our channels are too deep. Undersea cables are clearly not the whole answer to Hawai‘i getting off of fossil fuels, but perhaps they can be part of a broad solution.
I am glad to know that the technology exists today, should we, the people of Hawai‘i, decide we want to share the robust renewable resources we have on each of our islands to create a reliable, stable, statewide electric grid that is not dependent on fossil fuels for its electricity generation.
About the Hawaii Island Economic Summit
On Friday, I attended the Kona/Kohala Chamber of Commerce’s Hawai‘i Island Economic Summit.
One of the questions during an energy session I attended was whether Big Island Mayor Billy Kenoi’s vision of “100 percent renewable energy by 2015” is reasonable.
I replied with some facts:
- Puna Geothermal Venture (PGV) estimates that it has 200MW of geothermal power at its present site.
- At peak use, the Big Island uses less than 200MW.
- Right now, PGV is authorized to produce 60MW.
- Last time it took them just six months to get authorization from the Planning Commission.
- That would leave three and a half months for building the needed production units.
This is doable. What we need is the will to do it.
A description of the Economic Summit:
This Summit will consist of a morning panel “conversation” comprised of five to six guest thinkers and leaders who will discuss their work, ideas that inspire them and what they see as the future for Hawai‘i Island. Confirmed speakers include Dr. Earl Bakken, engineer, businessman, philanthropist, inventor of the pacemaker; William P. Kenoi, Mayor of Hawai‘i County; Sanjeev Bhagowalia, Director of the newly created State Office of Information Management and Technology, Robert Pacheco, President and Naturalist Guide, Hawaii Forest & Trail and Michele Saito, President of Farmers Insurance Hawaii. Moderator for this panel will be Steven Petranik, editor of Hawaii Business magazine.
Our luncheon keynote speaker is Eric Saperston, acclaimed film director and producer, successful author and award-winning speaker and storyteller. Eric is Chief Creative Officer for the ‘inspire-tainment’ company, Live in Wonder, a forward thinking experiential company on the cutting edge of communication to ignite, inspire and enliven the world.
Eric’s story:
Dr. Earl Bakken talked about his manifesto (read about June and I visiting him at his request to discuss geothermal), which includes inspiring kids to use a live cam during the building of the Thirty Meter Telescope, the development of geothermal and Ku‘oko‘a, as well as building a world-class hospital in Waimea.
West Hawaii Today wrote about the summit.
What the Geothermal Working Group Found
Advantages of geothermal:
- It is an indigenous resource
- It generates revenue for the state
- It generates community benefits
- It provides stable power
- It is less than half the cost of any of the renewable energy alternatives.
- The Big Island will be over the geothermal “hot spot” for 500,000 to 1 million years
I want to share some highlights of the Geothermal Working Group’s final report.
Page 10, Revenues derives from geothermal:
Page 12:
IV. Recommended Steps for Hawaii State Legislators
– Make the allocation of geothermal royalties more transparent to show how benefits come back to the community. Designate the records of the allocations to be public domain.
– Establish a community advisory board to offer suggestions to the DLNR about how royalties generated by geothermal power plants are spent. The advisory board should be members of the communities that host existing or future geothermal power plants and/or those who are most impacted by the development of geothermal energy.
– Encourage the DLNR to use geothermal royalties to identify promising geothermal sites and to further develop the resource.
– In light of the probability that oil will reach $200 per barrel (Lloyds of London), the legislature is requested to commission a study to show the economic impact of various prices of oil.
– Facilitate development of geothermal with a critical review of the geothermal permitting process, regulatory capabilities, and possible investment incentives.
Page 5:
The Geothermal Working Group’s principal findings
– Geothermal is a renewable resource indigenous to the island of Hawaii that is dissociated from the price volatility of petroleum fuels.
– Geothermal can be a key component in a diversified energy portfolio for Hawaii County, both for the electrical grid and for transportation.
– In Hawaii, geothermal is a firm-energy resource at lower cost than fossil fuel. – Developing multiple geothermal plants is the most prudent approach.
– Geothermal has the potential to supply baseload electricity; long term reliability and the ability to supply grid management services (currently supplied by conventional fossil-fueled power plants) must be demonstrated in order to consider geothermal as the primary energy resource.
– With geothermal power plants, agricultural fertilizers, hydrogen, oxygen, and business-enterprise power can be produced for off-peak rates during the hours of curtailed electrical demand.
Page 9:
Overview
Geothermal energy can be developed to become the cheapest form of baseload power for Hawaii County. There are no importation or storage costs. Using geothermal as the primary source of baseload power will permit the county’s businesses to be more competitive with the rest of the world. Using geothermal as the primary source of baseload power will also help folks on the lowest rungs of the economic ladder—those who struggle with the cost of services.
In addition to stability and affordability, geothermal can leave less of an environmental impact than the commercially-available baseload power sources of electricity. There are no greenhouse gases, emissions and no oil spill risks.
The lower rates of off-peak geothermal electricity encourage the production of ammonia locally. Ammonia is an efficient hydrogen carrier that can be used to power internal combustion engines and as an aid to local agriculture as fertilizer. Light-industry business parks constructed near geothermal energy plants can use excess heat as a resource for heating vegetable and tropical flower hothouses, drying wood, and drying fish.
Benefits of geothermal energy to the community include sharing in geothermal royalties. In accordance with state law, the geothermal royalties are paid directly to the Department of Land and Natural Resources who allocate the royalties in three ways:
1. Department of Land and Natural Resources receives 50% 2. County of Hawaii receives 30% 3. Office of Hawaiian Affairs (OHA) receives 20%
Potential adverse impacts are listed below:
– Interference with worship of the Goddess Pele – Interference with certain Native Hawaiian practices – Rainforest destruction – Possible health and safety impacts – Disruption of the way of life for nearby residents – Hydrogen sulfide and other air quality issues – Noise – Increased strain on an inadequate infrastructure – Impact on native fauna and flora
If We Spend All Our Money on Electricity…
At a local level, the rising cost of electricity, whatever the cause, will result in severe economic pressures.
What’s important to realize is that 70 percent of our economy is based on consumer spending. “If people no more money, they no can spend.”
It all relates to costs.
See these Honolulu Star-Advertiser articles on the subject:
Geothermal power production could double
Hawaiian Electric Light Co. wants to tap more of the Earth’s power for electricity
By Alan Yonan Jr.
POSTED: 01:30 a.m. HST, Jan 07, 2012
Officials from Hawaiian Electric Light Co. said Friday they will soon seek regulatory approval to more than double the amount of geothermal power produced on Hawaii island in a move that could provide some relief for residential utility customers, who pay the highest electric rates in the state…. Read more
and
Keep close eye on geothermal funds
POSTED: 01:30 a.m. HST, Jan 07, 2012
Hawaii has been touted as an ideal laboratory for the development of renewable energy that’s bound up in its wind, seas and sunshine. It’s the southernmost island in the chain, however, that may be the most richly endowed overall, and the most promising resource of all is the one that’s buried far beneath the surface…. Read more
Having attended four Peak Oil conferences now, I have seen that Jeff Rubin is one of the credible commentators on the world oil situation. His comments are especially relevant to the discussion about rising oil prices in Hawai‘i today.
Audio of Jeff Rubin’s talk at the most recent ASPO conference.
From his blog:
…The real story behind triple digit oil prices is not the threat of supply shocks, but the sheer, unrelenting rise in world oil demand. Already closing in on 90 million barrels a day, the quick rebound in world oil consumption to new record highs demonstrates the global economy can’t grow without burning greater amounts of oil.
No matter how many rabbits the oil industry can pull out of its hat, be it tar sands from Alberta or shale oil from the Bakkens, supply just can’t seem to keep pace – at least not at the prices most consumers can afford to pay. That is the message that triple digit prices keeps telling us.
If the global economic expansion, troubled as it may be, continues, we will see even higher oil prices in 2012. But what does that say about the sustainability of growth?
And even if there is growth, what is the pace? Read the whole post here.
Jeff Rubin explains why he quit his job as Chief Economist at CIBC World Markets. In Hawai‘i, we call it kuleana.
After twenty years as Chief Economist for a North American investment bank, it was time for me to seek a larger audience for the story I needed to tell.
My predictions of steadily rising oil prices over the last decade, including my call for $100-per-barrel oil by 2007, had flown in the face of conventional wisdom.
Among other things, my track record on predicting rising oil prices demonstrated that the traditional laws of supply and demand were no longer working for one of the economy’s most basic and essential commodities. And when they stopped working, the consequences for the economy would be severe.
It wasn’t subprime mortgages but triple-digit oil prices that brought down the world economy.
And unless that economy started to wean itself off an ever-depleting supply of affordable oil, there would be other recessions to follow as economic recoveries would simply push oil prices right back into triple-digit range. But weaning our economy off oil meant, at the same time, making fundamental changes in the way we live.
This is not the kind of message investment banks want their chief economists delivering these days, to either governments or investors. But the urgency of this message grows with every passing day.
On March 31, 2009, I resigned my position as Chief Economist and Managing Director of CIBC World Markets to deliver this message in my book, Why Your World Is About To Get A Whole Lot Smaller: Oil and the End of Globalization.
Jeff Rubin was the Chief Economist at CIBC World Markets for 20 years. He was one of the first economists to accurately predict soaring oil prices back in 2000 and is now one of the world’s most sought-after energy experts. He lives in Toronto.