Geothermal, Peak Oil

Are Shale Gas & Shale Oil Hope or Hype?

Richard Ha writes:

This video is well worth watching.

It’s called “Shale Promises or Shale Spin? The Economics
Behind Hydrofracking. A Conversation with Deborah Rogers.” If you are following this subject at all, you should watch it.

Deborah Rogers began her financial career in London working
in Corporate Finance, specifically venture capital.

Upon her return to the U.S., she worked as a financial consultant for nearly a decade for several major Wall Street firms, including Merrill Lynch and Smith Barney.

She has also served on the Advisory Council for the Federal Reserve Bank of Dallas and on a task force for the Texas Commission on Environmental Quality.

She currently serves on a regional steering committee for the Oil and Gas Accountability Project (OGAP) and has the responsibility of addressing economic questions.

An entrepreneur herself, she founded Deborah’s Farmstead, an
artisanal cheese-making operation, now one of the premier artisanal cheese dairies in the U.S.

She was featured in a lengthy NY Times article by Ian Urbina on June 26, 2011 entitled Insiders Sound an Alarm Amid a Natural Gas Rush.

Shale gas and shale oil: Are they hype, or hope? We farmers want to know.

Nitrogen fertilizers, chemicals, plastics and other farm supplies are made from natural gas as long as it is cheap. Do we really have a hundred years’ worth of supply, and will it be cheap?

At the 2009 Association for the Study of Peak Oil conference in Denver, the petroleum geologist and consultant Art Berman described his analysis of 4,000 wells in the Barnett Shale. He showed that the average gas well produces 70 percent of its total production in the first year.

Also on the panel, though, was an oil/gas company executive, who said their calculations show that gas wells will produce for 22 years.

Now, three years later, we see that there are wells generating $120/day and they are still in production. What does that mean in
the whole scheme of things? Who is right?

There is more data now, and it still, consistently, shows that shale gas – and, by the way, shale oil – depletes really quickly, like 90 plus percent in the first five years.

And it costs $4 million or so to drill each well. Now that there is so much more data, the math on this is easy.

Farmers do not care who is right. Farmers only care about what is right. So while we do appreciate the low, below-break-even costs of nitrogen fertilizer, chemicals, plastics and other farm supplies today, we are also calculating what our costs might be if the price of natural gas rises to $5, $6, $8/mcf (thousand cubic feet).

If we cannot control the price of oil or natural gas, what do we do?

We must pivot to what is cheap and stable and actually works. 

The petroleum age is barely 150 years old and already we are worrying that it will not last another 50 years; it might last even fewer years than that.

On the other hand, the Big Island will be over the geothermal hot spot for 500,000 to a million years.

The rubbah slippah folks get it. This not rocket science!

Geothermal, Peak Oil, Renewable Energy Sources

Shale Gas & Shale Oil, Only a Short-Term Bubble

1 Comment

Richard Ha writes:

From ShaleBubble.org:

THEY TELL US

WE’RE ON THE CUSP OF AN OIL & GAS REVOLUTION.

But what if it’s all just a short-term bubble?


The Reality is that the so-called shale revolution is nothing more than a bubble, driven by record levels of drilling, speculative lease & flip practices on the part of shale energy companies, fee-driven promotion by the same investment banks that fomented the housing bubble, and by unsustainably low natural gas prices. Geological and economic constraints – not to mention the very serious environmental and health impacts of drilling – mean that shale gas and shale oil (tight oil) are far from the solution to our energy woes.

This makes total sense to me.

In 2009, at the Association for the Study of Peak Oil and Gas (ASPO) conference in Denver, I attended a panel discussion on natural gas production.

Arthur Berman, a petroleum geologist and energy consultant, talked about analyzing 4,000 Barnett Shale wells. He found that an average well produces 70 percent of its production in the first year. This made sense to me: It’s a gas.

An industry person on the panel said that life span of the wells is calculated to be 22 years. Obviously, they must produce at a very low rate later in their life span, compared to their first year’s production. One has to keep drilling more just to stay in one place.

In this landmark report “Drill Baby Drill,” J. David Hughes of Post Carbon Institute takes a far-ranging and painstakingly researched look at the prospects for various unconventional fuels to provide energy abundance for the United States in the 21st Century. While the report examines a range of energy sources, the centerpiece of “Drill, Baby, Drill” is a critical analysis of shale gas and shale oil (tight oil) and the potential of a shale “revolution.”

From the Executive Summary of “Drill Baby Drill:“

World energy consumption has more than doubled since the energy crises of the 1970s, and more than 80 percent of this is provided by fossil fuels. In the next 24 years world consumption is forecast to grow by a further 44 percent—and U.S. consumption a further seven percent—with fossil fuels continuing to provide around 80 percent of total demand.

Where will these fossil fuels come from? There has been great enthusiasm recently for a renaissance in the production of oil and natural gas, particularly for the United States. Starting with calls in the 2008 presidential election to “drill, baby, drill!,” politicians and industry leaders alike now hail “one hundred years of gas” and anticipate the U.S. regaining its crown as the world’s foremost oil producer. Much of this optimism is based on the application of technologies like hydraulic fracturing (“fracking”) and horizontal drilling to previously inaccessible shale reservoirs, and the development of unconventional sources such as tar sands and oil shale. Globally there is great hope for vast increases in oil production from underdeveloped regions such as Iraq. 

However, the real challenges—and costs—of 21st century fossil fuel production suggest that such vastly increased supplies will not be easily achieved or even possible. The geological and environmental realities of trying to fulfill these exuberant proclamations deserve a closer look.

Click here to see a report about the role of Wall Street investment banks in the recent shale gas drilling frenzy and related drop in natural gas prices, written by Deborah Rogers from Energy Policy Forum.

The petroleum age is not even 150 years old, and already we are worrying about supply. In contrast, consider that the Big Island will be over the “hot spot” for 500,000 to a million years.

We don’t need $200/barrel Aina Koa Pono biofuel, which will make us less competitive. What makes sense is the $57/barrel oil equivalent that is geothermal.

We in Hawai‘i need to prepare for worse case scenarios.

So how much time do we have and how do we take care of all of us?

We need to be practical: What works, works.

This is about competition. Low cost trumps high cost.

It’s about net energy. The energy left over from what’s expended in getting the energy is what we have left to use.

And it’s about common sense. When kids picking guava or waiawi in a pasture hear hoof beats, they run first. Then they look to see if it’s a horse or the wild bull.

Contest, Video

Did You Win Our Caption Contest?

Richard Ha writes:

Announcing the winners of our photo caption contest, which we announced last week.

First, here's the video that the caption was for:

We had four winners. Here they are, in alphabetical order:

 

Richard Gozinya:   A lot of magical stuff happens and then…poof!…out comes the biodiesel.


Rico Reed:   Fresh running photo-shop!

 

Baron Sekiya:   Ho brah! Check out da video I went shoot of dis faucet. I bin watchin' dis ting all week in da office…UNREAL!!! Da bucket neva even ova-flow once wit water! How dey do dat?

 

Brendan Shriane:   Sherwin-Williams' invisible paint might just work a little too well. 

 

I got a real kick out of these.

The prizes? Rubbah slippahs, of course! At one of the recent PUC hearings, a friend of mine donated three grocery bags full of rubbah slippahs.

To our four winners: Give me a call on my cell phone, 960-1057, to claim your prize. Please really do call, because I would like to talk to each of you.

Big Island, Geothermal, Government, Iceland, Lowering Electric Rates, Peak Oil, Philippines, Renewable Energy Sources

Amending HB 106: ‘Let’s Fix It”

Richard Ha writes:

I sent in testimony, on behalf of the Big Island Community Coalition, regarding HB 106, draft 1. This bill contemplates repealing Act 97 (geothermal subzones, etc.).

We should keep the good parts of this bill and add parts that make it better. We need balance as we take care of everyone’s needs. This is about all of us, not just a few of us.

Here’s my testimony:

To the Water & Land committee

Aloha Chair Evans and Vice Chair Lowen,

The BICC is very strongly in favor of amending this bill.

There are good things in this bill; let’s leverage that. We are strongly against repealing it in its entirety.

No question: home rule should be addressed. This was an unfortunate oversight the last time around. Let’s fix it.

The heart of the bill that must be kept is the part that allows geothermal exploration and development in various land use designations.  The geothermal resource exists where it exists, not where we want it to exist. So we need a larger area to explore, not less. By having more choices we can get further away from populated areas. And we can increase our chances of success. The permitting process gives the necessary checks and balances to protect the people.

The essential problem we must solve is how to protect the people from rising oil prices. Repealing Act 97 in its entirety will raise our electricity prices.

The petroleum era is less than 150 years old. Oil is a finite resource and we are observing increasing oil prices. Oil price has quadrupled in the last 10 years. In contrast, the Big Island will be over the “hot spot” for 500,000 to a million years.

Geothermal-generated electricity is less than half the cost of oil-generated electricity. And it will be stable for 500,000 years.

The Big Island’s electricity costs have been 25 percent higher than O‘ahu’s for as long as anyone can remember. The Big Island Community Coalition is a grass roots organization that was formed to drive the cost of electricity on the Big Island down.

One of the BICC members did a cost analysis of a local school district’s 12 month electricity bills – generally 2012. Their costs (total of all schools involved) averaged $115,900/month.

At O‘ahu’s rates, those costs would be $115,900/1.25 = $92,700. That’s a savings of $23,200/month or $278,400/year.

If we figure $70,000/year pay for a teacher, the difference is four teachers for the district.

Because of these kinds of things, the BICC said enough was enough.  People turned out at the PUC hearings, and consequently the governor issued a press release saying that HECO/HELCO had withdrawn its proposed 4.2 percent rate hike.

No one has ever told us: “We disagree with you; we want higher electricity rates.”

The members of the BICC are Dave DeLuz, Jr., John E.K. Dill, Rockne Freitas, Michelle Galimba, Richard Ha, Wallace Ishibashi, Ku‘ulei Kealoha Cooper, D. Noelani Kalipi, Ka‘iu Kimura, Robert Lindsey, H.M. “Monty” Richards, Marcia Sakai, Kumu Lehua Veincent and William Walter.

Rising electricity rates act like a regressive tax, but worse. As electricity prices rise, folks who can afford to get off the grid will do so. Those who cannot leave, the rubbah slippah folks, will be left to pay for the grid.

If we can achieve low-cost, stable electricity, trickle-up economics can result. If the rubbah slippah folks have money to spend, they will spend. Then businesses will be able to hire, and then we won’t have to send our children away to find jobs.

There is a lot at stake here.

Good luck.

Aloha,

Richard Ha
Cell 960-1057

I’ve been to five Association for the Study of Peak Oil conferences. I was co-chair of the Geothermal Working Group authorized by SCR99, and sit on the Hawaii Clean Energy Initiative (HCEI) steering committee and the State Board of Agriculture. I’ve been to Iceland to see geothermal in operation, and I was part of the Big Island delegation that toured geothermal resources in the Philippines.

At Hamakua Springs we farm 600 fee simple acres of diversified crops. I do an Ag and energy blog at hahaha.hamakuasprings.com.

Government, Mauna Kea

The TMT Hearing Crowd

Richard Ha writes:

Lots of folks turned out before the state Board of Land and Natural Resources on Tuesday morning for the final hearing for a Thirty Meter Telescope construction permit. Plenty folks for and plenty against.

As Patrick Kahawaiola‘a said, “It’s about the process. If you do not participate, you cannot grumble.” People were very respectful of each other.

There was an overflow crowd. This is what it looked like outside.

Here’s what it looked like just prior to the start of the hearing.

Since everyone contributed to the process, we must aloha each other, no matter on which side of the issue we happen to be on.

Biofuel

Same Old Piggy With Lipstick & A Dress

2 Comments

Richard Ha writes:

Aina Koa Pono (AKP) just announced plans to bring a trailerable “Micro Dee” process to Ka‘u to demonstrate the pyrolysis oil process.

That liquid is not drop-in diesel.

  • It still needs to be sent through a refinery so that it can meet fuel specifications.
  • After refining, rate payers will still subsidize the fuel to the tune of $200 per barrel.

It kind of looks like the same old piggy but with lipstick and a pretty dress.

From the Aina Koa Pono press release:

….Our plan is to start with one, 33-ton-a-day unit so the community can see and understand the Micro Dee (Microwave Thermo Catalytic Depolymerization) process in place. AKP and its engineering, construction and procurement partner, AECOM Technology, are focused on final plans for this trailerable unit; we’re performing final validation on technology so investors are confident as we move ahead. We expect to locate the 33-ton unit in Hawaii within the next several months and be operational before second quarter, 2014.

AKP has 12,000 acres on which to produce the crop they need to make fuel. Palm oil is the only crop that can compete with oil in the biodiesel space. It yields approximately 500 gallons/ acre.

Assuming – and this is a huge assumption – that AKP gets the same yield as palm oil produces, they might get 6 million gallons annually from their 12,000 acres.

That will be far short of the 18 million gallons the utility is looking for.

Right now the land is mostly in cattle, but it’s clear that AKP will need every inch of land.

I wonder when they are planning to break the news to the cattle ranchers – that the cattle ranchers will need to leave?

Bananas, Big Island

Yogurtland Calls Hamakua Springs Bananas ‘Best in World’

Look at this video that Yogurtland produced, which features Richard.

It's from back when they sent their "flavorologist" to find the "best bananas in the world," for their new Yogurtland flavor "Bananas Foster."

They found the "best bananas in the world" right here at Hamakua Springs!

It's kind of ironic that there is talk about importing bananas from the Philippines, when Yogurtland thinks Hawai‘i has the best bananas anywhere.

Take a few minutes and watch this video, which is really so much fun. What a total kick.

And make sure you watch to the end. I almost missed that short little scene right at the end, after you think it's over. Great ending.

– posted by Leslie Lang

Education, Lowering Electric Rates, Peak Oil

Let’s Fight Rising Electric Rates, Not Teachers

Richard Ha writes:

Today we find ourselves fighting against our teachers. But it’s rising electricity costs that is putting the pressure on school budgets.

We should be fighting against rising electricity rates, not our teachers.

The main problem with the proposed HECO/Aina Koa Pono (AKP) biofuel project is that its $200/barrel cost would raise Big Islanders’ electricity rates.

It proposes to supply liquid fuel for the Keahole plant, which represents 60 percent of base electrical power on the Big Island. Most of the increase to our Big Island electricity bills would be due to liquid fuel pass through. So AKP’s $200/barrel biofuel cost would have a significant, negative impact on Big Islanders’ electricity bills.

Hawai‘i’s poor already have the highest tax burden in the nation, according to a front page headline in Thursday’s Hawaii Tribune-Herald.

Let’s not increase the burden; let’s lessen it.

We can. Check out the Big Island Community Coalition, which is working toward lowest cost electricity for the Big Island.

Instead of the Aina Koa Pono project, we should support HELCO’s ­22MW Hu Honua biomass/firewood project, as well as the 50MW geothermal project. If we include the present 38MW geothermal project, of which the old 25 MW contract is being renegotiated right now, it will result in 110MWs of stable, affordable electricity. More than 60 percent of our electricity would come from stable, affordable sources.

This is what will protect us from rising world oil prices. And as the price of oil rises, which it will, Big Island electricity rates would stay stable. Our electricity rates would actually become the lowest in the state.

Can you even imagine the changes that will happen when the Big Island has the lowest electricity rates in the state? We have become so accustomed to electricity bills that are 25 percent higher that we have a hard time imagining anything different.

It doesn’t have to be this way.

There will be a paradigm shift when our electricity costs are the lowest in the state. We will be able to protect some of the most defenseless among us, without having to raise the tax rates.

When people have spending money, they spend that money. They
boost economic activity. Farmers can make money and even manufacture food products for the O‘ahu market. This would increase our food security.

Our County government will be able to maintain services without having to raise taxes.

Let’s all support each other as we work toward lowest cost electricity for all Big Islanders. Not, no can. CAN!

Science, Video

Irradiator Starts Operating on O‘ahu

Richard Ha writes:

On Tuesday, I was in Honolulu and got to see locally grown produce go through the new O‘ahu irradiator as part of the equipment’s first commercial treatment.

It looks like a tall carousel, and automatically lowers units of produce underwater for a certain amount of time and at a specific distance so the irradiation is applied uniformly.

Curry leaves and papaya were part of that first treatment. Other products, such as basil and other in-demand produce, could also be exported using this method.

It’s a good example of how folks worked through environmental and other issues to come up with an acceptable solution.

The irradiator is located at the old Del Monte pineapple facilities, now occupied by the Hawaii Ag Research Center. “Stevie” Whalen, the Center’s leader, has an impressive vision of private and public organizations that will each help the whole.