Geothermal, Government, Peak Oil

Price of Oil Stayed the Same for 100 Years, Then Started Doubling Every 5 Years

Except for some spikes in the 70s and 80s, oil cost less than $20 per barrel for a hundred years. Until 2000.

In the year 2000, the price of oil averaged $25 per barrel. And then for 11 years, the price of oil increased an average of 13.5 percent every year. There were peaks and troughs along the way, but 13.5 percent was the average yearly increase during that period of time.

In 2011, it averaged $100 per barrel.

This means that the price of oil doubled every 5.5 years. (Here’s a shorthand way to calculate doubling time: Take the growth rate and divide that into 70. In this case, divide 70 by 13.5 percent and you get approximately 5.5 years.)

Demand is exceeding supply. Something has changed fundamentally, and we here in Hawai‘i need to pay close attention to it.

It’s why Mayor Kenoi is taking a delegation to Ormoc City, Philippines. Ormoc City has about the same population size as the Big Island, a similar ag/tourism-based economy, and a university about the same size as UH Hilo.

But they generate 700 MW of geothermal energy, compared to the Big Island’s 30 MW. The Mayor wants to see for himself, and understand what the risks and potential for reward are for the Big Island.

Bananas

Bunchy Banana Top Virus in Hilo

A fellow banana farmer recently told me of an infestation of the Bunchy Banana Top Virus in Hilo.

I drove by to look and sure enough, most of the bananas at that site were infected.

Bananas1

If you see this symptom on banana plants, please call Kyle Onuma at the State of Hawaii’s Department of Agriculture.

Banana2

From the Cooperative Extension Office, College of Tropical Agriculture & Human Resources of the University of Hawaii at Manoa:

Banana bunchy top virus (BBTV) is one of the most serious diseases of banana. Once established, it is extremely difficult to eradicate or manage. BBTV is widespread in Southeast Asia, the Philippines, Taiwan, most of the South Pacific islands, and parts of India and Africa. BBTV does not occur in Central or South America. In Hawaii, BBTV was first observed in 1989 and is now widely established on Oahu. In 1995 it was discovered in the Kona area of the island of Hawaii, and in 1997 it was found on the island of Kauai.

The virus is spread from plant to plant by aphids and from place to place by people transporting planting materials obtained from infected plants. There is no cure for BBTV. Some banana varieties, like the Cavendish types, are more readily infected with the virus, but no variety of banana is resistant. Banana plants that show symptoms rarely bear fruit, and because they are reservoirs of the virus, they must be destroyed. BBTV is a serious threat to Hawaii’s banana industry and to the productivity of banana plantings in home gardens…. Read the rest here

Banana Bunchy Top is a very serious banana virus. It adds another layer of cost to banana farming.

We need to renew our vigilance.

Biofuel, Geothermal, Government

Should Farmers Grow Biofuels Instead of Food?

Should farmers grow biofuels instead of food?

This is a fundamental question that our society will need to answer. How much do we value food production?

When farmers look at rising and uncontrolled oil prices, and are not able to raise their prices to keep up, the message they get is that our society does not, fundamentally, value farmers.

One thing that can help our farmers is geothermal – because it is cheap and its price is stable. Having cheap electricity bills would mean that the people who are the farmers’ customers will have discretionary income, which they can then use to help support farmers.

Every day I talk to many people who are very fearful about rising electricity and gas prices.

Mayor Billy Kenoi has thrown down the gauntlet. He is saying: “We have geothermal; why aren’t we using it?”

I agree with the mayor. Geothermal can help the folks that are on the verge of having their lights turned off. It’s truly about the effect on real people.

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Geothermal, Government, Renewable Energy Sources

Mayor Kenoi Asks Why We Aren’t Using Our Geothermal Resource Better

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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?”

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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….

Uncategorized

Supporting Hunters & the Kulani Forest

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Richard Ha writes:

This past Saturday evening, I went over to Nani Mau Gardens to give moral support to my friends in the Mauna Kea Recreational Users Group (MKRUG). This group includes hunters, off-road motorcyclists and mountain bikers. I was an avid off-road motorcycle and mountain bike enthusiast back in the day.

Big Island Video News covered this meeting well. Big Island Video News video: Hunters hold hearing over DLNR gencing, game eradication

Blyth

Wayne Blyth, chairman of the MKRUG

They had invited all the Big Island legislators to this meeting, in order to let them know how the "hunters" part of the coalition feels about a large part of the Kulani Forest being fenced off. They do not like it. Representatives Jerry Chang and Clifton Tsuji attended, as did Council Member Fresh Onishi. I was floored to see how many people attended the meeting, which was called on very short notice.

Although Rep. Jerry Chang congratulated the group for being well-organized, I think he misread it. It’s not that they were organized. It’s more that fencing off the forest touches a real sore spot. It threatens people's ability to get food for their families. What about the people? 

Audience

Some of the 200 people in attendance

One eloquent speaker said it was all about cost for them to go hunting for food. They had to buy the license, pay for dog food and buy gas to make it possible to go hunt for food. On the other hand, he said, the folks who fence off the forest just have to find something to justify getting a grant to do so. For him, it is a cost issue.

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It was a coalition of like-minded folks; Rep. Jerry Chang

My dad used to hunt to feed his family. This audience was made up of young people and families, and all the way up to people in their 60s and 70s who have hunted all their lives. I saw the same concern as in people worried about rising electricity bills.

It’s why people are so supportive of geothermal.

  • Low-cost electricity helps the regular folk.
  • Seventy percent of the economy is made up of consumer spending.
  • If people have extra money, they will spend.
  • This will cause our standard of living to rise.

This is not rocket science.  

Geothermal, Peak Oil, Renewable Energy Sources

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.

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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.

Renewable Energy Sources

A Visit to Kauai Island Utility Cooperative

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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.

Biofuel, Geothermal

Why Biofuel at Keahole?

Why would we want to burn expensive biofuels at the Keahole plant on the Big Island? We know that will result in increasing electricity rates.

Biofuel is expensive, unproven technology. You cannot even get a sample of it. It should not be used to make electricity when there are other alternatives. Biofuel should only be used for transportation, where there are no alternatives.

Keahole is the largest-capacity generating plant on the Big Island. Locking in expensive biofuels and fossil fuels there for 20 years means locking out cheap geothermal for the same amount of time.

This will not be good for the rubbah slippah folk.

Biofuel, Geothermal, Renewable Energy Sources

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.

Energy-score

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.

Geothermal, Peak Oil

Can We Have the Same Electricity Rates Statewide?

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Levelized electricity rates across the whole state?

Yes, but it needs to be done in a deliberate, thoughtful manner.

Geothermal is gaining momentum, but we need to make sure we don’t get ahead of ourselves. This must be a bottom-up process, and it must be a Big Island-driven process.

  • We must assure public safety and demonstrate appropriate deference to cultural concerns.
  • That accomplished, there must be a clear pathway to lower electric rates for Big Islanders.
  • And, as the geothermal working group suggests, there needs to be transparency in the distribution of royalties.

So, as geothermal electricity is expanded, Big Island people need to see a plan that shows that rates will stabilize at a reasonable level in a reasonable amount of time. The people have an abundance of common sense.

If geothermal results in lower and stable electricity rates for the Big Island, and if transparent royalty distribution shows that the more geothermal production the more benefit now and for future generations, then Big Islanders will ask themselves, “How can we share?”

There is a big difference between volunteering to share and being forced to share. Local people hate it when the opportunity for sharing is taken away. This is the heart of the matter.