Geothermal In Alaska

Alaska's cost of electricity is about 16 cents/kWh, which is nearly half the cost of electricity here on the Big Island.

Despite the fact that they have oil, they are looking at geothermal as a source of energy, as well. The main challenge there is that they have small populations and long transmission distances. 

The Alaska Legislature set 1.75 percent as the royalty charge for the first 10 years, and 3.5 percent thereafter. That was probably what they thought the industry could bear under their economic conditions.

In Hawai‘i, our royalty charge is 10 percent.

From Alaska Business Monthly, April 1, 2011:

Geothermal heats up: developing Alaska's steamy resources

…Alaska legislators last session passed a bill sponsored by State Sen. Lesil McGuire, which established a 1.75 percent royalty obligation for gross revenues derived from the production, sale or use of geothermal resources under a lease during the first 10 years immediately after the geothermal resource first generates gross income. After that first 10 years, the royalty obligation would rise to 3.5 percent of the gross revenues. The bill also transferred authority from the Department of Natural Resources to the Alaska Oil and Gas Conservation Commission over permitting and inspection of geothermal wells, and provided for a regulatory cost charge for geothermal wells. The bill, signed into law, took effect July 1, 2010….

Read the rest here

How Do We Know The Oil Field is Depleting?

How do we know that the mega-giant oil field in Saudi Arabia is depleting?

Do we need to know beyond the shadow of a doubt? Even small kids know that when you are in a pasture and you hear hooves, it’s time to run.

An article at the Oil Drum presents a movie on the drilling of Uthmaniyah.

Using a set of wells in a productive (but now rather depleted) slice of this part of the Saudi oil field of Ghawar, it is possible to deduce to drilling sequence of these wells using the identifiers assigned to the wells as they are drilled. Given a few known dates for well placement, a timeline for overall development can be constructed and displayed as an animation. 

The Making of the Movie

Until the early 1990s, all wells (oil, water injectors, gas, etc.) in Saudi Arabia were assigned a numerical ID with the same sequence of numbers for a given field or area. The Ghawar areas are all numbered independently, such that the discovery well in Uthmaniyah is UTMN-1 and the tenth well in ‘Ain Dar is ANDR-10, etc. Under this assumption, a map showing both the locations and IDs of the various wells also gives the drilling sequence. Furthermore, if the drilling of a given well (by ID) can be independently attributed to a specific date, the drilling sequence can be anchored at that date. For example, the first well was placed in Uthmaniyah in around 1951 — thus providing the lower anchor for the sequence. Of course, this depends on the wells used being representative of the entire Uthmaniyah area. Fortunately, this appears to be true in this case. I will discuss below the sources of information and the assumptions made when assigning dates for the various wells.

Read the rest

There Are Two Separate Economies In Play

According to Charles Hugh Smith, at his blog Of Two Minds, there are two economies in play. Interesting article.

Our “Let’s Pretend” Economy 
(April 21, 2011) 

There are two economies–the real one, which is in decline, and the “let’s pretend” one touted by the State and corporate propaganda machines.

Children love to play “let’s pretend.” Let’s pretend the economy is “recovering.”Why does this “recovery” remind me of an addict who’s conning his caseworker? (Yes, I’m really in recovery–those aren’t tracks, they’re insect bites….)

Let’s play pretend that jobs are really really coming back, so please ignore this chart, or turn it upside down:

Also ignore that Big U.S. Firms Are Shifting Hiring Abroad.

The rubbah slippah folks understand that something is not right. But here in Hawai‘i, there is a way out of this. Move to geothermal now! No fool around!

The Kids at Kua O Ka La Charter School

High school students from the charter school Kua O Ka La came to Hamakua Springs the other day on a field trip.

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Richard talked about how great it was to connect with that school, which is located on the ocean at Pu‘ala‘a in Puna, right next to the Ahalanui warm pond. “They are off the grid and all their computers are run by solar,” he said. “They have composting toilets that are very sanitary. They live on, and with, the land. I really like their hands-on learning style. They live sustainability.”

From Kua O Ka La’s website:

Pu`ala`a is an intact ancient Hawaiian village complete with historical sites, fishponds, and native habitat that affords an ideal outdoor learning environment for our project-based curriculum.

Kimo Pa, the farm’s manager, told me that he and his wife Tracy Pa were surprised, and pleased, at how interested the students were.

“We told them about what Richard has been working on,” said Kimo, “wondering how we are going to adapt to the new way of doing business, and to the high cost of oil. I talked about how we looked into Peak Oil, studied it for a few years, to really understand it. And how Richard got to the point of looking at geothermal and how he can help the rest of the community.

“We told them we’ve been looking at our resources here. We had water, so we could make hydroelectric….

“I told them that Richard said, ‘What about our workers, the island, the state? What resources do we have that could help the rest of the people?’ That’s how he found geothermal. Now he’s working with Ku‘oko‘a.

“They were really into that part, and had questions,” he said. “This has to do with their community. They’re next to the warm pond. Why is that water hot? Because of the volcano.”

He told the students that our huge dependence on oil now has to do with the leaders we have picked over the years, and their decisions.

“I told them how important they are as an individual, and that it’s their responsibility to pick the leaders; that their vote counts, because they are the future leaders. That their decision making is for the generations under them.”

He showed the students the farm’s hydroponics system, the tomatoes, and the fish they are raising.

“And I explained that we are working with other farmers, and that we like to employ people from nearby,” he said. “Working with other farmers, we can produce more food. We want to fit into the community and grow food for the area. It’s all about the sustainability – taking care of your neighbor, doing the right thing for your community so in the next generation, and the next generation, things don’t get worse.”

It’s a perfect fit with the school’s vision:

Kua O Ka Lā has adopted the concept of `Ke Ala Pono – The Right Path – to describe our goal of nurturing and developing our youth. We believe that every individual has a unique potential and that it is our responsibility to help our students learn to work together within the local community to create a future that is pono – right.

 

Supporting Kids’ Financial Literacy

I recently attended a reception for Richard Henderson, who had just been inducted into Junior Achievement of Hawaii’s “Business Hall of Fame.” It was a nice evening at the Naniloa Hotel in Hilo, and a nice tribute to him.

From the Hawai‘i Tribune-Herald:

Henderson was born in Hilo in 1928 and graduated from Punahou High School in 1946. Armed with a degree in business from Wharton School of Finance and Commerce, Henderson returned to Hilo in 1951. He joined The Realty Investment Co., which became his springboard for launching and managing a number of Big Island businesses, including nine theaters, an insurance agency, a wireless phone company, several car dealerships, Comtec Cable Co., KPUA and KWXX radio stations.

In addition, Henderson served for 15 years in the state Senate, often in leadership positions. Over the years he has also supported and served in key roles with many non-profit organizations on Hawaii Island.

It was also interesting to hear more about Junior Achievement (JA). What a terrific organization. I already knew that, but it was interesting to hear that, just here in Hilo and Puna last year, more than 100 of our local business people volunteered several hours each in 116 K-6 classrooms, and reached 2800 students. JA also meet with middle school and high school students.

Junior Achievement’s purpose is to “educate and inspire young people to value free enterprise so they can improve the quality of their lives and their communities.”

Its high school Company Program pairs business leaders with high school kids who create a business and learn how to write a business plan, research their market, efficiently manufacture their products, promote and sell their goods, keep the employees happy and keep the books straight.

Lee Wilson, president of JA on the Big Island, said, “This year, the six companies amassed revenues of nearly $50,000 in a shortened sales window of just over 8 weeks. What recession? I think Mr. Henderson would have been thrilled if a few of his startups had generated that type of volume right out of the gate.”

I think so.

Out Of Business


Tomatoes

Farming is a challenging business, and getting more challenging every day. That this tomato company in Southern California just halted operations is a good example of that.

Oceanside Pole Tomato Sales Inc., the marketing arm of Harry Singh & Sons, is one of the country’s largest tomato suppliers, packing and selling 4.5 to 5 million cartons of tomatoes a year. Harry Singh & Sons was one of nine companies that make up a Fresno-based cooperative that grows about 90 percent of the country’s fresh tomatoes.

It’s noteworthy that they had to shut down operations so suddenly. According to the article in The Packer, it was due to a “perfect storm of issues,” including labor and water costs, competition from Mexico, California’s regulatory climate and urban encroachment.

As I have often said, “If the farmer makes money, the farmer will farm.” As oil prices rise, I am curious to see if other mainland farmers are feeling economic pressures as well.

From The Packer:

Oceanside focuses on 2012 return with tomatoes

Published on 04/14/2011 06:40PM

Southern California’s Oceanside Pole Tomato Sales Inc., one of the nation’s largest suppliers to retail of vine ripe tomatoes, abruptly halted operations April 12, as did grower Harry Singh & Sons because of “a perfect storm of issues” related to costs.

Barbara Metz, a spokeswoman for Harry Singh & Sons, said April 14 that the company had not gone bankrupt. She said “a perfect storm of issues” including costs of labor and water, competition from Mexico, California’s regulatory climate and urban encroachment had caused the shutdown.

“I’ll be closing down the company in the next few weeks,” said Bill Wilber, Oceanside Pole president, on April 13.

Krishna Singh, general manager of the growing company and grandson of its founder, sent a message to that firm’s employees the same day, explaining that the company would not be operating for the 2011 season.

“I regret to inform you that effective immediately, Harry Singh and Sons Farming Partnership will not be in operation for the 2011 season. … We will work diligently and explore all options in our efforts to reorganize and resume farming operations for 2012,” according to the e-mail message.

The closures of Oceanside Pole and Singh’s growing operation could put a dent in the upcoming season’s vine-ripe category.

Read the rest

$100 To Fill Your Car With Gas?!

The Star-Advertiser just ran an article about peak oil, using gasoline prices as an example of some of the stark realities ahead of us.

The writer characters a switch to geothermal energy as a “a tough sell, but one that will become easier the first time it costs you $100 to fill up.”

Believers in ‘peak oil’ preparing for when a fill-up costs $100

By Richard Borreca 

POSTED: 01:30 a.m. HST, Apr 12, 2011

Standing in the state Capitol basement is a new symbol that times have changed: an electric vehicle charging station.

Hawaii may have only a few electric cars so far, but state law requires large public parking structures to have at least one charging station. As many as 320 of the 2-foot-tall systems are expected to be installed across the state.

It is part of the answer to the looming crisis of peak oil, which is defined as the time when global oil extraction reaches its maximum rate and the rate of extraction declines….

Read the rest

How much does it cost you these days to fill up your car? Leave a comment and let us know.

Pahoa Holds a Forum on Geothermal

I attended a geothermal energy forum at the Pahoa Community Center on Saturday, and the seats were all taken.

Patbrandt

Pat Brandt is CEO of Innovations Development Group, which hosted the forum

This article, which ran in the Honolulu Star-Advertiser the day before the forum, gives some background:

Forum on geothermal energy to include Hawaiian leaders

By Alan Yonan Jr. 

POSTED: 01:30 a.m. HST, Apr 08, 2011

A Honolulu-based company that has developed geothermal energy projects on Maori trust lands in New Zealand will lead a community forum on the Big Island tomorrow to discuss the pursuit of geothermal energy there.

Innovations Development Group, which specializes in socially responsible development, said the forum will include presentations by six native Hawaiian leaders who will offer their views on how development of geothermal energy can be done in a way that protects cultural and resources…. Read the full article here

By my quick count, I would say 60 people attended.

I was there to hear people’s points of view, and there were many. I was very encouraged because we had the opportunity to talk story and bridge gaps. The overriding sentiment, which I heard over and over, was that we were talking about benefits to the community – not just the Hawaiian community but the whole community!

This made me very happy. It is truly about all of us!

The second thing that rose to the top was that we could have moved further forward if not for a historical lack of transparency. For example, 10 percent of geothermal revenues right now are royalties paid to the state of Hawai‘i, and 50 percent of that goes to the Department of Land and Natural Resources. People ask: How is that money used? There is no answer, though, because it merely goes into a general fund.

The same question is raised about the 20 percent that goes to the Office of Hawaiian Affairs (OHA). Where exactly does it go? No answer. To the credit of OHA Trustee Robert Lindsey, he knows this is unacceptable and has said that it needs to be fixed.

People also want to know why geothermal is available on the Big Island, and yet we have the highest electric rates in the state. How come? Had the utility been more transparent about its cost structure, this would not be an issue. But the people are often told, “We cannot tell you the cost; it is proprietary information.” That just breeds distrust. People feel that transparency should be the trade-off for having a monopoly!

Wally Ishibashi and I agree wholeheartedly. We were joint chairs of the Geothermal Working Group, and agreed that we would make the process transparent. We know about people’s concerns.

Moanikeala Akaka was there. She is a community watchdog, and told the IDG people, “I have not made up my mind. You guys may be Hawaiian developers, but I’m watching you, too.” I’m glad she’s watching. There’s nothing to hide.

A young girl had the most impact on me. She said, “We need to move on. I worry about the world my daughter will grow up in. I don’t want to come back here 20 years from now and be having the same discussion.”

That was a very powerful statement and I feel it resonated with everyone there. And that’s what makes things very hopeful.

People do know that “one day the boat not going come.”

This was a heavy-duty meeting, and I will be writing more about it in the coming days.

Hawaii’s Triple Whammy

Hawai‘i is facing a triple whammy of declining world oil supplies.

The net energy left over from our efforts to produce that oil is decreasing as it becomes more difficult to get.

We are near to, or maybe past, the peak of world oil production.

Past the peak, we face a steady decline in net energy on top of the decline in gross volume. In addition, oil-exporting countries will need to divert oil to subsidize their own populations, or their politicians will get thrown out of office.

Chefs, Farmers & Food Security

Food security awareness is starting to gain traction, and I am very encouraged by this get-together at Leeward Community College on Friday, April 15. I believe it will make a difference for Hawaii’s food security.

Food Security is about farmers farming. And if the farmers make money, farmers will farm.

The objective of this exercise is to enable incremental change to help farmers make money. All the pieces will add up to something significant!

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