Tag Archives: ASPO

Energy

Hawaii Energy Picture: Making Our Lives Better

How do we make the Hawaii energy picture, and our futures, better?

I sense that young folks know something needs to change in our modern world. And I see lots of folk helping each other cope.

This is all very encouraging, so I want to have a conversation: What can we do to make things better for all of us? I’m going to be posting about this in the next few weeks.

I’m going to talk about it being important that we take care of ourselves here in Hawaii, because nobody else is going to worry about us. In a world of declining energy, the pie is getting smaller and everybody is jockeying and fighting for a smaller piece of pie. This is when you get discontent. Look, for instance, at the current presidential election.

But the solution is not fighting with each other like what’s going on right now.  The solution is helping each other.

The bottom line is that in whatever we choose to do, the pluses have to exceed the minuses.

This is why I look at the Thirty Meter Telescope (TMT) as a plus. It supports education, and that helps us develop new technologies. Technology is not energy, but it helps us to extend energy. Also, investment in the TMT is all coming in from foreign dollars, instead of us taxing ourselves. All pluses.

Another thing we have that’s clearly a plus in terms of energy is geothermal. We will be over the “hotspot” that provides us with geothermal energy for 500,000 to a million years. That isn’t going away. A huge plus.

And GMOs are a plus because they help us find different ways to keep feeding ourselves, which of course is critical.

This is what it all boils down to. This is the graph that changed my life.

Hawaii Energy

I first saw it during the 2007 Association for the Study of Peak Oil conference in Houston. It shows, simply, that we have been using much more oil than we’ve been finding.

Obviously there will be consequences if we don’t either:

  • conserve what oil we have
  • find affordable alternatives
  • or use technology to extend what energy we have.

It takes energy to do work and Gross Domestic Product (GDP) is a measurement of work, so this graph implies the world GDP may be challenged if we don’t find alternatives.

It was clear to me that this was going to be the biggest challenge facing Hawai‘i.

I continued studying this and also attended four more ASPO conferences. And I realized I was the only person from the state of Hawai‘i that was attending these conferences and hearing all these experts, and Hawaii energy became my kuleana. It’s not that I wanted it or needed it; I just felt stuck with the knowledge and knew I had to do something with it.

My friend, Professor Charles A.S. Hall, who is known as the father of Energy Return On Investment (EROI), was someone I found clear and easy to understand.

Hawaii energy

What it’s about and what we can do

I am going to revisit a lot of what I’ve learned since I started studying about this problem in 2007, and write about it here. For example, it takes energy to get energy (for example, to get oil up out of the ground) and net energy is decreasing as we use increased amounts of energy to access more difficult sources.

Is it surprising that World GDP is lessening? Not many of our leaders seem to be paying attention to these things.

So to get back to my question above: What changes can we make? What can we do to make things better for all of us?

People have ideas, and I’m going to write some posts about what makes sense to me (and others). Stay tuned.

Big Island, Food Security, Geothermal, Peak Oil, Renewable Energy Sources, Sustainability

Shale Oil & Gas: The Overhype

1 Comment

Richard Ha writes:

Art Berman says we don’t have as much shale oil and gas as we think we do. He feels that the shale oil and gas sector is largely uneconomic.

The first time I heard Art Berman speak was on a panel discussion at a 2009 Association for the Study of Peak Oil conference. He studied four thousand Barnett shale wells in Texas and found that the average well gave up 72 percent of its production in the first year.

He definitely had a different perspective than an oil company executive panel member, who said that according to his hyperbolic curve calculations, the average well would produce for 22 years.

I knew someone was wrong. I thought that the oil company executive was just blowing smoke, to sell stocks. I imagined that by the end of the 22nd year, the amount of gas production from his gas well would fill a balloon an hour.

Many thousand of wells later, several credible studies from other sources, such as by this Post Carbon Institutes study by David Hughes, support Art Berman’s initial observations.

We need to pay attention to this because we rely on oil for seventy percent of our energy, and this makes Hawai‘i especially vulnerable. It’s much better to be safe than sorry.

The Big Island is lucky to have an alternative to oil and natural gas to make our base power electricity: Geothermal.

As time goes on, and as oil and natural gas prices rise, future generations will have a competitive advantage over the rest of the world. We will be over our geothermal “hot spot” for 500,000 to a million years.

It takes energy to do work. No energy, no work done. But it is the net energy left over from getting the energy that society uses to grow the economy. And since two-thirds of our economy is made up of consumer spending, it boils down to how much extra money the rubbah slippah folks have that will determine the health of our economy.

So Kumu Lehua was right. He asked me: “What about the rest?” 

That is the key question. What about our kupuna on fixed income? The single moms? The working homeless? If they had extra money, they could spend it and everyone would benefit. Farmers are price takers, not price makers, and they would benefit. If the farmers made money, the farmers would farm.

Asking what about the rest will help us with food security. It all boils down to cost. That is to say, what are the combination of things that gives us the best net energy profile? This is more about common sense than rocket science. If we take our time to look for two solutions for every problem and one more just in case, we will find the solutions that make us competitive with the rest of the world.

This, in the final analysis, is about survival and adaptation. And it is about all of us; not just a few of us.

Peak Oil

Why LNG is Such a Bad Risk

Richard Ha writes:

We are getting ready to make huge liquified natural gas (LNG) decisions, and LNG is a big risk. We need to understand the risk and who’s going to be left paying the price.

The first time I heard about shale oil and gas was at an Association for the Study of Peak Oil (ASPO) conference. I attended five of those conferences, the only person from Hawai‘i to do so. Hawai‘i County paid for the trip to the 2010 ASPO conference, held in Washington D.C., and is still benefitting from that small investment.

That discussion about shale oil and gas though was at the 2009 ASPO conference, in Denver, and it turned into a sharp discussion between the geologist Art Berman and a drilling company executive.

Art said he had studied data from 4,000 wells in the Barnett Shale and found that the average well gave off 72 percent of its production in the first year.

The executive countered that his figures showed a hyperbolic curve indicating that production lasts for 22 years.

Somebody was wrong. Later I learned that hyperbolic curves only mean that the following year is less than the one previous.

I didn’t know the definition then, but common sense told me that at the end of 22 years, maybe just a gallon might be coming out per hour. I felt like the executive was just trying to sell stock.

Later, a study of 19,000 wells showed that the average well gave more than ninety percent of its production in its first five years. This was not rocket science – even a banana farmer could tell that you would need to replace one-fifth of the wells each year just to stay even. More if production is higher in the first few years.

As of 2010, it was common knowledge that the average shale oil and gas well depleted in a short time, and it was a subject of intense discussion among those of us who attended the ASPO conferences.

In the meantime, some of the folks out there trying to sell stocks were using the terms “resource” and “reserves” interchangeably in describing what was available. The phrase “Saudi America” started to be thrown around.

The U.S. Energy Information Administration (EIA) finally estimated that the U.S. had an economically accessible shale oil supply of about 100 more years.

But David Hughes, a Canadian geologist, challenged the availability of the Monterey Shale oil due to its geological characteristics. Instead of being flat, the resource rock was wavy and squished. It was hard to access via horizontal drilling.

And then this March, the EIA quietly changed its estimate. In a low-key announcement, it readjusted its estimate of Monterey Shale oil availability – which was two-thirds of our national recoverable supply – downward by an amazing 96 percent.

I saw the announcement and realized its significance immediately. Readjusting the estimate of the US supply of oil downward by two-thirds was a huge, huge deal. But the news kind of just slipped by.

Shale gas has the same characteristics of shale oil – it depletes rapidly. If you ask me who I believe about shale oil and gas? Based on his track record, I believe the data and conclusions of David Hughes.

He based his studies on the same historical data and information the U.S. EIA used, but analyzed it in a more meticulous and targeted way. His data shows natural gas declining much, much faster than does the EIA. A recent University of Texas study agrees more with David Hughes than with the EIA.

This Peak Prosperity podcast features an interview with David Hughes talking about shale production and how he did his analysis. It’s a good interview (47:24). Alternately, you can read the transcript here.

On p. 300 of his report, in figure 3-116, Hughes shows an interesting graph of the EIA’s forecast for shale gas projections and how, in the long term, they are greatly overestimated.

At the end of Hughes’ study on natural gas, he cautions (click to enlarge) :

David Hughes report

Here on the Big Island, based on the precautionary principle, I would rely on geothermal rather than liquid natural gas for our electricity generation. A faster decline probably means a faster rise in natural gas price. If we rely on LNG, the rate payer will assume that risk.

And in Hawai‘i we do not have methane underground. So the bad effects of fracking does not apply to us at all. We have drilled 85,000 wells by now. It’s a mature industry that deals with H2S routinely.

In the future, geothermal could also help us solve our transportation problem by providing hydrogen for fuel-celled vehicles. The cost of hydrogen comes from either natural gas or from passing electricity through water. Eventually, the cost of making hydrogen from natural gas will pass the cost of making hydrogen from electricity from geothermal. Then we will have a permanent advantage over the rest of the world. That’s what we want!

Geothermal is climate change-friendly and as infinite as we can get—we will sit for 500,000 to a million years over the “hot spot.” And we are one of the few places in the world with these circumstances and this opportunity.

We have truly come to a crossroads in our history. We must put our personal agendas behind us and do the right thing for ourselves and future generations.

Geothermal

A Geothermal Column in OHA Newspaper

Richard Ha writes:

Do you read the Office of Hawaiian Affairs monthly newspaper Ka Wai Ola? You can download the June 2014 issue here, and if you scroll down to page 28, you’ll see Trustee Robert Lindsey’s column.

He asked Davianna McGregor and me to write about geothermal in his column this month. She writes from the “anti” perspective, and I write from the “pro” one.

It was not a debate. I have no expertise in the cultural area of geothermal, though I am very respectful of the cultural aspect. I’m sharing my mana’o as a 35-year farmer and the only person from Hawaii to have attended five Association for the Study of Peak Oil (ASPO) conferences on the mainland. I’ve visited both Iceland and the Philippines to see geothermal operations and I have a good sense of how and why it would work for us here.

Current Affairs, Geothermal, Peak Oil, Renewable Energy Sources, Sustainability

What Monterey Shale Oil?

Richard Ha writes:

The U.S. Energy Information Administration (EIA) made a dramatic announcement recently: it is revising its estimate of the Monterey Shale Oil supply downward by 96 percent.

Ninety-six percent is a lot.

Especially when you consider that the Monterey Shale Oil supply presented two-thirds of the United States’s oil reserves. It was estimated that we had 100 years of oil reserves left in this country altogether, but now that we know 66 percent of it doesn’t exist, there must be only 34 percent, or 34 years, of oil reserves remaining in the U.S.

However, the cost we would have to pay for oil companies to retrieve it would exceed what it would cost them to do so. In other words, if we consumers were willing to pay $1 million/barrel, all of those 34 years’ worth of oil could probably be recovered. But if we the people can only pay $150/barrel, we might only see ten years’ worth drilled. Hmm.

Those of us who attend Association for the Study of Peak Oil conferences (I’ve attended five now, the only person from the Big Island to do so) have known that the claim that the U.S. has a 100-year supply of oil was way overestimated. We are never going to be Saudi America.

Kurt Cobb writes about this at Resource Insights:

The great imaginary California oil boom: Over before it started

Sunday, May 25, 2014

It turns out that the oil industry has been pulling our collective leg. 

The pending 96 percent reduction in estimated deep shale oil resources in California revealed last week in the Los Angeles Times calls into question the oil industry's premise of a decades-long revival in U.S. oil production and the already implausible predictions of American energy independence. The reduction also appears to bolster the view of long-time skeptics that the U.S. shale oil boom–now centered in North Dakota and Texas–will likely be short-lived, petering out by the end of this decade. (I've been expressing my skepticism in writing about resource claims made for both shale gas and oil since 2008.)

California has been abuzz for the past couple of years about the prospect of vast new oil wealth supposedly ready for the taking in the Monterey Shale thousands of feet below the state. The U.S. Energy Information Administration (EIA) had previously estimated that 15.4 billion barrels were technically recoverable, basing the number on a report from a contractor who relied heavily on oil industry presentations rather than independent data.

The California economy was supposed to benefit from 2.8 million new jobs by 2020. The state was also supposed to gain $220 billion in additional income and $24 billion in additional tax revenues in that year alone, according to a study from the University of Southern California that relied heavily on industry funding.

But that was before the revelation by the Times that the EIA will reduce its estimate of technically recoverable oil in California's Monterey Shale by 96 percent–almost a complete wipeout–after taking a close look at actual data for wells drilled there already. The agency now believes that only about 600 million barrels are recoverable using existing technology. The 600 million barrels still sound like a lot, but those barrels would last the United States all of 40 days at the current rate of consumption….

Read the rest

We need to take a step back and reevaluate where we are and what we need to do. As I’ve been saying for years now, we need to get on with geothermal. For the Big Island, the path we need to take is clear.

A byproduct of the oil operations is natural gas, and it would be helpful if natural gas prices rose to help with the costs of development.

It’s kind of like curtailed electricity. If it could be sold at any price, it would help lower the bid price of geothermal and wind operations and would result in lower electricity costs for the rubbah slippah folks.

If curtailed electricity could be bought at a cheap enough price, it could also enable a hydrogen storage option. Then we could get a hydrogen fuel cell option for various motors. And we could look at converting hydrogen to ammonia, so we would have nitrogen fertilizer to help with our food security. 

Biofuel, Food Security, Peak Oil, Sustainability

Nothing Is More Important Than Being Able to Afford Food

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Richard Ha writes:

How are these two things related: The Aina Koa Pono biofuel project, which is subsidized by the rate payer at $200 per barrel, and Bill 79, the anti-GMO bill submitted by Councilwoman Margaret Wille?

There is a very good chance that we will soon start down the backside of the world oil supply curve. If there is even the remotest chance this will happen, we need to be focusing sharply on the things that are crucial to us, living out here in the middle of the Pacific Ocean.

Nothing is more important than being able to afford food.

We cannot waste time subsidizing $200 per barrel oil; what is the objective there? And we cannot waste time pitting farmer against farmer. We need to focus on helping all farmers make money. Because food security involves farmers farming. And if the farmer makes money, the farmer will farm.

Here in Hawai‘i, nearly 90 percent of our food is imported. We are going to need the help of all farmers to achieve food security. Bill 79 is a distraction that takes our focus away from helping farmers become economically viable. Worse, and most distressing, is that it pits organic farmers against conventional farmers.

We need the help of all the farmers to make Hawai‘i food secure.

The problem is that farmers’ customers are being squeezed by rising energy costs. The rubbah slippah folks can only go so far in supporting locally grown products. Oil costs have quadrupled in the last 10 years and electricity rates have continuously risen. It’s as if we had a massive tax hike. We’re in the middle of a crisis and we don’t even recognize it.

The small farmers on the Big Island know it, though. That’s why they are taking valuable time off from work to show support for each other.

An Interview with Steven Kopits

 | May 1, 2013

By Steve Andrews – The following is taken from an interview with Steven Kopits, managing director of the New York office of Douglas-Westwood, an international energy analysis firm.  The views expressed are atttributable to Mr. Kopits and do not necessarily represent those of Douglas Westwood.

…Peak oil does not occur when we run out of oil.  Peak oil occurs when the marginal consumer is no longer willing to pay the cost of extracting and processing the marginal barrel of oil.  And we can actually calculate what the related numbers are.

Q:  How do we do that?

Kopits: To begin with, we refer to the price a nation’s oil consumers are willing to pay as its “carrying capacity.”  For the US, carrying capacity is about $95-100 Brent [per-barrel oil price in London].  If the oil price is above this level, oil consumption will decline—which is exactly what we see and what we predicted four years ago.  But carrying capacity is not a static number.  It changes over time, specifically, with three things: GDP growth, efficiency gains in the use of oil, and dollar inflation.  So if GDP goes up, efficiency goes up and the CPI goes up, then the amount that consumers are willing to pay for oil will increase.  For China, by the way, we estimate the carrying capacity at around $115-120 / barrel Brent.  So oil consumption will increase in China at $115 Brent, but fall in the advanced economies—exactly the pattern we’ve seen in the last few years.

Q: So the story line getting a ton of ink of late—peak oil is dead….it isn’t actually quite dead yet, is it?

Kopits:   No.  But importantly, we’re going to peak out production not because we’re “running out of oil,” but because the marginal consumer is not willing to pay for the marginal barrel.  We seem to be pretty much at that level today.

We need to understand these dynamics better.  What are the combined effects of flat oil prices and rising production costs, that’s where I think the challenge is and where our professional work is focusing on the macro side…to better understand what these trends are, what they mean, and how companies in the industry should respond to it.

I’ll give you an example.  Normally, if you look at an oil production system, it tends to be symmetrical around the peak.  The rate at which you approach the peak is the rate at which you depart from the peak.  We haven’t done that.  What we’ve done is that we’ve approached the peak and we’ve leveled out production, the so-called “undulating plateau”.  But we’ve maintained that plateau by turning to non-oil liquids, by dramatic increases in upstream spend, and also by technological innovation related to hydrofracking.  All of these, as of today, look to be running their course.  Even shale oil.  Yes, it will grow for the next few years from the three majors plays in the US, but the peak of production growth is already behind us in the Bakken, for example.  On current trends, Bakken production will be increasing by single digits within two years.  Not a tragedy by any means, but not enough to move the global oil supply at that time, either.

Related article
Biofuel, Peak Oil, Renewable Energy Sources, Video

Cutting Edge Info on Peak Oil: Here, Now & in November

Richard Ha writes:

Five Association for the Study of Peak Oil (ASPO) annual conferences later, it’s very clear to me that the information I learn at the conferences is cutting edge. It’s consistently two or more years before what the experts there are talking about shows up in the mainstream news.

From the first ASPO conference I attended, I noticed there were stock traders in the audience. I asked them why there were there, and one told me it was so he could make better investment decisions.

The oil decline situation is much more serious than people realize, and I highly recommend that anyone who wants to be on the cutting edge of knowledge attend the next ASPO conference. It is usually held around the end of November.

I also recommend you visit the ASPO-TV site and take in some of the videos there.

Robert Rapier gave this interesting talk at ASPO last year, which may be of interest to folks who have more than just a passing interest in energy issues.

Robert Rapier – Navigating a New Energy Reality from Peak Oil TV on Vimeo.

Robert, who presented at the conference the last two years, lives
in Waimea now, where he moved to take the job of Chief Technology Officer for Merica International.

He has written a book, Power Plays: Energy Options in the Age of Peak Oil:

In Power Plays: Energy Options in the Age of Peak Oil, energy expert Robert Rapier helps readers sort through energy hype, doom and gloom, and misinformation to understand what really matters in energy, and how it impacts individuals, investors, businesspeople, and policy makers worldwide. The book
covers the overall global energy situation, the particular risks for the U.S. with its present energy mix, the energy outlook for the developed world and emerging economies like China and India, what peak oil really means, and the present and likely future of natural gas, coal, oil, nuclear power, and alternative energy sources. 



The book also addresses common misconceptions. For instance, most readers are likely unaware that the U.S. is the third-largest oil producer in the world. Or that Canada leads the U.S. in per capita oil consumption. It will also highlight interesting facts—for example, China has solved part of its energy challenge by
mandating solar hot water systems in all new construction. Most
importantly, the book will provide specific energy insights unavailable elsewhere and help individuals and business planners chart future actions and decisions. 

In a recent blog entry, Robert talks about why rising natural gas prices will affect the biofuel industry (natural gas is a cost component of the biofuel industry).

He once told me that if a biofuel project has a negative energy balance, it would never be cheaper than oil.

He is highly technically qualified and has a knack of making difficult issues and conclusions easy to understand. I highly recommend both his book and blog.

Geothermal, Government, Lowering Electric Rates, Mauna Kea, Peak Oil

Geothermal Talk at the Democratic Party Convention

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Richard Ha writes:

On Saturday, I was on a geothermal panel at the Hawai‘i Island Democratic Party Convention, which was held at the Volcano Art Center. Brian Schatz at Hawai‘i County Democratic Party Senator Brian Schatz speaking

Also on the panel were State Senator Russell Ruderman and former Big Island Mayor Harry Kim.

It went very well and I’m very optimistic. I think most of us just want to do the best for all of us.

I made it a point to tell the audience that I went to O‘ahu on behalf of the Big Island Community Coalition and testified in favor of four
geothermal bills. What the four bills had in common is that they all contained provisions for “home rule.” I told the audience: This was so you could have a say in the geothermal issue.

My main point was that we are competing with the world for oil. And we need to seek a competitive advantage for the Big Island, and this has to do with cost.

We all know that the price of oil price rise; it’s only a matter of when, and how high. So if we can find a lowest cost solution, this will protect us from a rising oil price. It does not matter what the alternative is, so long as it gives us a competitive advantage.

Right now, it’s geothermal that has the potential for giving us that competitive advantage, assuming we don’t drive up its cost so high that we lose that advantage. Whether or not we achieve its potential is up to our leaders and to the Puna community.

Here’s what I told the Democratic Party Convention:

We are on a search for “competitive advantage” for the Big Island. Organisms, organizations and civilizations do this – it is called “survival of the fittest.” It isn’t the strongest or the smartest that survive; it’s the ones that can adapt – Charles Darwin

My name is Richard Ha. I am a farmer here on the Big Island. Together with our 70 workers, we farm 600 fee simple acres at Pepe‘ekeo. We have produced multi-millions of pounds of bananas and tomatoes over the past 35 years.

In my search to find competitive advantage for my farm’s future, I’ve now been to five Association for the Study of Peak Oil (ASPO) conferences.

Here is what I took away from these conferences:

  1. Oil price quadrupled in the last 10 years.
  2. The last 11 recessions were associated with a spiking oil price.
  3. Oil is a finite resource.
  4. The world has been using three times the oil it has been finding for many years now.
  5. The days of cheap oil are over.
    1. The cost to produce the marginal barrel of oil – the last barrel, as in shale oil and tar sands – was $92 per barrel in 2011.
  6. The U.S. mainland uses oil for only two percent of its electrical generation. Hawai‘i uses oil for more than 70 percent of its electrical generation.
    1. Anything manufactured on the mainland with cheap oil embedded makes our local producers and manufacturers less competitive. This affects Ag products.
  7. It is not the supply or demand of oil that will cause the
    greatest damage; it is the cost of oil.
  8. How much time do we have? Because it is about oil cost, we have less time than we think.

ELECTRICITY ON THE BIG ISLAND

  1. Uses 180 MW at Peak.
  2. Most of the increase in electricity bills is caused by oil pass through.
  3. Bio mass – as in wood chips – and geothermal have base power potential.
  4. Solar and wind must add storage to become useful as base power.
  5. Storage at utility scale is prohibitively expensive today.

ECONOMY

  1. Big Island electricity rates have been 25 percent higher than O‘ahu’s rates for as long as anyone can remember.
  2. The Big Island has the lowest median family income in the state.
  3. The Pahoa School Complex has, at 89 percent, the highest percent of students participating in the free/reduced lunch program in the state. Ka‘u at 87 percent and Kea‘au at 86 percent are close behind.

Education is the best predictor of family income. Yet the Big Island’s high electricity cost takes away from its education budget.

Rising electricity rates act like a giant regressive tax. The folks who are able to leave the grid for PV do so. The folks left behind pay more for the grid. Many of these folks are the ones already on the lowest rungs of the economic ladder: THE ONES THE DEMOCRATIC PARTY IS CONCERNED ABOUT.

Rising electricity rates take away discretionary income. Two-thirds of our economy is made up of consumer spending. Bottom-up economics benefit all, from the rubbah slippah folks to the shiny shoe folks.

GEOTHERMAL

  1. Cost to generate electricity from geothermal is estimated at 10 cents per kilowatt hour. This is less than half the price of electricity generated by oil, which is estimated to be 21 cents per kilowatt hour.
  2. The cost of the feedstock steam will be stable for a long time. The Big Island is estimated to be over the “hot spot” for 500,000 to a million years.
  3. Concentrating geothermal on the East Rift increases risk. Iceland mitigated the risk by keeping some oil-fired plants in operational reserve.
  4. Home Rule. The Big Island Community Coalition, myself as representative, personally voted for four of the bills that contained the Home Rule provision.
  5. Mediation vs. contested case hearing. It is a risk/benefit, cost, competitive advantage question. The lowest cost solution to accomplish the objectives is our target.
  6. How much time do we have? If cost is our primary concern, we have less time than we think.

I asked Dr. Carl Bonham: What happens if the oil price hit $200 per barrel? He replied that it would devastate our tourism industry.

I asked Dr. Bonham: What if we used geothermal as our primary base power? Wouldn’t we have a competitive advantage to the rest of the world as the oil price rose? He said, “YES.”

And, I asked, isn’t it fair to say that our standard of living would rise? He said: “YES.”

By giving the Big Island a competitive advantage in electricity rates, we can take care of all of us; not just a few of us.

WHERE ARE WE TODAY?

We are on a good track.

  1. We have 38MW of geothermal. The 25MW original contract, which is still tied to oil, is being renegotiated right now.
  2. HELCO has signed a 22MW power purchase agreement with Hu Honua. This is proven, stable and affordable technology – firewood, boil water.
  3. HELCO has issued a 50MW request for geothermal proposals.

These 110MWs of stable, affordable electricity base power represent 60 percent of the Big Island’s peak power usage.

O‘ahu has 10 percent of its base power electricity coming from stable affordable sources.

If we all work together, to take care of each other, we can be on track to have a competitive advantageover the rest of the world.

***

Some good resources on this topic:

Geothermal Assessment & Roadmap is a report compiled by the Pacific International Center For High Technology Research (PICHTR) under contract to Hawaii Natural Energy Institute, University of Hawaii in January 2013.

Peak Oil Warning From an IMF Expert: Interview with Michael Kumhof is a modeling done by the International Monetary Fund (IMF) economic team. Although it is not an official IMF document, it was done by the team that does economic analysis and modeling for the IMF.

We are dependent on air transportation, and this video, Charles Schlumberger: Out of Gas: Implications for Transportation, gives a sobering view of what we can expect in the future. Dr. Schlumberger is head of the air transport division of the World Bank.

Peak Oil

Middle East Worries About Peak Oil

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Richard Ha writes:

Qatar just held the Middle East’s first-ever Peak Oil Conference, and when Arab countries start showing concern about peak oil, we definitely need to pay attention.

Energy expert Robert Hirsch attended the Qatar conference and wrote about it at the Association for the Study of Peak Oil (ASPO) website.

By Robert L. Hirsch PhD, Senior Energy Advisor, MISI

I was fortunate to be among the few westerners invited to attend and speak at this first-of-its kind “peak oil” (PO) conference in a Middle East. The fact that a major Middle East oil exporter would hold such a conference on what has long been a verboten subject
was quite remarkable and a dramatic change from decades of PO (Peak Oil) denial. The two and a half day meeting was well attended by people from the GCC as well as other regional countries.

The going-in assumption was that “peak oil” will occur in the near future. The timing of the impending onset of world oil decline was not an issue at the conference, rather the main focus was what the GCC countries should do soon to ensure a prosperous, long-term future. To many of us who have long suffered the vociferous denial of Peak Oil by GCC-OPEC countries, this conference represented a major change. In the words of Kjell Aleklett, who summarized highlights of the conference, the meeting was “an historic event.”

A flavor of the conference can be gotten from the following loosely translated, random quotations:

  • This is a groundbreaking conference.
  • The organizers were brave to organize this conference.
  • Peak oil provides an incentive to consider important national and regional issues. The GCC is currently working new problems with old solutions.
  • Oil revenue represents about 93% of the Saudi budget. Everything is now imported — foreign expertise and most labor. Saudi can’t continue on the current track, because it would lead to a “bad future.” We need radical change.
  • After peak oil, will there be great cities, or will Middle East cities end up like the gold mining ghost towns of the old U.S. west?
  • So far we have wasted our opportunity.
  • Shale oil in the U.S. is so much foolishness and does not invalidate peak oil. We definitely must worry about peak oil.
  • Political reforms have failed to properly address our lack of democracy and accountability.
  • When people are excluded from politics, they get unruly.
  • Citizens in the Middle East prefer public sector jobs because they pay better than private sector jobs.
  • Foreigners are the majority of our populations, typically 80%.
  • Schools are teaching children “old stuff.” Schools are a disaster.
  • The current culture is one of waste….

Read the rest.

This country’s conference on peak oil is coming up in November, and Hawai‘i needs to send more people to it. We need to be smart about what we do. It’s all about cost and effect on the rubbah slippah folks.

We must base our decisions on good, verifiable data. We need to play the position on the chess board that exists in front of us, not the position we wish we had.

In the end it is about all of us, not just a few of us — in the spirit of aloha.

Geothermal

Testimony to OHA Supporting Geothermal

Richard Ha writes:

OHA is contemplating investing in geothermal. I am in favor of that, for the reasons that I mention below.

I sent the following testimony to OHA:

***

Subject:  OHA testimony re: Huena Power Co/IDG

April 17, 2013

Office of Hawaiian Affairs
711 Kapiolani St.
Honolulu, HI  96813

Aloha Chair Machado and Board members of OHA:

The Geothermal working group report, which Wallace Ishibashi and I co-chaired, recommended that geothermal be the primary base power for the Big Island. OHA was represented on the working group by trustee Robert Lindsey.

I believe that OHA should participate in geothermal development because it is an income source for OHA to provide services to the Hawaiian people. And it can influence the course of our people’s history.

Geothermal-generated electricity is proven technology, affordable and environmentally benign. The Big Island is expected to be over the “hot spot” for 500,000 to a million years so its price is expected to be stable.

The Pahoa School Complex in Puna, at 89%, has the highest number of students in the State who participate in the free/reduced school lunch program. Participation is related to family income. The Big Island has had electricity rates 25% higher than O‘ahu’s for as long as anyone can remember. So a large portion of the school budget, that should go to education, goes instead to pay for electricity. Yet the best predictor of family income is education. A lower electricity rate, generated by geothermal, will have a direct effect on education. And if OHA, through its influence, emphasizes education in the community, there will be even more positive results.

Rising electricity rates act like a giant regressive tax. The folks on the lowest rungs of the economic ladder are affected disproportionately. Those who can leave the grid, leave. Those who cannot leave end up paying more for the grid. Too often those folks will be Hawaiians.

Hawaiians should be able to live in their own land. Yet there are more Hawaiians living outside of the State, because they needed to move elsewhere to find jobs to raise their families. Exporting our children is the same as losing our land. OHA is in a position to drive the agenda so Hawaiians can afford to live at home.

During the development of the Geothermal Working Group report, Rockne Freitas arranged a meeting with Carl Bonham, Executive Director of the University of Hawai‘i Economic Research Organization (UHERO), and some staff.

I asked Dr. Bonham two key questions: “Is it fair to say that if the Big Island were to rely on geothermal energy for its primary base power as oil prices rises, shouldn’t we become more competitive to the rest of the world?” He said that was fair to say.

I asked: “Then is it fair to say that our standard of living would rise?” He said: “Yes.”

I am a farmer on the Hamakua coast with family ties — Kamahele — in lower Puna. I farmed bananas at Koa‘e in the late 70s and early 80s. I have been to five Association for the Study of Peak Oil (ASPO) conferences. I went to learn and to position my business for the future. I found that the world has been using two and three times the amount of oil than it has been finding for more than 30 years and that trend continues. The price of oil has quadrupled in the last 10 years.

Until the first ASPO conference, I was just minding my own business, being a banana farmer. But what I learned became my kuleana. I did not ask for it.

Until last year, when Kamehameha Schools sent Giorgio Calderone and Jason Jeremiah and Noe Kalipi went to the conference, I was the only person from Hawai‘i to attend. The subjects were always data driven and conclusions could be duplicated.

We have the resources here to dodge the bullet. We need to drive a clear agenda for the benefit of all the people, not just a few.

One of the controversial issues in the Puna district is H2S gas. I went to Iceland and sat in the Blue Lagoon, where a geothermal plant within a quarter mile emits geothermal steam into the atmosphere. Millions of tourists visit the Blue Lagoon for health purposes.

There are small geothermal wells within the city that are used to heat the residences and businesses. If you did not know what to look for, you wouldn’t even know they were there. I walked by and touched the walls.

A long term study of the effects of H2S on people who suffer from asthma was just completed. It was done in Rotorua. They found no correlation of asthma to daily ambient H2S levels of 20,000 parts per billion over a three-year period. The study indicated that there might be a beneficial effect because it relaxes the smooth muscles. See link above.

The human nose can detect levels of H2S at incredibly low levels: 5 parts per billion. The Department of Health requires reporting when levels exceed 25 parts per billion. The Rotorua study was done for three years at average levels that were 20,000 parts per billion. OSHA allows geothermal plant workers to work in a 10,000 parts per billion environment for 8 hours per day without a mask.

Wallace Ishibashi and I went to the Philippines with the delegation that Mayor Kenoi put together. We visited a geothermal plant that sat on a volcano that last erupted 100,000 years ago. Mauna Kea last erupted 4,000 years ago. We may have more resources than we know.

The Phillipines and Hawai‘i started geothermal exploration at the same time. They now have in excess of 1,200MW, while we have 38MW. We are so far behind them, a supposedly Third World country, that it is embarrassing.

OHA is in a unique position to be able to influence the future. It is as if we are getting ready to duplicate that first voyage from the south so many years ago. It’s not whether or not we are going. It’s who should go, and what should we put in the canoes? Mai‘a maoli? Popoulu? What else?

Richard Ha
President, Mauna Kea Banana Company

I am a member of the Hawaii Clean Energy Steering Committee, Board of Agriculture and farmer for 35 years.