Tag Archives: Biofuel

Biofuel, Renewable Energy Sources

Good News: PUC Says No To AKP Biofuels

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Richard Ha writes:

Happy holidays, everyone!

We received good news on Monday: The PUC rejected the ‘Aina Koa Pono biofuel project.

From Civil Beat:

The Public Utilities Commission has rejected a proposal to build a biofuels facility in Kau on the Big Island. 

The developer, Aina Koa Pono, hoped to use plant feedstocks to produce drop-in biofuel for the electric utilities on the Big Island, Maui and Oahu. But the PUC said that the fuel would be too expensive, in a decision issued on Monday.

“The contract price for the AKP-produced biofuel is excessive and not cost-effective at present and for the foreseeable future, and thus, is unreasonable and inconsistent with the public interest,” commissioners wrote…. Read the rest

It goes to show that “we, the people” can make a difference.

In this case, a grassroots group of folks came together spontaneously to advocate for low-cost electricity on behalf of the rubbah slippah folks on the Big Island. We called ourselves the Big Island Community Coalition (BICC).

We supported other community members by submitting written testimony, and helped organize public participation at two PUC hearings on the Big Island. Here’s a post about it from last year.

The people involved in the BICC were Dave DeLuz, Jr., John Dill, Rockne Freitas, Michelle Galimba, Richard Ha, Wallace Ishibashi, Kuulei Kealoha Cooper, Robert Lindsey, H.M. Monty Richards, Marcia Sakai, Kumu Lehua Veincent and William Walter.

Helping the rubbah slippah folks helps all of us.

Biofuel, Food Security

Monsanto Not Coming to Big Island

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Richard Ha writes:

Monsanto is coming, Monsanto is coming. Hide the women and children!

Not.

Did you see the letter to the editor from the Monsanto spokesman, Alan Takemoto, in the Hawaii Tribune-Herald last month? He testified to the fact that the reason Monsanto is not on the Big Island is that this island does not have the combination of factors they need, like deep soil, plenty of sunshine, irrigation and flat lands. It’s a practical thing. He wrote that they do not own land or even lease land here.

The Aina Koa Pono biofuel project proves this point. The Ka‘u bio fuel project, which plans to grow crops to make biofuel, needs a huge subsidy or it won’t work. They are even trying to hide the fact that we the people will pay $200/barrel for the biofuel.

So why, again, are we banning all future biotech crops? There was a front page article in the Hawaii Tribune-Herald a few days ago saying that Hawai‘i seniors have the best prospects for quality of life and length of life in the entire nation. And the American Medical Association, at its 2012 annual meeting, said there is no substantial difference between crops that are conventionally bred and those developed from biotechnology. I trust the doctors.

The real problem is this: In a world of finite resources, how are we going to provide our people with affordable food? For this, we need, simply, farmers farming. All kinds of farmers need to contribute. And farmers need to make money so they will keep farming.

Let’s regroup, form a task force of knowledgeable stakeholders, and work toward this goal.

We need to work together in the spirit of aloha.

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, Geothermal, Peak Oil, Renewable Energy Sources, Sustainability

Very Simple Explanation of ‘Energy Return on Investment’

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Richard Ha writes:

Every organism, organization and even civilization needs surplus energy or it goes extinct.

Richard Ha, Hamakua Springs, Big Island, Hawaii, Energy

When a mama cheetah catches an antelope, for instance, she needs to get enough energy from consuming that antelope to take care of her kids.

Let’s say all the antelopes are very skinny, and the energy she gets from eating a skinny antelope only gives her enough energy to make one more sprint, and that’s all.

That would be described as an "energy return on investment," an EROI, ratio of 1-1. She has no excess energy available to do anything but catch her next meal. That would be a very scary existence: She would have to catch an antelope on every single sprint, or her species would go extinct.

But if the antelopes got fatter, and the cheetah could make two sprints from eating one antelopes, we would call this an EROI of 2-1.

When the cheetah could make five runs from eating one antelope, things would be starting to look better (EROI 5-1). She would have energy left over to do more than just survive. She could spend time washing and playing with the kids.

At an EROI of 10 to 1, she could send the kids to grad school; things would be wonderful.

At an EROI of 30 to 1, the cheetah population would start to grow. The cheetahs would move into condominiums and take vacations in Hawai‘i.

Richard Ha, Hamakua Springs, Big Island, Oil, Electricity Cost

So what does this mean in real life? Here’s some history.

In the 1930s, we could extract 100 barrels of oil from the ground by using the energy we got from one barrel of oil. That’s an EROI of 100-1.

By 1970, we were only getting 30 barrels of oil from the use of one barrel (an EROI of 30-1).

And in 2013, it’s around 10 barrels of oil (EROI 10-1).

Tar sands is around 5-1.

And biofuels are less than 3-1. Some biofuels (for example, alcohol from corn) are barely more than 1-1. You can see why putting our money and efforts into biofuels hardly makes sense.

Especially when you realize that geothermal, as we have in Hawai‘i, appears to have an EROI ratio of 11-1. It’s also significant to note that this rate won’t change anytime soon. The Big Island will be over the “hot spot,” which creates our geothermal conditions, for 500,000 to 1 million years.

Here is an article about the minimum EROI a sustainable society must have, by Charles A.S. Hall, Stephen Balogh and David J. R. Murphy.

What don’t we understand about this?

Biofuel, Renewable Energy Sources

NO to AKP and a 4.2% Rate Hike

Richard Ha writes:

We have until Friday (November 30, 2012) to voice opposition to the Aina Koa Pono biofuel project and the 4.2 percent rate hike.

You can make a difference by submitting testimony to hawaii.puc@hawaii.gov before this Friday.

Wally Andrade is taking charge of his destiny:

Subject: CC: PUC Docket #2012-0185; Application for approval of biofuel supply contract with Aina Koa Pono

Chair Morita and commissioners:

I am very much against the approval of the Aina Koa Pono project and the current biofuel agreement with HELCO. Please do not tie us to a 20 year contact @ $200/barrel. The AKP microwave technology is not proven on this scale, they have not tested their feedstock, their projections are not rational. What’s the true EROI?

We are depending on you to drive the utility to focus on ways to lower the rates and stop acting as a regulated monopoly with loyalties to their shareholders and not the customers.

We have an abundant low cost geothermal resource on this island that would serve to lower the rates, spur economic growth and provide security for the people. Drive Helco to this resource. 

Sincerely,

Walter Andrade
Hamakua Coast

Biofuel, Peak Oil, Renewable Energy Sources

Legend of the Horse That Was Really a Unicorn

 

Screen Shot 2012-11-18 at 7.01.54 PM

It was a hard-working
horse, they said, and it would not cost us much money.

All our problems
would be solved, they insisted, if we just had this horse.

And from the back
end, it did indeed look like a horse.

They said we couldn’t
look at the horse’s face, though, for competitive reasons.

It wouldn’t be fair
to the other horses, they said.

We searched and
searched through the scrolls,

and we realized that
all was not what it seemed.

Their “horse,”
it turned out, was actually a unicorn.

One of their friends
spoke up.

“What if we gave you
the uni….er, I mean the horse, for free?

What if we made
people from the land of O‘ahu pay for the horse?”

We said, “No. The
unicorn spends more time eating than working.”

Someone shouted, from
the back of the great hall,

“Don’t believe them!
They want to take over the kingdom!”

We replied, “No! We
just don’t want to take care of a unicorn.

A unicorn does not
help our people. It eats too much and takes up too much land.

We worry about having
enough food for the most defenseless among us.”

And that, Boys and Girls, was the start of the Rubbah Slippah
Revolution.

 

HECO and Aina Koa Pono (AKP) both issued glowing press releases
about the AKP project. But neither would say how much AKP would be paid for its
biofuels. They said it was a secret – to protect other bidders.

They said that the average ratepayer would only pay about $1
more per month, and that this would only go into effect if AKP was successful
in producing biofuel. They said it would mean several hundred new jobs, and
lots of money would be saved by not importing oil.

The project anticipated supplying HELCO’s Keahole 80MW plant
with most of its liquid fuel needs. That would be roughly 16 million gallons
annually, plus another 8 million gallons for transportation fuel.

HECO was not being fair when it would not give price
information and yet did predict that this would be very inexpensive to rate payers
– basing all this on assumptions and secret information.

The cost of the biofuel the rate payer would subsidize, it
turns out, is around $200/barrel. This is not a small amount. By assuming that
the price of oil would be close to $200, HECO could then say that this project would
not cost the ratepayers substantially more than what they would be paying
anyway.

Try wait! No amount of public relations will earn back the
credibility lost because of this unfair assumption.

Also, AKP says, the microwave technology they plan to use has
been successfully and safely used in the herbal extraction and pharmaceutical
industries for decades.

People who know tell me that this statement is like someone
with a Piper Cub pilot’s license offering to fly you to the moon sometime in
the future. But at least this one is a claim we can research.

Both the Hilo and Kona PUC hearings made clear that the
people are vehemently against the Aina Koa Pono project. At the Kona hearing,
the Consumer Advocate asked whether people would be in favor of this project if
all the costs were paid by O‘ahu rate payers. I think the logic was that O‘ahu
residents should pay for this, because it helps O‘ahu fulfill its part of the
Hawaii Clean Energy Initiative mandate for renewable energy.

Doesn’t each island’s contribution apply to the whole state?
Try wait!

AKP claims that it’s a fact that Keahole will be using
liquid fuel far into the future.

We don’t agree that we should favor AKP’s 20-year contract,
because it precludes using lower-cost alternatives; for example, natural gas
and other technologies that are being fast tracked, such as ocean energy.

Take geothermal as an example. Generating electricity at today’s
prices using geothermal costs 11 cents/kilowatt hour less than oil. Output at
the 80MW Keahole plant (which is equivalent to 80,000 kilowatts) times 11
cents/kilowatt hour is equal to saving $8,800/hour, $211,000/day and $77
million/year. That amount of savings could pay off the potential stranded asset
and also save the rate payer money.

The barrel equivalent of geothermal is $57. Why would we
want to tie ourselves to a $200/barrel and a 20-year contract?

Aina Koa Pono says it will, on its 12,000 acres, produce 24
million gallons of fuel per year. That’s roughly 2,000 gallons of biofuel per acre,
which is four times more productive than palm oil, the only biofuel that can
compete with oil. Yet they plan to do it with an undetermined species of grass.

Ka‘u Sugar Company, in the projected area of Aina Koa Pono,
grew sugar cane and was one of the least productive sugar companies in the
state. Sugar cane is a grass.

AKP is not cost-effective and it doesn’t make sense for us.
We need to concentrate on solutions that better the condition of our people.

If you agree and would like to let the PUC know, this is the time. You can write to the PUC before November 30th at Hawaii.puc@hawaii.gov, and refer to “PUC Doc 2012-0185-Application for biofuel supply contract.”

 

Biofuel, Peak Oil, Renewable Energy Sources

The Big ‘Aina Koa Pono’ Risk

Richard Ha writes:

Hawaiian Electric Company (HECO) and Hawaii Electric Light
Company (HELCO) are asking for PUC approval to pay Aina Koa Pono $200/barrel for biofuel, and they are asking for approval to pass the cost straight through to the rate payers (us).

Should we rate payers accept the risk and provide the
subsidy? No!

We need to attend the upcoming PUC hearings and testify against assuming the $200/barrel cost of biofuels. Please consider attending. The hearings are:

East Hawai‘i:

  • Monday, Oct. 29th, 6 p.m. at the Hilo High School cafeteria

West Hawai‘i:

  • Tuesday, Oct. 30th, 6 p.m. at the Kealakehe High School
    cafeteria

O‘ahu:

  • Thursday, Nov. 1st, 6 p.m. at Farrington High School

Should we rate payers pay for biodiesel that costs $200/barrel, starting in 2015 and lasting until 2035? There is a great risk that the price of oil will not follow the Annual Energy Outlook 2012 ‘high price forecast’, and if that’s the case, we will be paying more for electricity than we would be otherwise.

Very risky.

There is also a technology risk. Fuel has not yet ever been produced using the feedstock that Aina Koa Pono proposes to grow. So far, the feedstock being used experimentally is white pine. The Micro Dee technology Aina Koa Pono wants to use is still experimental.

Risky.

There is a risk that this process might use more energy than it generates. Generating electricity is generally about boiling water and making steam that turns a turbine. It’s cheaper to burn the product to boil water. Aina Koa Pono’s proposed process – making electricity to make microwaves to vaporize the cellulose to get the liquid and then refine it to make it burnable, and haul it down to Keahole in tanker trucks to make steam – is extremely energy intensive.

Very risky.

Mid-year last year, on the mainland, the EPA drastically decreased its 2011 estimate for cellulosic biofuel from 250 million gallons to a paltry 6 million gallons. Almost all the cellulosic biofuel companies went bankrupt.

This makes this project risky as well.

In 2010, cellulosic biofuel companies needed to buy their feedstock for $45/ton. But because farmers were making $100/ton for hay, the biofuel firms got a $45/ton subsidy. I asked how much Aina Koa Pono expected to pay for feedstock, and the AECOM Technology Corporation consultant said between $55 and $65/ton. The problem there is that Hawai‘i farmers have been earning $200/ton for hay for 10 years now.

The supply of feedstock is a risk.

There is agriculture production risk, as well. Palm oil is the only industrial-scale biofuel that can compete with petroleum oil. In the tropics, it produces 600 gallons of biodiesel per acre of production. Say Aina Koa Pono can produce 500 gallons of bodiesel, since we are located 22 degrees north of the equator. To produce 16 million gallons a year at 500 gallons per acre would require 32,000 acres of productive land. Add 10 percent more for roads and unusable land and you would need 35,200 acres. But we only have 12,000 acres to use. Is the feedstock throughput adequate to cover the capital costs? We don’t know. They have not decided on a feedstock yet.

Risky.

Imagine the 12,000 available acres could produce 16 million gallons. Then each acre would need to produce 1,333 gallons to get the required throughput.

This would be twice as productive as the best biofuel producers in the world.

It’s a risky assumption.

Ka’u Sugar relied on natural rainfall. Depending on natural rainfall makes achieving optimum production very risky, due to the very real possibility/probability of occasional drought.

According to Energy Expert Robert Hirsch, in his book The
Impending World Energy Mess, the best model is a circular one, where processing is done in the center of a field (which does not exceed a radius of 50 miles) that consists of flat land, deep fertile soil with irrigation and lots of sun energy. This situation exists in Central Maui, where Hawaiian Commericial & Sugar Company (HC&S) is located. That is exactly why HC&S is the sole surviving Hawai‘i sugar plantation.

If Aina Koa Pono is supposed to serve as an example from which to expand, then there is very limited suitable land on the Big Island
that meets the criteria. To compete heads up on the world market will require the best possible combination of production factors. These are not them.

Locking into a 20-year contract would preclude lower cost alternatives. Geothermal, for example, is the equivalent of oil at $57/barrel. Oceanthermal has the possibility of being significantly lower in price than $200 oil. Water-to-liquid fuel is a possibility, too.

The amount of risk involved is just far too great. In the investment world, the reward is generally commensurate with risk. Except for protection from $200 per barrel oil in the later years, there is little reward for all the risk we would assume.

This is a very bad deal for consumers.

Big Island, Biofuel

Aina Koa Pono: Farmers Want To Know About Pay

Richard Ha writes:

Farmers want to know: What can Aina Koa Pono pay farmers to raise the crops they need to make pyrolysis oil?

On the mainland, large cellulosic biofuel projects wanted to pay $45/ton for feedstock. But farmers were getting much more than that – $100/ton – to grow hay. So the biofuel projects got a $45/ton subsidy, and could then offer $90/ton for the farmers' feedstock.

Last year, in a presentation, I heard Chris Eldredge of Aina Koa Pono say that they would pay $75/ton for feedstock. But farmers here in Hawai‘i make $300/ton for their hay!

I just shook my head.

From Big Island Now:

HELCO Proposes New, Cheaper Aina Koa Pono Deal

Posted on August 3rd, 2012 

by Dave Smith

Hawaii Electric Light Co. is asking state regulators to approve a new contract with Aina Koa Pono which the utility says will be cheaper for its customers than the proposal shot down last year.

Like the proposal rejected last year by the Public Utilities Commission, HELCO would buy 16 million gallons of biodiesel produced by Aina Koa Pono on former sugar cane lands in Ka`u.

However, under the latest proposal, Aina Koa Pono would also produce an additional eight million gallons of biofuel for Mansfield Oil Company for sale in Hawai`i and eventually the mainland, the company said in a statement Thursday. Read the rest

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.

Geothermal, Iceland

About the “Broken Economy that got out of Jail”

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This article about Iceland and its ongoing recovery from the financial crash of 2008 was written a month after Roald Marth and I visited Iceland in August 2011.

The Independent

Iceland: The broken economy that got out of jail

The small nation went bust spectacularly. But its recovery has been remarkable, too – and holds lessons for other countries. Ben Chu reports

Iceland experienced one of the most severe recessions in the world when the markets crashed in 2008. Economic output fell by about 12 per cent over two years. But the latest report on Iceland by the International Monetary Fund shows that growth is resuming. GDP is expected to increase by a relatively healthy 2.5 per cent in 2011. The Icelandic public finances are on a sustainable path too with government debt projected to fall to 80 per cent of GDP in 2016.

The turnaround should not be exaggerated. Iceland is still more than 10 per cent below pre-crisis output levels. Unemployment remains at about 6.7 per cent, considerably higher than before 2007. The standard of living of most Icelanders is well down. Access to foreign currency is tightly controlled. And risks to recovery remain. Central bank interest rates are going up in order to curb inflation. This could stifle growth. Yet the fact remains that the outlook for the Icelandic economy is looking rather healthier than other distressed economies in Europe such as Greece, Portugal and Ireland…  Read the rest

Iceland experienced the biggest financial crash in modern history – yet they are now recovering. They are recovering because they inoculated themselves from high oil prices by using low cost hydro and geothermal for 100 percent of their electricity and house heating. And by utilizing low cost electricity, they made an electricity intensive aluminum export industry.

It is clear to me that had they used expensive biofuel to generate electricity, they would not be competitive in making aluminum for export. And instead of coming out of this disastrous financial situation, they would be facing years of depression. This is exactly why Hawai‘i should not be using expensive biofuels to make electricity when we have low-cost geothermal.

Here are my observations from that trip we took took to Iceland.

I want to conclude my “Iceland Series” by pointing out something very simple and straightforward that they have learned in Iceland and put into practice, but that we in Hawai‘i have not:

Cheap and proven technology, and clean energy projects, protect an economy from oil crises. Read the rest