Tag Archives: Biofuel

Biofuel

National Research Council: Biofuels Costly, Impacts Questionable

Cellulosic biofuel projects have been a financial disaster for U.S. taxpayers.

From Robert Rapier’s Energy blog:

NRC Report to Congress: Cellulosic Biofuel Mandates Unlikely to Be Met

A congressionally requested study by the National Research Council — an arm of the National Academy of Sciences — concluded that next-generation biofuels are costly, and their impacts questionable. “Absent major technological innovation or policy changes, the … mandated consumption of 16 billion gallons of ethanol-equivalent cellulosic biofuels is unlikely to be met in 2022,” the report stated. This conclusion should come as no surprise to readers of R-Squared Energy, as its author Robert Rapier covered this in a recent article: Cellulosic Ethanol Targets: Mandating the Nonexistent. Read the rest

You can learn about this and other important liquid fuel subjects at the Association for the Study of Peak Oil (ASPO) conference, which will be held November 2 – 5 in Washington, D.C. I highly recommend decision makers send people to this conference.

I’ll be representing the County of Hawai‘i at this year’s conference, my fourth time attending. Mahalo to Mayor Billy Kenoi. He knows what is going on.

Biofuel, Food Security, Renewable Energy Sources, Sustainability

Kudos to the PUC!

The recent PUC decision denying a HECO/Aina Koa Pono biofuel contract was a landmark decision. Kudos to the PUC for understanding precisely what was at stake. Very impressive!!

See this Big Island Video News story about the decision.

My observations:

  • The process was not transparent, and people had a difficult time understanding the issues.
  • Cellulosic biofuels is not proven technology, so it’s high risk.
  • Filling oil tanks with long term biofuel contracts would block cheaper alternatives, like geothermal, from gaining critical mass.
  • Ratepayers would have financed the risk. And ratepayers are not venture capitalists.
  • Businesses would have seen their electricity rates go higher than they were with electricity generated by oil, making their products even less competitive to mainland competition. And food security would have suffered.
  • Social consequences would have included fewer government services, less charitable giving and more working homeless. It would have put stress on our spirit of aloha.

We can and must do better for our future generations. As Steve Jobs always said, “We need to think different!”

Not, no can, CAN!

Big Island, Biofuel, Geothermal, Peak Oil

‘Ignorance Does Not Inspire Confidence’

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Biofuels in Ka‘u

…To be blunt, there are big gaping holes in their business model as far as their agricultural/harvesting expertise. They really don’t know what they are doing, especially in respect to the actual physical costs of growing and re-growing biomass. It’s not something I hold against them very much. Ignorance of biological reality is rampant. On the other hand, ignorance does not inspire confidence. Is it okay for them to blunder into our neighborhood armed with a HECO contract, federal funding, and an amorphous plan? I really don’t know.…. Read the rest 

On the mainland, biofuel guys are paying $100 per ton for feedstock (which includes $45/ton of subsidies). But farmers in Hawai‘i are making $75 for a bale of hay now, each of which weighs 500 lbs. So right now, farmers are making $300/ton. The biofuel guys want to pay $100/ton.

Farmers would rather make $300/ton than $100/ton. Duh! Somebody will have to pay the farmers more.

On the other hand, geothermal is very straightforward. It is inexpensive, 7 to 10 cents per kWh, and it is steady. It does not emit greenhouse gases, it is proven technology and requires no subsidies.

We hope that for electricity generation, biofuels do not crowd out geothermal.

For each unit of energy in, biofuels yield 1.2 or less units of net energy out. This puts us in mind of Easter Island.

In comparison, for each unit of energy in, geothermal yields 10 units of energy out, and that will continue for as long as one can imagine.

With that sort of cheap, stable electricity, capital would rush here from all over the world. And everyone would have jobs!

It is estimated that the Big Island will be over the “hot spot” that gives us our geothermal for 500,000 to 1 million years.

Biofuel, Geothermal, Peak Oil

HEI’s Flurry of Announcements

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I hear there’s somebody out there investigating me; making phone calls and asking questions about me and such.

To that person: Please feel free to call me directly. There’s nothing to hide and I’d be happy to answer any of your questions. Anybody with questions, in fact, I invite you to call me. My cell number is 808 960-1057.

Maybe what we should be investigating is what’s going on over at Hawaiian Electric Industries (HEI).

Since it was announced that Ku‘oko‘a is attempting to buy HEI in order to retire its old, oil-fired plants, the electric utility has issued a flurry of announcements:

1. The Star Advertiser reported an HEI deal with a large, wind farm operation. But it will not result in any oil-fired plants being shut down.

2. It was announced that there will be a large biofuel operation in Ka‘u on the Big Island. Its purpose will be to provide liquid fuel for HECO’s oil-fired plants.

But the EPA just announced that it was revising its 2011 estimate of cellulosic biofuels from 250 million gallons down to only to 6.5 million gallons. All the millions and millions of dollars that have been spent? They have not resulted in a single industrial-scaled production plant.

Maybe those folks in Ka‘u will be the first in the entire U.S. to be successful. We are rooting for them. But they are not farmers; they say they may grow sorghum or guinea grass. Farmers just shake their heads at that.

The real question is, How much will it cost Big Island citizens to subsidize this crop? And for how long would we be subsidizing it?

3. Maybe HEI will soon announce that the 8 MW geothermal contract is done. I thought it would have been done a year ago.

HEI should be putting more geothermal on line faster, rather than slower. They should be aggressively bringing more geothermal on line. They’re wasting valuable time. How come we’ve got this geothermal resource but are not using more of it? We know that if we use more of that cheap geothermal resource, it will really benefit us here in Hawai‘i.

HEI says they are for geothermal, but we know they truly are not, because they cannot shut down their oil-fired plant. They’re trying to make us believe they can and will, but they cannot, because they have to keep their stock value high for shareholders.

It’s why we’re looking for a new model.

Geothermal is the least expensive of all the base power alternatives for electricity, and its costs will be stable for as far to the future as we can see – unlike oil and biofuels, the costs of which will continue to go up.

Biofuel, Geothermal

HECO Says: ‘Let Them Eat Cake!’

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I remember that in the 7th grade we read about a French royal, who – when told that the peasants didn’t have bread and were hungry – is said to have stated, “Let them eat cake.”

I have come to the stark realization that the Hawaiian Electric Company (HECO) has a duty to keep the stock price of its parent company, Hawaiian Electric Industries (HEI), healthy.  It’s not HECO’s mission to take care of Hawai‘i’s people.

But its strategy of raising the cost of electricity to its white-haired stockholders, in order to keep up HEI’s stock price, is as “brilliant” as its strategy of raising electricity rates of farmers so it can pay the farmers the high price they will need to raise biofuel crops.

Cynics have described it as putting money into one pocket
while taking it out of the other.

I just attended the 2010 Hawaii Ag Conference at the Ihilani
Resort and spa at Ko Olina on O‘ahu, which was very well attended.

Although the conference covered many topics, I was most interested in the Hawai‘i Biomass and Bioenergy workshop, which was held all day on Friday. It asked: “What’s the buzz, and what’s in it for agriculture?”

I was encouraged because Diane Ley, the State Executive
Director of the USDA Farm Service Agency, explained that at the end of the day, there would be a facilitated discussion with farmers and Sarah Bittleman, USDA Office of the Secretary.

There were 21 speakers, starting from 8:45 in the morning until 3:15 p.m., when the facilitated discussions began. It was very good and valuable information, covering topics from the USDA Biofuel roadmap supporting President Obama’s plan to transition America’s energy economy, by Sarah Bittleman, to the explanation of Fuel Purchasing – who is doing the “pulling” in the military.

Chris Tindall, Director for Operational Energy, Deputy
Assistant Secretary of the Navy for Energy Office, told us that the Navy is interested in buying very large amounts of advanced fuels that can be used directly to power its Great White Fleet. I can absolutely understand the national security concerns. I found him very clear and persuasive.

Early on in the morning presentations, during the Q&A, I
made the statement that Food Security is about farmers farming, and if the farmers make money, farmers will farm. I pointed out that simple math shows that farmers can not expect to get more than 7 cents per pound to grow feedstock for biodiesel, and that no farmer will farm biofuel feedstock for 7 cents per pound.

Farmers all agree with me, though we would be happy to be proven wrong about this price. I have been saying this for several years, and have not had a single rebuttal to date.

Many folks gave presentations in their area of expertise and
it was all very useful and informative. But the question left unanswered was “How much will farmers get paid for growing biofuels?” All the farmers in the room knew that the answer was: “Not enough.”

The facilitated discussions were very useful. Sarah Bittleman told everyone that it is not for the federal government to decide energy policy for Hawai‘i; that we need to decide that for ourselves.

I thought this was a very important statement, because it
has been my distinct impression that the movement toward biodiesels in Hawai‘i is running because of inertia, and is not going to be overcome by simple common sense.

Ms. Bittleman authorized folks to use common sense.

Several speakers said that we could do both food and fuel. But I wonder about that. It seems to me that if biofuel prices were subsidized enough, then farmers would quit growing food to instead grow fuel. Why shouldn’t farmers strive for a better life for their kids?

It is no longer just me asking why geothermal is not
mentioned. Many, many folks are asking that same question and it can no longer be ignored, because there is just too much at stake. Saying that “People were against it 20 years ago” is just a lame excuse.

Geothermal solves so many of the crucial issues Hawai‘i
faces that we must be looking for ways to maximize its usage. Every single farmer I talk to agrees, and is incredulous that we aren’t doing just that.

I notice that Indonesian palm oil prices are very high compared to fossil fuel oil. If local farmers don’t produce biofuels, then HECO will probably buy expensive palm oil from Malaysia. But HECO will say that it’s okay because it is green.

Biofuel, Geothermal, Peak Oil

What About ‘A Long Time’ Do We Not Understand?

Just because O‘ahu does not have a base power solution to
electricity, and needs to grow biofuel to generate electricity, that does not mean the Big Island – which has a vast geothermal resource – needs to grow expensive biofuels just to copy O‘ahu.

We need to treat each island as a bundle of resources, and solve each island’s problems according to the resources it has. We cannot afford a one-size-fits-all plan.

Farmers make these kinds of decisions all the time. You work
with the ground under your feet, not the ground that exists the next valley over.

The Age of Oil is now 150 years old and we are already talking about decline. But the “hot spot” under the Big Island will last 500,000 to 1 million years.

What is it about “a long time” that we don’t understand?

This video is by Jeff Rubin, former chief economist at CIBC World Markets, the investment banking arm of the Canadian Imperial Bank of Commerce.

In it, he gives a clear description of today’s oil situation and discusses why oil prices will be rising – and sooner than people think.

It’s because we simply are not finding as many new oil fields as we are using.  More and more, the evidence is growing and we need to come to grips with reality.

It does not have to be disastrous. But we do have to be smart and think like survivors.

Where do we want our future generations to be 150 years from now?

Biofuel, Geothermal, Renewable Energy Sources

I Have Lost Confidence In HECO

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I am becoming more and more critical of the Hawaiian Electric Company’s (HECO’s) top-level decision makers, and of their policies. I am sad to say that I have lost confidence in their ability to lead us safely into the future.

A Wall Street Journal article last September noted that Spain – the world leader in solar technology – stopped its generous subsidy to support the solar industry. Basically, ratepayers could not bear the cost of the subsidy.

So I was not surprised recently to hear HECO say it could not accept any more solar. What I was surprised about was that they reversed their direction immediately. Did things change? No. It was a missed opportunity to educate the public about what is truly going on. They chose not to.

Recently, HECO was turned down regarding its attempt to initiate Smart Grid on O‘ahu, Maui and the Big Island. Smart Grid is a developing system, and there was no need to be the first in the world to implement this. At Hawai‘i’s size, it is much smarter to be best in the world at copying the most successful systems. You get a tested system that does not cost the ratepayers as much.

Several years ago, HECO chose the biofuel path, but it did not have a serious conversation about it with farmers. Farmers know that they will not grow anything for 7 cents per pound. They might switch from growing food to growing fuel for 35 cents per pound, but oil prices would have to be $400 per barrel before it would send that price signal.

And small farmers would not be able to grow biofuels on the kind of scale that HECO needs, anyway. More likely, it would be on the scale of redemption of cans and bottles.

When HECO brought the biofuel meeting to Maui, there was
discussion about ultimately importing palm oil from Indonesia. Many of the folks in the audience were distressed at what would happen to animal habitat, especially the orangutan. HECO replied that it would source “green” biofuel. 

We know that biofuels will be more expensive than fossil fuels. Will the rubbah slippah folks be able to afford it?  Can small businesses afford to pay the resultant higher electricity rates?

Is this the solution that will give a continuous, competitive advantage to the islands, relative to the rest of the world?

We should look at the resources available on each individual island before we decide what is best for that particular island. It is the cost of the fuel, not whether it is brown or “green,” that is important.

On the Big Island, we know it must be done right. Geothermal
for base power is: proven technology, a low-cost alternative, has the smallest footprint and gives off no greenhouse gases.

The Oil Age is only 150 years old, and already we are worrying about depletion. According to Jim Kauahikaua, Scientist-in-Charge at the Volcano National Park Observatory, though, the “hot spot” under the Big Island will last for half a million to a million more years.

What about HECO’s general renewable energy strategy? They
say they are for everything – wind, solar, geothermal, ocean thermal, biofuels, biomass, etc. But being “for everything” seems to be a way of not talking about any one thing. HECO does not put any effort into enabling geothermal, so we can only assume that they do not really want it.

On the other hand, they do really want biofuels. “Shameless”
comes to mind. I am not for geothermal exclusively. But I do think there should be a prioritization of the various resources based on many factors, such as: proven technology, relative competitiveness, scalability, net energy, social consequence, geographic appropriateness, etc. 

In other words, what will give us the best chance of surviving since we are living out here in the middle of the Pacific? “We are for everything” falls way short.

I think that the rubbah slippah folks intuitively have it figured out when they say: “One day, the boat not going come.” That is their shorthand way of saying: “One day, things will be too expensive, and the boat might as well not come.” In that scenario, we will be going back to the basics. The most important question one asks all day might be, “I wonder what color malo I going wear tomorrow?”

Two weeks ago, former Chancellor of UH Hilo Rose Tseng invited Bill Steiner, the Dean of the UH Hilo College of Tropical Agriculture and Forestry and myself to attend an REIS retreat put on by the UH Manoa College of Engineering.

I immediately noticed that the Big Island was not a focus and that geothermal was not on the radar. But we were able to express the Big Island’s concerns, and we were welcomed to participate fully. This is very encouraging.

HECO sent many of its people to the retreat because many of
those people work as engineers, and many graduated from the UH College of Engineering. I found HECO’s new Director of Renewable Energy Planning, Dora Nakafuji, impressive because she is willing to discuss alternatives in an inclusive way.

The most recent issue of Hawaii Business magazine describes the restructuring of HECO. I hope the new folks will change HECO’s
corporate culture, and take the time to understand the needs of the rubbah slippah folks. We can take the right path to survival and accommodate everyone’s needs at the same time.

In an ideal reorganization, HECO gains the trust of the community, and because its plan is mutually beneficial we go down to support it at the PUC. Not, no can. CAN!

Biofuel, Geothermal, Renewable Energy Sources

Study: U.S. Should Reconsider Biofuel Policy

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Now there’s a study out saying it is basically wrong to pursue our present biofuel policy. I agree with it completely.

In the 1930s, you could get 100 barrels of oil with the energy from one barrel. In the 1970s, this had decreased to 30 to 1. Now, oil’s Energy Return on Investment (EROI) ratio has decreased to 10 to 1, and it will steadily decline as oil is more and more difficult to harvest.

To sustain our society, we must have an EROI of at least 3 to 1. Biofuels only have an EROI of 2 to 1.

Geothermal, however, is 10 to 1, and that ratio will stay steady for centuries.

Rice University’s Baker Institute for Public Policy took a strong stance in the following article, and it goes against everything that is taking place in Hawai‘i today. Lots of the biofuel companies are benefitting from the new stimulus money, which is pushing biofuels that have ex-HEI folks in their organizations.

HOUSTON (Dow Jones)–The U.S. government needs to rethink promoting ethanol as a way to enhance energy security as production of the fuel is costly for taxpayers and poses economic and environmental risks, according to a study released Wednesday.

The report by the Rice University’s Baker Institute for Public Policy notes that in 2008 the U.S. government spent $4 billion in biofuel subsidies to replace 2% of the U.S. gasoline supply. The average cost to the taxpayer of those substituted barrels of gasoline was roughly $82 a barrel, or $1.95 per gallon on top of the retail gasoline price, according to the study.

“We need to set realistic targets for ethanol in the United States instead of just throwing taxpayer money out the window,” said Amy Myers Jaffe, a senior fellow in energy studies at the Baker Institute and one of the report’s authors.

Here are the names of leaders in the Baker Institute for Public Policy. I especially trust Colin Powell, who seems balanced and credible to me.

Personnel
•    James A. Baker, III Honorary Chair,
•    Edward P. Djerejian, Director (former American Ambassador to Israel and Syria and Assistant Secretary of State for Near Eastern Affairs).

Board of Advisors
•    William Barnett
•    David Leebron
•    Colin Powell
•    Madeline K. Albright