Tag Archives: Energy

Geothermal

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

Geothermal, Government, Peak Oil

Support HB 1257 By Sending Testimony

We could use your support.

HB 1257 is going to be heard by Rep. Herkes’ Consumer Protection Committee.

Read the bill here. Here is where I discussed the bill.

Send testimony in support of HB 1257 to CPCtestimony@Capitol.hawaii.gov. It should be less than five pages in length; couple sentences plenty.

This bill’s essential elements are simple. It requires the PUC to consider the following three factors when it issues approvals for electricity generation:

  1. Consider the technology as to its effectiveness
  2. Consider the amounts of greenhouse gases emitted
  3. Consider the costs to the rate payers compared to alternatives.

Persons wishing to offer comments should submit testimony at least 24 hours prior to the February 2nd hearing with a transmittal cover indicating:

  • Testifier’s name, with position/title and organization
  • The committee the comments are directed to (the Consumer Protection Committee)
  • The date and time of the hearing (Feb 2, 2011 at 2:05 p.m.)
  • Measure number: HB 1257

Please send this to your friends, too. Mahalo.

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.

Peak Oil

Coming Up Next Month: Peak Oil Conference 2010

It’s Peak Oil Conference time again. I highly recommend this conference, especially for folks in decision-making positions here in Hawai‘i.

I have attended the Peak Oil conference twice before, in 2007 and again last year. Both times I paid my own way and was the single, solitary person to attend from the entire state of Hawai‘i. This time, I am going as a representative of the County of Hawai‘i.

Aspo_2k10_peak_oil_banner  

Here’s the conference information:

Join us in Washington, DC Oct 7-9 for our 6th annual dialogue with the experts on peak oil, energy and the economy.

ASPO-USA members and subscribers receive a $100 discount on all registration categories through Sept 14, 2010

Register Now

More Tangible Benefits Than Ever!

Sometimes change is glacial, sometimes swiftly chaotic. Get the latest data from the best sources with up-to-date numbers on both conventional and unconventional production, depletion, flows, costs, and the opportunities and challenges that come with them.

Keynote Speakers

Geopolitics: Dr. James Schlesinger will announce and explain, once and for all, with updated finality that “The Peak Oil Debate is Over”, for above-ground and below-ground reasons;

Global Trade: Jeff Rubin will present his views on the “End of Globalization” due to energy constraints and be available all week as part of our interactive discussions;

National Security: Admiral Lawrence Rice will explain the U.S. military’s peak oil warnings during our Saturday plenary on national security with Michael Klare, Lt. Colonel Danny Davis, and Tom Whipple;

Transportation:  Dr. Charles Schlumberger of the World Bank will discuss liquid fuel concerns in aviation while Dr. Roger Bezdek, Anthony Perl and others will focus their analysis on the future of transportation.

Investing: learn the personal and institutional upsides and downsides from the Dean of the Energy Analysts, Charlie Maxwell, and don’t miss our popular peak oil investing sessions with Dr. Schlumberger, Jim Hansen, Lily Donge, Gregor Macdonald and others.

See Full Agenda and Speakers

* It’s not just another great ASPO-USA Conference. It’s Conference+Plus. It’s the Year of Hydrocarbon Hell, and our peak oil message will not be ignored by the powers that be. Just to make sure, we are taking the message to the policymakers with a Senate Briefing, a House Briefing, a National Press Club news conference, and other targeted outreach efforts inside and outside the Beltway. Two highly-respected consulting firms are helping to organize ASPO’s first ever fire-hose-data-flow to lawmakers. First come, first served with strictly limited seating for these special events.

 * Sometimes wine and hors d’oevers are better than PowerPoints.  Imagine you’re at the opening reception having a drink with Art Berman, and you ask about his work on the 2010 National Petroleum Council Study. He shares with you the latest input from Jean LaHerrere. Or you overhear some information about the forensic investigation of the BP blowout preventer. This kind of information doesn’t come with the DVDs.

Come to the Conference on the Future of Energy

Register Today!

Call 877-363-ASPO (2776) or email webmaster@aspousa.org

Geothermal, Government

Testifying for Geothermal Resolution

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I went to O‘ahu on Thursday to testify for the geothermal
resolution.

SENATE CONCURRENT RESOLUTION 99–REQUESTING THE ESTABLISHMENT OF A WORKING GROUP TO ANALYZE THE POTENTIAL DEVELOPMENT OF GEOTHERMAL ENERGY AS THE PRIMARY ENERGY SOURCE TO MEET THE BASELOAD DEMAND FOR ELECTRICITY ON THE BIG ISLAND.

I strongly support Senate Concurrent Resolution 99.

Together with our workers and family, we farm 600 acres of diversified ag crops at Pepe‘ekeo. We have more than 25 years of farming experience.

I was the only person from Hawai‘i to attend the Peak Oil
conference in October of 2007 and again this past October (2009). For several years, I have been following energy issues very closely.

The world is not running out of oil; we are running out of cheap oil. According to the International Energy Association, the official
world barrel counters, world oil supply is declining at the rate of about 4 million barrels per day every year. Saudi Arabia puts out nearly 10 million barrels per day, so every 2 and a years or so, we need to find the equivalent of a Saudi Arabia.

We have maybe 6 million barrels per day of spare capacity now. But it will be used up in a year and a half or sooner, as the world
economy improves, so we do not have too much time to get off oil. And many reputable folks and institutions feel like it is 30 years maximum before the oil-exporting countries will no longer export oil.

On the Big Island we have a proven technology resource that makes cheap electricity—geothermal. One of the things I learned at the Peak Oil conference is the concept of Energy Return on Investment (EROI): the energy it takes to get energy. In the 1930s, the energy in one barrel of oil would help you get 100 barrels of oil. In the 1970s, that one barrel of oil could get you 30 barrels of oil, and now it will only get you about 10 barrels.

Clearly this trend is not good. It’s estimated that it takes a minimum of 3 to 1 (3 barrels of energy gotten by using one barrel) to maintain our present society. After that, we will have to leave it in the ground.

Geothermal on the other hand is 10 to 1 and will stay steady for centuries. EROI must be taken into consideration when evaluating energy projects.

The EROI for biofuels is less than 2 to 1. That is less than the minimum amount of 3 to 1 that we need to maintain our present society.

What about biofuels? Here is how a farmer views growing biofuels. There are 286 pounds in a barrel of oil. At $80 per barrel, that is equal to 28 cents per pound. Say the farmer needs to squeeze four pounds of stuff to make 1 pound of liquid. That farmer can expect no more than 7 cents per pound to grow the stuff, no matter what the stuff is. Lose money. More better plant cucumbers.

Say the farmer needs to make four times that, 28 cents, to break even. Then the price of oil needs to be 4 x $80, or $320 per pound.

By contrast, a Scientific American article points out that geothermal breaks even at $57 per barrel.

SCR 99 is about looking at the feasibility of geothermal for base power.  Of the three main base power sources, oil price is now $80
but everyone knows it will keep on rising. Locally grown biofuels will be expensive and their EROI is not good.

But geothermal is cheap and its EROI is favorable and stable.  Its EROI will stay steady and it will be cheap for centuries.

And of the base power sources, only geothermal is a resource for the Hawaiian community – right now, $600,000 goes to the Office of Hawaiian Affairs every year.

The main reason we need to put geothermal on line is because it is the folks on the lowest rung of the economic ladder whose lights will be turned off first. And when they benefit,  everyone will. People will have discretionary income and businesses will
flourish. Folks will have jobs and be able to raise their families.

If the most defenseless among us are safe, we are all safe.

Click here to read other supporters’ testimony for this
bill.

Peak Oil

Gail Tverberg & Peak Oil

Gail Tverberg wrote this article for Oil and Gas magazine:

It seems to me that the current recession is very much energy-related, and is likely to continue. The recession is occurring because the current US “system” (individual homes, private cars, many imports) was built for cheap ($20 barrel) oil and gas, and cannot function well using expensive oil and gas.

She notes that people’s income are relatively fixed and any increase in energy costs is not good for the economy. This means that expensive energy will hurt us, while cheaper energy will help us. If people no more money, they cannot go to the stores.

Geothermal gives us a way out.

When energy matters came to my attention several years ago, Gail’s writings stood out. They are clear, simple and easy to understand. Gail has a mathematical background. She worked as an actuary, advising the insurance industry on risk and reward matters.

Later, I found out that most Peak Oil staffers are international and nationally recognized experts in the oil and gas industry, or experts in other relevant fields. They know what they are talking about. I respect simple competency.

When I went to the first Association for the Study of Peak Oil conference in October 2007, in Houston, I made sure to go up and introduce myself to Gail.

As soon as I came back, I suggested to Betsy Cole of the Kohala Center that they do an energy conference. It took place in June 2007 at the Hilo Hawaiian, and Gail was the featured speaker.

After the conference I spent three days taking Gail and her family sightseeing. Peak Oil was on both of our minds and we spent quite a bit of the time talking about the ramifications.

Although masked by the present recession, the same forces of declining oil supplies are still at work two and a half years later. Many folks from Hawai‘i responded to her post on the Big Island. It is true that we are very much aware of what is going on.

Back then I called Kale Gumapac, alaka‘i of the Kanaka Council, and told him that I could arrange for the Kanaka Council to hear Gail’s talk free of charge. He told me that his people would feel awkward among the “shiny shoe” crowd*.

So instead I made arrangements for Gail to see them at the Lili‘uokalani Children’s Center. Though the Kanaka Council members were at an important County Council hearing, they all went over to hear Gail speak.

It was remarkable how Gail’s message resonated. For them, it was not a matter of “if the boat not going come.” It was a matter of when.

During the talk and after, they  treated Gail as a kupuna. It was remarkable to see.

* This is where the phrase “rubbah slippah crowd” came from.

Peak Oil, Renewable Energy Sources, Sustainability

Positive Changes and Energy Solutions

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A few days after the Peak Oil conference has ended, things are starting to become clear.

We have the oportunity to both make positive changes and also solve our energy problems. But we will need help from the University of Hawai‘i at Hilo to analyze Big Island energy options from a holistic point of view.

The distribution curve of median family income is skewed heavily toward low income folks on the Big Island. The median family income in the state is $56,000. On the Big Island, it is $46,000.

Here on the east side of the Big Island, it is in the mid-30,000s. True aloha requires us to fix this, for all our sakes.

Last year when the oil price spiked, gasoline prices spiked as well. For the first time some of my workers asked me if they could borrow money for gas to come to work! The lower income folks were hurt bad.

It is no secret that I believe that biofuels are no solution to our energy problems, because return to the farmers would be too low.

But biofuels would also be as or more expensive than fossil fuels to the final customer. My workers would still have to borrow money for gas. What good is that?

The state of Hawai‘i legally owns our geothermal resource. So any royalties from its use must be paid to the state and to the Office of Hawaiian Affairs (OHA).

Right now, Puna Geothermal Venture pays the state $3.5 million a year, and OHA gets 20 percent of that. That’s $750,000 a year generated from geothermal en to OHA.

Also, the cost to consumers is less than that of fossil fuel and it will not go up when fossil fuel prices go up.

We need to put in more geothermal, not less. More money would go to the state and to OHA. Geothermal has low and stable costs, which results in more discretionary income left in people’s pockets. When they spend that money, businesses can hire workers, who can then take care of their families.

Taking care of people, this is true aloha. The tougher it gets, the more we need to take care of each other.

Geothermal energy is a gift of true aloha.