Tag Archives: Palm Oil

Biofuel, Peak Oil, Renewable Energy Sources

Legend of the Horse That Was Really a Unicorn

November 18, 2012 Richard Ha

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, Community, Geothermal, Peak Oil, Renewable Energy Sources

Rubbah Slippah Folks Turn Out at Kona PUC Meeting

November 2, 2012 Richard Ha

Richard Ha writes:

The Kona PUC hearing we’ve been talking about here took place on Tuesday evening.

From West Hawaii Today:

Powerful resistance to PUC

By Erin Miller

West Hawaii Today

West Hawaii residents described to the Public Utilities Commission how they have cut back on energy usage, and questioned why Hawaiian Electric Light Co. shouldn’t have to bear the costs of upgrading its own equipment.

The questions continued as the PUC heard comments from residents Tuesday evening on a proposed contract between HELCO, Oahu’s Hawaii Electric Co. and Aina Koa Pono for a biodiesel project in Ka‘u.

Albert Prados, manager of the Fairway Villas at Waikoloa Beach Resort, was one of more than 20 people who testified against HELCO’s rate increase request, which HELCO officials would raise rates 4.2 percent, or about $8 per an average 500 kilowatt hour monthly bill. Prados described the measures he has taken in his own home, including shutting everything off except the refrigerator at night, to lower his electricity bill. Read the rest

Mayor Kenoi took a very strong stand on renewable energy. He
made clear that it is not sufficient that it be renewable; it also needs to be affordable. He is concerned about the most defenseless among us.

He said, This is the kind of project that 20 years from now, we will be asking, “How did we let that happen?” He also said that we are doing this for the benefit of HEI and HECO – but that there is no benefit for the Big Island. The Mayor is very aware that high and rising electricity costs threaten our economy and also the folks on the lowest rungs of the economic ladder.

Rep. Denny Coffman asked, “How is it we are here? This is not even proven technology.” He pointed out that the electric utility is setting the state’s energy policy, and that that should stop while we finish the Integrated Resource Planning process that’s happening right now. Rep. Coffman understands the energy situation worldwide and he knows it’s foolish to be chasing unproven technology. It is both a waste of time and money. In Hawai‘i, we do have proven technology that is affordable.

My testimony:

To answer the Consumer Advocate’s question, “Would we change our minds if all the costs were given to the Oahu rate payers?,” the answer is no! I think that giving AKP a 20-year contract will forego the opportunity of developing lower cost alternatives. And it will take up valuable time. Liquid natural gas is an option. Ocean energy might be ready within the 20-year period. Geothermal is an affordable, proven technology. For instance, there is an 11 cent difference between geothermal and oil today. We could replace liquid fuels with 80MW of geothermal electricity, and apply that savings to pay the remaining debt of the Keahole 80 MW liquid fuel burning plant.

(80 MW is equal to 80,000 kilowatts. That 11 cents/kilowatt hour savings multiplied by 80,000 kilowatt hours equals $8,800 that you save each hour. And the savings per day is $211,200. That times 365 days equals an annual savings of $77 million. That is enough to write off the plant and still give the rate payers a break.)

Consumer Advocate Jeff Ono asked: “If O‘ahu rate payers would pay the cost, would you still be against the AKP project?”

Most of the time, making electricity has to do with making steam to turn a turbine. You can burn coal to make steam, or you can burn oil to make steam. You can burn firewood to make steam, or use the steam from underground – that’s geothermal.

AKP takes the long way. They grow plants using fossil fuels,
then they use electricity to make microwaves to vaporize the plants, then take the liquid that rises and convert it to a burnable liquid, and haul it to Keahole, where they burn it to make steam.

It isn’t surprising that it is expensive.

More than a few engineer folks tell me that this process
uses more energy than it makes. And if that is the case, it will always be more expensive than oil. This is not a good bet for us.

Palm oil is the only biofuel today that can compete heads up
with petroleum oil. It produces 600 gallons of oil per acre. AKP strives to produce 16 million gallons per acre, plus another 8 million gallons – or 24 million gallons from 12,000 acres. That is 4 times as productive as palm oil, the only biofuel that competes straight up with petroleum oil. If it works, they don’t need any subsidy from us. If it works, they will all end up billionaires.

We cannot predict the price of oil. But people are hurting right now. And if oil prices reach $200 per barrel, the tourism industry will be devastated and everything connected with it will shrink. We do not have the luxury of time. We need a lower cost alternative right now.

Well-respected Council of Revenues economists Paul Brewbaker, of TZE Economics, and Carl Bonham, Executive Director of the
University of Hawaii Economic Research Organization (UHERO), agree that low-cost energy is a key component of our economic future.

There are alternatives to $200/barrel biofuel. Geothermal is the equivalent of $57/barrel. Liquid natural gas is low cost now on the
mainland, and maybe ocean energy will be an alternative within the time period of the contract.

We need lower cost electricity, not higher, and AKP is not the answer. The AKP project is wasting valuable time, and we need to put it to bed so we can focus our attention on the next projects.

I agree with the electric utility from here forward. The next PUC hearing will be on the Hu Honua biomass plant at Pepe‘ekeo. They will use wood chips to boil water and make steam. This is proven technology and it looks to be cost effective.

After that will be a proposal for 50MW of geothermal. Geothermal does not have to burn anything. It just uses the steam underground to make electricity and it is cost effective.

At that time, HELCO with its leverage should be able to successfully renegotiate the old contract that is tied to oil. Then we will be well on our way to protecting ourselves from the volatility of world oil prices. Those two projects will result in a total of 110 MW of stable, affordable electricity using proven technology.

We need to strive for balance and common sense as we try to make things work for everyone. Hospitals, schools, hotels and businesses need the electric services provided by the grid. Fifty percent of our people rent and so cannot get off the grid. We need to be practical, and help to make sure the electric utility is healthy as we strive for a lower cost to the rate payer.

Biofuel, Peak Oil, Renewable Energy Sources

The Big ‘Aina Koa Pono’ Risk

October 22, 2012 Richard Ha

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.

Renewable Energy Sources

Taking Matters Into Our Own Palms

October 9, 2012 Richard Ha 2 Comments

Richard Ha writes:

Over the weekend I went to a Palm Oil presentation given by Dr. Bill Steiner, the recently retired Dean of the University of Hawai‘i College of Agriculture, Forestry & Natural Resources, and I made a decision: We are going to plant palms, and produce enough palm oil to make our farm free of fossil fuel in 10 years.

We use 12,000 gallons of diesel annually for our tractors and trucks.

Oil palms produce 500 gallons/acre per year. If we plant thirty acres in palms, that should produce 15,000 gallons annually. This would allow us to grow our crops and definitely get them to market, no matter what happens in the Middle East.

We have the land, deep soil and free water. A big disadvantage is that harvesting palm oil is labor intensive, but the palms will not need to be replanted for 25 years. We already have the land, and if oil is cheap and abundant 10 years from now, then we control our
cost by not harvesting. If, at that point, oil is expensive and hard to get, then we harvest and are to get our produce to market. There are some other issues, which we are working through right now.

Palm oil production is a proven technology. Palms like to grow in the tropics, and Hawai‘i is not perfect at 22° north latitude, but we think it’s good enough. Palms need 80 inches of rain per year, and where we are we have one and a half times that amount falling out of the sky.

Robert Rapier, who writes the R-Squared energy column at Consumer Energy Report, has this to say about palm oil:

The Palm Oil Conundrum

by Robert Rapier

People sometimes ask which biofuels are competitive head to head with crude oil. By competitive, I mean those that can actually compete favorably with oil prices on a level playing field (i.e., they don’t require big subsidies or mandates in order to compete). There are two that always come to mind: Ethanol from sugarcane (although less competitive currently due to high sugar prices) and
fuel from palm oil (oil derived from the fruits of the African Oil Palm). In fact, in the first book chapter I wrote in 2007 (Renewable
Diesel in Biofuels, Solar and Wind as Renewable Energy Systems:
Benefits and Risks) I highlighted palm oil as a crop with great
promise, but also great environmental risk:

By far the most productive lipid crop, palm oil is the preferred oil crop in tropical regions. The yields of up to five tons of palm oil per hectare can be ten times the per hectare yield of soybean oil. Palm oil is a major source of revenue in countries like Malaysia, where earnings from palm oil exports exceed earnings from petroleum products.

Read the rest