Expert suggests natural gas as local energy alternative
By Sean Hao
Advertiser Staff Writer
Liquefied natural gas, an increasingly popular energy alternative, could lower the state's dependence on oil and lead to a cleaner environment, an East-West Center expert says.
But importing natural gas to generate electricity also could lead to one of Hawai'i's two oil refineries shutting down.
That and other key issues deserve further study as state officials consider whether natural gas could provide Hawaiian Electric Company Inc. an alternative to burning fuel oil to produce electricity, said Fereidun Fesharaki, an international energy expert.
The state will need to move quickly, Fesharaki said, because the opportunity to sign economically feasible contracts to buy liquified natural gas could be lost within three years.
Hawaiian Electric already is exploring the issue and ChevronTexaco Corp. and several other companies are considering supplying the state with liquified natural gas.
"The path is there," Fesharaki told a group at Bank of Hawaii yesterday. "We can have this in place before the end of this decade. If we want to do it, we need to find a way to make it happen."
Importing the alternative fuel and building a terminal and facilities could cost up to $275 million and require broad support to fast-track such projects through hundreds of permits, Fesharaki said.
He added that liquified natural gas would be a competitively priced alternative to the fuel oil HECO now buys from local refiners, but more study is needed.
It also is possible that the loss of fuel oil sales could lead to the closing of one of the state's refineries, although exporting oil or other refined products is an option, Fesharaki said.
Because liquefied natural gas occupies 1/600th of the volume of the gaseous form, it becomes cost effective to ship it long distances. Once the fuel reaches its destination, it is turned back into a gas.
Liquified natural gas could help the state reduce dependence on oil imports, which now account for about 90 percent of local energy needs, Fesharaki said.
The long-term nature of natural gas contracts make them less subject to price fluctuations than petroleum, Fesharaki said.
Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.
