Posted on: Friday, August 13, 2004
Ethanol proposal draws support
By Sean Hao
Advertiser Staff Writer
A proposal that would require ethanol to be added to gasoline in Hawai'i was supported by most of the 13 people who testified yesterday at a public hearing on the initiative.
About 60 people attended the one-hour public hearing, which was the last opportunity for the public and businesses to weigh in on the requirement that could take effect in about 18 months.
Those testifying included ethanol and oil industry representatives and members of the general public. About two dozen written testimonies were submitted, but were not immediately available.
Now it's up to the Department of Business, Economic Development and Tourism to decide whether a set of rules that has been 10 years in the making are ready for Gov. Linda Lingle's signature. Lingle has said she supports implementing the law, which would require that most gasoline sold in Hawai'i include 10 percent ethanol content.
A mandate that ethanol be blended with gasoline to cut down on oil dependency and support the local sugar-cane industry was first passed in 1994, then amended in 1997. Ethanol, an alternative fuel that can be made from grain or sugar-cane byproducts, is used in most states.
Producing ethanol to blend with gasoline would also help restore the viability of sugar production in Hawai'i, supporters of the proposal said.
"Growing sugar cane is a tough business, as evidenced that there are only two plantations left in Hawai'i," said Charles Okamoto, director of finance and property management for one of those plantations, Gay & Robinson Inc., on Kaua'i.
"Gay & Robinson is committed to agriculture, but its economic viability is currently being challenged with low sugar prices and higher costs," he said. "We must find an alternative to our core sugar business and we've identified production of ethanol to be one target that would be viable."
William Maloney, managing director for Maui Ethanol LLC — one of at least three companies planning to produce ethanol locally — testified that the regulations in their current form are a product of two years of work that included input from the oil industry. He also tried to allay concerns that ethanol factories would produce foul smells.
Ethanol proponents including ethanol and renewable energy trade groups contend ethanol is a cleaner burning renewable fuel. They also cite a state study that estimates local ethanol production will result in $104 million of new investment in manufacturing plants, 84 direct jobs and 601 indirect jobs.
Those against the use of ethanol, including local oil companies, contend that it would result in less fuel efficiency, potentially higher gasoline prices, cut into state and county tax collections and won't guarantee a cleaner environment.
State officials have said the use of ethanol is not likely to reduce or increase gasoline prices, though it could result in less fuel efficiency.
Melissa Pavlicek, a spokeswoman for the Western States Petroleum Association, which represents ChevronTexaco and Shell Oil, testified that the hearing served as an opportunity to make the public aware of concerns that ethanol could cost consumers more money without necessarily resulting in less pollution. In addition, Pavlicek questioned whether 18 months is enough time to allow for adequate supplies of locally produced ethanol to become available.
If the proposed rules don't require significant changes a final version could be ready for Lingle's signature within weeks, said Maurice Kaya, energy branch administrator for DBEDT. Kaya said it was too early to tell whether such changes were warranted.
Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.
