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The Honolulu Advertiser
Posted on: Sunday, February 5, 2006

COMMENTARY
Our need for oil can be reduced

By Sen. Daniel K. Akaka

We all want better gas prices. But a recent U.S. Department of Energy report projecting that the price of crude oil will stay at or above $50 per barrel for the foreseeable future is bad news for Hawai'i and our nation.

This challenge presents our state with a real opportunity to become a leader in the nation's effort to identify and develop energy alternatives. Gov. Linda Lingle and state lawmakers should be commended for putting Hawai'i's energy future at the top of the list for legislative action.

On Capitol Hill, we're working to ensure that the federal government does its part to help Hawai'i move away from oil dependency. We have made significant progress on several fronts.

We now have a federal mandate to use ethanol in the Energy Policy Act of 2005. Coupled with the state mandate, which will take effect in April, Hawai'i's refineries will have to blend a percentage of ethanol with gasoline. Two provisions have been amended to ensure sugar-cane-to-ethanol production in Hawai'i a $36 million demonstration program for a production facility and up to $50 million in loan guarantees. At present, we are importing ethanol. We need to turn to our own homegrown sources for fuels for gasoline, biodeisel and other feedstock.

Although I was pleased to hear President Bush commit to increasing funds for alternative energy initiatives, efforts to conserve also can be bolstered. Congress must renew discussion of higher vehicle fuel economy standards. Hawai'i has an opportunity to increase efficiency of air conditioning even further by supporting proposals to use cold-water air conditioning in Honolulu. Leading our state in this area is the University of Hawai'i's John A. Burns School of Medicine in Kaka'ako, which uses cold ocean water to cool its buildings. This saves $100,000 a year in electrical costs and reduces the need for fresh water supply. Right now, this facility is the only public building in the Islands using this seawater cooling system.

Tax policy can encourage investment in and use of renewable energy. The Energy Policy Act extends tax credits for the production of electricity from renewable sources. The act provides tax credits for residential solar and photovoltaic equipment, and it provides tax credits for hybrid vehicles. Proposals for state tax credits and excise tax breaks for buyers deserve full attention and discussion.

At the federal level, we're working hard to promote renewable energy and electricity through production tax credits and research and development. Hawai'i can be a renewable electricity leader in the nation.

Focusing on the path ahead, I strongly believe in the potential of hydrogen as an energy source, and I will continue to push for investment in hydrogen and the infrastructure that is needed to deliver it. The Legislature should support the governor's proposal for a $10 million fund for hydrogen power potential.

And finally, we also must fully weigh the costs and the benefits of moving off "the oil standard." If we reduce crude oil imports, what happens to the price of gasoline? In some cases, alternatives may make energy cost more, at least momentarily, unless we have a plan to offset costs in the future. The Energy Policy Act includes my request for a Department of Energy-sponsored assessment of Hawai'i's dependence on oil and the economics of moving to alternative or renewable sources.