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The Honolulu Advertiser
Posted on: Sunday, February 26, 2006

COMMENTARY
Homegrown Solutions

By Maurice Kaya

A truck unloads gasoline at a station in Kawaihae on the Big Island, where prices surpassed $3 a gallon late last summer. Since the 1970s, Hawai'i has tried to wean itself off fossil fuels, but to no avail.

Advertiser library photo

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ENERGY LEGISLATION PENDING

Here is energy legislation now pending at the Legislature:

House Bill 2308 HD1

Status: Referred to the House Finance Committee; no hearing yet scheduled

Contact: Rep. Dwight Takamine, Finance Committee chairman, 586-6200, reptakamine@capitol.hawaii.gov

Senate Bill 2271 SD1

Status: Referred to the Senate Ways and Means Committee; no hearing yet scheduled

Contact: Sen. Brian Taniguchi, Ways and Means Committee chairman, 586-6460, sentaniguchi@capitol.hawaii.gov

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While we're not seeing the long lines at gas stations as we did in the 1970s, and our Islands are not being hit regularly by rolling blackouts, Hawai'i is nevertheless in the midst of an energy crisis.

Our residents pay the highest prices in the nation for gasoline and electricity. We are geographically isolated and dependent on oil for almost 90 percent of our energy needs. That makes our state vulnerable to manipulation by world oil markets and by the corporations that supply our energy needs. We cannot allow this to continue.

Ever since the Arab oil embargoes of the 1970s, Hawai'i has had the goal of weaning itself off a dangerous overdependence on the imported fossil fuels that power our economy. Despite more than 30 years of state policies to achieve self-sufficiency, the state has not overcome its oil habit.

Recent experiences with oil prices and electricity supply illustrate how acute this problem is for Hawai'i. With oil prices hovering around $60 per barrel, there is no relief in sight. The federal Energy Information Administration confirms that world oil prices are expected to remain high as a result of strong demand in developing economies such as China and India, and because there has been inadequate investment in worldwide capacity to meet demand growth.

Locally, Hawaiian Electric Co. has warned us that serious electricity shortfalls may be experienced over the next few years because of a growth in demand, and therefore a new power plant is needed on O'ahu. This plant will use naphtha, which is a form of petroleum fuel.

At the same time, we are constantly reminded that Hawai'i residents pay the highest prices in the country for gasoline and electricity. So this begs the question: Should we be satisfied with our current energy situation?

The answer is a resounding "No!" It's time we commit ourselves to a serious action plan that embraces at its core development of renewable energy sources indigenous to the Islands.

What we need is a bold, strategic plan that encourages and supports market-based development of reliable, costeffective and self-reliant energy. This should be accomplished through a combination of conservation, greater energy efficiency and development of renewable power sources.

Simply put, Hawai'i consumers cannot afford to wait any longer for more economical energy supplies and stable energy prices.

Many experts have spent considerable time offering ideas and solutions, including the Hawai'i Energy Policy Forum, the Economic Momentum Commission and members of academia and the state Legislature. And an increasing number of private citizens also are urging action.

In putting forward its comprehensive and far-reaching energy package this legislative session, the Lingle-Aiona administration calls for a bold, integrated and complementary approach that includes these key components:

  • Savings through efficiency.

  • Independence through renewable energy.

  • Fuels through farming.

  • Security through technology.

  • Empowering Hawai'i's consumers.

    When fully implemented as originally presented to the Legislature, these initiatives by 2020 will eliminate the need to import 110 million barrels of crude oil and retain $6.3 billion in our economy that would otherwise go to purchase oil.

    From an environmental protection standpoint, these proposals would eliminate 49 million tons of carbon dioxide emissions.

    State government would lead by example by adopting such comprehensive energy initiatives. For example, the state would make its facilities more energy efficient and accelerate acquisition of renewable energy for electricity production.

    We also want to strengthen the state's renewable energy portfolio standard law and require that 20 percent of our motor fuels come from renewable resources such as ethanol and biodiesel by 2020.

    Hawai'i has the potential to be a national and global leader in developing renewable energy sources, including hydrogen power. Billions of dollars are being invested by governments and private companies to advance this highly promising technology, and Hawai'i must not be left behind.

    The Aloha State's abundant natural resources and intellectual assets offer significant competitive advantages in the race to develop hydrogen power. Notably, partnerships formed by the state and the University of Hawai'i's Natural Energy Institute already have attracted the attention of the federal Department of Energy and major corporations.

    Imagine a time when renewable energy such as geothermal power on the Big Island is available at low prices in quantities that will more than meets the needs of local communities. And imagine a time when this energy can be converted to hydrogen and used elsewhere in the Islands or even exported.

    These proposals and many others are before the Legislature, and consensus appears to be emerging on most of these initiatives.

    One proposal being debated includes ending the current practice of allowing the electric utilities to pass along increases in fuel prices to consumers. While debate in the House and Senate is a healthy part of our democratic process, unless we change the way Hawai'i's electric utilities are compensated for acquiring energy supplies, we cannot expect to move from the status quo. And the status quo is unacceptable, in that 77 percent of our electricity is produced from oil and its products.

    We need to create new incentives so electricity providers make it a priority to promote energy efficiency and to acquire renewable sources of power. At present, consumers assume all the risks of oil price increases, since electric companies are able to pass that burden onto us. This automatic pass-through that appears on our electric bills as a "fuel cost adjustment" is disincentive for the utilities to develop renewable energy sources. Requiring electric companies to share that risk with consumers is a reasonable way to encourage a move away from fossil fuels.

    While the challenges to advance energy independence remain formidable, they are not impossible to overcome. We cannot afford to wait for the next oil crisis to act. Unless we take decisive action today, the state's economy and energy consumers will continue to bear the unacceptable effects of oil dependency.

    It's time we face reality and demand action from our policymakers. We all deserve lower, more predictable energy prices and supplies.