Ko Olina Resort & Marina hopes to tap seawater deep below the West O'ahu resort for cooling buildings and bottled water.

The resort's master developer yesterday received state permission to develop a well inland of Ko Olina's marina to supply potential future hotel and time-share condominiums as well as an envisioned operation to desalinate, bottle and sell the water to consumers.

The endeavors seek to capitalize on two popular commercial uses of deep-sea water in Hawai'i — one that is booming (bottled water sales), and one that holds enormous potential to reduce energy and potable water use (air conditioning).

The seawater well is a byproduct of Ko Olina's effort to develop a world-class aquarium using up to $75 million in state tax credits authorized by the Legislature in 2003. Developers shelved the plan for a major aquarium earlier this year but hope to put the well to use in other ways.

The aquarium plans were set aside early this year when developer Jeff Stone agreed not to use the tax credit funding because economic development at the resort has been so robust in recent years while other needs such as affordable housing have worsened along the Leeward Coast.

Through an affiliate, the resort drilled an exploratory well last year to test whether saltwater from below the 'Ewa-Kunia fresh-water aquifer could be used in aquarium fish tanks.

"It was like we got this hole in the ground, what can we do with it?" said Mike Nelson, a Ko Olina Resort vice president.

In addition to air conditioning and bottling seawater, Ko Olina may still develop some sort of marine attraction at the growing resort and use seawater from the well for that, too.

1,300 FEET DEEP

According to Ko Olina's application before the state Commission on Water Resource Management, the proposed well would be 16 inches in diameter and descend 1,300 feet, passing through the fresh-water aquifer.

The well must be constructed with a casing to ensure overlying fresh and brackish water isn't affected by the saltwater withdrawal, according to a Water Commission staff report.

"No adverse impacts to water resources ... are anticipated," the report said.

The staff report recommended that the permit be issued, and yesterday the Water Commission's board approved the application.

Ko Olina seeks to tap 6.5 million gallons of seawater a day, though the future ultimate demand is projected to be 11.6 million gallons a day.

The largest projected use of the cold seawater would be to chill water in the air-conditioning systems of four envisioned condominium time-share and hotel buildings.

The buildings are not among present projects at the resort that include Centex Corp.'s Beach Villas at Ko Olina or a planned Crescent Heights condo-hotel, but are more conceptional and are two or more years away from development.

Using cold seawater to cool buildings promises to cut air-conditioning costs while reducing crude oil consumption and energy demands by using an abundant, reusable resource in Hawai'i.

PROVEN TECHNOLOGY

Seawater air conditioning is a proven technology, which is viewed as having wide application in Hawai'i but to date has been limited to relatively small-scale projects, including one at the Natural Energy Laboratory of Hawai'i Authority on the Big Island.

A large-scale application three years ago was proposed for Downtown Honolulu by St. Paul, Minn.-based Market Street Energy Co., but that project to serve 65 buildings in the area with a four-mile seawater pipeline has run into delays and is projected for a late-2009 start.

A Market Street official at the time said the proposed Downtown system could reduce energy costs for users and cut annual demands for oil by 215,000 barrels and drinking water by 400 million gallons.

On a smaller scale, the owner of International Market Place in Waikiki explored air-conditioning a redeveloped version of the shopping bazaar with a similar system using an on-site well two years ago. But the center's owner, The Queen Emma Foundation, shelved its redevelopment plan.

At Ko Olina, four buildings could ultimately use about 8 million gallons of seawater a day for cooling, but resort officials have not projected energy savings.

There is some question as to how cold the water below Ko Olina is and how efficient it will be for air conditioning. Ko Olina expects the water to be 63 degrees, which may not be cold enough to produce air conditioning but could still be used to remove heat from a traditional air-conditioning system and make it more efficient.

The Honolulu Board of Water Supply ran into such a snag when it prepared to outfit the University of Hawai'i Medical School in Kaka'ako with a similar system three years ago.

The medical school project, according to the municipal water agency, was the first instance anywhere to bring up cold water from a well for air conditioning. The agency said water temperature needed to be in the low 40s to properly chill the air-conditioning system, and would have saved an estimated $750,000 annually. The water, however, was warmer and resulted in a less-efficient application.

Nelson of Ko Olina said it hasn't been determined to what extent seawater can help air-condition buildings at Ko Olina, and whether existing buildings could one day connect to a system.

Bill Mahlum, chief executive officer of Market Street affiliate Honolulu Seawater Air Conditioning LLC, said either way the technology is useful and exciting. "I applaud (Ko Olina) for looking to find as much free energy as possible," he said.

BOTTLED WATER BOON

A bottled water operation for the resort is projected to initially use 43,200 gallons of seawater a day, but could become a substantial moneymaker for the resort.

Nelson said Ko Olina may explore partnering with a bottled water company to produce the desalinated water for marketing and sale, perhaps under the Ko Olina name.

"It would probably be more of a boutique (operation) for us," he said.

Desalinated seawater from Hawai'i has become the state's leading locally produced export from a small but growing number of companies that mainly market the product as a health drink in Japan but are trying to break into the U.S. retail market.

Most of the seawater bottlers in the state operate at the Big Island's Natural Energy Lab park, where a pipeline draws nutrient-rich seawater from off the Kona Coast from some 3,000 feet deep.

The facility is currently host to four operators, including industry-leader Koyo USA Corp., which can produce 1 million bottles of water a day.

Two other companies, Savers Holdings Ltd. and Moana Water Co., have leased property at the facility and are working to start up operations.

$37 MILLION EXPORT

Last year, the industry exported $37 million of bottled seawater, according to state figures, and there are more plans from companies hoping to get into the business or dramatically expand existing bottling operations.

On O'ahu, a firm called DSH International Inc. and operating as Deep Ocean Hawaii, last month began harvesting deep-sea drinking water from a ship positioned 3.4 miles west of Ko Olina.

DSH, which pumps water from a depth of 2,000 feet, hopes to eventually ship 2 million gallons of desalinated seawater out of the state monthly.

Nelson said the resort researched the bottled seawater business and saw the potential to become part of an industry that has been able to sell 1.5-liter bottles of water in Japan for $5.

"Are we going to be able to sell it for $5 or $6 a bottle?" Nelson said. "I don't know. I'm still amazed that someone is going to pay $5 or $6 a bottle."

A third prospective use of the seawater is for a marine attraction, possibly an aquarium. Nelson said Ko Olina is keeping its options open for possible future development of some kind of marine attraction after spending so much time researching and planning to build an aquarium.

In Ko Olina's water permit application, about 400,000 gallons a day would be needed to supply a 2 million-gallon marine attraction, which potentially could receive some seawater warmed by the air-conditioning system.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.