Nuclear Energy – possibility or distraction for Hawaii? – reposted

Note:  I was contacted by Lena Tran of Civil Beat who advised me that I could not post the article in its entirety.  The link that she referred me to only has the first part of the article, to read the rest you have to be subscriber, however, since I am allowed to “print” an excerpt of the article, here is the part that describes what happened in the Legislature in 2009 on the issue plus the contact info for Michael Levine, how to subscribe or participate in the discussion on-line.  House Concurrent Resolution 196 summarizes the issues that need to be addressed for a “thoughtful” decision on the topic.

House Leader: Nuclear Power DOA in Hawaii

Rep. Hermina Morita, chair of the Energy and Environmental Protection Committee that voted 9-0 to kill HB1, said last week that the idea of nuclear power in Hawaii has never gotten a full analysis and has typically turned into a distraction.

“There are too many things stacked against nuclear to have any kind of real possibility to move forward,” she said, pointing to the high costs and potential dangers of the technology. She also said nuclear would not achieve the primary goal of the Hawaii Clean Energy Initiative: moving away from imported fuel and reducing the risk of supply disruption.

“If you go nuclear, you’re still reliant on imported fuel, and if the rest of the world moves more toward nuclear, we’re going to be competing for fuel again,” she said.

That tone was echoed by DBEDT Director Ted Liu in one of many written testimonies [pdf] that raised concerns about HB1.

“As the demand for nuclear energy increases throughout the world, it is likely that the cost of uranium will also increase. For instance between 2004 and 2007, the spot price of uranium more than quadrupled, reaching more than $140/lb before falling sharply in the past several months to less than $80/lb,” Liu wrote. “Switching from one commodity, petroleum, subject to speculative swings to another, uranium, would not appear to effectively address Hawaii’s goal of energy independence.”

After House Bill 1 stalled in committee, Morita and Water, Land and Ocean Resources Committee Chair Ken Ito introduced House Concurrent Resolution 196, requesting that the Hawaii Energy Policy Forum study the benefits and risks of nuclear power. The resolution did not move forward.

DISCUSSION Should Hawaii consider pursuing nuclear energy? Join the conversation and learn more about energy in Hawaii.

---

If you’re not a Civil Beat member, you can click here to get $5.00 off your first month’s membership.

Copyright 2010 Peer News LLC. All rights reserved. You are granted permission to share this content with people personally known to you by email only. Posting this content to the Internet in any form or using this content for commercial purposes is prohibited, except as permitted by the Fair Use doctrine of copyright law.

—
Michael Levine
Reporter-Host, Honolulu Civil Beat
http://www.civilbeat.com/
Follow me on Twitter — @mlevineCB
(808) 377-0244

In Memoriam – Dr. Stephen Schneider

Typically, climate change is not a top of mind issue for me because if we keep to the implementation of the Hawaii Clean Energy Initiative objectives we can anticipate greenhouse gas emissions reductions of 38.7% below 1990 target levels by 2020 (GHGTaskForceworkplans).  But today I found two climate change concerns disturbing and sad.

First, I heard this story on Poison Ivy Growing Faster, More Virulent because of rising carbon dioxide levels and forest disruptions.

Second, climatologist Dr. Stephen Schneider died yesterday.  The brilliance of Dr. Schneider was his ability to explain the science and political complexities of climate change in plain English.  I first met Dr. Schneider when we were both participating in a 2007 conference convened by Blue Planet Foundation at Ko Olina.  By chance, the night before the conference started, I sat next to him at dinner not knowing anything about his background or accomplishments.  Had I known I probably would have been too intimidated to carry a conversation with a Nobel Prize winner.  He was funny, delightful and unassuming.  His presentation on climate change risk management and its solution reflecting our value judgement was practical and thought provoking and has helped me to better frame energy/environmental issues.  I could not find his video on the Blue Planet website but I did find a similar presentation without the powerpoint on YouTube.

After the Ko Olina conference, Dr. Schneider made several other trips back to Hawaii to lecture and had hoped to vacation on Kauai.  His passing is a huge loss for humanity.  Here is an excerpt from Peter H. Gleich, Co-Founder & President of the Pacific Institute, post:

But his contributions extend far, far beyond his superb science: Schneider was perhaps the most important communicator on climate science issues to the public and to policymakers. Steve was committed to challenging those who deny the realities of climate change because he understood that their abuse and misuse of climate science threatens the health of humans and the planet itself . . . He taught me and many others he mentored to understand and honor the science, but he also taught us the importance of speaking up in defense of the integrity of science and the public interest.

Clean Energy Transformation Takes More Than “Green” Jobs

Yesterday The Garden Island ran an article about the Kauai Planning & Action Alliance’s annual meeting where I gave a presentation at last Thursday.  While I understand the challenge to write an article on an issue as complex as the clean energy economy and its focus on green jobs, I thought the article missed the gist of my presentation, Hawaii’s Clean Energy Transformation, Creating & Identifying Green Jobs (KPAA62410finalnotes).

Throughout the article were snippets in quotes which did not fully convey and may have inadvertently misstate what was actually said.  For example, went I used the term “energy junkies” it was in the context that we really needed to broaden outreach to include all sectors of community, not just preach to the choir which I described as the “energy junkies”.  And, I use that term in an endearing way as these are the clean energy advocates I can count on to be involved and who already understand the importance of a clean energy economy.  But in order for a clean energy transformation to occur the reach has to be far beyond the choir and immediate congregation.

In my presentation I reference the essay The Death of Environmentalism and the book that resulted from that essay, Break Through.  I bring these two references up because both are provocative in pointing out that the stakes are too high to continue with a business as usual scenario and environmentalism alone will not save the planet.  However, reframing issues to engage a larger stakeholder groups can lead to greater buy-in and participation demonstrating a good solution has multiple benefits.

A Hawaii clean energy economy transformation is both technical and social engineering at its best.  And, unless we can gain confidence in this long-term strategy from a broad base of Hawaii residents and businesses a transformation will be almost impossible to bring to fruition.

Tipping Point

There has been a whirlwind of energy announcements over the past two weeks beginning with Nissan announcing Hawaii as a launch site for the Nissan Leaf electric car.  The next announcement was CT&T, a Korean electric car manufacturer, siting Hawaii as an assembly site creating as much as 400 jobs.

On Wednesday, I drove a fuel cell/hydrogen vehicle as the GM-The Gas Company partnership was announced.  Visionary, Dr. Patrick Takahashi, Emeritus Director of the Hawaii Natural Energy Institute, and one of the early drafters of hydrogen research and development legislation in Congress for U.S. Senator Spark Matsunaga covers our shared experience in his May 13 blog.

Yesterday, I participated in the press conference where Hawaii Energy (for electricity customers serviced by HECO and its subsidiaries) and Kauai Island Utility Cooperative (Kauai residents) announced their cash for clunker refrigerator rebate program.  The program will begin on May 24 and last as long as the ARRA grant monies hold out for qualifying refrigerators and proper disposal of the old refrigerator.  The second part of the press conference was an announcement from the Energy Division of the Department of Business, Economic Development & Tourism of its electric car and recharging system rebate as well as its request for proposals for a systems management approach for the recharging of electric vehicles.

In August 2002 I gave one of my first major speeches at a   Hydrogen Partnering Meeting on the Big Island.  The following month I was quoted in Hawaii Business that I would hope for the day when people would say “hydrogen” and “Hawaii” in the same breath.   That certainly happened this week.  Although I have become a little bit more pragmatic in my approach to a hydrogen economy, I still strongly believe the marriage of renewables and hydrogen can be a pathway to peace.  But more importantly, in the short-term, Hawaii is pushing the envelope in integrating its electricity and transportation sectors in its clean energy policy and incorporating energy efficiency.  That’s a huge tipping point.

Hydrogen Partnering Meeting
Hilton Waikoloa Village Hotel
Hawaii State Representative Hermina Morita
Chair, House Committee on Energy & Environmental Protection
Wednesday, August 28, 2002

The renewable energy, hydrogen and fuel cell technology expertise in this room is overwhelming. I am honored to be here and included; however, I couldn’t help but notice that I am the only politician on the participant list. I don’t know if that’s a good thing or a bad thing. I do not presume to have the academic, technological or business expertise to contribute anything significant and I have spent the past week trying to figure out how I can best participate. I have come to the conclusion that I am here for a somewhat obscure purpose — so obscure that the only way they could fit me in was to make me the dinner speaker. However, with the audience mellowed by a few cocktails and a glass of wine at dinner any politician can sound pretty good — perhaps even purposeful and palatable.  But, before everyone gets too mellowed out I hope you are ready to hear about my personal quest to have the words, “hydrogen” and “Hawaii” said in the same breath when anyone speaks of a hydrogen-based economy. When this happens, I know I will have been successful as a politician and in carrying out my obscure purpose. And, I, along with you as partners, will have shaped a preferred future for Hawaii that the rest of the world will model to gain economic prosperity, environmental stewardship and social justice and equity.

My presentation is based on a talk given by Hawaii futurist Dr. James Dator before the House Committee on Energy & Environmental Protection, which I Chair. His message played a pivotal role in my personal development as a Legislator.  Here is a story worth retelling. More than a generation has passed since the Hawaii 2000 Project.

In the late 1960’s, an era typified by the anti-war message of love and peace, mellowed perhaps by an herbal substance, Hawaii’s future looked extremely bright. The Future Studies program at the University of Hawaii, initiated by the Hawaii State Legislature, forged critical links between futurists and decision-makers and decision-makers and Hawaii’s citizens. Funded by the Legislature, Hawaii took an impressive step in “Anticipatory Democracy” – as communities statewide planned their preferred future for the year 2000.  Through this unique partnership progressive legislation flourished – zero population growth, family planning services, the preservation and protection of our natural and cultural resources, universal health care, becoming the first state to ratify the Equal Rights Amendment and establishing the Hawaii Natural Energy Institute are just some of the few bold steps of the Legislature.

During that same period Hawaii’s own — the late United States Senator Spark Matsunaga — promoted not only renewable energy but laid the ground work for the discussion of hydrogen in Congress. We are so fortunate to have this vision and legacy carried on our present United States Senators Dan Akaka and Dan Inouye.  Hawaii’s Legislators took risks. They thought bold and acted on it. Their primary purpose was maintaining the quality of life for all Hawaii residents.  Then, Hawaii lost its vision and lost its nerve.

First the oil shocks of the 1970’s. In the 1980’s, Hawaii was enticed by Japanese money. This time Legislators boldly reached out – with their hands. They offered little or no resistance to new development and seemingly never met a developer they didn’t like. Despite high interest rates, construction and real estate sales boomed. These activities provided everyone with a false sense of security but created a greater divide between the haves and the have-nots. By the mid-1990’s we, reluctantly, realized that along with boom periods come the bust. The Legislature struggles to just balance the budget.

The year 2000 has come and gone. The great efforts of Hawaii’s citizens in the Hawaii 2000 Project have fallen to the wayside. Instead of living up to the project’s slogan, “Somebody better care about tomorrow”, many decision-makers have been guided by the mantra, “Somebody check out the next poll”. And, I do not believe this is trend is unique to Hawaii. Unfortunately, with this breakdown in the critical links between futurists, decision-makers and Hawaii’s citizens, we have seen a dismantling in not only anticipatory democracy but also participatory democracy. Once we were known for our innovation and daring as a community. We have stopped dreaming and live for the here and now with little regard for future consequences. And, this too is not unique to Hawaii.

So, in these difficult times what should be the role of the Legislature be? What is our obscure purpose?

Dr. Dator puts it succinctly. He says, “Legislators need to become futurists — the applied futurists for our society. As such, they should enable citizens to identify significant trends and emerging issues, to understand the long-range consequences of their actions so as to anticipate alternative futures and to envision preferred futures. And then they must enact legislation.”  He continues, “Politicians should provide strong leadership and vision, not by pretending they know all the answers, but by becoming the social experimenters, by trying out different responses to various problems and opportunities on the basis of the community’s preferred vision. They should be open to change on the basis of experience, new problems and new opportunities.”

In the midst of the Great Depression — and these words should guide leaders today — Franklin Delano Roosevelt said, “The country needs, and unless I mistake its temper, the country demands bold, persistent experimentation. It is common sense to take a method and try it, if it fails, admit it frankly and try another. But, above all try something.”

I believe the temper of the community I represent, which, hopefully, will be validated by the results of the General Election in November, is a community that desires a clean, renewable energy source based on the principles of sustainable practices. I believe that this temper is not unique to the community I represent but is one shared statewide, nationally and internationally.

However, I am an advocate for a hydrogen economy for a selfish reason. I am Hawaiian and I cannot bear the thought that the Hawaii I knew as a child will be different for my grandchildren. I view the transformation to a hydrogen economy as the only means to protect the natural and cultural heritage of my identity. I am convinced that this is the only answer to sustain Hawaii’s fragile environment and to stabilize and diversify its economy.

Much like Mayor Harry Kim and Senator Dan Inouye in their visions for the Gateway Project, I want the experiences and lessons that Hawaii will learn in this transformation to be a model for the rest of the world. I believe we must move forward because it is the only moral and ethical choice we have. The very existence and survival of many island nations and their people are dependent on this progressive transformation. Island nations, including Hawaii, are the canaries in the mine, gauging the adverse consequences of climate change.

A hydrogen economy that utilizes renewable energy resources captures the basic principles of sustainability in promoting environmental stewardship, economic prosperity and social justice and equity. In Hawaiian we say that this is “pono”, that it, this is right and just.

Hawaii is at a critical juncture. We are all on an outrigger canoe trying to catch a wave. We are dependent not only on an expert steersman to guide the canoe but each paddler doing his or her part to stay just ahead of the breaking wave. With all our combined efforts we can catch that wave to for an exhilarating ride. With the help of my legislative colleagues like Senator Lorraine Inouye, I hope to cultivate the political will to catch that wave on the first attempt. But if not, I and many of my colleagues will definitely try again and again, to do our part to help rebuild a bold Legislature of vision and nerve.

However, in this room, our collective passion for a hydrogen economy is one of the few ways to reestablish the critical partnership between the future, politics and humanity. In this room, our collective passion for a hydrogen economy can rekindle the hopes and desires of all citizens of the world in shaping the preferred future.

But most importantly, in this room, we are not just politicians, scientists, technicians, civil servants or business executives but we are partners in an extraordinary humanitarian effort to build a better future. In this room, we are the somebodies that care about tomorrow.

sPACEd out – Property Assessed Clean Energy

Some would like to give the impression that political posturing and bickering was the sole reason for the demise of House Bill 2643, the Property Assessed Clean Energy program.  I have, along with Speaker of the House Calvin Say, taken the brunt of criticism in the press and from PACE proponents for killing a bill I introduced by not moving it to conference committee and passing out House Resolution 47 instead.  However, if one were to take a pragmatic and reasoned approach in analyzing House Bill 2643, simply put, it was not ready for prime time.

PACE is a property tax lien oriented financing that can be used as a tool to improve the economics of energy retrofits where the biggest barrier to their installation is coming up with the upfront cash to make such improvements.  Unfortunately, PACE is a relatively new program fraught with lots of buzz and attractive sound bites, after all who doesn’t want to promote easy financing for clean energy.

Let me make this very clear.  There is nothing in statute that prevents each county within Hawaii from instituting a PACE program on their own.  House Bill 2643 proposed floating state bonds and establishing a state revolving loan program to filter funding to the counties for loans to property owners to install clean energy improvements where the loan repayments would be made through a special assessment in the collection of property taxes.  This is very different from what is happening in mainland cities where the municipalities who are directly responsible for assessing and collecting property taxes are adopting the program by floating municipal bonds, not state bonds.

The mayors of each of our four counties are not totally sold on PACE and fully supported House Resolution 47 which called for the Department of Business Economic Development and Tourism to work out the bugs with all the stakeholders.  Without buy-in from the counties PACE simply would not work.

So I guess the first question to be asked, why should the Legislature move forward on a program the counties are ambivalent about?  As each county faces reduced revenues and budget shortfalls, the creation and administrative cost of a new program is of serious concern.  And these types of issues were not resolved by the time the bill reached conference.

Mortgage lenders are concerned about the priority of liens, and rightly so.  This concern is not only being raised by Hawaii lenders alone but by lenders across the country.  A  March 25, 2010 Wall Street Journal article touches on this concern.

. . .This debt (the PACE loan) would be senior to existing mortgage debt, so if the homeowner defaults or goes into foreclosure, it would be repaid before the mortgage lender gets any money. While property-tax assessments are usually senior to existing property debt, cities have traditionally used their assessment authority for community-wide improvements like sewers and roads—not for upgrades that homeowners elect to make on their own homes. . .

. . .But the regulator of Fannie Mae and Freddie Mac—which guarantee half of the nation’s $11 trillion in mortgages—has raised concerns in meetings about the program with federal and state officials. Alfred Pollard, general counsel for the mortgage companies’ regulator, the Federal Housing Finance Agency, said he was worried about the problems that a first-lien, or first-in-line, loan could create. “The goal of enhancing energy efficiency, which we share, should not overcome the need for prudent underwriting,” he said.

Fannie and Freddie aren’t allowed to speak out on public policy, and the companies declined to comment for this article. PACE advocates have lobbied for a measure barring Fannie and Freddie from taking any adverse action over the next two years on communities participating in PACE.

Critics of the program say that Fannie and Freddie, or mortgage lenders themselves, could raise rates in such communities to cover the risk that a PACE loan will displace payments to the mortgage holder. Cities could also face legal challenges, they say. The state of Maine is considering making energy loans junior to existing debt in legislation that would establish its PACE program.

“The fundamental problem is that there isn’t a free lunch but there often appears to be,” said William K. Black, a professor of economics and law at the University of Missouri-Kansas City.

One of the challenges of PACE is insuring that the bond rate, the interest rate for the assessment and the administrative fees associated with the program are affordable and attractive enough to make the program a success.  Currently, mortgage and home equity interest rates are very low.  In many cases on the mainland people who initially signed up for PACE dropped out because it was far cheaper for them to either restructure their mortgage or draw on their home equity.  In an analysis of the Berkley PACE program it was found that property owners who were creditworthy and did not have a problem securing financing but just had to be motivated to make these improvements.  Therefore, if PACE cannot compete with traditional financing, there may be a propensity for PACE programs to attract less creditworthy property owners.  As this is a relatively new program there is no track record or risk evaluation.

Because PACE is an opt-in type of program and needs pull-through to make a substantial impact, the key is for the State and counties, as critical partners, to educate property owners and to assist in making the energy assessments and financial evaluations to help implement the retrofits.  The objective would be for a transparent, easy-to-access, standardized, with correctly “sized” incentives, not subsidies, with installation by qualified vendors for a self-sustaining program.  DBEDT intended to put the details in administrative rules, however, by the end of second crossover and as the bills were being scheduled for House-Senate conferences there were more questions than answers.

Overzealous proponents of PACE may feel that this is a serious setback in our advancement for renewable energy and energy efficiency.  However, it is not the lack of a PACE program that will put a brake on the Hawaii Clean Energy Initiative but the lack of funding overall to carry out the long term strategy for energy and food security in Hawaii.  It was the Governor’s veto of the barrel tax last year and again this week that gives Hawaii’s energy security strategy an uncertain future.  All of the Energy Division’s special funds and stimulus money will be sucked dry by the end of the next fiscal year and their general fund funding will be jeopardy like any other program if we fail to fund this Division with a dedicated tax.  The reality could be that there wouldn’t be anybody to run a PACE program in the next Administration or the county level given the current furlough and economic conditions.  However, there now is a little light of hope with the veto override of the barrel tax.

Barrel Tax Passes Legislature

Here is my floor speech on the barrel tax which passed the Senate by a vote of 16 ayes, 2 ayes with reservations and 7 noes, and the House with 37 ayes, 11 noes and 3 members excused.  The bill now moves to the Governor for her approval or veto within the next ten days.  Should she veto the bill, the Legislature must override by the end of session (April 29).  Although I am disappointed that not all of the $1.00 tax increase is dedicated to the energy and agriculture special funds, many of existing energy and agriculture programs are still appropriated out of the general fund like the agricultural inspectors and the renewable energy tax credits.  While I had hoped that this tax increase would be used to accelerate energy and food security implementation, unfortunately, the State’s core government programs need to be funded.  The language of House Bill 2421 does call for the allocation of the tax to be reviewed each year.

Mr. Speaker, in the parlance of the Representative from Hawaii Kai, non-support of this measure is economic development and job killer number one.  This bill should not be viewed as a tax but a retention fee.  A retention fee to reduce the over $8 billion dollars each year we ship offshore to pay for our imported fuel and food. 

            One year ago when we voted on a similar measure which was House Bill 1271, where all the funding was dedicated to energy and food security, we were recovering from a oil price spike which peaked at $145.29 per barrel on July 4, 2008.  When we took that vote oil prices hovered at about $51.00 per barrel.  Today the price of crude oil is at $86.00 per barrel, the past 52-week pricing ranged from $44.45 to $86.42 per barrel and the one year forecast is projected at $99.00 per barrel. 

            As the global economy improves and demand increases the oil pricing trajectory is upwards.  Mr. Speaker, as politicians, we can all agree that there is never a good time to raise taxes.  It is very easy, especially in an election year, to chant “no new taxes”.  During a time of recession we question ourselves about the wisdom of raising taxes.  However, Mr. Speaker, in dealing with energy issues the window of opportunity for Hawaii is limited and getting smaller each day and it’s going to cost money.  If we want to put our energy and food security strategies into action and implementation we have to pay for it somehow.  Doing nothing is not an option, not if we call ourselves leaders.

            As an isolated archipelago, we are vulnerable to fuel and food supply disruptions and global forces beyond our control.  A transition to a clean energy economy and a strategy to reduce both our fuel and food imports, which is funded through this tax increase, puts Hawaii’s destiny more under our control.  It will take a long term planning, a smart strategy, public-private partnerships, the infusion of new technology, smart investments and political will to achieve this strategy.  However, we can only achieve this strategy with political will and putting our money where our mouth is.

            Mr. Speaker, the economic development opportunities are in the energy, agriculture, health and education sectors.  However, the energy sector is the bedrock of our economy.  Stable, predictable energy pricing is a major factor that affects each sector of our economy and offers an opportunity for economic growth.  Moreover, Mr. Speaker, the energy sector moves hand in hand with the information technology and communications as technological integration require software and communications support.

            Hawaii should be the center of research and development, technology validation and integration for a clean energy economy transformation.  But we can only be taken seriously and achieve these goals if we, as the leaders, residents and businesses of this State, make the needed long-term commitment and investment by putting our money where our mouth is.

            Colleagues, don’t be pennywise and pound foolish on this measure.  Mr. Speaker, the reality is that if this bill does not pass, when the ARRA funds run out DBEDT’s Energy Division will not have the funds for staff to drive the Hawaii Clean Energy Initiative next year.  The State will not have any funds available to cost share any Department of Energy awards which will limit our ability to compete for federal funding and the agricultural sector will continue to limp along with further declining resources.

            Mr. Speaker, if this bill does not pass what I fear the most is that clean, renewable energy and energy efficiency will only be available to those who can afford to make the transition.  As the cost of fossil fuels rise it will be those who can least afford rising energy costs that will ultimately bear the burden of maintaining an antiquated electricity and transportation infrastructure.  One of the key objectives of the Hawaii Clean Energy Initiative is grounded in social and economic justice; that is we provide for a strategy that moves our entire community forward to secure the benefits of a clean energy economy and food security transformation for each person and business throughout Hawaii.  Mr. Speaker the tax is broad based, a burden shared by all and a tax that can be easily offset by efficiency and conservation measures.

            Mr. Speaker, I will put this bluntly because I know of no other way to describe this situation.  When the Lingle Administration leaves office, the ARRA monies allocated for energy and the petroleum violation trust fund, which has supported the Energy Division for several decades, will be depleted and sucked dried.  In dealing with critical issues like energy and food security, these are long-term strategies that cannot be planned or implemented by election cycles or by a single person’s action for a large scale transformation to occur.  We all have an on-going but important role to play in this endeavor.

            Mr. Speaker and colleagues, today we have the opportunity to look our children and grandchildren in the eye and say I voted in favor of bill that will change the course of Hawaii’s destiny by working to reduce Hawaii’s dependency on imported fuel and food.  I voted to put my money where my mouth is and supported a tax increase to ensure energy and food security for Hawaii despite my fear of how voters will react in the fall elections because it is the right thing to do for the future of Hawaii.  And, that I am a Leader in this State in helping to achieve energy and food security for a healthy, safe and prosperous future for our families and businesses.

Better Place Test Drive

“I like to drive fast,” says Jenn Lucien, my Office Manager, “and this car can keep up with me! It was a blast and I am really excited about the emerging technology and the affordability that will make it an easy choice for Hawaii drivers.”

Jeff Gilbreath, a Legislative Aide in my office, commented after his test drive, “I don’t drive, but this car may change that.”

Darcey Whitney, who is a proud new hybrid owner and another Legisaltive Aide of mine said, “It was so much fun to drive; electric vehicles are perfect for Hawaii!”

“I like my 5-speed manual transmission, but I could definitely see my self in one of these,” said Josh Frost, another one of my Legislative Aides.

From left to right: Me, Jason Wolf, Regional Vice President of Better Place, and Brian Goldstein, Head of Hawaii Market for Better Place.

When 9/10 of a Loaf is Better Than None

When the renewable portfolio standard and net metering laws were first passed in 2001, what started out as separate bills were merged into one bill by another chair leaving me frustrated because the net meeting language was an okay first step, but the renewable portfolio standard was meaningless. I had the option of killing the bill, and both concepts, completely and walking away with nothing or taking half a loaf. Begrudgingly, I took half a loaf. After amending these laws over the past eight years, net metered households and businesses have increased significantly statewide and Hawaii has one of the most aggressive renewable portfolio standards in the nation long with an energy efficiency portfolio standard.

Last week at the Senate public hearings for House Bill 2421 (the barrel tax), well-intentioned people opposed the bill and recommended that the bill be killed because it does not tax coal or bio-fuels, specifically palm oil. While it may be true that the coal burning power plants have higher levels of carbon dioxide emissions than the petroleum burning power plants, as the below graph depicts, the more significant problem is the oil as it is used to meet 86% of Hawaii energy needs versus coal at 7.9%. The use of bio-fuels is insignificant at the present time.

The failure to include a tax on bio-fuels and coal, the two biggest culprits in global warming have left people like Henry Curtis and Kat Brady of Life of the Land as opposing House Bill 2421. Kat has been quoted in the Honolulu Weekly saying “If you’re going to do something about climate change, why would you not include the two biggest contributors to greenhouse gases?”

Here’s the answer. In Hawaii we are doing something to address Hawaii’s biggest contributor to greenhouse gases, which is oil, funding a long-term strategy through the barrel tax. House Bill 2421 cannot solve the global issue of greenhouse gas emissions, but we can start in our backyard by implementing policies and actions we have full control over. It will take resources to put these policies to action. The barrel taxes addresses funding issues. So isn’t 9/10 of a loaf better than none?

Supporting An Increase In The Barrel Tax

As House Bill 2421 moves through the Senate, discussions around the bill can get pretty convoluted.  Here are some simple points to keep in mind:

• We live on the most isolated land mass in the world.
• We import 85% of our food.
• We have, approximately, only a 10-day supply of fresh produce at any given time.
• We import 95% of our energy resources.
• We are extremely vulnerable to supply disruptions.
• Global demand for petroleum is projected to outstrip the global supply of petroleum; we will continue to see price increases.

Currently, the State of Hawaii invests millions of dollars to market Hawaii as a visitor destination to bring in out-of-state money, then we turn around and send billions of that money back out of the state to purchase food and fuel. 

House Bill 2421 provides the fiscal resources for the development and implementation of a long term strategy to achieve food and energy security for Hawaii by increasing the tax on refined products from a barrel of oil to the equivalent $1.00 per barrel.  Yes, it will increase the cost of products like gasoline, diesel, electricity and propane, however, that price increase can be mitigated through efficiency and conservation measures.

And, it is not as much as some anti-tax types would like you to think.  If you are a Hawaii driver, the impact is about $15.00 per year, or $1.25 per month, or 4 cents per day.  When paying your electricity bill, the impact on your household is about $9.36 per year, or 78 cents per month or 2.6 cents a day.

House Bill 2421 is an economic development strategy to grow our clean energy and agricultural sector and retain the billions of dollars we currently export out of our state to be redirected and reinvested in Hawaii residents and businesses.

Fossil Fuel Ban

Blogger Brad Parsons gives his analysis on three fossil fuel ban bills to be heard in the Senate Committee on Energy & Environment

http://alohaanalytics.blogspot.com/2010/02/evaluating-hawaii.html

Some have questioned why I have not scheduled a public hearing on any fossil fuel ban bills in the House Committee on Energy & Environmental Protection.  Simple answer, I heard a fossil fuel ban bill last year and am not convinced that there is any new evidence to move such a concept forward again.  Here is a statement I made last year on this issue:

A simple ban on fossil fuel generation makes for an easy sound bite but does not equate to a practical implementation of state law . . .

. . . Further, a fossil fuel ban gives the impression that we can meet all our energy needs through renewable energy sources,  however, in 2030 it is projected that a substantial amount of Hawaii’s electrical generation will still rely on fossil fuels.  I strongly believe that all of Hawaii’s future energy options should not be shut off prematurely without a full understanding of cost, reliability and carbon footprint impacts.

Hawaii’s clean energy future is a transition of moving away from our dependency on fossil fuels by incorporating energy efficiency and renewable energy.  It will not happen overnight and will require that we make the right investments in various technologies at the most opportune time to minimize risk and costs.  Wind and solar are intermittent sources of energy which will require some kind of storage technology which is not readily available.  Currently, local production of biofuel crops is not available.  Imported biofuels are more expensive and in some cases actually have a larger carbon footprint than some of the petroleum products from Hawaii’s refineries.

Right now, the emphasis of Hawaii’s clean energy future should be on maximizing energy efficiency, the low hanging fruit, to put off the decision and need to build new fossil fuel power plants for as long as possible, the integration of a renewable energy system into a modernized smart grid and establishing the right pricing mechanisms, including consideration of possible federal initiatives and carbon taxes . . . It is too simplistic to think that we can just draw a line in the sand banning fossil fuels without factoring cost and reliability issues and not anticipate inadvertent consequences.

A critical component in the discussion of Hawaii’s energy future that has not had thoughtful debate is the role of Hawaii’s refineries.  In an integrated clean energy system, both electricity and transportation fuels must be factored to facilitate a transition strategy.  We have had lots of discussion on electricity but hardly any on transportation fuels.  If we come to the conclusion that Hawaii’s refineries play an important role in our energy security (importing crude oil to be refined in Hawaii rather than importing refined products such as aviation fuel and gasoline) then every bit of that barrel of oil should be utilized in Hawaii in the most efficient way.

Discussions are ongoing about transitioning one of Hawaii’s refineries into a bio-refinery.  Research and developments are focusing on algae as a biofuel feedstock to be refined into jet fuel.  It’s all very exciting but very preliminary at this stage.  To be completely self-sufficient using renewable resources will take breakthrough technology.  In the meantime, I am just trying to be realistic and pragmatic in shaping Hawaii’s clean energy future.