Ha Ha Ha!

Welcome! I'm a Big Island farmer/businessman concerned about Peak Oil and the nexus of energy, the economy and the environment. I'm also Chairman of the Board of Kū‘oko‘a, formed to help the utility refinance its system in order to move to 100 percent renewable energy. Enter your email at right to receive new posts by email. Never any spam, except sometimes for lunch.

Peak Oil: Preaching to the Laupahoehoe Choir

Richard Ha writes:

Last night, I spoke at the Laupahoehoe Community Association meeting and shared the perspective I have gained from watching the world oil supply subject evolve over a short five years.

I related how I have attended four Peak Oil conferences, most recently as Hawai‘i County's representative. The first thing I learned was that the world has been using twice as much oil as it has been finding for 20 to 30 years – a trend that continues.

Five years ago, oil prices were supply driven. When supply was restricted, oil prices rose, and when oil supply resumed, prices fell.

Last year, that correlation fundamentally changed. We now have a demand problem. And the demand is coming from the new economies: China, India and others.

That’s why, during this recession, we still have $100 per barrel oil. Unlike during the last 150 years, supply cannot seem to keep up with demand. If you are a subscriber to Nature magazine, or don't mind becoming one, you can read a good article about that here.

Oil’s tipping point has passed

The economic pain of a flattening supply will trump the environment as a reason to curb the use of fossil fuels, say James Murray and David King.

...There is less fossil-fuel production available to us than many people believe. From 2005 onwards, conventional crude-oil production has not risen to match increasing demand. We argue that the oil market has tipped into a new state, similar to a phase transition in physics: production is now ‘inelastic’, unable to respond to rising demand, and this is leading to wild price swings.... Read the rest here

World oil supply is naturally declining at approximately five percent, meaning we need to find the equivalent of a Saudi Arabia every two to three years. Clearly we have not been doing that, nor is it likely we will do that.

To make matters worse, oil-exporting countries are forced to use more of the oil resource in their own countries or the people will revolt. Sooner or later, oil-exporting countries will keep all its oil for its own people. All the signs indicate that we have much less time than we think.

I told the folks that most of us, except the native Hawaiians, were immigrants. We all dream of a better future for our children and grandchildren, and rising oil prices are a threat to that dream.

We are very lucky, though, to have an indigenous alternative – Geothermal. Generating electricity from geothermal costs approximately 10 cents per kilowatt hour, while generating electricity from oil (at $100 per barrel) costs more than 20 cents per kilowatt hour. Geothermal-generated electricity prices will be stable for generations, while oil prices will keep on rising.

I was preaching to the choir. They wanted to know what could be done. I told them to contact their legislators and that I would make sure to keep in contact with their organization.

Women as 'Economic Growth Strategy' & East Hawaii's Business Woman of the Year

Richard and June had a table at the Hawaii Island Chamber of Commerce’s Athena luncheon yesterday, for the presentation of East Hawai‘i’s Business Woman of the Year, and they invited me to join them. It was a good lunch at ‘Imiloa, and a nice event.

Before the Athena award was presented, Connie Lau, President/CEO of HEI, gave a talk about empowering women that I found really interesting. 

She discussed U.S. Secretary of State Hillary Clinton's High-Level Policy Dialogue on Women and the Economy at a recent Asia-Pacific Economic Cooperation (APEC) forum.

(Clinton) articulated important steps in a path toward the Participation Age—where every individual has the opportunity to be a contributing and valued member of the global marketplace—including strategies to remove barriers that have prevented women from being full participants in the economy and unlock their potential as drivers of economic growth.

Clinton said that unlocking the potential of women in the work force, where women are underutilized or are bumping their heads on glass ceiling after glass ceiling, would add 9 percent to our GDP, 13 percent to the Euro Zone's, and 16 percent to China's.

At a time when the U.S. is struggling to have a 2.5 to 3 percent GDP, seeing it bump up to 12 percent would mean we would even surpass China (currently at 8.5 percent), Lau pointed out.

It's all about "women as an economic growth strategy." Wow, what a sentence. Another interesting concept: "Empowering women is not only the right thing to do, it's an economic imperative."

From here:

If we address the barriers to women’s economic participation, we can fundamentally transform our economies.

• The World Economic Forum Gender Gap Report shows that where the gender gap is closest to being closed in a range of areas—including access to education, health survivability, economic participation, and political participation—countries and economies are more competitive and prosperous.[ix]
• Reduction in barriers to female labor force participation would increase the size of America’s GDP by 9 percent, the Euro Zone’s by 13 percent, and Japan’s by 16 percent.[x]
• Narrowing the gender gap could lead to a 14 percent rise in per capita incomes by the year 2020 in several APEC economies, including China, Russia, Indonesia, the Philippines, Vietnam, and Korea.[xi]
• Globally, women will control $15 trillion in spending by the year 2014. And by 2028, women will be responsible for about two-thirds of consumer spending worldwide.[xii]
• The Food and Agriculture Organization of the United Nations (FAO) estimates that if women had the same access to productive resources as men, they could increase yields on their farms by 20 to 30 percent. This increase could raise total agricultural output in developing countries by 2.5 to 4 percent and reduce the number of hungry people in the world by 12 to 17 percent, or up to 150 million people.[xiii]
• Women disproportionately spend more of their earned income on food, healthcare, home improvement, and schooling, which has a multiplier effect in local communities.[xiv]
• Research shows a correlation between the number of women on boards and higher corporate profits. One analysis found that companies with more women board directors outperform those with the least by 66 percent in terms of return on invested capital, by 53 percent in terms of return on equity, and 42 percent in terms of return on sales.[xv] Another study indicates that one-third of executives reported increased profits as a result of investments in employing women in emerging markets.[xvi]

I found the data and topic really interesting. There’s lots more, and you can go here to read the rest.

And how about East Hawai‘i’s Business Woman of the Year, you ask? Congratulations to Charlene Masuhara, a counselor and Key Club Adviser at Hilo High School.

- Leslie Lang

Introducing Ka‘u Coffee Mill

Richard Ha writes:

We went to the grand opening of the Ka‘u Coffee Mill, an Ed Olson project. As Senator Gil Kahele said - and we agree - Ed is a good guy!

John Cross, a good friend of June's and mine since plantation days, is Project Manager. He's a good guy, too.

This is Senator Kahele (left) with John.

Coffee drying.

Are Undersea Cables to Transmit Electricity Feasible?

Richard Ha writes:

As I continue to look at ways to decrease our reliance on fossil fuels for our electricity generation so we will be free from the volatility of oil prices - particularly in this time where we know most of the “cheap oil” has already been found and processed, and global demand for oil exceeds its supply - I keep bumping up against the idea of undersea cables.

People are always questioning whether undersea cables are technologically feasible, and I thought you'd be interested to know that there at least 14 such undersea cables in operation today, transmitting electricity.

Some were built as far back as 1965, such as the Cook Strait submarine cables in New Zealand, which transmit electricity between the North and South Islands.

There is a very interesting history of the debate that went on in New Zealand before the cables were installed. What struck me is that the debate was in the 1950s and 1960s. 

Some very modern cables have just been commissioned, such as the BritNed cable that connects the United Kingdom to the Netherlands and can transmit up to 1000MW. A short video on the BritNed web site details the making and laying of this cable.

Cables are currently being manufactured to be laid at depths up to 2000 meters, which is deeper than our Alenuihaha Channel (1900 meters) between the Big Island and Maui.    

People used to believe that undersea cables couldn’t work in Hawai‘i because our channels are too deep. Undersea cables are clearly not the whole answer to Hawai‘i getting off of fossil fuels, but perhaps they can be part of a broad solution.

I am glad to know that the technology exists today, should we, the people of Hawai‘i, decide we want to share the robust renewable resources we have on each of our islands to create a reliable, stable, statewide electric grid that is not dependent on fossil fuels for its electricity generation.

About the Hawaii Island Economic Summit

Richard Ha writes:

On Friday, I attended the Kona/Kohala Chamber of Commerce’s Hawai‘i Island Economic Summit. 

One of the questions during an energy session I attended was whether Big Island Mayor Billy Kenoi's vision of “100 percent renewable energy by 2015” is reasonable.

I replied with some facts:

• Puna Geothermal Venture (PGV) estimates that it has 200MW of geothermal power at its present site.
• At peak use, the Big Island uses less than 200MW.
• Right now, PGV is authorized to produce 60MW.
• Last time it took them just six months to get authorization from the Planning Commission.
• That would leave three and a half months for building the needed production units. 

This is doable. What we need is the will to do it.

A description of the Economic Summit:

This Summit will consist of a morning panel “conversation” comprised of five to six guest thinkers and leaders who will discuss their work, ideas that inspire them and what they see as the future for Hawai‘i Island.  Confirmed speakers include Dr. Earl Bakken, engineer, businessman, philanthropist, inventor of the pacemaker; William P. Kenoi, Mayor of Hawai‘i County; Sanjeev Bhagowalia, Director of the newly created State Office of Information Management and Technology, Robert Pacheco, President and Naturalist Guide, Hawaii Forest & Trail and Michele Saito, President of Farmers Insurance Hawaii. Moderator for this panel will be Steven Petranik, editor of Hawaii Business magazine.

Our luncheon keynote speaker is Eric Saperston, acclaimed film director and producer, successful author and award-winning speaker and storyteller. Eric is Chief Creative Officer for the 'inspire-tainment' company, Live in Wonder, a forward thinking experiential company on the cutting edge of communication to ignite, inspire and enliven the world.

Eric's story:

Dr. Earl Bakken talked about his manifesto (read about June and I visiting him at his request to discuss geothermal), which includes inspiring kids to use a live cam during the building of the Thirty Meter Telescope, the development of geothermal and Ku‘oko‘a, as well as building a world-class hospital in Waimea.  

West Hawaii Today wrote about the summit.

Hawaii Community College and its Food Art

Incredible fruit carvings and sculpture by Chef Alan Okuda's culinary students at Hawai‘i Community College.

 

What the Geothermal Working Group Found

Richard Ha writes:

Advantages of geothermal:

• It is an indigenous resource
• It generates revenue for the state
• It generates community benefits
• It provides stable power
• It is less than half the cost of any of the renewable energy alternatives. 
• The Big Island will be over the geothermal "hot spot" for 500,000 to 1 million years

I want to share some highlights of the Geothermal Working Group's final report. 

Page 10, Revenues derives from geothermal:

Page 12:

IV. Recommended Steps for Hawaii State Legislators

- Make the allocation of geothermal royalties more transparent to show how benefits come back to the community. Designate the records of the allocations to be public domain.

- Establish a community advisory board to offer suggestions to the DLNR about how royalties generated by geothermal power plants are spent. The advisory board should be members of the communities that host existing or future geothermal power plants and/or those who are most impacted by the development of geothermal energy.

- Encourage the DLNR to use geothermal royalties to identify promising geothermal sites and to further develop the resource.

- In light of the probability that oil will reach $200 per barrel (Lloyds of London), the legislature is requested to commission a study to show the economic impact of various prices of oil.

- Facilitate development of geothermal with a critical review of the geothermal permitting process, regulatory capabilities, and possible investment incentives.

 

Page 5:

The Geothermal Working Group's principal findings

- Geothermal is a renewable resource indigenous to the island of Hawaii that is dissociated from the price volatility of petroleum fuels.

- Geothermal can be a key component in a diversified energy portfolio for Hawaii County, both for the electrical grid and for transportation.

- In Hawaii, geothermal is a firm-energy resource at lower cost than fossil fuel. - Developing multiple geothermal plants is the most prudent approach.

- Geothermal has the potential to supply baseload electricity; long term reliability and the ability to supply grid management services (currently supplied by conventional fossil-fueled power plants) must be demonstrated in order to consider geothermal as the primary energy resource.

- With geothermal power plants, agricultural fertilizers, hydrogen, oxygen, and business-enterprise power can be produced for off-peak rates during the hours of curtailed electrical demand.

 

Page 9:

Overview

Geothermal energy can be developed to become the cheapest form of baseload power for Hawaii County. There are no importation or storage costs. Using geothermal as the primary source of baseload power will permit the county’s businesses to be more competitive with the rest of the world. Using geothermal as the primary source of baseload power will also help folks on the lowest rungs of the economic ladder—those who struggle with the cost of services.

In addition to stability and affordability, geothermal can leave less of an environmental impact than the commercially-available baseload power sources of electricity. There are no greenhouse gases, emissions and no oil spill risks.

The lower rates of off-peak geothermal electricity encourage the production of ammonia locally. Ammonia is an efficient hydrogen carrier that can be used to power internal combustion engines and as an aid to local agriculture as fertilizer. Light-industry business parks constructed near geothermal energy plants can use excess heat as a resource for heating vegetable and tropical flower hothouses, drying wood, and drying fish.

Benefits of geothermal energy to the community include sharing in geothermal royalties. In accordance with state law, the geothermal royalties are paid directly to the Department of Land and Natural Resources who allocate the royalties in three ways:

1. Department of Land and Natural Resources receives 50% 2. County of Hawaii receives 30% 3. Office of Hawaiian Affairs (OHA) receives 20%

Potential adverse impacts are listed below:

- Interference with worship of the Goddess Pele - Interference with certain Native Hawaiian practices - Rainforest destruction - Possible health and safety impacts - Disruption of the way of life for nearby residents - Hydrogen sulfide and other air quality issues - Noise - Increased strain on an inadequate infrastructure - Impact on native fauna and flora

If We Spend All Our Money on Electricity...

Richard Ha writes:

At a local level, the rising cost of electricity, whatever the cause, will result in severe economic pressures.

What's important to realize is that 70 percent of our economy is based on consumer spending. "If people no more money, they no can spend."

It all relates to costs.

See these Honolulu Star-Advertiser articles on the subject:

Geothermal power production could double

Hawaiian Electric Light Co. wants to tap more of the Earth's power for electricity

By Alan Yonan Jr. 

POSTED: 01:30 a.m. HST, Jan 07, 2012

Officials from Hawaiian Electric Light Co. said Friday they will soon seek regulatory approval to more than double the amount of geothermal power produced on Hawaii island in a move that could provide some relief for residential utility customers, who pay the highest electric rates in the state.... Read more

and

Keep close eye on geothermal funds

POSTED: 01:30 a.m. HST, Jan 07, 2012

Hawaii has been touted as an ideal laboratory for the development of renewable energy that's bound up in its wind, seas and sunshine. It's the southernmost island in the chain, however, that may be the most richly endowed overall, and the most promising resource of all is the one that's buried far beneath the surface.... Read more

Having attended four Peak Oil conferences now, I have seen that Jeff Rubin is one of the credible commentators on the world oil situation. His comments are especially relevant to the discussion about rising oil prices in Hawai‘i today.

Audio of Jeff Rubin's talk at the most recent ASPO conference.

From his blog:

…The real story behind triple digit oil prices is not the threat of supply shocks, but the sheer, unrelenting rise in world oil demand.  Already closing in on 90 million barrels a day, the quick rebound in world oil consumption to new record highs demonstrates the global economy can’t grow without burning greater amounts of oil.

No matter how many rabbits the oil industry can pull out of its hat, be it tar sands from Alberta or shale oil from the Bakkens, supply just can’t seem to keep pace – at least not at the prices most consumers can afford to pay. That is the message that triple digit prices keeps telling us.

If the global economic expansion, troubled as it may be, continues, we will see even higher oil prices in 2012. But what does that say about the sustainability of growth?

And even if there is growth, what is the pace? Read the whole post here.

Jeff Rubin explains why he quit his job as Chief Economist at CIBC World Markets. In Hawai‘i, we call it kuleana.

After twenty years as Chief Economist for a North American investment bank, it was time for me to seek a larger audience for the story I needed to tell.

My predictions of steadily rising oil prices over the last decade, including my call for $100-per-barrel oil by 2007, had flown in the face of conventional wisdom.

Among other things, my track record on predicting rising oil prices demonstrated that the traditional laws of supply and demand were no longer working for one of the economy’s most basic and essential commodities. And when they stopped working, the consequences for the economy would be severe.

It wasn’t subprime mortgages but triple-digit oil prices that brought down the world economy.

And unless that economy started to wean itself off an ever-depleting supply of affordable oil, there would be other recessions to follow as economic recoveries would simply push oil prices right back into triple-digit range. But weaning our economy off oil meant, at the same time, making fundamental changes in the way we live.

This is not the kind of message investment banks want their chief economists delivering these days, to either governments or investors. But the urgency of this message grows with every passing day.

On March 31, 2009, I resigned my position as Chief Economist and Managing Director of CIBC World Markets to deliver this message in my book, Why Your World Is About To Get A Whole Lot Smaller: Oil and the End of Globalization.

Jeff Rubin was the Chief Economist at CIBC World Markets for 20 years. He was one of the first economists to accurately predict soaring oil prices back in 2000 and is now one of the world's most sought-after energy experts. He lives in Toronto.

Mayor Kenoi Announces Hawaii County Will Use 100% Renewable Energy by 2015

Richard Ha writes:

At the press conference announcing the Geothermal Working Group’s final report, Mayor Billy Kenoi announced that Hawai‘i County will use 100 percent renewable energy by 2015. That was significant.

Mayor Kenoi emphasized geothermal’s primary role as that of base load and he said we are lucky to have an array of options available, such as wind, solar and biomass. He mentioned that the County would be converting some of its passenger vehicle fleet to electrical. He said that we will need the help of the Federal, State and County governments, as well as that of the community. 

He has already touched bases with Lieutenant Governor Shatz, and will be speaking with our congressional delegation next week. Senator Kahele and Representative Nakashima both reiterated the importance of enabling geothermal for base power. 

More about the Geothermal Working Group's final report press conference:

Big Island Video News: Geothermal Working Group Report Unveiled in Hilo
Hawaii 247: Geothermal Working Group Presents Findings

Although the topic of the press conference was the Geothermal Working Group’s final report, Mayor Kenoi's announcement about taking the Big Island to 100 percent renewable energy by 2015 was the big news. 

He is retaining the Geothermal Working Group, which will continue its work under the County of Hawai‘i.

As I have been saying, we are running out of time. Mahalo, Mayor Kenoi, for leading the Big Island to a safe place for us and future generations. 

Following the Mayor's lead, we can get there. Not, no can. CAN!

Geothermal Working Group Report is Unveiled

Richard Ha writes:

We know the era of cheap oil is over, and that it is only a matter of when and how high oil prices will rise.

What we need now is to see what we can do to enable geothermal. Two-thirds of our economy is made up of consumer spending, and stabilizing electricity prices will help our people cope.

From Hawaii Reporter:

Geothermal Working Group- Final Report unveiled by the County of Hawai‘i

REPORT FROM HAWAII COUNTY - HILO, HAWAII - The Geothermal Working Group, with the support of Hawai`i County Mayor Billy Kenoi, will present the final draft of the Geothermal Working Group Report on Wednesday, January 4, 2011 at 2:30 p.m.  The press conference will be held at the County building on the Mayor’s lanai at 25 Aupuni St., second floor.

The report was sponsored by the County of Hawai‘i to evaluate geothermal energy as the primary source of baseload power for electricity on the Island of Hawai‘i.  The report includes an analysis of technical data and expert testimony providing convincing rationale to develop local renewable energy plants and transition away from the county’s dependence on petroleum-fueled generators for baseload electricity.  The report, which is currently being circulated within Hawai`i’s State Legislation, was developed as research to help support Hawai`i’s Clean Energy Initiative goals.... Read the rest

As I've talked about here before, Iceland has made itself energy and food secure. We can too.