Tag Archives: Kamehameha Schools

Win an Agricultural Lease and Farm Start-Up Money

The Mahi‘ai Match-Up 2016 is coming up. I was a judge for one of the Match-ups before. It’s a good program.

Here’s how Kamehameha explains it:

At Kamehameha Schools, we partner with the community to work toward a sustainable Hawaiʻi by supporting the local farm industry and increasing food production here on our islands. We are proud to once again team up with Pauahi Foundation to present the:

Mahi‘ai Match-Up 2016
Agricultural Business Plan Contest
Registration deadline: February 29, 2016

Submit your agricultural business plan by February 29, 2016 for a chance to win an agricultural lease* from Kamehameha Schools and start-up money from Pauahi Foundation. First place winner receives $20,000 and second place prize is $15,000. The competition is open to farmers, aspiring farmers and other agricultural producers including ranching, fishery and nursery proprietors.

To apply or for more information, visit www.pauahi.org/mahiaimatchup.

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OHA & the Thirty Meter Telescope

Richard Ha writes:

I testified at the Office of Hawaiian Affairs (OHA) on Wednesday regarding the protests over the Thirty Meter Telescope (TMT). Sixty-five people showed up, the vast majority of them in favor of the TMT.

I introduced myself as a Big Island farmer who produced more than 100 million pounds of fruits and vegetables in the last 35 years. I flunked out of the University of Hawai‘i and then got drafted and went to Vietnam, where the unspoken rule was that we all come back or no one does. After we all came back, I returned to school and majored in accounting to be able to keep score. I was the only person from Hawai‘i to attend five Peak Oil conferences. I have attended most of the TMT meetings over the past seven years.

I made two main points.

1. OHA needs to act like parents and kupuna.

We are starting to see lots of outside Islanders coming to stick their spoon into Big Island business. Activist Walter Ritte even came from Moloka‘i to advocate for the removal of all the telescopes from Mauna Kea.

When Big Islanders were in charge, I didn’t worry about public safety. Now, though, I am very worried. We are seeing folks wearing hoodies and bandanas, and they’re hiding their identities. The leaders have got to stop that. It puts a hair trigger on the situation, and it’s dangerous.

We saw someone like that recently, and we knew he wasn’t from the Big Island because he was driving a bright red Jeep. Nobody drives a bright red Jeep; those are only rental cars.

The folks protesting are getting false hope that they can get all the telescopes off the mountain if only they push back harder. And the discourse is pilau. People are insulting people. This is very dangerous.

OHA needs to act like parents and kupuna. This is not rocket science. You folks all know that the process was followed; that is why the permits were issued. Don’t give people false hope. The young people protesting who are college-age now were only in middle school when we started the process to make sure the project was done right. This is why they don’t know about the intricate, seven-year process the Thirty Meter Telescope people went through to work through all the issues the protestors are just now talking about.

It is OHA’s job now to do the right thing. Just tell them—they’re not going to change the law. Letting them think that will possibly escalate the problem and the mounting safety issues. That’s the kind of thing that is going to cause something to happen. We don’t want anybody getting hurt.

2. Remember what the TMT will bring to our community. The Big Island has the lowest median family income of all the counties. And the Kona side is higher than the county average, making the east side even lower than the county’s average. The Pahoa/Ka‘u/Kea‘au school complex is in the top four in the state for the free/subsidized lunch program. This island’s spouse abuse, substance abuse, and teen pregnancy rates are high.

Henry Yang, president of the TMT Corporation, came to the Big Island to talk with the community fifteen times. He came personally and talked to folks on the other side of the table, and he listened. He didn’t assign someone else to come; he came himself. That’s how the THINK fund was born. Nothing fancy, just listen. They are developing a work force so kids now in high school can follow a path to jobs. They did an environmental study, instead of taking the shorter way.

The TMT set the bar for how other big companies should interact with the community. To turn them away would be the most irresponsible thing we could do.

The Big Island needs jobs, and we need to diversify our economy to protect ourselves from rising oil and gas prices. The TMT is free money. The THINK fund helps our kids not fortunate enough to have gotten a Kamehameha Schools education. They are the ones who need help. Once you get an education, no one can take it away.

Acting like parents and kupuna will ensure that you address public safety as well as move up the folks on the lower rungs of the economic ladder—those not fortunate enough to go to Kamehameha Schools, or to take advantage of the GI bill like me. Education is the great equalizer.

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You’re Invited to a Community Meeting re: Hamakua Agriculture

Richard Ha writes:

Save the dates:

  • Wednesday, October 29
  • Wednesday, November 5
  • Thursday, November 13
  • 6-8 p.m.
  • Laupahoehoe Community Public Charter School Bandroom

On these dates, the Hilo Hamakua Community Development Corporation will hold a series of community meetings to discuss agriculture on the Hamakua Coast. All are welcome (and refreshments are free).

We will take a 40,000 foot view of ag and its outside influences, and then look at the resources available to help us, such as the Daniel K. Inouye-Pacific Basin Ag Research Center (PBARC), the College of Tropical Ag and Human Resources (CTAHR), and the College of Ag, Forestry and Natural Resources Management (CAFNRM) at UH Hilo. 

There are many scientists researching various subjects. What do we want them to work on?

Farmers will be at the meeting to share their knowledge and experience.

Are you looking for land to farm? Kamehameha Schools/Bishop Estate with be there, and the Hamakua Ag Co-op has vacant land.

John Cross, former land manager for C. Brewer/Hilo Coast Processing, will attend. Did you know why all the sugar cane equipment had tracks, rather than rubber tires? Did you know that the plantations frequently planted banyan trees as significant landmarks? 

Jeff Melrose will be at the meetings. He recently did a study that's a snapshot of agriculture on the Big Island. He will talk about on what is grown on the Hamakua coast and why.

Come and talk story with the presenters, learn where you can get additional information, and speak up on what you would like to know more about in the future.

Ag & food security symposia

 

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Visitors To The Farm

Richard Ha writes:

We had a lot of visitors one day last week. All, like us, were very excited about the possibilities surrounding ag and energy at the farm. Agriculture and energy are inextricably intertwined.

The visit was arranged by Matt Hamabata, Chief Executive Officer of the Kohala Center, of which I am a board member. He brought researchers from Cornell University, as well as representatives from UH Hilo and Kamehameha Schools.

Main

From UH Hilo, Cam Muir and consultant Greg Chun. From Cornell, Max Zhang and Robert J. Thomas. Matt Hamabata from Kohala Center. From Kamehameha Schools, Mahealani Matsuzaki, Neil Hannahs, Giorgio Caldarone, Sydney Keliipuleole, Llewelyn Yee and Marissa Harman.

This reservoir supplies all the irrigation water for our vegetables. The water comes down from an intermittent stream. Soon, the water pumps that move the water and pressurize the lines will be electrified from the old plantation flume.

Biodiesel tank 023

See the blue tanks in the distance? That’s a tilapia experiment, where we oxygenate the water by using falling water rather than electricity. This is another way to leverage the abundant water that falls on the farm: We get 2.3 billion gallons annually on our 600-acre farm.

James&Kimo

Construction of the head works: connecting up the old part of the flume with the new part. (Left) James Channels, produce buyer for Foodland Supermarkets and (right) Kimo Pa, farm manager at Hamakua Springs.

We took them up to the head works, where the old part of the flume system joins up with the new. As we looked downslope, someone mentioned how amazing it is to think that the sugar people moved the sugar cane to the mill by portable wooden
flume structures that they moved from field to field. We were standing about three miles upstream of the sugar mill.

Next we went to the hydro turbine shack to see where the water we borrowed 150 feet upslope is returned to the flume after energy is extracted. From there, overhead lines take the electricity to our packing house.

Turbine before

The turbine before

Turbine after

The turbine after
We have a vision of lining the south side of the flume with native trees. Their shadows would fall across the flume and suppress invasive species at the same time.
Back at the packing house, I told them about diversifying our produce mix. A papaya farmer wants to work with us, producing and labeling non-GMO papayas. Also, I visited an organic farmer in Opihikao yesterday. He is interested in getting heat-sterilized coconut coir to use as media for his certified clean ginger seed business. I told him I will keep him in the loop.

Later, Laverne Omori, the new Research and Development Director, came by with County Energy Coordinator Will Rolston. Vincent Kimura, of the INNOVI group, was at the farm helping us install an ozone food sanitation system. The beauty of this system is that we won’t have to use chemicals for sanitation treatment.
The only thing left over will be plain water.

Here’s a “before” picture with some previous visitors, Claire Sullivan and Steve Carey from Whole Foods.

Claire&Steve

And this short video shows “after.”

We want to use the electricity we get from the river to help area farmers produce more food. The bottom-line, inescapable fact is that if the farmers make money, the farmers will farm.

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Testimony to OHA Supporting Geothermal

Richard Ha writes:

OHA is contemplating investing in geothermal. I am in favor of that, for the reasons that I mention below.

I sent the following testimony to OHA:

***

Subject:  OHA testimony re: Huena Power Co/IDG

April 17, 2013

Office of Hawaiian Affairs
711 Kapiolani St.
Honolulu, HI  96813

Aloha Chair Machado and Board members of OHA:

The Geothermal working group report, which Wallace Ishibashi and I co-chaired, recommended that geothermal be the primary base power for the Big Island. OHA was represented on the working group by trustee Robert Lindsey.

I believe that OHA should participate in geothermal development because it is an income source for OHA to provide services to the Hawaiian people. And it can influence the course of our people’s history.

Geothermal-generated electricity is proven technology, affordable and environmentally benign. The Big Island is expected to be over the “hot spot” for 500,000 to a million years so its price is expected to be stable.

The Pahoa School Complex in Puna, at 89%, has the highest number of students in the State who participate in the free/reduced school lunch program. Participation is related to family income. The Big Island has had electricity rates 25% higher than O‘ahu’s for as long as anyone can remember. So a large portion of the school budget, that should go to education, goes instead to pay for electricity. Yet the best predictor of family income is education. A lower electricity rate, generated by geothermal, will have a direct effect on education. And if OHA, through its influence, emphasizes education in the community, there will be even more positive results.

Rising electricity rates act like a giant regressive tax. The folks on the lowest rungs of the economic ladder are affected disproportionately. Those who can leave the grid, leave. Those who cannot leave end up paying more for the grid. Too often those folks will be Hawaiians.

Hawaiians should be able to live in their own land. Yet there are more Hawaiians living outside of the State, because they needed to move elsewhere to find jobs to raise their families. Exporting our children is the same as losing our land. OHA is in a position to drive the agenda so Hawaiians can afford to live at home.

During the development of the Geothermal Working Group report, Rockne Freitas arranged a meeting with Carl Bonham, Executive Director of the University of Hawai‘i Economic Research Organization (UHERO), and some staff.

I asked Dr. Bonham two key questions: “Is it fair to say that if the Big Island were to rely on geothermal energy for its primary base power as oil prices rises, shouldn’t we become more competitive to the rest of the world?” He said that was fair to say.

I asked: “Then is it fair to say that our standard of living would rise?” He said: “Yes.”

I am a farmer on the Hamakua coast with family ties — Kamahele — in lower Puna. I farmed bananas at Koa‘e in the late 70s and early 80s. I have been to five Association for the Study of Peak Oil (ASPO) conferences. I went to learn and to position my business for the future. I found that the world has been using two and three times the amount of oil than it has been finding for more than 30 years and that trend continues. The price of oil has quadrupled in the last 10 years.

Until the first ASPO conference, I was just minding my own business, being a banana farmer. But what I learned became my kuleana. I did not ask for it.

Until last year, when Kamehameha Schools sent Giorgio Calderone and Jason Jeremiah and Noe Kalipi went to the conference, I was the only person from Hawai‘i to attend. The subjects were always data driven and conclusions could be duplicated.

We have the resources here to dodge the bullet. We need to drive a clear agenda for the benefit of all the people, not just a few.

One of the controversial issues in the Puna district is H2S gas. I went to Iceland and sat in the Blue Lagoon, where a geothermal plant within a quarter mile emits geothermal steam into the atmosphere. Millions of tourists visit the Blue Lagoon for health purposes.

There are small geothermal wells within the city that are used to heat the residences and businesses. If you did not know what to look for, you wouldn’t even know they were there. I walked by and touched the walls.

A long term study of the effects of H2S on people who suffer from asthma was just completed. It was done in Rotorua. They found no correlation of asthma to daily ambient H2S levels of 20,000 parts per billion over a three-year period. The study indicated that there might be a beneficial effect because it relaxes the smooth muscles. See link above.

The human nose can detect levels of H2S at incredibly low levels: 5 parts per billion. The Department of Health requires reporting when levels exceed 25 parts per billion. The Rotorua study was done for three years at average levels that were 20,000 parts per billion. OSHA allows geothermal plant workers to work in a 10,000 parts per billion environment for 8 hours per day without a mask.

Wallace Ishibashi and I went to the Philippines with the delegation that Mayor Kenoi put together. We visited a geothermal plant that sat on a volcano that last erupted 100,000 years ago. Mauna Kea last erupted 4,000 years ago. We may have more resources than we know.

The Phillipines and Hawai‘i started geothermal exploration at the same time. They now have in excess of 1,200MW, while we have 38MW. We are so far behind them, a supposedly Third World country, that it is embarrassing.

OHA is in a unique position to be able to influence the future. It is as if we are getting ready to duplicate that first voyage from the south so many years ago. It’s not whether or not we are going. It’s who should go, and what should we put in the canoes? Mai‘a maoli? Popoulu? What else?

Richard Ha
President, Mauna Kea Banana Company

I am a member of the Hawaii Clean Energy Steering Committee, Board of Agriculture and farmer for 35 years.

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Is HECO Seriously Damaging Its Credibility?

A proposed biofuels project that Hawaiian Electric Company (HECO) supports is going through PUC approval process right now.

HECO’s public relations people say that as a result of this new project going through, the average Hawai‘i rate payer’s electricity bill would increase by only about $1 per month.

But let’s look at that in a little more depth. HECO is seeking approval to pay Aina Koa Pono (AKP) $200/barrel for the biofuel it produces on the Big Island at Ka‘ū, and would pass on any extra cost (beyond what oil actually costs at the time) to its rate payers, both on the Big Island and on O‘ahu.

HECO has kept that $200/barrel price secret – they are still keeping it secret – but the Big Island Community Coalition folks figured out the price, and how the “$1/month rate increase” was determined.

Using the Energy Information Agency’s (EIA) Annual Energy Outlook (AEO-2012), one can see that HECO is using the highest price scenario, which projects an oil price close to $180/barrel in 2015. In the AKP discussion, it was said that the price of oil would exceed the actual price projected at the end of the period.

We can see that the line hits $200/barrel in 2035. Since they assume that oil will be $180 in 2015, they can therefore say that the difference (between the actual and projected price) would be very small: Hence, an increase of only perhaps $1/month for the average rate payer.

However, it follows that if the actual price of oil is much lower than $180/barrel, rate payers will be paying the difference between that amount and $200. What if the actual cost of oil in 2015 is $120/barrel? That would cause rates to go up much more than $1/month – especially for high-power users.

I cannot help but think that HECO is damaging its credibility immensely by pushing this project. HECO is spending hundreds of
thousands of dollars on public relations to convince us that it is trying to lower people’s rates – when, in secret, it appears to be doing exactly the opposite.

By the way, HECO says the hundreds of thousands of dollars it spends on PR comes from its shareholders. How can rate payers tell when HECO is speaking on behalf of its shareholders, and when it’s speaking on behalf of its customers?

This Aina Koa Pono project needs to be rejected because it will make our electricity rates rise. Rising electricity rates act like a giant regressive tax, because as folks who are able to leave get off the grid, those who cannot afford to are left to pay for the grid.

This results in farmers and other business folks having higher operating costs. For everyone else, it takes away discretionary income. And we know that two-thirds of our economy is made up of consumer spending.

There are also problems with the project itself. Fuel has never actually been produced using the process and feedstock that Aina Koa Pono proposes. AKP does not know what it is going to grow. So far, the feedstock it is testing experimentally is white pine. The Micro Dee technology that AKP wants to use is still experimental.

There is also a risk that this process might use more energy than it generates. Generating electricity is generally about boiling water and making steam that turns a turbine. It is cheapest to burn the stuff, boil water and make steam.

But Aina Koa Pono’s proposed process is extremely energy-intensive and expensive: It would make electricity to make microwaves to vaporize the cellulose to get the liquid and then take the pyrolysis oil, refine it to make it burnable, and then haul it down to Keahole in tanker trucks to make steam. Why should the rate payer pay for all that?

Cellulosic biofuels are not yet a cost-effective technology. On the mainland, in the middle of last year, the Environmental Protection Agency drastically decreased its 2011 estimate for cellulosic biofuel from 250 million gallons to a paltry 6 million gallons.

In 2010, cellulosic biofuel companies on the mainland needed to buy their feedstock for $45/ton. But because farmers were earning $100/ton for hay, the biofuel firms received a $45/ton subsidy.

I asked how much AKP expected to pay for feedstock, and the AECOM Technology Corporation consultant said between $55 and $65/ton. The problem there is that Hawai‘i farmers have been earning $200/ton for hay for 10 years now.

There is an agricultural production risk, as well. Palm oil is the only industrial-scale biofuel that can compete with petroleum oil. AKP has 12,000 acres and it says it will produce 18 million gallons of biofuel annually, and another 6 million gallons of drop-in diesel. So it will produce 24 million gallons using 12,000 acres. That is 2,000 gallons per acre, and that is four times the production of palm oil. More likely they would need at least four times as much land, or 48,000 acres. But where?

Consider too that Ka‘ū Sugar relied on natural rainfall, and it was one of the least productive of the sugar companies. There is a drought right now. And at 22 degrees N latitude, the area has less sun energy than the palm oil producers located on the equator.

According to Energy Expert Robert Hirsch, in his book The Impending World Energy Mess, the best model for biofuel production is a circular one, where processing is done in the
center of a field (which does not exceed a radius of 50 miles) consisting of flat land and deep fertile soil with irrigation and lots of sun energy. This situation exists in Central Maui, where Hawaiian Commercial & Sugar Company (HC&S) is located. It explains exactly why HC&S is the sole surviving Hawai‘i sugar plantation.

To compete heads up in the world market would require the best possible combination of production factors. These are not them.

It’s also important to consider that locking ourselves into a 20-year contract now would preclude lower cost alternatives. Geothermal, for example, is the equivalent of oil at $57/barrel. Ocean thermal has the possibility of being significantly lower in price than $200/barrel oil.  LNG is on the radar and so is biomass gasification. Who knows what else would come up in 20 years?

Paul Brewbaker and Carl Bonham, both highly respected Council of Revenue members, have said, very emphatically and for a while now, that low energy cost is critical. We should listen to them.

The International Monetary Fund team modeled different oil supply scenarios and did a presentation at the Association for the Study of Peak Oil (ASPO) conference a month and a half ago. They could not model a constant $200/barrel oil. Those would be uncharted waters; and ones, by the way, that would devastate Hawai‘i’s tourist industry. Why should we start paying $200/barrel for oil in 2015 if we don’t have to?

Five people from Hawai‘i attended this year’s ASPO conference. Notably, Kamehameha Schools sent two high-level people. Next year, Hawai‘i should send 20 people to learn what’s happening with oil prices and energy.

In the meantime, the amount of risk involved in the AKP biofuels proposal is just far too great. In the investment world, reward is generally commensurate with risk. Except for protection from $200/barrel oil in later years, the AKP project would provide little reward for all the risk we rate payers would assume.

This is a very, very bad deal for consumers.

Big Island electricity rates have been 25 percent higher than O‘ahu’s for as long as anyone can remember. This probably adds to the reason why the Big Island has the lowest median family income in the state, as well as the social ills that go with it. We need lower rates, not higher rates!

Although this is not an official Big Island Community Coalition (BICC) communication, I would like to point out that the BICC has been very instrumental in getting lots of people to stand up and say, “Enough is enough.”

The BICC is a bare-bones, grass roots citizen group with some of the most recognizable names on the Big Island on its steering committee: Dave DeLuz Jr., John E K Dill, Rockne Freitas, Michelle Galimba, Richard Ha, Wallace Ishibashi Sr., Ku‘ulei Kealoha Cooper, D. Noelani Kalipi, Ka‘iu Kimura, Robert Lindsey, H M Monty Richards, Marcia Sakai, Kumu Lehua Veincent and William Walter.

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Biomass To Electricity: A Fancy Way To Talk About Firewood

Richard Ha writes:

At last week’s PUC meeting in Hilo regarding the Hu Honua Bioenergy project slated for Pepe‘ekeo, few members of the public objected to the project.

The hearing was required because HELCO is proposing to relocate a switching station. The proposed site is on a 13-acre parcel that June and I own; they want to buy half of the property. We notified the community associations that this was taking place several months ago, and, as a consequence, I do not plan on submitting personal testimony to the PUC.

At the PUC meeting, the Kamehameha Schools (KS) representative talked about forest products as an industry. What is more practical and proven than using firewood to boil water? This is what we need; it’s practical.

This Big Island Video News video covers the meeting, and here are some things to especially note:

At the 3:00 minute mark, the KS representative expresses how this project could be the catalyst around which a forest industry could grow. Native trees, especially, take a longer time, and so a combination of native and non-native trees could make the forest industry viable.

As a scalable feedstock, trees work on the Hamakua Coast. They’ve been growing for 20 years. KS is crucial to making this big picture work.

Of course we won’t overdo it. Everyone knows what happened to Easter Island. We are talking about balance and proportion.

Early Hawaiians understood this; it’s why they sometimes had a kapu on fishing – in order to prevent overtaxing the resource.

At 6:50, David Tarnas presents Robert Rapier’s testimony. Robert was in Austin at the time, where he was lead speaker on the second day of the Association for the Study of Peak Oil conference. Giorgio Calderone and Jason Jeremiah, both from KS, and Noe Kalipi and I also attended that conference.

Robert lives in Waimea and we would love to claim him, but he is more of a national/international representative. He participates in the HECO Integrated Resource Planning process.

His testimony was that the Big Island needs a firm power alternative to oil, and that biomass and geothermal fit that description. His testimony is that the most efficient way to turn biomass (firewood) to electricity is to burn it.

At the 8:30 mark, Elaine Munro talks about the conflict between HECO’s fiduciary duty to the shareholders and the rate payer. She talks about the cost of capital and how the present model results in unnecessary higher costs to the rate payer. We all know that the model is broken.

Lynn Nakim, at 11:00 minutes, talks about environmental effects. Lynn is a neighbor of ours at Hamakua Springs. She uses solar panels for power.

At the 16:00 minute mark, a worker expresses his opinion. The money stays in Hawai‘i and provides jobs for Big Islanders, instead of being sent to foreign countries to pay foreign workers.

Making firm power electricity is mostly about making steam to turn a turbine. Burning wood to make steam is proven technology and will be cheaper and more stable than oil price in the long run.

From Big Island Video News:

HILO, Hawaii: The public expressed widespread support
for the Hu Honua Bioenergy project at Wednesday night’s Public Utilities Commission hearing in Hilo.

Hu Honua Bioenergy LLC is converting the former Hilo Coast
Power Company plant at Pepeekeo into a modern biomass energy facility. The 24-megawatt operation is expected to meet about 10 percent of the island’s electrical needs and about enough for 14,000 homes, once in operation.

Hu Honua has negotiated a power purchase agreement with
Hawaii Electric Light Company, which is subject to approval by the PUC. 
However, the hearing was triggered by the need to install transmission lines for the project, as explained by this HELCO engineer.

Nevertheless, the hearing created an opportunity for the public to share its views on the entire project.

Speaking in favor of the proposal, the growing forestry industry on the Hamakua Coast, where thousands of acres on the Hamakua Coast are occupied by Eucalyptus trees, ready for harvest….

Read the rest

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Hawaii Contingent at the Peak Oil Conference

Richard Ha writes:

The most important thing about this year’s Association for the Study of Peak Oil (ASPO) conference was that we had a whole Hawai‘i contingent. I believe we made the point that Hawai‘i is serious.

Neil Hannahs, Senior Assets Manager for Kamehameha Schools (KS), is a visionary. Any thought about Kamehameha Schools being a slow-moving institution mired in inertia is not true in this area. In fact, KS is making major changes across a wide front.

I was especially pleased that Giorgio Calderone, Regional Asset Manager for KS, pointed out how impressive the academic rigour of the conference presentations was. I thought so too, and it was good to hear confirmation.

Big Island Community Coalition steering committee member Noe Kalipi is a smart, action-oriented young leader who knows what is going on. I cannot be happier that she made the decision to attend on her own.  Photo

Noe Kalipi and Giorgio Calderone. Not pictured: Jason Jeremiah, Kamehameha Schools Cultural Resource Manager.

I attended the first annual ASPO conference because my farm costs were rising, due to oil. I wanted to learn about oil so we could position our farm for the future. It was a matter of survival.

But by the second ASPO conference, it was apparent that this situation was bigger than me or Hamakua Springs farm. I learned that for the past 30 years, the world had been using two to three times as much oil as it had been finding—and there were going to be consequences.

More than just being talkers, we need to be doers. What can we do?

  1. There are a thousand reasons why no can. We must find the one reason why CAN!
  2. It is about cost! We need to find the lowest-cost, proven technology, environmentally responsible solution to our problem.
  3. It is about all of us—not just a few of us.
  4. The energy our society has available to use is what’s left over after energy is used to obtain the energy in the first place. Another way to phrase this: the net energy left over from the effort to get energy, minus the energy to get our food, equals our lifestyle.
  5. The Big Island Community Coalition’s goal – of lowering the Big Island’s electricity rates so they are lowest in the state – accomplishes our mission. This is the most important thing we can do.

View descriptions of this year’s conference topics.

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What Happened to $200 Oil?

Richard Ha writes:

Whatever happened to $200 oil?

For the last few years, supply side thinking was the most prevalent way of considering the world’s oil supply. But in this last year,
something changed. Commentators started to ask about the demand side.

Specifically, they started asking, “What happens if demand goes up and prices start to rise – eventually killing demand?” In that scenario, the rising price of oil contains the seed of its own destruction.

In May of this year, Jeff Rubin, who had been the most outspoken expert warning of $200 oil, changed his mind. He calls what is happening “the end of growth.”

Whatever Happened to $200 Oil?
by Jeff Rubin on May 23rd, 2012

Four years ago, when I was still chief economist at CIBC World Markets, I forecast that global economic growth was on pace to send oil prices to $200 a barrel by 2012. In short, the argument was based on a supply-driven analysis that weighed the sources of future oil supply against the prices that would be needed to make the extraction and processing of that oil economically viable…. Read the rest  

If Jeff and many others are right, we are not looking at a rapid climb of the price of oil to $200/barrel. It may not get to that price for 20 years.

And if that’s true, HECO’s request to pay $200 per barrel for Aina Koa Pono’s biofuel will be a tremendous mistake. All that will be
accomplished is a massive transfer of wealth.

This is why I am so pleased that Kamehameha Schools (on the
recommendation of Neil Hannah, Kamehameha’s Director of the Land Assets Division) is sending two senior level management folks to the upcoming Peak Oil conference. Things are moving quickly in the world energy field, and policy makers need to be up on current information.

That HECO is betting on the high side of the 2012 AEO cost curve shows they are not aware that thinking has changed. Had they sent people to past Peak Oil conferences, they would have seen the shift.

Including myself, there are now five people from Hawai‘i going to the ASPO conference. We have the makings of a delegation. Robert Rapier will also be going, too, but I am not counting him because he is a national/international commentator and he will be presenting.

This will be my fifth ASPO conference. I cannot be happier that there are other people from Hawai‘i going, besides myself, and educating themselves on this very important subject.

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Peak Oil in the Rear View Mirror; Geothermal in the Headlights

Last week Wally Ishibashi and I gave a presentation to the Hawaii County Council. There’s a video of our talk up now on local channel 52, where it will repeat from time to time.

Wally spoke about the Geothermal Working Group Report we gave to the legislature. I talked about “Peak Oil in the Rear View Mirror,” from the perspective of having been the only person from Hawai‘i to attend four Peak Oil conferences.

On Monday, I gave an essay presentation to the Social Science Association of Hawai‘i, whose members are prominent members of our community. This organization has been in operation since the 1800s.

From Kamehameha School Archives, 1886 January 21 -1892. Bishop becomes a member of the Social Science Association of Honolulu. All Bishop Estate Trustees and the first principal of Kamehameha Schools, William B. Oleson, are members. Members meet monthly to discuss topics concerning the well-being of society.

And yesterday I gave a “Peak Oil in the Rear View Mirror” presentation to the Office of Hawaiian Affairs’ Beneficiary Advocacy and Empowerment (BAE) Committee.

I was interested to note that the Hawaii County Council, the Social Science Association of Hawaii and OHA’s BAE committee were all overwhelmingly in favor of stabilizing electricity rates. It was clear to everyone that we in Hawai‘i are extremely vulnerable, and also so lucky to have a game-changing alternative.

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Hawaii is the world’s most remote population in excess of 500,000 people. Almost everybody and everything that comes to Hawaii comes via ship or airplane using oil as fuel. As isolated as we are, we are vulnerable to the changing nature of oil supply and demand. There is trouble in paradise.

I explained how it was that a banana farmer came to be standing in front of them giving a presentation about energy.

My story started way back when I was 10 years old. I remember Pop talking about impossible situations, and suddenly he would pound the dinner table with his fist, the dishes would bounce, and he would point in the air. “Not no can, CAN!” And at other times: “Get thousand reasons why no can, I only looking for the one reason why can.” He would say, “For every problem, find three solutions …. And then find one more just in case.”

Once he said, “Earthquake coming. You can hear it and see the trees whipping back and forth and see the ground rippling.” He gave a hint: “If you are in the air you won’t fall down. What you going do?”

I said, “Jump in the air.” He said yes, and do a half turn. I asked why.

He said, “Because after a couple of jumps you see everything.”

Lots of lessons in what he told a 10-year-old kid. Nothing is impossible. Plan in advance.

I made my way through high school and applied to the University of Hawai‘i. But I came from small town Hilo, and there were too many places to go, people to see and beers to drink. I flunked out of school.

It was during the Vietnam era, and if you flunked out of school you were drafted. Making the best of the situation, I applied for Officers Candidate School and volunteered to go to Vietnam.

I found myself in the jungle with a hundred other soldiers. It was apparent that if we got in trouble, no one was close enough to help us. The unwritten rule we lived by was that “We all come back, or no one comes back.” I liked that idea and have kept it ever since.

I returned to Hawai‘i and reentered the UH. I wanted to go into business, so I majored in accounting in order to keep score.

Pop asked if I would come and run the family chicken farm. I did, and soon realized that there would be an opportunity growing bananas. Chiquita was growing the banana market and we felt that we could gain significant market share if we moved fast. But, having no money, we needed to be resourceful. So we traded chicken manure for banana keiki.

A little bit at a time we expanded, and after a bunch of transformations, we became the largest banana farm in the state. Then about 20 years ago we purchased 600 acres at Pepe‘ekeo and we got into hydroponic tomato farming.

Approximately seven years ago, we noticed that our farm input costs were rising steadily, and I found out that it was related to rising oil prices. So in 2007, I went to the Association for the Study of Peak Oil (ASPO) conference to learn about oil. What I learned at that first ASPO conference was that the world had been using more oil than it was finding, and that it had been going on for a while.

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In addition to using more than we were finding, it was also apparent that the natural decline rate of the world’s cumulative oil fields needed to be accounted for. The International Energy Association (IEA) estimates that this decline rate is around 5 percent annually. This amounts to a natural decline of 4 million gallons per year. We will need to find the equivalent of a Saudi Arabia every two and a half years. Clearly we are not doing that, and will never do that.

At the second ASPO conference I attended, in Denver in 2009, I learned that the concept of Energy Return on Investment (EROI) was becoming more and more relevant. It takes energy to get energy, and the net energy that results is what is available for society to use. In the 1930s, getting 100 barrels of oil out of the ground took the energy in one of those barrels. In 1970, it was 30 to 1 and now it is close to 10-1.

Tar sands is approximately 4 to 1, while some biofuels are a little more than 1 to 1. And, frequently, fossil fuel is used to make biofuels. That causes the break-even point to “recede into the horizon.”

But the EROI for geothermal appears to be around 10 to 1. And its cost won’t rise for 500,000 to a million years.

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After the oil shocks of the early 1970s, the cost of oil per barrel was around the mid-$20 per barrel. That lasted for nearly 30 years.

In this graph above, one can see that oil would have cost around $35 per barrel in 2011, had inflation been the only influencer of oil price.

The cost of oil spiked in 2008, contributing to or causing the worst recession in history. In fact the last 10 recessions were related to spiking oil prices.

From late 2008 until mid-2009, the price of oil dropped as demand collapsed for a short time. But demand picked back up and the price of oil has climbed back to $100 per barrel – in a recession.

It is important to note that we in the U.S. use 26 barrels of oil per person per year, while in China each person uses only two barrels per person per year. Whereas we go into a recession when oil costs more than $100 per barrel, China keeps on growing. This is a zero sum game as we move per capita oil usage toward each other.

What might the consequences be as China and the U.S. meet toward the middle at 13 barrels of oil per person?

People are having a tough time right now due to rising energy-related costs. Two thirds of the economy is made up of consumer spending. If the consumer does not have money, he/she cannot spend.

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How will we keep the lights on and avoid flickering lights? Eighty percent of electricity needs to be firm, steady power. The other 20 percent can be unsteady and intermittent, like wind and solar. So the largest amount of electricity produced needs to have firm power characteristics.

There are four main alternatives being discussed today.

  1. Oil is worrisome because oil prices will likely keep on rising.
  2. Biofuels is expensive and largely an unproven technology. The EPA changed its estimation of cellulosic biofuel in 2011 from 250 million gallons to just 6.5 million gallons because cellulosic biofuels were not ready for commercial production.
  3. Biomass or firewood is a proven technology. Burn firewood, boil water, make steam, turn a generator – that’s a proven technology. It is limited because you cannot keep on burning the trees; they must be replenished. And it’s not clear where that equilibrium point is. There are also other environmental issues.
  4. That leaves geothermal.

The chain of islands that have drifted over the Pacific hotspot extends all the way up to Alaska. This has been going on for over 85 million years.

It’s estimated that the Big Island, which is over the hot spot now, will be sitting atop that hot spot for 500,000 to a million more years.

Of all the various base power solutions, geothermal is most affordable. Right now it costs around 10 cents per Kilowatt hour to produce electricity using geothermal, while oil at $100 per barrel costs twice as much. The cost of geothermal-produced electricity will stay steady. Allowing for inflation, geothermal generated electricity will stay stable for 500,000 to a million years, while oil price will rise to unprecedented heights in the near future.

Geothermal is proven technology. The first plant in Italy is 100 years old. Iceland uses cheap hydro and geothermal. It uses cheap electricity to convert bauxite to aluminum and sells it competitively on the world market. With the resulting hard currency, it buys the food that it cannot grow.

Iceland is more energy- and food-secure than we are in Hawai‘i. Ormoc City in the Philippines, which has a population similar to the Big Island, produces 700MW of electricity with its geothermal resource, compared to our 30 MW. Ormoc City shares the excess with other islands in the Philippines.

Geothermal is environmentally benign. It is a closed loop system and has a small footprint. A 30 MW geothermal plant sits on maybe 100 acres, while a similarly sized biomass project might take up 10,000 acres.

In addition, geothermal can produce cheap H2 hydrogen when people are sleeping. It is done by running an electric current through water releasing hydrogen and oxygen gas. One can make NH3 ammonia by taking the hydrogen and combining it with nitrogen in the air. That ammonia can be used for agriculture. NH3 ammonia is a better carrier of hydrogen that H2 hydrogen.

The extra H atom makes NH3 one third more energy-dense than H2 hydrogen. It can be shipped at ambient temperature in the propane infrastructure.

The use of geothermal can put future generations in a position to win when the use of hydrogen becomes more mature.

If we use geothermal for most of our base power requirements for electric generation, as oil prices rise we will become more competitive to the rest of the world. And our standard of living will rise relative to the rest of the world.

Then, because two thirds of GDP is made up of consumer spending, our people will have jobs and we will not have to export our most precious of all our resources – our children.

In addition, people will have discretionary income and will be able to support local farmers, and that will help us ensure food security.

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