Ka`u News Briefs June 11, 2013

SEN. MAZIE HIRONO JOINED HUNDREDS of guests with Hawai`i ties Sunday at the U.S. Capitol to participate in the 44th annual lei-draping ceremony honoring King Kamehameha the Great. 

      Hawai`i observes Kamehameha Day today.
      Hirono gave closing remarks at the ceremony.“We gather to honor the first King of Hawai`i, Kamehameha the Great,” she said. “From the island of Hawai`i, Kamehameha was raised to become a skilled warrior in the traditional ways of combat, uniting the islands we all know as Hawai`i. He laid the foundations for modern Hawai`i by protecting the traditions and culture of his ancestors even as the kingdom grew and interacted with Western nations. His strong leadership during this period of great change inspires us all to work together to ensure our shared traditions and history can be celebrated for generations to come.”

IN REBUTTAL TESTIMONY SUBMITTED to the Public Utilities Commission regarding the proposed contract for `Aina Koa Pono to sell biofuel refined above Pahala from biomass grown in Ka`u to Hawai`i Electric Light Co., utility executives discuss externalities, or positive and negative effects of the project.

      “Externalities are generally valued based on the perception of the person viewing the externality,” said Robert Alm, executive vice president of Hawaiian Electric Co., Inc. 

      “Nevertheless, the Commission should consider that the AKP Biodiesel Supply Contract will create a direct economic benefit to the state and energy security, and is in line with the state’s energy policy.
      “In evaluating the AKP Biodiesel Supply Contract, the Companies believe that the Commission should consider that the AKP Biodiesel Supply Contract (1) is to serve Keahole Power Plant, which its primary purpose is to serve as a base load generating facility, (2) is for biodiesel manufactured within the state of Hawai`i, creating a direct economic benefit to the state (e.g., increase in jobs and more revenue stream) in addition to energy security from locally-produced feedstock, and (3) is in line with the state’s energy policy, which supports the use of biofuel, and will contribute to lower greenhouse gas emissions.

      “The Companies believe that the assessment of many of these externalities are more directly associated with the AKP Project itself, and would be more appropriately addressed in the Project permitting process, or in a mandatory environmental impact statement or environmental assessment process, if so required.”
      Cecily Barnes, manager of Hawaiian Electric Fuels Department, discusses potential positive and negative externalities.
      “Benefits of locally-produced biofuels include the creation of new agricultural and manufacturing jobs, a reduction of greenhouse gas emissions, increased energy security and independence, and the shifting of a portion of our significant expenditures on imported fossil fuels to locally-produced biofuel.
      “There are a number of expected qualitative externalities or benefits which may serve to justify a potential AKP biodiesel price premium which is expected to diminish over time. Further movement to increase available biofuel produced within the state of Hawai`i increases energy security and reduces reliance on imported fuel sources.
      “With approval of the AKP Biodiesel Supply Contract by the Commission, AKP will begin construction of its facility and begin more detailed work to develop its agricultural operations. AKP is planning to scale its Project to produce much more biodiesel than will be sold to Hawaiian Electric under the AKP Biodiesel Supply Contract. Therefore, not only will the power generation sector benefit from reducing its reliance on imported fuel, AKP expects to produce additional biodiesel volumes that can contribute to reducing reliance on imported fuels in other sectors of Hawai`i’s economy, thus keeping those expenditures within the state’s economy.
      “Greenhouse gas emissions are projected to be significantly less when compared to GHG emissions from conventional diesel production from crude oil.

      “The use of locally-produced feedstock developed with a strategic land management plan, coupled with an advanced bioconversion process, will serve to minimize AKP’s land footprint and GHG profile. Because the AKP Project is a commercial scale agro-industrial project, it is expected to generate jobs in a number of sectors, primarily in agriculture. Launching the AKP Project along with its agricultural and industrial infrastructure and logistics networks will help stimulate Hawai`i’s biofuel industry. A successful AKP Project is expected to attract additional high-tech investment in the advanced biofuel industry. 

      “The Companies believe there are potential positive and negative externalities associated with any new large-scale facility/project. Potentially negative externalities include: fuel spills or leaks associated with fuel storage or transportation of the biodiesel; social issues, such as traffic congestion; and, land use, such as roadway damage and noise. However, the Companies have not quantified any negative externalities, and it is difficult to determine the impact, if any, they will have.
      “It is also important to note that a positive externality that impacts one group may create a negative externality for another group. For example, with the potential for volumes of biofuel displacing fossil fuel, there is a potential adverse effect on the businesses and employment in the state that rely on the importing and refining of petroleum products. However, it would be unfair to place the burden of declining fossil fuel use in Hawai`i on biofuel producers in the state that offer local economic growth and energy security, as energy independence and the use of renewable energy are supported by the governor and Legislature. Further, although no calculations have been done to evaluate the impact on petroleum jobs that may result from biofuel substitution, because local biofuel production has a labor intensive agricultural component, it could be assumed that barrel for barrel, local biofuels could generate more jobs than the petroleum jobs that may potentially be displaced within the state of Hawai`i.”
      This and other testimony is available at puc.hawaii.gov. Docket number is 2012-0185.