State says LNG is Hawaii’s next energy source

by Michael Hansen, Hawaii Shippers’ Council

Hawaii Governor Neil Abercrombie and his Director of the Hawaii State Department of Business Development and Tourism (DBEDT) Richard Lim spoke this week to the Annual Asia-Pacific Clean Energy Summit and Expo at the Hawaii Convention Center in Honolulu.

Gov. Abercrombie and Director Lim both said the State’s energy plan eventually calls for a submarine  power cable, which would link Oahu, Maui and Hawaii Islands to transmit electricity from renewable energy sources.  Installation of the submarine cable could be as far as 30 years in the future.   In the meantime, they said the state would need to rely upon liquefied natural gas (LNG) brought in from the U.S. mainland as a transitional fuel to mitigate the high costs associated with generating electricity from liquid petroleum fuels (manufactured from crude oil).

It would appear that LNG could very easily become the default fuel for Hawaii for the foreseeable future.  There will be challenging problems associated with installing an interisland submarine power cable system, including:  the enormous cost of an interisland submarine power cable system; the lack of existing excess wind energy capacity in Maui County; the technical difficulties of crossing the very deep and wide Alenuihaha Channel between Hawaii and Maui Islands; problems of developing excess geothermal energy on Hawaii Island; and, the political opposition to the submarine cable system.

Two recent articles reporting on Gov Abercrombie and Director Lim’s presentations to the Clean Energy Summit emphasizing the importance of LNG in the State’s energy plan were published in the Pacific Business News on September 11, 2013, and the Honolulu Star-Advertiser on September 13, 2013.

To make US-sourced LNG Hawaii’s next primary energy source for decades to come, an exemption from the U.S. build requirement of the Jones Act would be required.  The type of ships designed to carry LNG are not built in the U.S., but are constructed routinely in Japan and South Korea and readily available at an economic cost from shipyards in those countries.

An exemption from the U.S. build requirement of the Jones Act for the noncontiguous trades – Alaska, Guam, Hawaii and Puerto Rico – would facilitate the transition of Hawaii from liquid petroleum fuels to LNG for electrical power production. Such an exemption would allow Gov Abercrombie to meet his future energy goals and benefit Hawaii residents with substantially lower energy costs. 

The Hawaii Shippers’ Council has proposed an exemption from the U.S. build requirement of the Jones Act which in the form of a resolution garnered bipartisan support in the last session of the Hawaii State Legislature and was endorsed by the Honolulu Star-Advertiser on March 28, 2013.  We look forward to support from the Abercrombie Administration for our proposal in the next State Legislative session in 2014.

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