UPDATE Jan 8, 2013: Tesoro Obeys Abercrombie, Drops Dead

Liquefied Natural Gas for Hawai‘i: Policy, Economic, and Technical Questions

Final liquefied natural gas report completed and available  

News Release from hnei.hawaii.edu January 3, 2013

The effort required to assemble and complete this report on liquefied natural gas was funded by the Hawai‘i Natural Energy Institute (HNEI).  The study itself was performed by FACTS Inc., the organization selected by HNEI for this work, as a result of the Request for Proposal (RFP) process conducted last year.

To view the final report, click here.  The contact for any questions regarding the RFP process or the report itself is John Cole.  

Executive Summary

CHAPTER I: POTENTIAL DEMAND FOR LNG IN HAWAII

FGE’s baseline demand forecast results in 148 kb/d of oil demand in 2030, which would rise even higher to around 159 kb/d if we substitute fuel oil for power generation with diesel in 2017 to comply with new EPA regulations.

Making adjustments with respect to the HCEI goals, however, results in some 50% reduction in fuel demand to some 76 kb/d, 41% of which would come from demand for jet fuel as there will be no readily available alternative.

LNG can substitute for oil products in the power sector, the utility and non-utility gas sector, the transport sector (ground and marine), and the industrial sector (refining).

Assuming a successful achievement of HCEI goals, Hawaii’s total potential LNG demand ranges from approximately 1-2 mmtpa between 2015 and 2035. If 50% of HCEI goals are met in 2030, then LNG demand could be as high as 2.5 mmt in 2030.

Although HCEI goals alone would change the size and pattern of demand in 2030 (a demand barrel with more than 70% middle distillates) such that it would not be compatible with a healthy Hawaii refining industry, the situation would be much worse for the refineries as we add another 25-30 kb/d demand cut by introducing LNG into our energy system. Under the LNG scenarios explained earlier, 60-70% of the 45-50 kb/d demand for oil would be jet fuel, about 20% gasoline, and some minor portions of other products.

Precisely as Explained: Abercrombie to Tesoro: Drop Dead