Three years ago, representatives of Hawaiian Electric Co. met with farmers on the Big Island to discuss growing feedstock that could be converted to biofuel and used in the company’s generators.
But discussions grew quiet when local farmers calculated how much they would be earning.
There are 42 gallons in a barrel of oil, each container of which weighs 286 pounds. So oil, at $80 a barrel, would yield the farmers about 28 cents per pound.
“There’s hardly anything a farmer will grow for 28 cents per pound,” said Richard Ha, one of the local farmers who attended the meeting.
Profits decline even more given that the feedstock must be drained to obtain the oil. Four pounds of a crop can result in only one pound of oil, meaning farmers would be getting paid only 7 cents per pound for their crops.
“The farmers never went back to another meeting,” said Ha.
This story looks at biofuels, and their role in Hawaii’s push for energy independence. It is the second story in an occasional series designed to analyze the status of our state’s alternative-energy options, where the best opportunities lie and what’s needed to overcome myriad obstacles.
While biofuel can be used readily in many of Hawaiian Electric’s generators as a substitute for, or blended with, petroleum, growing the feedstock at a profitable margin to compete in a global market is a challenge. For many local, small-scale farming operations it hasn’t penciled out.
Hawaiian Electric Industries, the parent company for the utilities on Oahu, Maui and the Big Island, is moving aggressively to cultivate a market for locally grown feedstock, but difficulties remain in creating commercially viable products that can be used to power the state’s energy needs. Biofuel’s attractiveness as an alternative-energy source is in how it can be used for grid electricity, transportation fuels and bioproducts.
Hawaiian Electric has been trying to import biofuels since 2006. Currently, it is purchasing biodiesel made from waste animal fat from Iowa-based
Renewable Energy Group for use at Campbell Industrial Park. The company also gained approval through the
Public Utilities Commission this summer to import palm oil from a Malaysian company, Sime Darby, to test in generators at Kahe on Oahu and Maalaea on Maui.
Hawaiian Electric spokesman Peter Rosegg said the purpose of the imports was primarily for testing the generators. The contracts are for two years, with hopes that locally grown biofuel feedstocks will soon emerge.
While few small farmers have taken up the call to grow feedstock, a number of companies are exploring the potential of growing feedstock on a larger scale. The potential for profitability increases with larger-scale operations, but they require high upfront investments.
To help cultivate the market, Hawaiian Electric recently issued a request for proposals for local biofuel projects and has received 10 proposals that are currently under review.
“I don’t think we’ve ever done an open-ended RFP like this,” said Rosegg. “We’re saying, ‘you tell us what you can do.’ It opens up the creativity and the possibilities.”
Currently there are a number of sources in Hawaii that hold potential, including sugar cane, sweet sorghum, cassava, guinea grass, eucalyptus, soybeans, oil palm, algae and jatropha. Local companies, including Hawaii BioEnergy, Gay & Robinson Ag-Energy, Pacific West Energy and Pacific Light and Power, have been testing some of these sources, but currently there is no commercial-scale operation for biofuels in Hawaii.
Robert Rapier, the chief technology officer at Merica International, a private bioenergy holding company that is working on the Big Island, is optimistic that the potential will grow. He is currently exploring the use of woody biomass. The tree source doesn’t require fertilizer, and its deep roots can tap deeper water sources. If managed properly, operations can enhance the fertility of the soil.
As obtainable oil supplies become increasingly scarce and prices likely rise, so do the prospects for biofuels.
“Biofuels will become increasingly competitive,” said Rapier. “I’m not looking at where things are now, but where things are going.”
That said, Rapier is also realistic about the current difficulties facing the industry.
“The thing about biofuels is that people don’t appreciate how difficult it is to compete with oil,” said Rapier. “A lot of time there are unreasonable expectations.”
There are also social and environmental concerns with growing biofuel feedstock, which can utilize large amounts of water and take up land that can be used for growing food crops, 90 percent of which Hawaii currently imports. But experts point out that growing feedstock for biofuels and crops or livestock for food can work synergistically. For instance, high-protein waste from oil extraction processes can be used as an animal feed, and farmers can rotate energy crops in ways that enrich the soil.
Read more: Biofuels have supporters, but scale remains an obstacle - Pacific Business News (Honolulu)
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