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How quickly things change.
Ever since the Hawaii Clean Energy Initiative was announced in 2008, the assumption has been that Hawaii’s new sources of power would come from renewable energy: wind, solar, geothermal, biofuels and others. These cleaner, local sources of energy were supposed to gradually wean us off our addiction to dirty and expensive oil, and dirtier but cheaper coal.
However, the dramatic decline in the cost of clean-burning natural gas is shaking up these assumptions. Using natural gas could lower energy costs and, along the way, transform the power structure of power in the Islands. But other experts say the environmental cost of natural gas versus renewable energy is too high to pay, both for Hawaii and the rest of the world.
Recent advances in gas-drilling technology – particularly horizontal drilling and the environmentally controversial technique known as fracking – have begun to tap previously inaccessible gas reserves locked in the vast shale fields of North America. As a result, gas prices have plummeted to all-time lows. This spring, they dipped below $3 per million Btus (MMBtu). That’s the equivalent of less than $17 for a barrel of oil. In comparison, last year, HECO spent an average of $127 a barrel for oil. The price of natural gas is cheap enough to compete with coal on the mainland. So, how can Hawaii get some of that inexpensive gas?
The answer, according to key players in Hawaii’s energy sector, is liquefied natural gas. LNG is natural gas that’s been cooled to minus 160 degrees C so that it condenses into a liquid. LNG’s big advantage is that it consumes only about 1/600th the space of regular natural gas. That makes it practical to safely ship in large quantities. Regular natural gas is transported by pipeline, but, for isolated markets like Hawaii, that’s not viable. LNG may solve that problem.
If only it were that simple.