I don’t take kindly to the Hawaiian Electric advertisement that’s been playing the past week or so, formatted as a news interview with HECO executive Robbie Alm. Alm is being interviewed by former news anchor Jade Moon, now a Hawaiian Electric spokesperson, and the ad has been running during evening news broadcasts. It probably also runs at other times, but we watch the news and that’s when we’ve seen it.
Viewers are also referred to the the company’s web site where the full interview is available.
In the brief excerpt being broadcast, Alm defends record high electric bills as simply the product of global competition for fuel in the wake of the Japan earthquake and tsunami, which has resulted in a turn away from nuclear power plants in Japan and elsewhere. He follows this with a plea for quick approval of the company’s renewable energy projects, while viewers might not know that many of those initiatives have been collapsing under the weight of their own internal problems.
To the casual viewer, the interview could easily be understood to be legitimate news content from the news team rather than a carefully controlled advertising message. You had to be watching pretty carefully to see any mention that the interview was prepared and packaged by Hawaiian Electric and not by your favorite news source. It seems to me that both the station and the company have responsibility to make the distinction between news and advertising clear to viewers.
Of course, it’s just part of a growing problem of public relations and advertising blending into news, or is it the other way around?
In any case, I’m unhappy to see Hawaii’s regulated energy monopoly using this technique. I wonder–is this kind of advertising paid with shareholders’ money or ratepayers money?
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Go read your smart meter for the amount of electricity you use to heat hot water. Then rely on stock dividends to determine how decisions are made to insure dumb is better when trying to understand your future electrical needs. With so much misinformation cascading down the pipe it’s to bad it can’t be harnessed as hydropower.
Dean Little
I just stumbled across this video from October 2011, and it reminded me of this post.
http://www.bloomberg.com/video/78235600/
The reporter asks the new head of the IEA why prices are so high. The answer given is that no one knows why. The price of oil is based on not just market demand/supply for oil, but on stock market assumptions about that demand/supply of oil, what the IAE head calls “speculation”. The IAE head then praises attempts to regulate this speculation, since regulation would provide more “transparency”.
Is this true? Can we compare professional stock brokers who base their decisions largely on the analysis of governments, oil companies and professors of geology and economics to the kind of working-class folks who bought million-dollar houses in Florida in the early 2000s? Now, when a retired electrician buys a $900,000 house in Orange County, that is speculation. That is, speculators do not exhibit all the classic properties that economic theory attributes to rational agents, namely:
1) they seek to maximize utility,
2) they are purely rational, and
3) they have all the facts.
But I would assert that those professionals who trade in oil futures do fit this profile more than those amateurs who speculated in real estate (and seemingly continue to do so in Hawaii). That is, the price of oil is high because there is the idea out there that oil production is entering decline. Also, this will be a very persistent idea because it is largely true. Current market conditions could be ideal but oil prices would still be high because capitalists themselves do not believe that oil is plentiful and that alternatives will easily come online.
I think that this is what happened in 2008. At one time, the futures market in oil was only limited to airlines. That is, only airlines could purchase advance orders of jet fuel at a price higher than current oil prices but lower than what future prices were assumed to become. If this futures trade in oil were opened up to anyone other than airlines, it was assumed (correctly) that this would have the effect of driving up current prices of oil since traders would become really paranoid when they adopt the long-term view — because, essentially, the world is running out of ‘easy oil’. I think the airlines’ futures market in oil was something like $25 billion/year in the US stock exchanges, but when traders figured out around 2008 that they could get around regulations by trading in oil futures in foreign stock exchanges (like Japan), that market grew to $300 billion.
Now, no one likes high gasoline prices and electricity prices. But it could be argued that all this so-called speculation is actually a return to reality. After all, when speculative bubbles burst, like they did in real estate, prices revert to their historical norm (e.g., the Case-Shiller home price index). This is not happening in the oil markets. Re-regulating the oil markets is an attempt to put the genie back in the bottle.
So high oil prices largely reflect the future reality of oil. Those high oil prices also provide a kind of reality check. Without the 2008 oil shock, we would have no Hawaii Clean Energy Initiative, as flawed as it might be. Also, taking the Jevons paradox into account, we need higher prices not only to facilitate the creation of alternative sources of energy, but to make sure that we get off the old sources when the new sources come online.
Now, getting back to HEI and Robbie Alm’s faux interview with Jade Moon. I don’t know a thing about the local price of energy and whether this is tied to Japan’s misfortunes. But one scenario is that the world market for energy is high because of ‘speculation’, as is the case since 2008, as it should well be. But the tendency might be for p.r. people to try to link high prices to an actual concrete event (an earthquake) rather than try to explain the futures market, which even the head of the IEA does not understand.
But then this is just my own “speculation”….
Before I forget, there was an article a couple of days ago in the WSJ entitled “Avoiding Innovation’s Terrible Toll”.
http://online.wsj.com/article/SB10001424052970204331304577144980247499346.html?mod=WSJ_mgmt_LeftTopNews
The gist of the article is that the average lifespan of an American corporation is only 40 years. Failing to innovate kills companies.
We’ve all heard that, but this article is more specific. There are supposedly two paths that companies follow. The path to success is exemplified by Apple, where small companies are constantly being acquired in order to change the corporation’s direction, and where new product lines are constantly being developed that will undermine and destroy the corporation’s most lucrative profit centers (the iPhone killed the iPod, e.g.).
The diametrically opposed path is embodied by Hewlett Packard. Such corporations are very complacent and regard their products as permanent fixtures in the market place. They tend not to acquire new companies until they fall behind, then they panic and make massive acquisitions, often of large companies that are already very similar to themselves in product line.
Of course, this latter model reminded me of the big projects in Hawaii. There is this aversion to change, then panic and an attempt at importing gargantuan projects that turn out to be kind of old fashioned. What is funny is that those who oppose the big projects are accused of being resistant to change. Of course, some of the protesters are indeed resistant to any change, but no more than those pushing for the big project.
Not good for Hawaii.
When it comes to fossil-fuel sources for electrical generation, the rest of the US has switched from oil to natural gas and coal. Hawaii has stubbornly and idiosyncratically stuck to oil, with passionate arguments being made that coal is a major source of greenhouse emissions. But that is a peculiar argument considering that oil as a source of electricity was never treated with such vehemence locally. And historically, there was not much interest in developing alternative energy until 2008.
There emerges an explanation for the local demonization of coal and the total disinterest in Liquified Natural Gas in today’s Civil Beat. The article in question states that Tesoro might be selling off its refineries in Hawaii, which would make Hawaii even more vulnerable to world oil markets because Hawaii would probably have to import already refined fuel. Tesoro is bailing out because as the state shifts to renewable fuels for its electrical grid, there will not be a ready market for the fuel that Tesoro refines.
http://www.civilbeat.com/articles/2012/01/11/14506-renewable-energy-push-could-hurt-refineries/
(Not mentioned is the effect of the gradual and inevitable adoption of electric cars, which will draw from renewable sources as they are developed. When crude oil is refined, it is broken into light jet fuel, less light gasoline, and heavier oil for industrial use, like electrical generation. An electrical grid that uses less heavy oil means that the process of refining crude would leave excess heavy oil, so the refinery would be reluctant to produce as much, driving up the cost of gasoline and jet fuel. But if the gasoline market is also recognized as in long-term decline, this would really press Tesoro to get out of the market because eventually there could be a very limited market for petroleum in Hawaii. Indeed, as we enter a post-peak oil world, the demand for jet fuel could also fall, along with the prospects of tourism.)
Basically, the longstanding local resistance to LNG and coal as sources of electricity are not entirely due to an attempt to be politically correct and prevent global warming (especially considering that natural gas in general produces fewer greenhouse emissions that petroleum). It probably has more to do with protecting a local monopoly, and a more general fear of upsetting the apple cart economically.
This seems to fit a pattern. For instance, there seems to be a certain pride that Hawaii is the “ultimate blue state” in its voting patterns and in local support for labor unions. Local politicians get all excited about banning plastic grocery bags. But just below the surface it seems that the real dynamic is that of a government that is run like a small town family business.
We see this, for example, in the debate on reapportionment of political districts, where the real motives behind the decisions are to protect insiders. Now, all politics anywhere is interest-group politics. But what is interesting locally is the way the decisions are made in the most secretive manner, much more so than other places — and then there is this facade of progressive politics painted on to the surface later on. (“We’re gonna exclude military personnel from voting locally because … we are so progressive. Yeah, that’s the ticket….”) Also, it’s unusual that the insiders who engage in this sort of deception actually later seem to buy in to their own whitewashing. I think that many of these local politicians actually come to believe themselves.
The problem with the last paragraph is that an earlier comment pointed out that the reapportionment decision was not the product of “progressives,” but the idea seems resistant to fact checking.
I took poetic license in that last paragraph with the fake quote (“We’re gonna exclude military personnel from voting locally because … we are so progressive. Yeah, that’s the ticket….”). There was no pretense to progressive politics in the reapportionment of districts; there were simply closed doors to the public. But my general bias is that in this state there is a tendency to dress up a quasi-feudalistic patronage system as progressive politics.
That could be why Hawaii remained stuck on oil for electricity, while the rest of the US turned to natural gas and coal: to protect Tesoro. HEI burns 10% coal, and the legislature I believed passed a resolution not to build further coal firing plants. In retrospect, that might have been to protect Tesoro. Also, it might have seriously rocked the boat to switch to natural gas or coal for electricity production because if HEI did so, Tesoro would have probably had a lot of heavy fuel oil left over from refining crude, making its operations in Hawaii problematic, and Tesoro and the state would have been earlier where they are right now with a refinery in a state of doubt.
Now, the problem with protecting the status quo in the name of progress is that it might have been possible to switch to LNG. LNG is not perfect because when accidentally released, methane absorbs sixteen times the atmospheric heat as carbon dioxide (I stumbled across that statistic earlier today), and natural gas extraction in the US is becoming destructive. But the tragedy is that there might not be any significant switch to renewables in Hawaii, and so ultimately the state will switch from oil to coal in a pinch.
What is happening with Tesoro is really the “shot heard ’round Hawaii”. Are people hearing it? This is perhaps the first phase of post-peak oil in Hawaii. Tesoro explained that it takes electricity to refine crude oil — some of which is used to make electricity. It seems like a kind of a localized feedback loop of inflation.
In any case, it’s one of those things that experts and insiders know will happen, but which takes laymen such as myself by surprise. The Governor stated that his administration had been expecting this for some time. So what else is going to go bust that is going to catch us by surprise but is so obvious in retrospect?
This also might help explain Robbie Alm’s fake interview with Jade Moon for Hawaiian Electric. The HCEI could become a scapegoat for all sorts of economic problems due to post-peak oil, and the least enlightened members of our society could start to blame HCEI just as it becomes more relevant to create alternatives. So Alm was perhaps engaging in a kind of public relations preemptive strike in defending investment in renewables and blaming the earthquake off Japan for high oil prices. He might have known that the post-peak oil is about to hit the fan.
There was an article in Civil Beat recently about Abercrombie’s reference in a speech to natural gas as a “renewable” energy. This upset the Blue Planet Foundation, which is dedicated to establishing Hawaii as a model of a society that has completely replaced the use of fossil fuels. Blue Planet wants carbon-free renewable fuel development, whereas the State of Hawaii is primarily interested in stability of their fuel market through diversification.
But just how “renewable” would natural gas be?
Here is a well-known segment of a “60 Minutes” episode which unveiled the Bloom Box, which is basically a ceramic fuel cell for home use that would combine methane or natural gas with oxygen to produce electricity.
http://www.cbsnews.com/stories/2010/02/18/60minutes/main6221135.shtml
http://en.wikipedia.org/wiki/Bloom_Energy_Server
In these sites, the Bloom Box is not described as “renewable” energy, but as “clean” energy. Following from this, Abercrombie erred in his description of natural gas as renewable. But the government mandate is named the “Hawaii Clean Energy Initiative”, despite any commitment to renewable energy.
Another question is how such a domestic fuel cell would effect the local utility HEI if its adoption was widespread. One would expect it to have a devastating effect on the utility, because it would bypass the utility’s grid. The fuel would centrally distributed via gas lines (from a non-utility source) although power generation would be the “distributed generation” championed by so many critics of the utility. As such, would there be opposition to the fuel cells by many in the local political elite who are tight with HEI? Interesting question….
Natural gas production will peak and decline in a generation, I have heard, and natural gas consumption produces greenhouse gases. But this is not what might kill this technology in Hawaii. The utility and its allies along with “renewable purists” like Blue Planet might together oppose this technology for different motives. But if costs for such a system plummeted, those of us who already have a natural gas line just might do this on our own, especially if we wanted to power an electric car overnight. Whether or not certain elites and activists want it, this technology could have the force of inevitability. And when post-peak oil prices rise, this could keep fuel prices low so that there are still funds to invest in renewables.
One of the problems with natural gas is that methane is also a greenhouse gas. In fact, I think methane absorbs 16 times the amount of solar radiation as does carbon dioxide, either per molecule or per volume. Methane does get released in the transportation and usage of natural gas, and so in some cases is as much of a greenhouse gas as coal. This might be expected to happen in Hawaii. The use of LNG might stabilize Hawaii’s economy (or at least Oahu’s), but it would not necessarily be clean energy.
No one is talking about this, and it is common knowledge (which is why I know about it). What’s going on?
Also, the shift to LNG might just not happen, for the same reasons the Big Wind and biofuels are not going to happen. It could be that the kind of people who are attracted to big fanciful project tend to be inexperienced. When things go wrong, they blame ten surfers and a rich nimby.
We need to envision a future with less of everything or even without much of anything, because that is where things might be going. Take transportation, for instance. When oil prices rose in 2008, people abandoned their cars for mass transit — even while governments cut back on mass transit because high oil prices mean government cutbacks. Society and the environment cannot afford either public or private transit. So the future lies not so much with electric cars and rail systems, but with each suburb developing its own urban core and people moving out of suburbs to the city. This represents the evaporation of commuting. This is, in fact, what seems to be happening, and without politicians really knowing about it (or even many urban planners being aware of it).
Now, is that happening in Hawaii? Yes, it might be happening, and real estate prices might reflect that (house prices in distant suburbs falling, apartment prices rising). But local public discourse and public policy are behind the curve. This might be due to geographic insularity, the power of developers and unions, and a flawed educational system. This means that massive expenditures will be wasted on things that run against the grain of history.
There is an article in CB, “Inouye Wants to Revive Interisland Ferry”.
http://www.civilbeat.com/articles/2012/02/17/14894-inouye-wants-to-revive-interisland-ferry/
Inouye claimed that people living on the outer islands could work in Waikiki. But it seems to me that Inouye is generally not a champion of the outer islands. He is almost totally focused on maintaining an alliance between the military, capitalists (developers) and unions in Hawaii. That’s it. He believes in that, it’s perhaps the sole purpose of his life, perhaps because he assumes that it’s the only thing holding the evil Republicans at bay (developers are Republican generally throughout the rest of the US).
One of the comments, by Bart Dane, states that “People should live CLOSER to where they work rather than further away.” That seems to me to be more realistic, and might also be better for the environment.
What is interesting is that Inouye, like a lot of politicians in Hawaii, is calling for the “unification” of the Hawaiian islands and an end to the “divisiveness” expressed on the outer islands. Those seem to be the new code words for land developers.
This same elite is pushing for the Big Wind using that platform of island “unity”. The argument is that these sorts of renewable energy initiatives are needed to prepare for the day when gasoline will be $8/gallon. Of course, a couple of questions that Inouye is not asking in advancing the idea of an inter-island ferry is how much a ferry ticket will cost in the future when oil prices skyrocket, and how many tourists will be coming to Waikiki when jet fuel costs rise. I think that this blatant oversight in his thinking reflects a growing incompetence on his part. In fact, he might have always been rather incompetent, since all he ever did was channel money to his friends and allies and not try to solve actual problems and plan for the future. It’s just that now we are in the future that was never planned for by diversifying the economy, and we notice Inouye’s incompetence.
Here is a NYTimes article on opposition to building energy infrastructures in their various forms.
http://www.nytimes.com/2012/02/19/sunday-review/drawing-the-line-at-power-lines.html
It’s very pertinent, of course.
Here is an editorial by Jay Fidell arguing that Hawaii should not abandon its push toward clean energy.
http://thinktech.staradvertiserblogs.com/2012/02/21/the-state-of-clean-energy-can-and-should-continue/
Fidell does not give any specific examples of what this clean energy consists of. That is a flaw. For example, biofuels are largely not clean energy, they require petroleum inputs in the form of things like fertilizer. It’s greenwashing.
So the question arises of whether there really is a clean energy initiative in Hawaii. It’s also important to note that the cleanest form of energy is minimizing energy usage, not constructing elaborate energy (greenwashing) systems that are attractive to men (and I do mean MEN) who are addicted to the latest cool technology.
Here’s a very interesting template by NPR visualizing the US electric grid:
http://www.npr.org/templates/story/story.php?storyId=110997398
I did not know that power grids could be so extensive.
Getting familiar with power grids is essential if we are to get serious about solar and wind power, which are often discussed as power sources of the future.
That is, perhaps we need to stop seeing energy development moralistically, in terms of good versus bad power sources, but rather in terms of short term versus long term sources of energy. In the short term, it could be that we need more natural gas. In the long term, wind and solar — genuine renewables — will become dominant. (Of course, there is the question of whether the wind projects proposed in Hawaii are really meant to be long term, or are actually just short term gimmicks.) In the very distant future, fusion power might become feasible as a source of energy for households, but that is still in the realm of science fiction.
So the question arises, what are the problems with the electrical grid?
First, according to wikipedia, there is the problem of an aging infrastructure.
A second problem, discussed in the NY Times article, is visual blight. Power lines are a very effective way to turn rural scenery into a lifestyle liability. This might be especially true in a region dependent on tourism, where visual blight would affect not just the quality of life or rural residents, but would be expected to impact the economy.
A third issue is the health effects of electromagnetic radiation. From my cursory reading on the issue, that concern seems overblown.
Visual blight does seem to be an issue. Perhaps a formula can be devised to minimize the visual impact of a project by estimating how many people will have to look at power lines every day, and for how long every day, divided by the amount of energy being transmitted. This formula would be the basis for a utilitarian calculus on visual impact versus public benefit. (Also, this might entail the expensive burial of power lines near urban areas.)
[edited]
Here’s a NYT article, the title of which is self-explanatory.
“A Fresh Scientific Defense of the Merits of Moving from Coal to Shale Gas”
http://dotearth.blogs.nytimes.com/2012/02/29/a-fresh-scientific-defense-of-the-merits-of-moving-from-coal-to-shale-gas/
This is really quite important for Hawaii if Hawaii is going to rely on LNG. The question now is if LNG will be considered a ‘clean’ energy even if it is not renewable and thereby satisfy the requirements of the HCEI. My prior vague impression was that it was not that clean, but this article has gotten my attention.
A couple of interesting posts from Henry Curtis in his “Disappeared News” blog.
http://www.disappearednews.com/2012/03/why-is-my-electric-bill-so-high_03.html
http://www.disappearednews.com/2012/03/is-avoided-cost-to-blame-for-high.html
Not only does Hawaiian Electric come across as conniving and predatory, but the Hawaii Clean Energy Initiative comes under a cloud of doubt. One wonders, has the HCEI become corrupted, or was it corrupt from the beginning? (That’s a bit like the rigged question, “Do you still beat your wife?”) All of these local energy initiatives, like the biofuels, come across like greenwashing, efforts that will not really promote energy independence nor lower greenhouse gas emissions.
Now, what if it is the case that the utility is actually an impediment toward serious clean energy development? In this case, one scenario would be to break up the utility. In fact, it seems that places that have diversification of energy sources also have a multiplicity of utilities. In this case, the undersea cable — explicitly presented as an effort to “unify” the islands — can perhaps be better understood as an attempt to entrench the utility and avoid its dismemberment.
The test case for confirming this hypothesis would be the utilities attitude toward importing natural gas. In one scenario, that LNG could be distributed by the Gas Company locally and then consumed in a decentralized mode to produce electricity (whether the fuel cell technology for this exists is a question).
This would pose a dilemma for the organization Blue Planet Foundation, which is dedicated toward making Hawaii an international model for moving off of fossil fuels. The only serious way to do that, however, would be to break up HEI and thereby reduce its economic and political influence; that in turn might require a limited embrace of natural gas. How would they feel about that?
So these are three interesting questions:
1) Is the utility an obstacle to developing true clean energy?
2) If so, how to break up this monopoly?
3) If a limited embrace of greater fossil fuel use is required to help loosen the grip of the monopoly, how would third parties react to this proposal? (How would Henry Curtis react?)
The elaborateness of the projects of HEI, supposedly intended to protect their monopoly, reminded me of how big projects tend to fail.
Or do they? Are big projects really prone to failure?
There is an ocean of commentary in the tech community on how big projects (usually writing software code) tend to fail, but at least one commentator asserted that small projects fail as well, and perhaps as often, but they go unnoticed. A 40% cost overrun on a $2000 project will not show up on the radar; such an overrun on a $20M project becomes the stuff of legend.
http://www.zdnet.com/blog/projectfailures/do-large-projects-really-fail-more-often/10522
However, some claim that there is evidence that big projects tend to fail. Unfortunately, big projects are sexy. One tactic around this is to break the big projects in to smaller pieces.
http://www.computerworld.com/s/article/352786/Big_Projects_Done_Small
Other IT websites are more nuanced, offering reasons why project fail. For example:
http://www.adaptivepartners.com/projfailb.htm
1. Poor User Input
2. Stakeholder Conflicts
3. Vague Requirements
4. Poor Cost and Schedule Estimation
5. Skills that Do Not Match the Job
6. Hidden Costs of Going “Lean and Mean”
7. Failure to Plan
8. Communication Breakdowns
9. Poor Architecture
10. Late Failure Warning Signals
Does this sound like what’s happening with the big projects in Hawaii?
One issue in relation to big public projects and the flaws that destroy them is to imagine a society where those flaws would be most likely. I am assuming that would be characterized by a:
1. relatively provincial and inexperienced society, geographically isolated, with a
2. government prone to paternalistic “father knows best” attitudes, manifest in avoiding public input and instead making back room deals, and relying on public relations blitzes instead to sell their (half-baked) ideas, and a
3. disorganized bureaucracy clinging to old technology, and
4. not forward looking or pro-active or progressive, but desiring very much to appear to be so because of
5. a small-town feeling of inadequacy that leads to big projects.
One task now would be to imagine what can be done in the scenario of the collapse of these big projects. What do we do after the fall?
I don’t know what to do technologically.
Politically, it will be the task of journalists and others to point out that all this was doomed from the start, and scapegoating ten surfers and a rich nimby is a sign of mediocrity.
Here is a blog entry by none other than Panos Prevedouros entitled “Big Projects in Hawaii — Why Are They Stuck”.
http://www.hawaiireporter.com/big-projects-in-hawaii-why-are-they-stuck/123
Prevedouros writes that “Big projects are complex. So the question why big projects get stuck can generate enormously complex responses. However, the answer boils down to a simple bottom line: Because they don’t make the grade.” He offers criteria (although I don’t know where he gets this criteria):
There are big projects that Prevedouros approves of by these criteria, including big projects in Hawaii.
Personally, I see the H3 as a mistake, but not for all the “romantic” reasons usually cited for “keeping the country, country” (although that is in itself valid). Societies cannot afford the environmental costs of building houses and suburbs and then relying on commuting (whether public or private) to hold it all together. Americans comprise five percent of the world’s population but consume 25 percent of the world’s nonrenewable resources, and the suburbs are a big part of this. Ultimately, a high-density, minimal-commuting mode of living needs to be embraced. Also, a diversified economy based on the rise of an urban and urbane “creative class” is predicated on such a rejection of suburbs (which tend to be culturally conservative). The building of H3 represents an extension of the old conservative suburban commuting mode of living, and has perhaps set back Hawaii in terms of economic diversification by perhaps a generation. Also, as oil prices rise, those houses will lose value and people’s investments will evaporate.
Likewise, the convention center should have been built in a more “urban” fashion, as part of a larger hotel complex. That would have also meant that the convention center would have been built with private, not public funds (something one would expect Prevedouros to champion), but that is not my central point. These projects need to be high density and mixed use and in a central location. Everything else is environmentally wasteful, vulnerable to energy price hikes, culturally conservative and potentially impedes economic diversification.
Prevedouros is negative on rail, Hoopili and the Big Wind.
Now, I think that Prevedouros has left out one important criterion, and that is how big projects promote energy efficiency. For example, mass transit projects do promote energy efficiency over cars, but on two conditions: 1) when mass transit is used during peak hours (outside of that it is operating near empty, which is wasteful), and 2) when it is in the urban core. So energy efficiency could be related to the constriction of a project geographically into concentrated zones; in this case, rail makes sense, but in town between Kalihi and Waikiki; the Big Wind is preferable to importing oil from Indonesia, but less preferable to more local modes of energy development; and Hoopili is the devil in disguise.
Now let me try to justify historically this criterion of energy efficiency, and relate this in turn to how this reflects changing paradigms and generational change.
There has been a historical development of energy sources, from wood and muscle power (animal and human) to coal in the 19th century, oil in the 20th, and perhaps natural gas and renewables in the 21st. Now, for some observers, this represents the greater use of more and more forms of energy, and progress can be measured as such. Others, in contrast, have noted that this evolution of energy sources represents increasing efficiency of energy use and greater sophistication, and that this refinement represents progress. Along the lines of this second argument, we have gone from mainframe computers to PCs and now tablets, and the trajectory has been toward greater efficiency in terms of the use of energy and space (although one could argue that the Internet consumes huge amounts of energy, although this is hidden from view). Progress, it can be argued, is not marked by gross expansion, but by greater efficiency and refinement.
Now, I don’t have an opinion on this matter. (Perhaps both greater use of energy and greater efficiency could go hand in hand as marks of ‘progress’; e.g., electricity consumption has double in Japan in the past ten years, even while Japan has become more energy efficient).
My point is that there seems to be a generation gap and perhaps a geographic and class divide between these two perceptions. The older generation and the working classes might tend to see progress as chopping down forests and building suburbs. The younger generation might tend to progress as moving to the city and being a vegetarian and using an iPhone. (One really sees this tension politically and culturally in places like Oregon and Washington state.) I was reminded of this divide when I read an article in the NYT this morning “As New iPad Debut Nears, Some See Decline of PCs”, which mentioned how there are endless YouTube videos showing infants and children using iPads, but elderly people are averse to tablet computers, and as the older generation passes on, so will PCs (and newspapers too, probably). Interestingly, Steve Jobs compared PCs to the trucks that farmers once drove that once dominated transportation, and which still exist but are proportionally fewer.
The big projects in Hawaii do seem to show the fingerprints of the older generation, in particular the influence of Dan Inouye. For the older generation, progress is not marked by sophistication and flexibility and versatility and beauty and minimalism — all the things we associate with Apple products. The older generation seems to associate progress with gross expansion and expansiveness.
This older generation in Hawaii just might be the reason why Hawaii never diversified. Suburban expansion in particular prevented the rise of an urban creative class. But what will happen when this older generation of politician leaves the scene? As stated, not only will newspaper subscriptions radically decline in the future as the older generation passes, but so too will PCs (that is happening now, in fact).
But people will not believe you if you tell them the same thing is happening with suburbs. If you tell less educated people and old people that suburbs are dinosaurs, they will laugh at you. Perhaps the same is true with big projects.
But what’s next?
“Now, I think that Prevedouros has left out one important criterion, and that is how big projects promote energy efficiency. ”
Oops. I meant to write:
“Now, I think that Prevedouros has left out one important criterion, and that is how big projects either do or do not comparatively promote energy efficiency.”
There is a lot of talk out there about “distributed generation” as being the future of energy development. In a sense, that would be along the lines of the model provided by the Internet, where there was a shift away from a centralized mainframe computer toward ever smaller computers that were dispersed but linked together.
My argument above was that this requires a paradigm shift to a new way of thinking, and that the older generation (Inouye) are incapable of this. The older generation would think of progress as gross material expansion, whereas the new model would be “less is more” in terms of sheer quantity (as opposed to quality), with an emphasis on ever greater efficiency, innovation and decentralization.
(In a way, the older model reminds me of the Soviet Union. It was the Soviet Union that had the single longest and strongest era of economic growth in history, around 10% a year all the way into the 1960s. This is why their model seemed at the time to be such a compelling alternative to capitalism. The problem is that the Soviet Union started as a desperately undeveloped country that for decades would build essentially the same old factories and infrastructure projects, over and over. That represents a huge improvement in living conditions for a traditionally backward country ravaged by war. But that is a kind of ‘extensive’ growth, not ‘intensive’ growth involving innovation.)
Now, there might be a couple of provisos in any embrace of distributed technology.
To start with, in our local discourse on distributed energy generation, the focus has been almost exclusively on renewable energy. But on every website on distributed generation, this is not the case. Here is a random sample, from the first website I found on the topic during a google search.
http://www.distributed-generation.com/technologies.htm
The technologies listed are:
1. Reciprocating Diesel or Natural Gas Engines
2. Microturbines
3. Combustion Gas Turbines
4. Fuel Cells
5. Photovoltaics (PV)
6. Wind Turbines
Only the last two of these are not based on fossil fuels.
The implication of this is that distributed generation in Hawaii would primary rely on natural gas in conjunction with solar and wind.
The further implication is that a smart grid would be irrelevant. When distributed generation refers exclusively to intermittent sources of power like solar and wind, then a smart grid is necessary so that centralized forms of energy can pick up the slack on a cloudy or windless day. But with the supplementation of solar and wind power with natural gas-powered distributed energy, this becomes redundant. Each home or neighborhood might have its own grid, in a sense. But there might not be the need for a centrally regulated, super-sophisticated super-grid.
The greatest implication of this could be that the local utility, HECO, is obsolete in current form. HECO has already transformed itself from an energy producer to an energy distributor. Nevertheless, even this model of being a kind of orchestra conductor could also be old fashioned. Going back to the model of the Internet, it needs to be remembered that the Internet is not so much a system as it is a collection of independent systems that have been voluntarily linked. It could be that each home, neighborhood and suburb would have its own system moving outward in concentric and overlapping circles. In this case, the shift would involve move away from the need for a utility to organize the entire grid toward having software that would manage household, local and regional distribution.
Moreover, one other obsolete thing would be our thinking in terms of islands, whether it be islands that need to be linked together or islands that need to be kept separate yet distinct. There are only concentric population centers, which exist numerously within each island.
Here is an article in the NYT that might have implications for when post-peak oil will hit.
http://www.nytimes.com/2012/03/23/business/energy-environment/inching-toward-energy-independence-in-america.html?pagewanted=1&_r=4
Obama has adopted, for better or worse, the policies of the Bush administration.
But there is another side to the reduced dependency on imported oil: Americans are simply using less oil.
In a similar vein, there was a recent NYT story on how young Americans have simply lost interest in cars, which is worrying Detroit. Young people would rather surf the Internet than cruise around.
http://www.nytimes.com/2012/03/23/business/media/to-draw-reluctant-young-buyers-gm-turns-to-mtv.html
Basically, people are moving into town. The residential, commuting mode of life in the US is winding down. This is good in virtually every possible way. In fact, this may be what will promote a diversified economy for the first time in modern Hawaii.
It is for this reason that I read with some dismay that the proposed redevelopment of Kakaako will strictly limit residences.
If that is true, it is perhaps the single most wrong-headed policy I have ever heard of in my life.
Can you explain that policy?
From what I understand, they need massive residential development along with business and the arts and tourism in that area to make it really work. In fact, it would be ideal if parts of Kakaako were a car-free zone. There would be people living there who would almost never use a car (or bus, etc.). It would be one of the “greenest” places on Oahu.
So this idea of limiting residential growth in Kakaako sounds like some oil company plot, or a scheme to undermine the growth of high tech and the arts in Hawaii.
I mean, after all these decades of talking about residential mixed-use development in Kapolei and in TOD areas and not seeing any of that, it’s finally going to happen in Kakaako and … they kill the baby right when it’s being born.
It’s like they screwed up Kapolei and they screwed up the rail, and now they’re managing to screw up Kakaako. Kakaako might not happen for this reason. It might already be dead. It looks like it’s going to become “Waikiki, Part II”, with plenty of congestion.
I think that it could be that people in Hawaii are so culturally conservative that they want this strict, puritanical separation of family life and work. It could be that they have a fear of the city for other reasons, like a lack of confidence.
The result of this might be that there will be more suburbs built on the North Shore.
Enjoy your commute before its length doubles, Ian!
Here’s a Civil Beat story that questions the original estimates of the cost of solar versus the cost of wind energy in Hawaii that underlay the Hawaii Clean Energy Initiative.
http://www.civilbeat.com/articles/2012/04/03/15317-is-wind-really-hawaiis-low-cost-option/
For example, here’s a big discrepancy between the (rather high) actual current cost of wind energy and the original (rather low) estimate of what electricity from Big Wind would cost.
Conversely, the original estimate of solar PV costs was quite high, whereas the actual current costs is relatively low. A home solar PV system costs about 14 cents per kilowatt hour. The initial study said that it would cost 47 to 71 cents per kw hour.
In fact, the cost of solar power could continue to fall, perhaps dramatically. Indeed, the failure of Solyndra does not reflect the impracticality of solar power, as many critics seem to assert. Solyndra was developing a new form of solar energy technology, but failed because the cost of traditional solar energy systems were plummeting.
The obvious question is whether the study that concluded that wind power would be much more financially viable was corrupted from the start — which is what is implied by Henry Curtis — or simply has become out of date. Those who conducted the study seem to imply the latter explanation:
Another obvious question was whether this was forced on HECO by the Lingle administration in cahoots with David Murdoch, or was done at the behest of HECO to build a centralized system HECO could regulate (or both scenarios or neither scenario).
But I have another question, a journalistic one.
Just how hard is it to figure this stuff out?
Here’s a quote from the comment section under the article.
Did the article really “probe deeply into the financing of large renewable energy projects”?
To me it seemed like the reporter made a few phone calls and simply wrote down what is common knowledge. Again, a home solar PV system costs about 14 cents per kilowatt hour. A whole lot of people, including laymen, have got to know that already. The initial study said that it would cost 47 to 71 cents per kw hour. Lots of folks in the solar energy business and government and in the utility have got to know about that discrepancy. Likewise with the discrepancy between the initial cost estimate of wind power (6-8 cents/kw hour) versus the actual current average cost (20-23 cents/kw hour).
The discrepancy is like the elephant in the room. So is the journalist Sophie Cocke really so brilliant (and underpaid)? Or is it that the rest of us are so out of it? Or is it corruption, with other journalistic outlets suppressing the (obvious) truth? Or both, or neither?
I am definitely not bashing Civil Beat here, or the reporter. Both are consistently good. But what’s going on in this society and in local journalism?
Here’s a Civil Beat story on Lt. Governor Brian Schatz, entitled “Hawaii ‘Ambassador of Energy’ Pushing State Renewable Policy Forward”.
http://www.civilbeat.com/articles/2012/03/22/15284-hawaii-ambassador-of-energy-pushing-state-renewable-policy-forward/
The question for me is whether Schatz has been sent on a fool’s errand. How alternative energy is going to evolve could be unpredictable. In fact, new fuel sources could involve the dissolution of the status of the local utility HECO as an official monopoly and the emergence of new players. Politically, Schatz could get caught in the crossfire and become resented by all sides, and for no good reason.
But at a deeper level it could be that the push for renewable energy is misconceived, and Schatz could be putting himself on the wrong committees.
Here’s an analogy of wrongheadedness:
Think of Title 9 in college sports, a well-meaning effort to expand women’s spectator sports for the sake of fairness. The problem, in fact, could be the very existence of spectator sports in colleges. For example, European universities don’t generally have (elitist) varsity sports, they have club sports, where ordinary students can sign up to play basketball or soccer or whatever. That might be closer to a democratic model, which is where American universities should head: The need to overthrow the current takeover of schools by their athletics departments (China is beating us).
Another analogy is the desire to develop public transportation options in the face of the hegemony of private transit (cars) in the United States. Perhaps both need to be downsized radically instead.
The real trick might not be developing new sources of energy, but finding ways to dramatically downsize energy usage.
This gets us to the issue of “retrofitting the suburbs”.
It could be that we need to rebuild our suburbs into serious walkable communities.
http://www.ted.com/talks/ellen_dunham_jones_retrofitting_suburbia.html
Recognizing and addressing the obsolescence of commuting could be more of a winner than developing alternative fuels. Looking at demographic changes alone, this is surfing the way of the future. It would also be laying the foundation for a new kind of diverse high-tech economy, like what is planned in Kakaako. And it’s also the right thing to do when taking into account Jevon’s paradox (i.e., creating new fuel sources would only drive down the price of oil, which would lead to more oil consumption, which is what happened in the 1990s).
Also, Schatz could rebrand himself into an urban planner if he pursued this tack, which is what former Mayor J. Harris has done (and what a former UH system president in the early 2000s did).
How will the sudden abundance of natural gas affect Hawaii’s economy?
It’s transforming the American economy.
This is from an article “Natural Gas Signals a ‘Manufacturing Renaissance’”.
http://www.nytimes.com/2012/04/11/business/energy-environment/wider-availability-expands-uses-for-natural-gas.html
This is feeding a modest boom in some US manufacturing quarters.
Intriguingly, natural gas is increasingly being used as a transport fuel.
Since Hawaii is unlikely to become a manufacturing center, perhaps natural gas might be used as a transport fuel locally.
In any case, any shift away from petroleum might help keep air fuel prices from skyrocketing, making tourism in Hawaii affordable; however, projected strong economic growth in much of the developing world might just overwhelm any decreased oil consumption in the US.
Also, natural gas can be used for decentralized (home) generation of electricity. If this is viable, then perhaps many of the current controversial energy projects will become moot.
There might be institutional ramifications for this. It is alleged by some that the energy projects in Hawaii (e.g., biofuels) serve neither the cause of energy independence nor environmental protection; these projects are supposedly being pursued at the behest of the politically powerful local utility. If natural gas from the Gas Company does provides a viable alternative to the utility, then the utility might be undermined — and better energy alternatives might emerge and proliferate. However, even organizations like Blue Planet Foundation — which have been subtly critical of how energy policy in Hawaii seems to be for the sake of major players (HECO, Murdoch) and not for society or the environment — might not recognize the revolutionary potential of natural gas to disrupt the status quo because natural gas as a fossil fuel is anathema to them.
(In Hawaii, the “health” of the utility seems to be foremost in the minds of politicians, as though the utility were some sort of revered patriarch. The need for the prosperity of the utility is a myth, utilities are not supposed to prosper; in fact, the need for a utility might be a myth.)
Eventually, natural gas production will peak, although this has been predicted repeatedly in the past, only to have a resurgence in production. (Last I heard was that it will peak in 2035, but I don’t know anything about the validity of these projections.)
The question would then be if Americans will see this as a temporary gift to buy time to invest in the long-term development of a slew of alternatives. Americans might see natural gas instead as a chance to kick back and pig out in a consumerist binge. But remember, the only place in the world with a negative growth rate is the Middle East. If the US is becoming the “new Middle East” thanks to natural gas, this could be a disaster in terms of pro-active economic development.
There is a joke, I think by the comedian Sinbad, that if you go on a seven-day vacation and leave seven bowls of cat food, the cat will eat one bowl a day; but if you leave seven bowls of food for a dog, that’s a different story. You will come home to a starving dog. The dog will be jumping around, saying “Man, where were you?! The first day was great, but but the other six days sucked.”
Americans are like dogs, Asians and Europeans are like cats. Americans might lose sight of developing alternatives energy supplies thanks to the temporary gift of natural gas abundance. Likewise, judging from their servile attitude toward the local utility, the politicians in Hawaii have a kind of cautious, conservative reverence for authority mixed in with an American lack of foresight.
How can natural gas be used as a tool to diversify Hawaii’s energy sources without becoming a new addiction?
Is the national push for alternative energy over and done with?
If so, what does this mean for Hawaii?
Here’s a NYT article, “Fuel to Burn: Now What?”
http://www.nytimes.com/2012/04/11/business/energy-environment/energy-boom-in-us-upends-expectations.html
Perhaps there is room to perform two hypothetical autopsies at this point.
One autopsy might be that of the push for renewable fuels, a push that is possibly now dying.
The second autopsy might be a glimpse into a death that may take place in the future (a la “Minority Report”) — the coming death of this recent renaissance of fossil fuels development.
As I understand it, the single biggest obstacle to developing alternative fuels is that plans to develop such fuels are rarely conceived on a moderate scale with a long-term time frame.
Instead, energy development programs are usually conceived in terms of a single grandiose, transformative scheme that will be rapidly enacted.
Most recently, an example of this type of dysfunctional energy development has been the popping of the ethanol bubble that grew up during the Bush administration. The ultimate plan is to develop ethanol from plant-based cellulose. One challenge is that the fueling infrastructure needs to be developed; to do this, corn-based ethanol has been subsidized as a fuel and mandated for use. Another challenge is that the efficient conversion of cellulose into ethanol is a technology of the future (which is now even further off into the future as cheap new sources of natural gas are exploited).
Basically, by fostering a bubble in this sector, the push for renewables in general was undermined. Ethanol fuel became a whipping boy for conservatives who are against renewables (even though it was “red state” conservatives who pushed for its development).
Here’s a taste of failure from 2009:
http://www.nytimes.com/2009/02/12/business/12ethanol.html?hp=&pagewanted=all
Ideally, the ethanol bubble should have been foreseen and support for ethanol would have been kept moderate. In fact, this was actually attempted.
Basically, the science is not there yet. This is all the more reason to double down and support research on cellulose ethanol, but that’s might be less likely to happen because there was a bubble and it burst.
Now, to what degree is the same thing happening in Hawaii with the Hawaii Clean Energy Initiative? The cost of solar power fell by 50% in 2011, and solar PV cost half as much as wind, yet the emphasis is seemingly on grand projects. Civil Beat wrote recently that “Big Wind Opponents Suffer Defeat in House”. But political will is largely irrelevant in the face of science and economics. Political insiders could be investing a lot of political capital into something that was doomed to fail from the start.
So what can be done?
Basically, Obama has part of the equation right with his “all of the above” energy policy, that each energy source needs to be developed in equal proportion.
The problem is that he does not seem to be supporting wind and solar as much as he should in the face of the rise of natural gas. Also, last year the federal government wrote off about $500 million in natural gas exploration; it could be that the government is investing too much in fossil fuel development, that the market should be more of an influence.
So, taking a page from Obama’s playbook, perhaps Hawaii should diversify it’s energy sources in a moderate way. That means LNG imports, but it also means mandating a long-term, gradualistic commitment to solar. That also goes for wind and geothermal, but the undersea cable does not fit the description of a gradual or moderate.
Of course, the “demand side” of energy use also needs to be addressed. Retrofitting the suburbs into walkable communities is important; so too would be a land value tax that promotes high-density urbanization; all transportation network improvements should be based on user fees imposed on fuel sales (those who use the roads should pay for them); the creation of new infrastructure should be paid for by developers, not taxpayers.
However, to be honest, I am not sure most people in Hawaii really want to limit their use of fossil fuels, and neither do the elites. They want money and jobs and the creature comforts, and the facade of being “progressive”. Once one understands this, everything makes sense.
The problem with this is that the current fossil fuels boom just might be a new bubble. The demand for fossil fuels in the developing world could be voracious, and prices might not remain low nor supplies last for as long as now conceived. And there are other problems.
http://oilprice.com/Energy/Natural-Gas/Reality-Check-for-the-Natural-Gas-Boom-A-Look-at-the-NYT-Shale-Gas-E-Mails.html