Peak Oil is You
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Page added on April 6, 2012
Hawaii Can Show the Way to a Better Energy Future
Over the past decade, world oil prices have advanced from approximately $25 per barrel to more than $100 per barrel. Had the price of oil merely kept pace with inflation, the $25 barrel in 2000 would have been worth just over $30 in 2010. Clearly, there has been a fundamental shift in the oil markets.
By 2005, the idea that the price increase was being caused by oil depletion — commonly referred to as “peak oil” — was receiving widespread attention. While some dismissed the idea of peak oil, instead offering up speculation, OPEC, growth in developing countries, or other geopolitical factors as the primary factors behind the advance in prices, oil production remained flat despite record-high oil prices.
Historically, spiking oil prices have contributed to recessions. While the recession that began in 2008 is attributed in part to the collapse of the housing bubble, consumers were also struggling with record energy prices. In the past, high energy prices have brought on economic slowdowns, which then reduce demand for oil as industrial demand declines and fewer people are driving to work.
Ultimately, the combination of lower demand and increasing oil supplies has caused oil prices to decline, which in turn spurs economic activity and allows the economy to recover. But this time, in the midst of a sluggish economy, oil prices have maintained strength. As with previous recessions, oil demand has fallen in the U.S. Indeed, over the past five years, oil demand has declined by 1.5 million barrels per day in the U.S. But globally, demand in developing countries has grown (up 2.2 million barrels per day in China and India alone in the past five years), yet supply has not kept pace.
The inability of the global oil industry to ramp up production in the face of $100 oil is a signal that the days of excess oil production capacity may be at an end. Historically, new production has been brought online at a rate faster than existing fields have been depleted, resulting in 150 years of growing oil capacity. In fact, even though U.S. oil production peaked in 1970 and then began to decline, the economy was able to continue to expand because global oil supplies continued to grow.
But the days of expanding global oil supplies are coming to an end, and that has serious implications for the world as a whole. Countries that are highly dependent upon oil are the most susceptible to economic catastrophe as they grapple with high oil prices.
Within the U.S., no state is more dependent upon oil for its energy needs than Hawaii. Hawaii depends on oil for around 90 percent of its energy needs — a far greater percentage than any other state. It is divided roughly equally among ground transportation, jet fuel, and electricity generation. Advanced biofuels are being contemplated to replace some of the oil used for electricity. However, there are many ways to produce electricity, but few scalable substitutes for jet fuel. To the extent that Hawaii can produce biofuels sustainably, they should be allocated to jet fuel or ground transportation, not electricity.
Hawaii should work toward geothermal to provide the 80 percent of electricity referred to as “base power.” The other 20 percent can be provided by wind and solar. And, certainly, Hawaii needs to maintain its research into all the possibilities and constantly reach for resilience.
Iceland, utilizing geothermal and hydropower to produce low-cost electricity, has made itself energy- and food-secure. And geothermal is used in many other parts of the world. It is a low-cost, proven technology and emits no CO2. Today, geothermal-produced electricity in Hawaii costs half of what electricity produced from oil at $100 per barrel costs. Oil prices are likely to keep rising over the long term, while geothermal prices will be much more stable. It is estimated that the Big Island will be over a geothermal “hot spot” for the next 500,000 to one million years.
Because of Hawaii’s heavy dependence on oil, it has been said that the islands are the “canary in the coal mine” for the rest of the U.S. But in warning others of impending danger, the canary dies. We do not want to serve as a warning to others; we want Hawaii to be the beacon for the world to see how we have achieved a better future.
As Hawaii begins to displace oil with geothermal electricity, its stable electricity price will make the islands more competitive with the rest of the world. Two-thirds of Hawaii’s economy is based on consumer spending. Low-cost electricity gives consumers more discretionary income. This will benefit those who are struggling financially, it will benefit small businesses, and it will give Hawaii’s children a reason to stay in the state. We should strive for a triple bottom line solution to our energy problem. We need to benefit the community, the environment, as well as the investment. This approach will help us maintain and perpetuate our Aloha way of life.
11 Comments on "Hawaii Can Show the Way to a Better Energy Future"
BillT on Sat, 7th Apr 2012 12:08 am
Perhaps Hawaii should consider cutting flights? Walking more and driving less? Turning off lights and cutting back on A/C? Alternate forms of energy are NOT going to replace oil and natural gas. All of them rely on mining,refining and forming the components of all renewables. Those functions will not be done with ‘renewables’.
Hawaii is the canary that is already gasping. It lives on tourists and exporting a few food items, both of which will die out as the Us/world economy continues to contract. Hawaii will go back to the natives in the next few decades. They can maintain some of their power needs by the above mentioned methods, for a while, but that will not be cheap.
cusano on Sat, 7th Apr 2012 12:15 am
At some point, the cost of importing society sustaining goods into Hawaii will simply become unsustainable from an economic perspective. Most folks will not be able to afford anything but the basics. Think I’m wrong? See how the folks in Nome Alaska are doing.
Kenz300 on Sat, 7th Apr 2012 1:46 am
Quote — “Iceland, utilizing geothermal and hydropower to produce low-cost electricity, has made itself energy- and food-secure. And geothermal is used in many other parts of the world. It is a low-cost, proven technology and emits no CO2. Today, geothermal-produced electricity in Hawaii costs half of what electricity produced from oil at $100 per barrel costs. Oil prices are likely to keep rising over the long term, while geothermal prices will be much more stable.”
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Geothermal has much potential to provide energy in some parts of the country. While there is no one solution to the problem of declining oil and higher prices geothermal may be a big part of the solution in Hawaii. Wind, solar and biofuels can also contribute.
MrEnergyCzar on Sat, 7th Apr 2012 3:56 am
High airfares might destroy their tourism first….
MrEnregyCzar
BillT on Sat, 7th Apr 2012 4:15 am
Hawaii has fewer people than Philly (1.5m) and the land area of Maryland. (10,000 sq.mi.) I guess they can go back to farming and using Hawaii’s mineral resources for their needs. Oops! They have no mineral or ores that are necessary for modern anything. No oil, no metals, no natural gas, no nothing of value except nice views and volcanoes. They will have a very difficult time maintaining their luxurious life style when oil is gone.
DC on Sat, 7th Apr 2012 5:27 am
How can an island thousands of miles from anywhere, that imports 100% of its fossil-fuels teach anyone anyhing about liveing a low-energy lifestyle? Thats got me stumped too. Take away the tankers bringing food and fuel for the over 1mill+ and it wouldnt matter how many windmills and solar-panels they got. Within a few weeks theyd be eating each other. Could make a TV show out of it
Survior Hawaii.
If the population droped back to its w/e it can actually support, im going to guess, that # is in the tens of thousands, tops? Maybe. Lot of these green sites show there real agenda. They just want the status-quo, with a little less oil. But no change. A lot of them just cant grasp theres too many people wasteing resources at too a high a rate. Solar panels and windwalls, as good as they are, dont begin to address that, the real root of the problem do they?
Bob Owens on Sat, 7th Apr 2012 3:38 pm
The time for Hawaii to have acted was 20 years ago. Better late than never but I don’t see how this will work out good. The tourists will stop arriving as the jets go out of business. So how will they finance these improvements? If they radically reduce their use of energy then they just might be able to get enough out of geothermal to get by. Hawaii can’t even get everyone onto solar hot water, for goodness sake! I hope it works out for them but the devil is in the details.
R. Awapuhi on Mon, 16th Apr 2012 5:24 pm
The problem with Hawaii is the governance of the US not matching the needs of the people. Electricity right now is produced and distributed by the same company. Excess energy is also purchased by companies (ormat) in a monopolistic fashion, which is foreign owned (israel). Which means, there’s no sustainability in any aspect fiscally. That means, not only are we exporting money to import fossil fuels, we are also exporting cheap energy production and buying it back at from Israel at avoided cost! The price of OIL! It all boils down to “There is no room for Cumin.” If we continue to allow this to happen, our children’s future will have no chance at all!
David Greene on Mon, 16th Apr 2012 8:22 pm
If your household is using more than 30KWH per day, you are using way too much. If you use less than 30KWH per day, you can provide your own power with aPV battery/inverter system. If you are using lead acid batteries with a stand alone PV system, you have not researched the different battery types available. Owning your own electricity is way more expensive than renting it from Hawaiian Electric, I don’t care how much more it costs, I choose to own my own stand alone system. Nickle-iron batteries revisited! Honolulu really gets the sun year round, so panel up, get a 700AH bank of nickel-iron batteries, inverters, charge controllers, and you won’t need Hawaiian electric! Nobody said independence would be cheap! You will pay through the nose, dearly for a big Photovoltaic system, Nickel-Iron batteries will set you back $40,000.00. So here’s the challenge, eliminate the outside influence, or keep contributing to the problem, your choice.
David Greene on Tue, 17th Apr 2012 2:48 am
By the way, if Thomas Alvah Edison invented the nickel iron battery, why is it that we gotta buy them from Russia, or china? Why can’t we buy them here in America? And the answer is ” what company would market a battery that would last 25 years! Battery companies make money when your batteries fail in 5 to 7 years, it’s a perpetual rotating door. Lead acid batteries are poison! Nickel iron batteries are not toxic! Check out iron Edison batteries. Com, yeah they are less efficient than lead acid, but your grandchildren will inherit them!
David Greene on Tue, 17th Apr 2012 3:15 am
You don’t need to cut back, it’s not what you’re doing so much as it is how much you are using to get the job done! Why would I drive a Hemi Cuda through rush hour traffic when I can take the Prius instead! DON’T BE STUPID! Use the right tool for the job! A good example would be also: you don’t need a sledge hammer to replace a watch battery, this is America’s worst problem! Let’s get back to reality, if we acted our incomes, we would probably discover that we are not as powerful as we once thought we were! The game has changed, let’s dig in and get back to sacrifice and chivalry, we might just get somewhere! WAKE UP AMERICA!!