LNG: Smart Public Policy Or Bridge To Nowhere?10/08/2012
On Thursday, Civil Beat reported that the State has made up its mind on importing liquefied natural gas (LNG) to Hawai‘i. According to the Lieutenant Governor, “We are no longer assessing whether LNG makes smart public policy. We are trying to figure out what it takes logistically and what we need to do to establish that.”
Does the administration really have enough information to conclude that a long-term bet on importing yet another fossil fuel is “smart public policy”? What about the economic and technical analyses, not due out until the end of the year?
From the letter the Lieutenant Governor sent to the Public Utilities Commission regarding the pursuit of imported LNG, it appears that the administration’s policy rests on a single question: What costs more, oil or gas? Is that the right question? And even if it is, until the public has detailed answers, any decision is premature and ill-advised.
Perhaps the administration is basing its analysis on the current price of LNG on the mainland U.S., where fracking techniques have drilled more gas out the ground than the market can handle. To assume that Hawai‘i can get LNG at the same price is incredibly short-sighted — short by thousands-of-miles-across-the-Pacific.
Thursday’s Civil Beat article noted that “Hawai‘i’s prices have remained high because Japan is now competing for the same type of low-sulfur fuel oil that is used in Hawaii.” Shifting from oil to LNG will not insulate us from Asia’s highest bidders. Any LNG tanker that can reach Hawai‘i can cruise straight to Asia, where Japan and other countries are massively boosting their LNG consumption, already driving up the price far higher than in the U.S.
In a seminar presented by Hawai‘i Gas in August, an LNG industry consultant explained that because of transport issues, wholesale LNG prices can vary by more than 25 times. With so much variation, what will really determine the price Hawai‘i pays for LNG?
First, it will depend on how many billions of dollars, and how many years, are required to buy the fuel and build the massive infrastructure needed to liquefy the gas at an export terminal, ship it to O‘ahu on a tanker, re-process it, alter our power plants to burn it, and ship it between islands.
Second, we must consider where the LNG would come from.
The U.S.? Currently there are no LNG export terminals on the U.S. mainland. A Civil Beat commentary in August said that “no project developer in Alaska is talking LNG before 2020 — at best.”
There is also the Jones Act hurdle. Unless it is repealed (or unless Hawai‘i decides to invest even more money on building its own U.S.-flagged LNG tanker), no LNG from the U.S. will land on Hawai‘i’s shores.
Canada? At the Hawai‘i Gas seminar, it was revealed that the potential price advantage of Canadian LNG over imported oil could be as little as 6 percent. Is that worth deepening our dependency on fossil fuels? That’s like buying a pack of smokes because they’re $8 instead of $8.50, and saying you’ll quit next week.
Australia? Hawai‘i Gas’s Australian owners would look favorably on making Hawai‘i reliant on Australian fossil fuel imports, no doubt. But is that “smart public policy” for Hawai‘i?
Finally, what about costs that aren’t measured in dollars and cents? Let’s call LNG what it is. LNG is a fossil fuel, just like oil and coal. It’s 90-percent methane (CH4), a more potent greenhouse gas than carbon dioxide. Hawai‘i Gas likes to call methane a “cleaner-burning fuel.” But that handy phrase hides the fact that methane leaks out of the ground during drilling (hello, fracking) and that fossil fuels are consumed to ship it across the sea. LNG is liquefied methane. It’s not clean. It’s not renewable. It’s not local. It’s not sustainable.
During his remarks at the Hawai‘i Energy Policy Forum’s 2012 Clean Energy Day, the Lieutenant Governor warned, “Dress me slowly; I’m in a hurry.”
“Shortcuts do not save time,” he said, referring to the hasty implementation of “big projects.”
Spending billions to bring LNG to Hawai‘i will be a ball-and-chain that enslaves us all to imported fossil fuels for the long term. We will keep shipping money out of the state, rather than moving full-speed toward a clean energy future.
Hawai‘i can’t afford a shortcut. The public deserves a real assessment before its leadership crosses a bridge that leaves Hawai‘i ever further from energy independence.
About the author: Jeff Mikulina is executive director of the Blue Planet Foundation.
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