Ethanol Refineries are “Planned” or “In Development”?
There is a major discrepancy in the MSM concerning the advancement of ethanol production in the state of Hawaii. On April 2nd 85 percent of the gasoline in the state must be 10 percent ethanol - which goes by the euphemism “gasohol.” The problem is that Hawaii has been unable to develop local refineries to make ethanol. Although that was the original intent of the law, aside from questionable environmental considerations, Hawaii will have to import all the ethanol required to meet the law.
The discrepancy is that there is no reporting that actual ethanol refineries are under construction. The media resort to such terms as “planned” and “in development” to get around the fact that the problems involved in ethanol production from Hawaii sugar cane are currently insurmountable.
Oahu Ethanol planned to begin ethanol production in the second quarter of this year. That has been delayed until the first quarter of 2007 because of difficulty securing land, among other things, KenKnight said.
The “among other things” is that the technology doesn’t exist yet, isn’t efficient enough to be economically feasible.
And then from another source:
Six ethanol refineries are in development in the state, although Tome said she was not aware of any that plan to use bioengineered enzymes to make the fuel.
Both of these comments are in the month of January 2006.
Hawaii will be importing ethanol for the foreseeable future. The consumers will pay a premium to enrich Archer Daniels Midlands because of short-sighted government fiat.
The ethanol program needs to be put on hold until a Hawaii source of ethanol production can be developed, if we need to do it at all.
Otherwise the public will only pay inflated prices for gasohol imported from the Mainland, to the detriment of Hawaii consumers.
January 25th, 2006 at 11:14 am
There is no going back on ethanol. Save your breath. The legislators were told that they were putting Hawaii in a position where it would be exporting gasoline and importing ethanol forever, but no one listened. This was an environmental “motherhood and apple pie” issue. Sen. Morita, one of our most idealistic (“hydrogen economy”?) and short-sighted senators, just stayed on point with her save the planet, save the sugar industry rhetoric. Who was going to stand up and say, “Screw the planet and the sugar industry. This is Hawaii.”? No one.
The result is that the refiners have discovered that ethanol represents an opportunity to get octanes in an octane-short economy. As you may recall, the mainland went through an exercise with the dreaded octane-enhancer MTBE, now banned in many places, including Hawaii (where it never appeared anyway). But refiners have been octane-short for some time. So, although they opposed it, now that there are tax advantages for ethanol, it represents a cheaper and more plentiful source of octanes than anything else. With the entire industry in Hawaii spending $ millions to build new tanks and prepare to import and isolate gasohol from water, the investment is made and you are not going to find them wanting to just eat that investment. SO, it’s likely here to stay. In March, a huge cargo of ethanol is going to offload at Campbell so refiners can meet the April deadline.
As far as helping the sugar industry, that is a joke. There are only two sugar companies left: Pioneer and G&R, both struggling. Democrats simply got them to say, “SURE! We’d be interested.” It was a no-brainer for Pioneer and G&R. But neither has a plan to actually build an ethanol plant, nor does either have enough acreage in sugar to make more than a drop in the bucket of ethanol. On top of which, the size plant they would ever build would be horribly inefficient and never able to compete with imported ethanol. But the big ethanol brokers (like the one who hired the lobbyists and romanced the sugar companies here) knew that all along. They also claimed they too would build ethanol plants all over Hawaii, eventually reaching the 45 million gallon capacity (50 by that time) required for 10% gasohol. Easy enough to claim, but also easy enough to back away from later, which is what we are now seeing. The bottom line is that some enterprising ethanol salesman has managed to snooker the State of Hawaii into buying 45 million gallons of ethanol per year it didn’t need.
Chevron and Tesoro have made it clear that they are going to import 100% of their requirements for ethanol from one source, since it makes no sense to buy some here and some there. Even if Oahu, Maui and Kauai ever produce ethanol, Chevron and Tesoro will still use their imported ethanol to those markets, because it is going to be blended into the gasoline right at the Oahu refineries. SO, the only two sugar companies likely to produce ethanol know that they will be faced with exporting it to markets in competition with other sources, like Brazil. How do you think those economics look? Want to bet on whether anyone ever builds an ethanol plant?
What we CAN do is use the ethanol issue to expose some of the idiots at the square building. The numbers were painfully obvious when they were considering this. One speaker at a hearing had calculated that if ALL the sugar plantations that had EVER existed in Hawaii were still here, and if they ALL built ethanol plants and committed 100% of their acreage to sugar for ethanol, they would produce something like 35% of Hawaii’s ethanol requirement. HELLO! I think the best estimates of Pioneer and G&R amounted to something like 4 million gallons (less than 10% of the requirement). Not to mention the fact that it takes fossil fuel energy to produce ethanol. Suppliers would LOVE to sell the diesel that Pioneer and G&R would use to produce ethanol. Legislators who supported this law should be defeated in the next election. They are generally the same ones who supported Gas Cap, divorcement, rent controls and other foolish economic sanctions. They need to learn that when they start tinkering with market economics, they are going to get burned.