Initial interest in liquefied natural gas (LNG) — the utility HAWAI‘IGAS proposes to phase in imports — has intensified recently with indications that Alaska wants to ship LNG to the Hawaii market. This is a development that both raises substantive questions about costs and dangles the tantalizing potential of benefits to Hawaii consumers.
That benefit would be that adding natural gas to the state’s energy portfolio would displace at least some of the stock of oil, which burns dirtier and is more expensive than LNG. And consumers in Hawaii, where energy prices are the highest nationally, are weary of mounting electricity bills and hungry for any glimmer of light at the end of the tunnel.
The path toward that goal is anything but straightforward, with numerous hurdles to clear, but it’s encouraging to see a determination by the state administration to begin asking the right questions.
Among the challenges ahead is finding the right balance between two imperatives. One is to diversify energy sources with an eye on lowering consumer costs, a goal it is hoped that LNG can accomplish.
The other is to keep Hawaii’s "homegrown" energy development on a parallel track. Nationally there’s been some concern that lower costs for natural gas could reduce the incentive to develop renewable sources, which in Hawaii principally include solar, wind and geothermal power.
Here that concern is especially acute, because, lacking indigenous stores of natural gas, the state wants to reap the economic benefits of producing at least some of its own energy. Every tanker of fossil fuel that Hawaii does not have to import — whether it’s LNG or oil — means keeping more of its money circulating within the local economy. And there’s pressure, too, coming from companies hoping to profit from a transition to LNG.
Regardless, the state’s official policy on renewable energy remains intact, said Lt. Gov. Brian Schatz, who has been in the thick of administration policy discussions about natural gas imports. It’s good to keep a close eye on this issue, which has a lot of moving parts.
U.S. Sen. Mark Begich of Alaska and Hawaii U.S. Sen. Daniel Inouye are discussing the possibility of a partnership between Alaska and Hawaii. There could be benefits to the 50th state, but the 49th is motivated by its own interest.
In addition to providing a reliable buyer for LNG, for example, the trade alliance could provide an added push toward an exemption from the federal Jones Act, the law that governs interstate ship commerce. Such an exemption would make it cheaper for Alaska to do business, because the Jones Act requires interstate shipments to be carried aboard ships built in America, crewed by Americans and flying the U.S. flag — typically more expensive operations.
Schatz said that at the end of the year, the state is expecting completion of technical studies evaluating the prospects of LNG. This analysis will be delivered by the Hawaii Natural Energy Institute of the University of Hawaii.
The importance of having a clear-eyed evaluation of the true considerations can’t be overstated, because critical questions need to be answered. Here’s one: What would be involved in reconverting LNG to gas for consumer use? LNG is kept extremely cold to remain in a liquid state for transport. Regassifying it on shore triggers more environmental and safety regulations, Schatz said, but it’s unclear whether that process can be conducted safely from an ocean rig.
Nobody can dispute the fact that Hawaii needs more and better energy choices than it now has, and LNG very well could fill an important niche, but getting more information is crucial. Moving ahead to explore that is the right instinct, as long as the state moves onto tested ground.
