Maui vs. MECO

Palm oil proposal worries residents

Haleakala Times
July 17, 2007
by Jacob Meade

"150 fires from palm oil harvests have been spotted in Indonesia over the past three days," Lance Holter nearly yelled at the presenters at a July 2 biofuel meeting. Holter, the president of the Sierra Club Hawaii chapter, was the first of many to lash out at Hawaiian Electric's plans to import palm oil for a proposed biodiesel plant on Maui.

The meeting brought over 100 people to a packed lecture hall at Maui Community College. It was the last of four that HECO held across the state to gain public input on its plan. If the utility gets approval, it will build one of the largest biodiesel production facilities in the U.S. on Maui Electric's Waena Site. Karl Stahlkopf and mediator Robbie Alm represented the company.

Stahlkopf and fellow speaker Ralph Cavanagh highlighted Hawaii's lousy energy situation. "I don't think any of us is satisfied burning 73 million gallons of petroleum diesel in Maui every year," said Cavanagh. Hawaii depends more heavily on imported fossil fuel than any other state (percentage-wise, of course), and HECO's oil price has risen 171 percent in the past 10 years. The representatives said that while biofuel imports may not offer an ideal long-term solution, they will at least help out a little for the time being.

Currently, demand for palm oil as a "green" alternative to petroleum causes numerous environmental and cultural offenses around the world. The incineration of rainforests in places like Indonesia releases far more carbon dioxide into the atmosphere than use of resulting fuel crops prevents. The methods in which sources of palm oil and other crops harvest their product make biofuels a greater contributor to global warming than fossil fuels.

HECO and its partner company on the project, BlueEarth Biofuels, expect to avoid these offenses. Among other things, they will not import from areas deforested after 2005. Said Holter, "That's like saying the mafia before 2005 was okay, but after 2005 is evil." A legal issue could throw another wrench into the companies' intentions. Earlier this year the state legislature granted $59 million in Special Revenue Bonds to the project. HECO's policy actually violates the terms of this agreement, which prohibit it from incorporating any deforested areas at all.

HECO has collaborated with the Natural Resources Defense Council, a national environmental group, to draw up sustainability guidelines for the import of palm oil. Cavanagh and Debbie Hammel spoke on behalf of the NRDC at the meeting.

The guidelines, said Hammel, will "raise the bar and send a marketplace signal," helping reform the overall market for palm oil. In addition to HECO's deforestation policy, the criteria require an "undisputed title to the land" and prohibit the use of fire to clear new areas.

But dissenters say HECO and BlueEarth's sustainability guarantee means nothing. Even if Hawaii makes sure its palm oil has had little environmental or cultural impact, it will still contribute to the global demand for the product, and so indirectly cause further destruction. Holter said Hawaii is in danger of becoming "a pariah to the rest of world." Since late June, over 5,000 people in 28 countries have sent letters to Hawaii Governor Linda Lingle to oppose her support of the project.

Hammel responded that they believe their sustainable model will catch on and spread to the rest of the market, thus amending grievances in the long run. Cavanagh said that the inadequacy of importing palm oil only reinforces the importance of bringing biofuel production to Maui's agriculture. HECO will use its share of the refinery's profits to incite local farmers to grow fuel crops, and to research the most appropriate method for doing so. Stahlkopf says the approach is "part of a broader strategy to revitalize the agricultural industry." HECO and BlueEarth want to save Hawaii's foundering agriculture by putting the state's fallow land (estimated at 140,000 acres) to biofuel-harvesting use.

But space is an issue. BlueEarth's website refers to use of foreign oil as "Temporary," but the new biodiesel plant will always require some amount of imports. Even at minimum operation capacity, the refinery will gulp more feedstock than could be feasibly grown on Hawaii. Money was also a concern at the meeting. The price of palm oil has doubled in the past year as global demand for the crop has increased. Some worry that ratepayers will feel the squeeze once HECO starts paying for it in bulk.

Kelly King is the marketing executive of Pacific Biodiesel, a local company devoted to renewable energy on a smaller scale. For the past 11 years, Pacific Biodiesel has transformed discarded restaurant cooking oil from a landfill-clogger into an energy source for both transportation and electricity production. Says King of palm oil imports, "How is that better for us than petroleum? Once again we're not growing it, it's not our resource. We're making a huge investment assuming that this feedstock will always be available."

Hawaii gets 90 percent of its food supply from elsewhere, and would only last a few days were access to the rest of the world abruptly cut off. Some want to focus on turning local available regions over to small, family-owned farms instead of energy sustainability. King shares this view: "Regardless of how much available ag land there is, we need some plan for greater food sustainability. We need more than four or five days."

Robbie Alm said that Hawaiian Electric's biofuel plan has "no shipping risks" because boats that bring in palm oil will simply take the place of those that presently arrive with petroleum. One audience member later said that transportation will be an issue because trucks will have to haul materials from the harbor to the plant and back again, where HECO will ship a portion of the plant's biodiesel to the Big Island.

Several audience members pushed for an Environmental Impact Statement (EIS). The representatives said they'd look into it but guaranteed nothing, even after former county environmental coordinator Rob Parsons read aloud the state law that requires one for oil refineries. Four days after the meeting, Stahlkopf said they still hadn't addressed the issue, but assured that they "will stay with all applicable laws."

Stahlkopf also said that the plant will technically not be an oil refinery because "This is really a chemical process rather than distilling." An FAQ page on BlueEarth's website refers to the plant as a refinery four times before coming to an answer at the bottom that says it is not one, but rather a "transesterification facility."

Bonnie Bonse, President of GMO-Free Maui, asked whether the prospective biofuel crops will likely be genetically modified to yield more oil. And others raised questions about the practicality of large-scale fuel crops on an island with limited water.

Gary Elster of Kihei had more general reservations. "We are about to find out whether something that hasn't been studied but built first is going to cause us harm on this island," he said. "What about the unique concept of studying whether these crops can be grown here and feasibly before we build a plant rather than after?" The crowd applauded.

Bonse agrees that HECO's plan appears troublingly incomplete. "There were so many issues that were just not clear, so many gaping holes," she says. "We don't need to just jump to a solution that's still fairly new."

Kat Brady of environmental group Life of the Land calls the plan "half-baked. I don't get why they're presenting this proposal that they haven't thought through. I'd be embarrassed."

Many worry about the lack of experience of all involved. BlueEarth BioFuels has never built a biodiesel plant, much less one of the largest ever. The NRDC doesn't have a base in Hawaii, and is opposed on this issue by numerous state environmental and indigenous groups. Henry Curtis, also of Life of the Land, says the NRDC "has no experience in Indonesia nor biofuel certification." HECO itself has never incorporated biofuels other than through King's company.

Brady takes issue with HECO's strategy of putting palm oil sources on an improvement timetable. An industry organization called the Roundtable for Sustainable Palm Oil (RSPO) recently released 39 requirements for appropriate harvesting of the crop. Foreign growers that HECO hires will at first only have to comply with a fraction of them, later being made to set up a system to meet the RSPO standard within a few years. "It just baffles me," said Brady at the meeting, pointing to issues not covered in the meantime such as child labor.

Jeff Parker, a local orchid farmer, cited widespread governmental corruption in regions that Hawaii will import its oil from. He asked why Hawaiian Electric would even consider doing business with Indonesia or Malaysia, where the drive for profit might obstruct HECO's ability to determine whether its guidelines will be followed. Hammel said the whole point of their sustainability guidelines will be to help remedy the effects of that corruption. HECO plans to hire an independent auditor that will follow feedstock all the way from plantations in foreign countries to Maui shores, to assure that we are obtaining the "correct" palm oil.

Parker's reservations run deeper. "I think there's something fishy with the BlueEarth proposal," he says. "When I heard that the Governor would be signing $59 million in Special Revenue Bonds for this group that has no track record, I had to wonder what really is going on here." Sylvia Hoffmeyer of GMO-Free Maui says, "It's great that they have these kind of meetings, but how will it impact anything? I think it's a done deal just like the Superferry was." BlueEarth had no representative present. Its lack of experience coupled with its take of half the plant's profits has some wondering.

Bonnie Bonse says in hindsight, the elephant in the room on July 2 was the issue of how to get people to habitually use less power in the first place. "What about educating people to get off their spoiled platform?" she says. "I wish I'd brought it up."

Amid criticism, the representatives said they too are not totally satisfied with this course of action. "There is no single magical answer to fossil fuel," said Cavanagh. "We're balancing a really bad status quo and we want to know if we can make it better."