[NOTE: Some of the stats used in this article are outdated but I think they still capture the depth of Hawai’i’s energy risks.]
Hawai’i wants greater energy independence and is taking active steps and forming policies to do so.
This has fascinated me since this summer when I went to visit my brother on O’ahu. I stayed with him for a few days in Honolulu and we got a good chance to catch up, since Hawai’i and DC are quite far apart. I went to Hawai’i to attend the International Achievement Summit on the Big Island (my write-up here).
My brother, who is a programmer for a project for NOAA, is always particularly well-informed.
We were driving to the airport and he was telling me how much the oil price crisis was hurting Hawai’i, back when oil was heading for $140/barrel. The impact of higher oil prices is particularly significant to Hawai’i, since most of its imports must be petroleum from Alaska and the Pacific Rim to support its own economy (I was unable to find the exact percentage of the total trade balance spent on petroleum imports, but oil costs them $7bil/year to import). My brother told me the taxi drivers were hurting in particular, but also anyone in the logistics and transportation sectors. Even here in DC, there was a $1 surcharge on all cab rides to account for higher gas prices — they only recently removed it again after oil prices dipped into the $40’s.
Hawai’i in other words is highly dependent on energy imports, moreso than any other state in the union. Petroleum in particular takes up 90% of all energy usage, 40% being imported from Alaska. Hawai’i’s demand is highly inelastic for energy since it is a basic requirement for economic operations there. However, in looking at the stats in depth, most of that oil demand comes from jet fuel and military operations. Around 60% is used for transportation purposes, and about 1/3 of that oil is used on jet fuel alone, according to some sources.
A Better Place?
So when I read an article yesterday in the NYTimes describing Hawai’i’s electric company and government endorsements (whatever that means) of Better Place (press release here), a new automotive energy infrastructure start-up, I was excited but skeptical.
Better Place is a company started by an amazing salesman, Shai Agassi. He recently had a long write-up in Wired Magazine (which, I should add, should be a must-read for anyone — it posts all its magazine articles online for free, but subscriptions run super-cheap). And I saw Mr. Agassi speak on a panel for an electric car conference in downtown DC over the summer, featuring a Tesla Roadster and Jim Woolsey. Agassi is considered to be (fairly over-optimistically) the leader in pushing for the future of automotive energy.
His plan for Better Place is to build an infrastructure of charge-up stations and battery-swapping stations using existing gas station infrastructure. Combined with electric cars, which he sees as appealing to car companies because his company can separate the battery and energy production from the car design itself (which will allow car companies to execute on what they know (or should know) best), people will be able to drive longer distances and just swap out batteries interchangeably with ones at the stations.
“Agassi dealt with the battery issue by simply swatting it away. Previous approaches relied on a traditional manufacturing formula: We make the cars, you buy them. Agassi reimagined the entire automotive ecosystem by proposing a new concept he called the Electric Recharge Grid Operator. It was an unorthodox mashup of the automotive and mobile phone industries. Instead of gas stations on every corner, the ERGO would blanket a country with a network of “smart” charge spots. Drivers could plug in anywhere, anytime, and would subscribe to a specific plan—unlimited miles, a maximum number of miles each month, or pay as you go—all for less than the equivalent cost for gas. They’d buy their car from the operator, who would offer steep discounts, perhaps even give the cars away. The profit would come from selling electricity—the minutes.” (Daniel Roth, Wired)
Very ambitious. And hard to get off the ground, apparently.
Electric Cars in Hawai’i: The Holy Grail and a Prototype?
But Hawai’i poses a unique environment that might be perfect as an Agassi prototype. This is the sort of shit that an international affairs grad student such as myself really enjoys analyzing.
It is a small collection of islands with a diverse ethnic composition of mainlanders and haolis, native Hawai’ians, and many Japanese and other Pacific Islanders. It is one of the most progressive states in the union (probably second only to DC in unanimity in voting for Barack Obama in 2008’s election). It is a major hub for civilian and military travel. It has the largest protected natural reserve under monument status in the country, which is what my brother is working on for NOAA. As said before, it is highly dependent on energy imports.
So it is a highly progressive state that exists somewhat outside of the rest of US politics, its budget made frail by reliance on energy imports, and is geographically suited for not only a small-scale electric car prototype project and to rid itself of continued energy dependence.
Interestingly, Agassi’s first attempt to install a Better Place infrastructure has been Israel. It also has interesting characteristics, being a highly-modernized nation dependent on oil, which it imports from its “enemies” (although it cuts deals with them all the time, normally) in surrounding Muslim countries. It is essentially isolated by geography, and is small enough for electric cars’ limited ranges.
But in Hawai’i’s case, if much of its actual oil consumption is constituted by jet fuel, then Hawai’i is ages away from ridding itself of that energy hurdle. Electric car models cannot be transferred to airplane models yet. We won’t have “green planes” for a while.
So one has to be realistic about the ultimate impact switching to electric cars would provide to Hawai’i. The other component is that electric cars will increase the demand for electricity production, which is also to some degree reliant on energy imports.
Hopefully the Hawai’ian government understands this with its more holistic solution for electric cars within a broader energy policy (read about it here). It instituted the Hawai’i Clean Energy Initiative (HCEI) recently as an agreement with the local utilities as of October 20, 2008, to end up receiving 70% of its energy needs from clean alternatives by 2030 as opposed to the 92-95% dependence on petroleum as of now.
So there seems to be a lot of political traction right now. My brother informed me that Lanai is trying to build large wind and photovoltaic farms and the islands are trying to unify their electricity grids, hopefully towards the smart grid that Agassi would like in order to distribute power and conserve it during peak times versus inactive times. So the increase in demand for electricity could be off-set by a shift from dirty energy to clean, alternative energies, facilitated by Hawai’i’s policies and initiatives.
[My buddy Monkey Pope (just returning from O’ahu) in his comment below rightly pointed out that I left out the rail transit plan in Honolulu. My brother mentioned this to me and said it was a highly-contested debate between people concerned about budget and environmental damage and people who want to remove the burden of cars on the gridlocked roads. As it turned out, the last election day found that the rail plan passed a vote. So this new railway may assist in removing pollution and energy burdens too.]
All of this is also interesting within the context of the automotive industry lobbying for a government bailout in DC. Better Place and Tesla Motors are two companies started out of Silicon Valley circles of entrepreneurs and not out of Detroit. Hawai’i and San Francisco have signed on to the Better Place project. Tesla’s popular among the rich investors in California. These projects may fail, but it’s sad that they receive so little support; in fact, the tech sector seems to be the only thriving source of innovation within the US right now save for its university research (pharma, auto, media, etc. are crumbling and are full of old minds that don’t understand why they’re losing) and if the US loses that, then we’re fucked. On top of that, the Republican party and its masters and lapdogs make fun of the fags in San Francisco and Massachusetts and the cocktail-drinking elite in DC…all the people who are busy creating real value in this country instead of peddling old garbage in strip malls that no one wants to buy now that they’re having to pay off their overpriced mortgages and credit card bills.
Here’s hoping for an innovation commons promoted by Barack Obama (a Hawai’ian) that leads to more of these companies!
Thanks to my bro for getting me to think about this stuff.