HONOLULU — Gov. Josh Green has reversed a major state energy policy position of his predecessor in a move that many environmentalists don’t consider to be very “green.”
The governor has asked the Hawai‘i State Energy Office to reconsider liquefied natural gas as a possible “near term” interim option to replace oil as a fuel to produce electricity as utility companies work toward deriving 100 percent of their power from renewable sources by 2045 to meet a state goal.
Green publicly shared his view during the 11th annual Hawai‘i Energy Conference, held May 22-23 on Maui, where he told energy industry stakeholders and others that a cheaper fossil fuel that generates lower carbon emissions needs to be considered as a “bridge” that displaces more expensive and dirtier oil as utilities advance to the 2045 goal.
“I think that there has to be some form of bridge between now and 2045 if we truly want to lead on renewable energy,” he said. “If we can get to a future with a different bridge that decreases our reliance on classic fuel — oil, diesel — but gets us there in a healthier way, I think we have to look at it.”
Green said liquefied natural gas, or LNG, is one potential way, and he has asked the Energy Office to assess it and other options.
Mark Glick, director of the Energy Office, said the agency is assessing LNG as a near-term option to replace low-sulfur fuel oil that powers many aging power plants in Hawai‘i as part of Green’s objective to reduce energy costs and carbon emissions while the shift progresses to 100 percent renewable energy.
“LSFO (low-sulfur fuel oil) plays a major role in oil price volatility and high prices of electricity as well as placing O‘ahu as the most carbon intensive location among the states for producing electricity,” he said in a statement.
Glick said the agency should have critical cost and carbon analytical findings by mid-July.
The reconsideration of LNG represents a reversal of a position to not allow such a bridge fuel held by former Gov. David Ige with support from environmentalists.
However, prior to the 2014-2022 Ige administration, in which Green served as lieutenant governor from 2018 to 2022, state leaders have endorsed LNG as a replacement for oil burned at power plants.
For more than a decade prior to Ige’s term as governor, importing LNG had been discussed at times but wasn’t pursued largely because of high costs. That equation changed around 2012 when natural gas prices fell to a decade low on the mainland and fuel oil costs in Hawai‘i hit historic highs.
“Liquefied natural gas is a real option for us, and we’re looking at it very seriously,” Brian Schatz, who was then lieutenant governor to Gov. Neil Abercrombie and is now a U.S. Senator representing Hawai‘i, said at the time. “It burns a lot cheaper and cleaner than coal or oil, so it’s attractive on a number of levels.”
Glick, who was appointed by Green in 2023 to lead the Energy Office after holding the same position from 2011 to 2016 under Abercrombie and Ige, said in 2012 that LNG would strictly have to be a replacement for oil and that nothing should diminish efforts to reduce Hawai‘i’s dependence on fossil fuels.
“We are totally dedicated to that, and we don’t want to give anybody the impression that we’re not,” Glick said 12 years ago.
The push to use LNG to generate electricity in Hawaii a little over a decade ago was largely driven by potential rate reductions for utility company customers who consistently pay far more for electricity than any other state because of Hawaii’s geographic isolation in the Pacific Ocean.
Hawaii’s reliance on imported oil to run power plants that still generate most power for Hawaiian Electric, which serves O‘ahu, Hawai‘i Island, Maui, Molokai and Lanai, is the primary reason the state’s average electricity cost to residential customers is nearly triple the national average.
According to the U.S. Energy Information Administration, natural gas was the largest source for U.S. electricity generation in 2022, at about 40 percent. The balance was from renewable sources (22 percent), coal (20 percent), nuclear (18 percent) and petroleum (1 percent).
Back in 2012, natural gas was the second-largest source of electricity generation in the U.S. after coal.
At that time, Kaua‘i’s nonprofit utility company, the Kaua‘i Island Utility Cooperative, estimated that the price per kilowatt-hour for customers could drop 11 percent to 40 cents from 45 cents by converting its power plants to run on LNG instead of petroleum-based naptha and diesel fuel.
A 2013 report commissioned by the Hawai‘i Natural Energy Institute, a University of Hawai‘i research unit, estimated that the cost of power at two Hawaiian Electric power plants on Oahu could drop by 40 percent to 55 percent with a shift to LNG from low-sulfur fuel oil.
Environmental and clean- energy groups, including the Sierra Club of Hawai‘i and Blue Planet Foundation, opposed LNG imports over concerns that expansion of renewable energy would suffer.
LNG pushback
The state Department of Business, Economic Development and Tourism soured on a broad 2014 plan by Hawaiian Electric that involved achieving 65 percent of power generated by renewable energy by 2030, converting fossil fuel power plants to run on LNG at a cost of roughly $200 million and cutting customer bills by 20 percent.
“Rather than using LNG as a bridge to a cleaner future, the (Hawaiian Electric) companies seem intent on using LNG as a bridge to more LNG,” the agency said in written comments on the plan being considered by the state Public Utilities Commission at the time.
Hawaiian Electric’s plan to use LNG totally came apart after Florida-based utility NextEra Energy made a bid to buy Hawaiian Electric in late 2014 for $4.3 billion.
NextEra, a far larger company with more financial resources, proposed a quicker shift to LNG for Hawaiian Electric that included spending $458 million to convert power generation units on O‘ahu, Maui and Hawai‘i island to run on LNG.
Hawaiian Electric estimated that the planned shift to LNG would save customers $850 million to $3.7 billion over 20 years, depending on oil price fluctuation.
Ige publicly opposed the NextEra deal, and in 2015 proclaimed his opposition to LNG as a bridge fuel because he said it would distract from investment in renewable energy.
“Any time and money spent on LNG is time and money not spent on renewable energy,” Ige said at the time.
The PUC in 2016 voted 2-0 to reject NextEra’s takeover, with one member obtaining.
After that, Hawaiian Electric abandoned plans for LNG, and environmental organizations celebrated.
“This goes to show that NextEra’s plans for Hawai‘i were all about LNG and committing ratepayers to a dirty energy future,” Kylie Wager, an Earthjustice attorney, said at the time.
New LNG look
Eight years later, Hawaiian Electric is still far from achieving the state’s 100 percent renewable energy goal.
The company reported that at the end of 2023 its share of power from renewable sources was 29.6 percent. KIUC was at 57.9 percent at the end of 2023, and aims to reach 100 percent by 2033.
Green said during the May energy conference that he believes Hawai‘i can both speed up renewable energy development and consider tapping an interim fossil fuel power source that is cheaper and cleaner than oil.
“I don’t think we have the luxury in the moment to take any options off the table,” he said, noting that he is only asking the Energy Office for an analysis and to proceed with what makes sense.
In March, Clint Churchill and Ed MacNaughton of the Practical Policy Institute of Hawai‘i said in written commentary for the Honolulu Star-Advertiser that Green should take the lead on reversing the de facto LNG ban and that achieving the state’s 100 percent renewable energy goal is not practicable.
Churchill and MacNaughton also said that the price for natural gas futures recently had reached its lowest point since 1990, adjusted for inflation.
Advocates for renewable energy and environmental protection don’t want to see a new move to import LNG even as an interim bridge fuel.
“This takes energy away from the rapid deployment of renewables,” said Henry Curtis, executive director of Life of the Land. “It is a false choice.”
Jeff Mikulina, a longtime local climate advocate, said he appreciates Green’s desire to explore alternatives to the status quo but believes the Energy Office will find that LNG is not a good interim power source during the transition to 100 percent renewable energy.
“It’s a bit of deja vu,” he said. “We’ve been here before. LNG is not a climate winner.”
Mikulina said the energy used to produce and ship LNG, as well as leakage could make using the gas worse than coal, from a climate impact perspective.
Hawaiian Electric has not taken a position on LNG under the current circumstances.
“We’ll continue to follow the policy set by the state,” Darren Pai, a company spokesman, said in a statement. “We are currently aligned (with) the state and community on our decarbonization and clean energy goals and we are continuing on the path that we’re taking to reach 2045.”
