POSTED: 4:28 p.m. HST, Aug 17, 2012
LAST UPDATED: 7:35 p.m. HST, Aug 17, 2012
Switching from oil to natural gas for the bulk of Hawaii’s electricity production could lower power bills “for many years to come,” an East-West Center energy expert said today.
There are several initiatives underway to ship liquified natural gas to Hawaii to take advantage of a glut on the mainland that his driven prices of the commodity to historic lows in recent months.
“Hawaii has no choice but to go to natural gas. It’s just the speed that is in question. You can go fast or slow, but you have to go,” said Fereidun Fesharaki, an East-West Center senior fellow, and head of an international energy consulting firm.
Hawaii is the most petroleum-dependent state in the nation. Oil accounts for about 90 percent of all energy needs and 75 percent of electricity production in Hawaii, according to the U.S. Energy Information Administration.
The natural gas option has been discussed in Hawaii in the past during periods of high oil prices, Fesharaki said at a seminar sponsored by the Hawaii Energy Policy Forum and HAWAI'IGAS, the state’s only gas utility. But enthusiasm waned when oil prices came back down.
“This time I see oil staying in the $80 to $120 a barrel range for many years to come,” Fesharaki said.
The benchmark oil futures contract closed at $96.01 a barrel Friday on the New York Mercantile Exchange, the highest closing price since May 11. Natural gas futures, meanwhile, fell for the fourth straight week to settle at $2.719 per million British thermal units. Natural gas futures have fallen 9 percent so far this year.
“The gap between natural gas and oil prices will continue into the future,” Fesharaki said.
HAWAI'IGAS last week applied with federal regulators to ship liquefied natural gas to Hawaii from the West Coast in refrigerated tanks mounted inside shipping containers starting later this year. The quantities of LNG would be relatively limited in the first phase of the project, but the company said it plans to eventually use specialized tankers to bring in larger quantities of LNG that could be used for electricity generation.