It all started, said Alicia Moy, about five years ago, when the two oil refineries serving Hawaii were contemplating pulling up stakes.

Moy, who heads the fuel utility HawaiiGas, said that felt like a serious threat, because the company used a byproduct of petroleum, naphtha, to create synthetic natural gas that it sells to customers. The refineries remain for now, but exploring liquefied natural gas (LNG) as a fallback option, she said, was an imperative.

"For us, converting from synthetic natural gas to liquefied natural gas makes a lot of sense," added Moy, HawaiiGas president and CEO, during a recent meeting with the Honolulu Star- Advertiser Editorial Board.

It’s what happens beyond that point where opinions diverge on which course seems sensible. HawaiiGas is proposing to pursue the option of bringing in LNG in larger quantities — much larger — than required to serve its current customers.

Hawaiian Electric Co., who at the outset would be by far the principal user of the fuel as a substitute in its oil-fired turbines, believes it could secure a better price than the gas company could. NextEra Energy, the Florida-based company seeking to acquire Hawaiian Electric Industries, has strong connections with natural gas sources, company officials say.

Finally, environmental groups such as Blue Planet Foundation don’t think LNG makes much sense for Hawaii at all. LNG is being proposed as a "bridge" fuel as Hawaii transitions to renewable energy to supply much of its needs. But the foundation posits that the investment in infrastructure needed to accomplish that could cost as much or more than making the jump to green energy without a bridge.

Hawaii stands at a pivotal juncture where LNG is concerned — and right at the time when a new state administration is reviewing its energy policy. Also, new leadership is being installed at the Public Utilities Commission; how it will weigh all this and decide on the direction, remains an unknown.

The case that HawaiiGas makes is that it already has many years of bulk importing of its other fuel, propane, in tankers, supplemented by the propane also produced at the refineries, said Joe Boivin, senior vice president of business development and corporate affairs. Demand for propane had long outstripped the supply the utility could get locally, he added.

"Because of that activity over the past decade, we’ve really developed a strong skill set and expertise in marine logistics planning and gaseous fuel supply and delivery," Boivin said.

The HawaiiGas approach to the state’s clean-energy goals was largely to pursue the capture of biogas produced in landfills and the production of new product through the planting of various crops, he said, but that’s proving to be a long path.

Because of the land costs and other production expenses involved in the crop planting, the most expedient of those options seems to be the landfill methane, which can be cleaned to utility grade and injected into the pipeline. That’s gas that’s currently being flared to dispose of it, he said.

However, Boivin said, the city is requiring a review process that starts with a request for information, with the aim of sorting through its various options. The request is expected to go out this year, to be followed by a request for proposals, he said.

HawaiiGas argues that it needs alternatives even more expedient than this.

"You’ve got two refineries operating in a market of declining demand," Boivin said. "The state completed a refinery task force report in 2014, and the conclusion of that was one or both refineries are likely to close by 2020."

That 2020 date is the driver behind HawaiiGas’ aggressive timetable to establish a supply route for LNG, one that projects its operation starting in 2019. And the principal user of that fuel would be HECO. Both utilities face approaching federal deadlines for lowering emissions, something LNG can help them do at what is now a lower cost.

But HECO has been positioning itself, too, in what appears to the outsider as a race to control the supply chain of LNG.

"I wouldn’t call it a race," said Peter Rosegg, senior communications specialist. "We’re kind of joined together, but we’re not always perfectly in step."

About three years ago, when the price of natural gas started to plummet, then-Gov. Neil Abercrombie wrote a letter to the electric company, asking executives to look into LNG as a cost-saving means of reducing oil dependency, Rosegg said.

That led in March to HECO putting out a request for proposals to bring in LNG by containers, he said, adding that the utility is very close to an agreement with a preferred bidder, a company in British Columbia, to produce the LNG for shipment.

"We are quite confident that we will get the lowest possible rate," Rosegg said.

He added that inquiries into LNG started two months before NextEra approachedHEI about the acquisition, and described it as "coincidental" that NextEra does use a lot of natural gas in its Florida electric plants, and has a lot of experience with the optimal use.

Part of the tension between the utilities centers on a memorandum of understanding executives signed. The agreement was to work collaboratively on any needed infrastructure and development needed for bulk imports of LNG, and unilateral moves by HawaiiGas has caused some concern, Rosegg said.

However, for all the discussion about potential cost savings, the fuel markets are in such flux that calculations being made now may soon be outdated. Richard Wallsgrove, program director of Blue Planet Foundation, said there is immense uncertainty about where prices may be going next, making the investment in infrastructure a greater risk than the consumer may want to underwrite.

The cost differential that made LNG such an attractive alternative to oil was caused by a "stranded oversupply" of LNG in the U.S., he said: With the recent tumble in oil prices, the margin has narrowed substantially, he said, to the point that in December, the market costs were relatively even.

Whether or not that changes again with oil prices resuming an upward climb is open to debate. Wallsgrove cited opinions of experts speaking at a recent legislative briefing convened by the Hawaii Energy Policy Forum. One opinion: It’s a better bet to buy LNG that is linked to oil in pricing because oil is likely to be cheap. The whole price relationship may have "flipped," he said.

"You couldn’t have a better example of just how crazy it is to be making huge infrastructure decisions based on this stranded oversupply and the weird economic imperfections we’re seeing," Wallsgrove said.

Blue Planet also believes that the increase in renewable-energy generation will continue to accelerate, which suggests large imports of another fossil fuel will not be worth the investment in offshore conversion plants, pipelines and other facilities.

However, state policy analysts still see merit in keeping Hawaii’s energy options open. Mark Glick is the administrator of the State Energy Office, part of the Department of Business, Economic Development and Tourism, and he said LNG can be an effective part of the diversified energy portfolio if it’s all planned carefully.

Since the enactment of the Hawaii Clean Energy Initiative, the push has been to reduce all fossil fuels for electrical generation, Glick said, including LNG.

However, he added, even as the demand declines for fossil fuels, supplies of LNG could be adapted for transportation uses, largely as a replacement for diesel in fleet vehicles and other applications, as has happened in California and other states. This could be a good transitional fuel as advances are made in the commercialization of hydrogen fuel cell vehicles (HCVs). Toyota is one company expected to roll out HCVs this year.

In the near term, though, the future of LNG remains ambiguous, with points and counterpoints being made on all sides. Deciding who plays what role in this is up to the PUC, Glick said, but he noted the logic of the HawaiiGas argument.

"They are the gas utility," he said, "and as the gas utility it would seem to me it meets their mission better."