Oil Expert Questions Local Renewable Energy Market
Updated On: Jan 12 2012 01:17:04 AM HST
One of Hawaii's two oil refineries is up for sale after Tesoro backs out of the island market. Experts suspect Hawaii's push toward renewable energy is one of several factors affecting the market.
International oil consultant Fereidun Fesharaki says he was not surprised by Tesoro's announcement to sell its refinery and 32 local stations.
It's a move he expected first by Chevron, which owns the state's other oil refinery.
"Refineries look at the long term and they see a no-growth market, expensive crude, and possibly losing ground," said Fesharaki.
The downsides of refining oil in Hawaii have been building for years: all crude oil is imported and from the Asian market, which is proving to be even more expensive than the Middle East, especially after Japan's earthquake and tsunami.
Then there is the push toward renewable energy to lower Hawaii's carbon foot-print and wean off that expensive crude oil.
The state is investing in photovoltaics, wind farms and electric cars.
The state's goal now: 40 percent renewable energy by 2030.
Fesharaki says there's a problem.
"Often people in Hawaii think if you use sun, wind or ocean it's free. It's not free," he says.
He says, right now, renewable energy costs are even higher than oil costs: about 100 dollars a barrel for oil and up to 200 for renewable energy.
He expects it will be our grandchildren who will see renewable energy prices at reasonable levels.
"The renewable push will be slowly and I emphasize very slowly over 20 to 40 year period of time," he estimated.
In the meantime, he believes another alternative is in order and within our reach.
The federal government has already labeled natural gas as what they call a "transition fuel."
That definition allows natural gas companies to take advantage of tax breaks and incentives, which are reasons to do business and bring business to Hawaii.
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