Hawaii and the Pacific Basin
The dwindling global supply of fossil fuels and the resulting escalation in prices has set the stage for entry of commercial biofuel produced from biomass, including co-products and bi-products. This transition in the energy sector’s feed stocks offers Hawaii a unique opportunity to locally produce biofuel from locally produced biomass feed stocks, and ultimately support the stabilization of the state’s energy resources; increase the local circulation of energy dollars; and further under gird Hawaii’s agricultural industry.
In October 2009, Secretary of the Navy Ray Mabus announced plans for a “Great Green Fleet” to demonstrate that Navy and Marine Corps ships and aircraft could operate utilizing non-fossil fuels by year 2016. In January, Agriculture Secretary Tom Vilsack signed a memorandum of understanding (MOU) with Secretary Mabus to support the biomass and biofuel development that would ultimately fuel the Green Fleet. Hawaii was selected as a pilot region, with USDA providing the “push” through research and business incentives and the Navy making the “pull” with plans for purchase of biofuel from locally produced biomass.
More recently, the local electrical utility announced plans to seek biofuel generated from locally produced biomass. For Hawaii there is the potential to establish and meet new market demands for up to 80 million gallons of biofuel per year from the Department of Defense and another 200 million gallons per year from the utility. This projection does not include other businesses that may pursue entry and expansion into other local markets, such as the fueling for commercial and private vehicle sectors.
This is a tremendous opportunity, which raises a series of questions that will be explored in this and later entries of this blog:
* Does Hawaii have the capacity to develop a biomass sector to supply 280 million gallons of fuel annually?
* How is this level of production to be accomplished in a manner that is sustainable in terms of the sector’s ability to remain competitive with other parts of the world; balancing the demands placed upon Hawaii’s environment through the use of land and water; and achieving economic gain for the communities in which this sector is developed?
* How do communities determine a balance in producing food and fuel?
* What opportunities does this expanding biomass and biofuel sector represent for Hawaii’s agriculture stakeholders?
To start with the question about what opportunities will likely present themselves for agricultural stakeholders. There are economic generators and synergies that occur with the start-up and expansion of industry sectors, such as deploying idle lands and infrastructure; increasing demand for related equipment and supplies; development of distribution systems, labor, education; and expansion of research. Hawaii’s relatively small and isolated location naturally encourages partnering and synergies among businesses and sectors. When one sector thrives so do others and marked change occurs.
Biomass and biofuel production in the quantities required to meet the projected market demands are likely to be varied, as will the feed stocks and the processing systems. Some will be very large and others smaller. While there will be the large “pull” from the Navy and others, ultimately it will be the private sector that “drives” the market and determines the future of the sector, including its scope; the products; and the players.
Some small landowners and producers may find no initial market opportunities; yet, these producers may still benefit directly by selling co-products and bi-products for processing into biofuels. Or alternately, bi-products of the biofuel processing may result in new locally produced sources of animal and fish feed which ultimately may be less expensive than imported feed or at a minimum keeps dollars circulating in the local economy.
In order to support and incentivize the development of the biomass and biofuels sectors, the USDA is targeting resources, programs, and services made available through the Energy Section of the 2008 Farm Bill. Highlights of resources available for producers and processors include:
* Rural Development loans, loan guarantees, energy audits, and grants to support developing renewable energy systems and helping agricultural producers and businesses adopt energy efficiency improvements; and
* The Farm Service Agency’s Biomass Crop Assistance Program, which supports the establishment and production of crops for conversion to bioenergy, bio-based products and power; and
* The Research, Education and Economics division’s comprehensive bioenergy research program, feasibility studies, and technology transfers to develop new varieties and hybrids of bioenergy feed stocks.
For more information regarding U.S. Department of Agriculture’s biomass and energy programs visit www.energymatrix.usda.gov.