Statehood & Business: Hawaii Statehood 50 Years
By HARRY EAGAR, Staff Writer
POSTED: August 23, 2009
In 1959, plantation agriculture was big business in Hawaii. The plantations were branching out into tourism, but sugar and pineapple – and coffee in Kona – dominated.
In August, with the days of the territory numbered, a typical issue of The Maui News advertised a total of half a dozen help wanted ads. The plantations didn’t advertise for help; they had their own labor recruitment system.
It dwarfed the nonplantation labor system. In August 1959, pineapple plantations hired 1,100 Maui youngsters on school vacations, most of them to work in noisy, hot canneries.
The jobs were much sought after. Damien Farias, owner of Maui Toyota, recalls waiting for three days on a labor bench for a chance to work at a cannery on Oahu when he was in school.
Statehood was expected to give a boost to agriculture. The summary of Hawaii agricultural history published by the state Department of Agriculture says that "with statehood, federal funds became available for the development and growth of Hawaii’s agricultural industries with funding for programs such as farm credit, natural resources and statistical services."
It did not, of course, work out that way.
May 21, 2007
Hawaii: a return to the land, for fuel
By Matt Villano
LAHAINA, Hawaii – Here on the West Side of Maui, where lush mountainsides and the warm waters of the Alalakeiki Channel juxtapose increasingly crowded roadways and a spate of new luxury hotels, the push for renewable energy has found an unlikely advocate: the chief executive of one of the most aggressive developers on the island.
The real estate maven, David Cole, has used his position as head of Maui Land and Pineapple, a land holding and operating company, to promote sustainable development. The effort harks back to Hawaii?s past, with plans to return some farmland to production ? this time for energy rather than food ? after so many years in which the state turned its back on its agricultural history in a headlong rush into tourism and real estate.
Perhaps the most notable effort is Hawaii BioEnergy, an international consortium that includes two other local landowners, Tarpon Investimentos, an investment company in Bermuda, and Brasil Bioenergia, an energy company in S?o Paulo.
The consortium, which also involves the co-founder of America Online, Stephen M. Case, and the venture capitalist Vinod Khosla, took form last July with the goal to make Hawaii, which has long had to pay high prices for imported fuel, largely energy-independent.
?As islanders, we?ve had to provide for our own survival for hundreds and hundreds of years,? said Mr. Cole, 55, who was raised on Oahu but spent most of his adult life on the mainland before coming to Maui in 2003.
?Now that the technology exists to turn some of our natural resources into energy, there?s no reason we should be getting energy from anywhere else,? he said.
While companies on the mainland are subsidized to produce ethanol from corn, Hawaiian companies and Hawaii BioEnergy are turning to other materials, particularly sugar cane, which are potentially far more efficient sources of ethanol per input of energy and raw material than corn.
Statistics from the Department of Energy, the Renewable Fuels Association in Washington and evidence from Brazil?s experience indicate that ethanol from sugar cane is considerably cheaper to produce than ethanol from corn, a savings that potentially could trickle down to consumers in the form of lower energy bills.
Even without these numbers, the business case for investing in alternative energy in Hawaii is compelling. The Hawaiian archipelago relies on imported oil for nearly 90 percent of its energy needs, making it one of the most expensive places in the nation to buy gasoline and pay for electricity and heat.
In May 2006, Hawaii passed a bill requiring that 20 percent of all highway fuel demand by 2020 must be provided by renewable fuels like ethanol, biodiesel or hydrogen. Another bill under consideration in the State Legislature would allow biofuel processing centers to be permitted in agriculture districts and would develop a baseline percentage of energy feedstock to be grown in the state.
Charmaine Tavares, mayor of Maui County, which includes the islands of Maui, Lanai, Molokai and Kahoolawe, said the goals were ?admirable,? but noted that more immediate changes were necessary as well.
?Every time we pay our energy bills, we?re all aware of the need for renewable energy,? Ms. Tavares said. ?The year 2020 just seems pretty far away.?
Mr. Cole, whose company is one of the largest landowners on Maui, agreed. Last summer, after an eye-opening trip to Brazil, he took matters into his own hands.
With the help of Mr. Case, whom he met during a stint at America Online in the 1990s, Mr. Cole signed up Hawaiian landowners like Kamehameha Schools, an independent school system and the largest landowner in the state, and the Grove Farm Company, a 22,000-acre sugar cane plantation in eastern Kauai that is owned by Mr. Case.
The pair also enlisted help from companies overseas, and recruited Mr. Khosla, a co-founder of Sun Microsystems in 1982 who has become one of the biggest backers of renewable energy in the world. Hawaii BioEnergy was born.
Since then, these founding partners and Maui Land and Pineapple have invested nearly $1 million in cash and put a number of full-time employees to work running the business. They expect other investors to help raise an additional $50 million to $80 million to get the operation off the ground.
?When you consider the tropical weather and all the sun Hawaii gets, it is a perfect place to prove that fuels made from biomass can be cost-competitive,? Mr. Khosla said of the project.
Still, the real heart of this consortium is land. The three landowners own about 10 percent of the arable soil in the state: 450,000 acres in all.
Though most of this soil is fallow today, Mr. Case wrote in a recent e-mail exchange that the partners plan to combine contiguous parcels, coordinate planting, harvesting and processing operations, and maximize economies of scale.
?These efforts are not without risk, but anything important has risks,? he wrote of the Hawaii BioEnergy plan. ?Hawaii?s first act was agriculture, and the second act was tourism. Now it is time for the third act, Hawaii 3.0.?
By some accounts, this new era is already under way. From a conference room at the understated Maui Land and Pineapple headquarters in Kahalui, Mr. Cole recently reviewed a new Hawaii BioEnergy feasibility study for producing ethanol from sugar cane on Maui, noting that the consortium could begin plant construction as soon as 2010.
Ultimately, he said, the plant would produce 27 million to 28 million gallons of ethanol a year, and would use the fuel to defray its own energy costs and to sell elsewhere in the state. He added that the group has explored other potential sources for ethanol, including soybeans, switch grass and a type of elephant grass called miscanthus.
Mr. Cole noted that the consortium also looked into producing ethanol from potential ?co-products? of the fuel-making process, including electricity from bagasse (the residue produced after crushing sugar cane), biodiesel from algae nourished by carbon dioxide off-take in the distillation process and animal feeds from the residual algae stream. All together, burning this additional ethanol could add another 25 to 30 megawatts of sustainable power capacity, Mr. Cole said.
?Part of our conception is that we get the most out of the project by making all waste streams into food streams for something else,? Mr. Cole explained. ?Before we invest in a particular technology, we want to be sure we?re investing in the technology that will give us the biggest and broadest return.?
To be sure, Hawaii BioEnergy is not the only partnership interested in renewable energy; elsewhere, the state?s two remaining sugar cane companies are exploring renewable energy efforts of their own.
On Kauai, for example, the cane producer Gay & Robinson recently received a state permit to build a $36 million ethanol plant in the town of Pakala as part of a joint venture with a local energy company. The other concern, the Maui-based Hawaiian Commercial and Sugar, is also investigating renewable fuels.
Because these companies currently combine to harvest 270,000 tons of sugar cane each year, they may be closer to actually producing renewable energy than Hawaii BioEnergy is. Alan Kennett, president and general manager of Gay & Robinson, suggested that his company could begin ethanol production as early as next year.
David Pimentel, professor of ecology and agricultural sciences at Cornell University in Ithaca, N.Y., said the fact that there would soon be various options for renewable energy in Hawaii was a step in the right direction.
?Any investment in renewable energy is a good investment,? he said. ?Beyond that, Hawaii should be practicing general conservation with smaller cars, less air-conditioning and decreased consumption over all.?
If anybody understands the need for conservation in Hawaii, Mr. Cole does. A stocky man with a graying goatee, he grew up in Kailua, a suburb of Honolulu, hiking through tropical forests and hanging out on beaches with friends. His first job on the island was delivering copies of The Honolulu Advertiser. He attended the University of Hawaii as an undergraduate.
Mr. Cole left Maui for law school on the mainland in the 1970s. Though he spent almost 30 years there before returning to head Maui Land and Pineapple in 2003, his love for the local environment still runs deep; he regularly rhapsodizes about the beauty of dawn, the sweet sounds of birds and the annual migration of humpback whales.
He also serves as chairman of the Hawaii Nature Conservancy.
Mr. Cole has extended these pro-environment ideals to many of his business decisions. This year, when construction crews dismantled the former Kapalua Bay Hotel, which is owned by a subsidiary of Maui Land and Pineapple, Mr. Cole required them to reuse 97 percent of the material in the company?s new offices.
Instead of recycling, he called the process ?upcycling,? and noted that his desk was a door in its former life.
Planning the next development ? an upscale neighborhood on the slopes of Mount Haleakala called Haliimaile (pronounced hah-lee-ee-my-lee) ? Mr. Cole has commissioned architects to design the enclave to minimize vehicle use, create a natural water filtration system, and incorporate solar and wind energy so residents generate more power than they consume.
Though the neighborhood is still in the permitting process and probably years away, Mr. Cole said he hoped this kind of forward thinking, together with the efforts of Hawaii BioEnergy, would eventually inspire outsiders to look to Hawaii for ideas about responsible and sustainable development.
?The whole world is looking for models,? he said. ?Years from now, when people think about renewable energy, I want them to look here and say, ?If it worked for Hawaii, it can work for us.? ?
Copyright 2007 The New York Times Company
Source: New York Times