Blue Earth Biodiesel Plant

From Haleakala Times
by Karen Chun

One of the largest biodiesel plants in the U.S. is proposed for Maui. BlueEarth Biofuels will partner with Hawaiian Electric Company to build a 120 million-gallon-per-year plant in three stages. First stage is 40 million gallons earmarked for the Maui Electric Company electrical generators.  Any excess biodiesel will go to other HECO facilities.

The plant will enable MECO to switch from diesel to cleaner-burning biodiesel. MECO already uses biodiesel from Pacific Biodiesel for startups to avoid expensive pollution fines. Biodiesel from sustainably grown crops does not contribute to net CO2 releases nor global warming and it burns 60 percent more cleanly than regular diesel.

A bill to allow the company to borrow $59 million through a state-backed special purpose revenue bond is before the Legislature.

Robert Wellington, BlueEarth co-managing partner, sees the plant as a good match for Maui. The biodiesel process is simple and efficient, requiring less fuel input than ethanol.

Wellington’s partner, Landis Maez, has already relocated to Hawai‘i  and both see this project as a win for the environment and for energy self-sufficiency.

The BlueEarth facility will initially import canola, soy or palm oil from  North America, South America and the Pacific Rim. Wellington says, “We’re hoping that within five years, half the feedstock will be grown on Maui.”
But controversy looms.

Kelly King of Pacific Biodiesel says growing enough feedstock on Maui  is “something which is impossible to achieve.” Her company currently produces about one million gallons of biodiesel on Maui – less than one percent of the proposed BlueEarth plant.

“Statewide the Governor’s Hawai‘i  Biofuels Summit identified 139,400 acres available for biofuels throughout the state, exclusive on non-sugar agricultural lands,” said Wellington.

But supplying just the initial 40 million gallons for the first phase would take 216,000 acres of jatropha or 178,000 acres of kukui – more biofuel land than Hawai‘i  has.  At full capacity the plant would require an astounding 650,000 acres of jatropha feedstock – over four times the amount of biofuel land available in the State.   In comparison HC&S has only 37,000 acres under sugarcane cultivation on Maui.

The most productive oil crop, palm oil, can produce 581 gallons of  oil per acre in good soil with abundant water. Crops such as jatropha (185 gals/acre) and kukui (225 gals/acre) are more suited to Maui’s arid conditions.  Jatropha can be grown on marginal land  and will produce within two or three years. The facility will continue to import feedstock from outside Hawai‘i even if all identified Hawai‘i  land is put into biofuel crops.

An interview with HC&S Director, Energy Development and Planning, Lee Jakeway, revealed that HC&S is currently more focused on their own ethanol production and doesn’t have any present plans to produce oil for the BlueEarth plant. Wellington hopes that will change when the plant is a reality. Jakeway saw several challenges to providing BlueEarth’s vegetable oil requirement locally including water supply, water infrastructure and inadequate land area to produce in the quantities BlueEarth requires.

When asked if he felt local growers could compete on price with foreign palm oil Jakeway indicated that he hadn’t run the numbers but felt it would be “somewhat of a stretch” to think Maui-grown feedstock could be competitive with foreign sources with no import duties applied, even with the proposed subsidized feedstock processing plant.
Wellington stated that local feedstock may not have to compete on price.  “Hawaiian Electric Company’s board recently passed a policy to give preference to locally grown renewable energy feedstocks,” Wellington suggested that perhaps the project-funded  Biofuels Public Trust could provide price supports in addition to oil extraction facilities for local feedstock producers.

Labor, land and water costs will make local bio-oil more expensive than imported unless import duties are enacted. There is no guarantee that the Public Trust fund will have enough money to enable local growers to compete.

If a portion of the feedstock were grown on Maui, it would require a processing plant be built and a delay of from two-ten years while the initial crop grows to seed-bearing age. HECO has established a trust fund to help build a local oil processing facility. Lance Holter, Conservation Chair of the Hawai‘i  Sierra Club, feels that supplying the plant with locally grown feedstock is a problem. “Do we  we want biofuels to become a monopoly directed by one company growing fuel that would take up all of Hawaii’s ag lands to provide fuel to this one electric plant?”
Holter goes on to say that palm oil is in such worldwide demand that rain forests are being razed for oil palm plantations. Thus, the apparently eco-friendly facility could be responsible for a net increase in worldwide CO2 and destruction of the environment.

BlueEarth’s Wellington responds that all of their suppliers certify that the palm oil comes from sustainable sources and thus their use of palm oil will not contribute to rain forest destruction or increased CO2.

Holter’s position is, “Palm oil demand is so high, this simply means that someone who would have bought from these suppliers will now be getting their supply from the slash and burn plantations. Any increase in demand increases the acreage that is being destroyed.”

Kelly King added that the the non-profit Sustainable Biodiesel Alliance rejected labeling some imported palm oil as ‘Sustainably Grown Palm Oil’ in part for this reason.  According to her,  “At the quantities BlueEarth is proposing, it is certain to have an extremely negative impact.”

According to Peder Jensen, of the European Environment Agency in Copenhagen, “If you make biofuels properly, you will reduce greenhouse emissions, but that depends very much on the types of plants and how they’re grown and processed. You can end up with a 90 percent reduction compared to fossil fuels — or a 20 percent increase.”
Since BlueEarth can use any vegetable oil, they feel that focusing on palm oil’s problems is misleading. “Virtually any vegetable oil product can be used and we can mix different feedstocks.” BlueEarth is considering soybean, canola, peanut, cottonseed, and sunflower oil from the Americas and various palm and non-palm tropical oils from the Pacific Rim and Central and South America.

Since a majority, if not all, of the feedstock for the Maui plant will be imported, we asked about potential increase in Kahului Harbor traffic. Wellington replied that the imported vegetable oil just about equals the imported diesel which it will replace. He expects one ship per month to export biodiesel to other islands once the third stage is built in about 2011. A spokesperson for Save Kahului Harbor indicated that this was not a concern for them.

Rob Parsons, former Maui Environmental Coordinator, questioned the potential 20 million gallons of glycerin waste product per year. “It could end up in our land fill. Increased biodiesel production has led to a glut of glycerin on the market.”
“The glycerin could be used to power the biodiesel plant process using a glycerin powered cogeneration system to provide the required power and steam, converted via a newly developed technology to methanol for the biodiesel refining process, or even burned as cheap, low-grade fuel in Kahului Power Plant,” Wellington said.
“With all of this value in the waste stream glycerin, none of it will end up in the Maui landfill.”

Critics want to see agreements in place to build the the glycerin infrastructure before they’ll accept assurances it won’t end up in landfill. “‘Could be used’ doesn’t mean ‘will be used’”, said Holter, “That’s all pie in the sky without agreements and timetables.” According to Parsons, “This facility is way out of scale with local sustainability for our island. We shouldn’t rush into such an endeavor without a complete understanding of its ramifications. Small, methodical steps make more sense.”