Hawaii’s State Energy Office called for more imports of liquefied natural gas (LNG) in a report released Friday aimed at tackling high electricity costs while continuing the development of renewable energy in the state.
The report, which Democrat Governor Josh Green commissioned in May, stressed the need to reduce dependence on fuel oil and improve grid reliability. In its analysis, the Hawaii State Energy Agency emphasized that LNG can serve as a “bridge fuel” to supply the state’s energy needs while not compromising long-term decarbonization goals.
This report comes on the heels of the recent reversal of the Biden administration’s LNG export ban which received widespread criticism, and highlights how LNG continues to be a solution at home and abroad for crucial energy needs.
LNG Needed for its Reliability, Affordability, and Flexibility with Renewable Energy Sources
The report – entitled “Alternative Fuel, Repowering, and Energy Transition Study” – looked at a variety of energy sources to determine which were most-effective at meeting the state’s energy needs. The Hawaii State Energy Agency concluded LNG was the best option due to its affordability and reliability – as well as its impact on reducing greenhouse gas emissions:
“This study confirmed prior work that identified LNG as a key component of lowering the state’s carbon emissions and promoting additional renewable energy integration onto the grid… LNG has both lower prices and less price volatility than low sulfur fuel oil, making it a potential mechanism to address high energy prices and Hawaiʻi’s affordability challenges.” (emphasis added)
The report also noted LNG’s flexibility with being integrated and used alongside other renewable energy sources, saying:
“LNG offers the added benefit of flexibility for future transitions, as infrastructure built for LNG can later be adapted for hydrogen-based energy.”
This combination of reliability and flexibility makes LNG the perfect choice for Hawaii. In its report, state energy officials recognized LNG’s importance to the state, and highlighted there were no other viable energy source options if Hawaii’s renewable energy goals are to be met:
“LNG emerged as the only near-term fuel with the potential to cost-effectively reduce the State’s greenhouse gas emissions during the renewable energy transition. LNG production technologies are mature, with key components of the supply chain having been widely implemented.” (emphasis added)
In the report’s conclusion, state energy officials confirmed the need for LNG as a “primary” energy source to meet the state’s growing power demand, saying:
“The preliminary pathway to meet the power demand for Oʻahu indicates LNG deserves careful consideration as a primary thermal generation source, using built-in fuel flexibility from current generation technology to accommodate lower-carbon, fossil-free alternatives as they mature and become more cost-effective.” (emphasis added)
Hawaii’s Democratic Governor Looks to LNG to Achieve Ambitious Renewable Energy Goals
This isn’t the first time LNG has been looked to in the Aloha State. Last May, Hawaii’s legislature passed an ambitious bill – H.B. 623 – with the stated goal of achieving 100 percent renewable sources of energy by 2045. If accomplished, Hawaii would become the first state to achieve this.
But looking at current statistics, Hawaii will need LNG for the foreseeable future if it is to achieve its lofty goals: In 2023 renewable energy sources accounted for only 31 percent of the state’s total power generation. At the same time, Hawaii has the highest average electricity price of any state – almost triple the U.S. average.
In May, when Hawaii Governor Green commissioned the analysis of energy sources to determine what mix gets the state to its goal of full renewables for electricity by 2045, he similarly highlighted the benefits of LNG:
“Can I just be blunt? One of those ways is liquid natural gas and that gives a lot of people hives. I get it. I do. But if the goal is to use less carbon and get there sooner so that we are actually renewable, we have to have everything on the table.” (emphasis added)
Beyond asking for a report, Gov. Green has placed a heavy focus on increasing energy supply through executive orders. This Tuesday, Gov. Green issued an executive order to build out the state’s energy infrastructure with renewable energy sources. In a press release announcing the order, he stressed the urgent need Hawaii has for increased energy supply:
“[Hawaii] needs to take some drastic steps to reduce energy costs, which have continued to rise and have contributed to the high cost of living for our people.”
“High electricity and utility costs impact households, are a drag on Hawaiʻi’s economy, and add additional tax burdens by increasing government operating expenses. Energy cost increases have represented a $15M recurring increase in the Governor’s latest biennium budget for the Department of Education’s operations alone.”
As the number one LNG exporter in the world, U.S. industry is more than able to assist Hawaii in meeting its energy needs – showcasing another vital example of why LNG is needed both domestically and globally.
Bottom Line: Hawaii Governor Josh Green and the state energy agency both recognize the need to import LNG in order to achieve energy security and affordability, while simultaneously helping meet the state’s lofty renewable goals. The state’s problems – high energy prices, increasing grid demand, and the need for flexible energy sources – can all be met through importing domestic LNG.
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