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Wednesday, August 17, 2011

WHAT IS HAWAII'S BIGGEST PROBLEM?

This is part 3 of a series I have initiated to lay the groundwork for my presentation to the Engineers and Architects of Hawaii in ten days.

Today, I focus on Hawaii.  What are our problems?

1.  Education is a convenient punching bag, especially with those furloughs that gave this state the least number of instruction hours in the Nation, the fact that the Hawaii State Teachers Association yesterday filed an ethics violation charge against Governor Neil Abercrombie and the embarrassment that our students regularly score in the bottom tier (say, worst seven states) on standardized tests.  Thus, problem #1 is that we don't work together for the common good.  But how good or bad our education system is is almost irrelevant to the so-called looming doom.  No amount of money will help much, and we can't afford it anyway.  Click on my final summary from SIMPLE SOLUTIONS for Humanity on education to understand that, while short-sighted, it just does not matter because we, the people, mostly caused this travesty.

2.  What about homelessness and poverty?  One third our children are from single-parent homes and 30% come from families where no one had full-time, year round employment.  Governor Abercrombie just completed his 90-day plan for the homeless, which was mostly to move them away from Asia-Pacific Economic Cooperation (APEC) venues. Which, of course, led to the Governor to declaring that the two were not related.  As terrible as all (poverty/homeless) this might be, it will only get worse no matter what we do.  Problem # 2, when you come down to it, is that we don't have any money to do anything.

3.  I can go into traffic (and the mass transit controversy), cost of living, and a lot more, but let me get to the core of the matter.  The one most important thing for the future of Hawaii is our biggest problem, ENERGY.  When oil jumps past $150/barrel and stays there, or worse, our economy will plummet.  The world's will too, but Hawaii is worse off because our only industry is tourism, and visitors will drop by 20-50%, and stay there, maybe even for decades.  We tried to diversify, but failed.  Worse, we've stopped trying.

Regarding energy, mainly because this is where funding exists, we started with developing renewable energy electricity and weaning ground transport vehicles away from gasoline.  The going has been rocky, but at least we're trying.  However, if shoring up our economy is crucial--that is, to sidestep that predicted doom--what we really need are solutions for aviation:  develop a renewable substitute for jet fuel and/or a next generation aircraft, probably one that will utilize hydrogen.  Hawaii is much too irrelevant, of course, to do any of this alone, and even if begun today with windfall input, it will take a generation or two to have any effect.  But we need to start now, and we do have some national connections:  President Barack Obama and U.S. Senator Dan Inouye.

Which leads me to an announcement from President Obama yesterday:

President Obama Announces Major Initiative to Spur Biofuels Industry and Enhance America's Energy Security

August 16, 2011

President Obama today announced that the U.S. Departments of Agriculture, Energy, and Navy will invest up to $510 million during the next three years in partnership with the private sector to produce advanced drop-in aviation and marine biofuels to power military and commercial transportation.


Isn't that a lot money?  Yes and no.  Yes, because there was previously nothing much for sustainable aviation, and, further, the entire budget of the Office of Energy Efficiency and Renewable Energy in the Department of Energy in 2009 was $625 million, about the same every year as the past decade.  However, NO because in 2009 the Department of Defense spent more than $56 billion ($56,000 million) for military research (mind you, this is just for R&D, not weapons nor salaries).  If we're serious about the future of the world economy, especially as we don't have a real major enemy anymore, the expenditures, if anything, should be reversed.

In any case, Hawaii should be in good position to benefit from this aviation initiative.  As Senator Inouye is chairman of both the Appropriations Committee and Defense Subcommittee, we hopefully will gain a leadership role in this effort.

The Defense Advanced Research Projects Agency a year and a half ago touted that jet fuel from algae could be produced in a few months for $2/gallon.  I questioned them then, and I still contend, that this commercial bio jet fuel a decade from now will cost the equivalent of $3-$5/gallon to produce.  While this does not look too bad, $4/gallon equals $168/barrel, and you will still need to add profit, taxes and so on.  The average gasoline price today is around $3.70/gallon, and that for jet fuel, $3/gallon.  Generally, jet fuel sells for $8-$32/barrel more than the price of petroleum.  Thus, if crude oil goes up to $150/barrel, then jet fuel will jump by 30%.  

Combined with what should be the state of the world economy under this condition, I fear for the future of tourism in Hawaii, and can only project a serious local economic depression.  When will Peak Oil occur?  Here to the left are all the credible predictions.  The consensus seems to be this year, but let us be super conservative, and say, by 2020, when one scenario could well be...$350/barrel!!!  (Click on the graph to view the details.)

Stay tuned for what we must do, immediately, to ameliorate the anguish to come from this projected doom.  Note that I do not say "prevent," because it's already too late.

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The Dow Jones Industrials inched up 4 to 11,410, a disappointment, for it was plus 124 at one point today, while world markets were mixed.  Gold was unchanged at $1786/toz, the NYMEX crude future at $87/barrel and the Dated Brent Spot at $110/barrel.

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Tropical Storm Fernanda I mentioned on Monday is still projected to move towards Hawaii, but will weaken and should move south of the islands by early next week.  Tropical Storm Greg, though, just formed south of Mexico, and will become a hurricane heading for Hawaii, but will diminish in a few days.

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