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October 2, 2014

Coming Soon to Hawaii: Natural Gas

Hawaii could soon be abandoning petroleum and switching to liquefied natural gas (LNG). Hawaii officials have been searching for a way to reduce electricity costs, improve grid resiliency, and provide a low-cost alternative fuel for ground fleet and marine transportation.

Imported petroleum currently supplies 90% of Hawaii’s energy, but high oil prices are causing large electricity costs. A Hawaii resident’s electric bills cost anywhere from 3 to 5 times higher (more than 30 cents per kilowatt-hour) than the average of mainland residents.

The recent advances in LNG transportation could help provide quick relief for residents. Now that natural gas is being liquefied for transportation (LNG carrier), it can be transported great distances with reduced risk, which will allow non-gas producing areas such as Hawaii to take advantage of the benefits associated with natural gas such as reduced costs for home heating, cooling, or cooking, reduced fuel costs for transportation, steam heat production, electrical generation and manufacturing and industrial uses.

This spring, Hawaii began importing limited quantities of LNG to be used as a backup fuel for its synthetic natural gas operations to increase the reliability of the gas supply to current utility customers. The goals for natural gas use in Hawaii are currently to reduce the electricity costs, to improve grid resiliency and renewable penetration by using natural gas in gas-fired electric generators, to provide a cleaner, low-cost alternative fuel for ground fleet and marine transportation.

Natural gas is a cleaner and lower cost alternative to petroleum. Now that smaller-scale standardized LNG shipping containers allow suitable volumes of LNG to be trucked, railed and shipped like any other containerized cargo, Hawaii may finally be in a position to take advantage of the lower cost fuel. In the spring of 2014, Hawaii took bids on a proposal for 800,000 metric tons of natural gas to be delivered to power plants on Hawaii’s five main islands annually.

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