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The Garden Island

Congresswoman Hirono Hears of Ethanol Plantation

KAUA'I, HI -- Gay & Robinson President Alan Kennett, and key players involved in the historic sugar company’s shift to a renewable energy plantation, updated U.S. Rep. Mazie Hirono yesterday at his Westside office.

“I would like nothing more than to see your project succeed,” the congresswoman said, adding that realizing an energy independent Hawai‘i is critical. 

Company officials noted progress, bumps in the road and hurdles ahead in the transition away from producing sugar as a raw commodity. They identified a slow permitting process, leery equity investors and housing woes, but remained optimistic and committed.

The multi-pronged project could preserve the Westside’s rural character, create up to 200 new jobs and reduce the state’s dependence on imported oil, Gay & Robinson Environmental Manager Howard Greene said.

The first major component of the alternative energy farm will be a refinery that will annually produce 12 million gallons of ethanol from molasses. The feedstock supply will come from 7,500 acres of sugar fields that Gay & Robinson cultivates.

The company has partnered with Pacific West Energy, which have together invested $80 million in the project.

An Environmental Protection Agency notice regarding sewage issues at some of the roughly 400 houses Gay & Robinson maintains at three separate camps has presented a “$1.25 million problem,” Kennett told Hirono.

The company has responded to the agency with a plan, he said, without providing many details.

An engineering firm has been hired to start designing septic solutions to the sewage problems at one of the camps, he said, which currently use cesspools. When the homes were first built, they had outhouses.

Kennett said he understands the need to resolve the issue, but it “causes heartburn for the partners we’re working with.”

Pacific West Energy President William Maloney, who is in the process of bringing in “major equity players,” said it is bad timing.

Gay & Robinson could come into compliance by closing down the homes, Kennett said, but the company absolutely does not want to go that route.

Roughly 160 homes were identified as being problematic, Greene said, but only 120 of those are occupied.

Greene said it is tough to tell residents the company plans to install a $15,000 sewage system at a 100-year-old house with a leaky roof, but that is what it may take to resolve the issue.

Design work has started for 80 homes, Greene added.

Active Gay & Robinson employees pay nominal rent and pensioners pay nothing, Kennett said.

“The only way we can attract employees with the wages we pay is with housing,” Greene said.

Aside from the EPA issue, which has been ongoing since 2000, a slow permitting process has frustrated company officials.

Both issues are intertwined when it comes to attracting investors, Maloney said, who feel more comfortable providing funds for a company that has already secured the necessary permits for the project and does not have potential violations hanging over its head.

The state Department of Health air permit for the ethanol refinery took 13 months to secure, Kennett said.

The company must resubmit it to the agency for some modifications, Greene said, such as removing coal as a potential source to power the boiler.

Gay & Robinson in November yielded to concerns from community members over the planned use of coal for the project, but Kennett said taking this power source off the table added delays.

“In retrospect, it was probably the right decision,” he told Hirono, adding that it “should be no problem” to have it re-permitted.

“We’re trying to be responsive to the community and be all green,” he said.

Construction for the ethanol plant is expected to begin by late-December or early January and be operational by the second quarter of 2009, Kennett has said.

The company plans to later add to the energy farm solar and wind power, technology to capture methane gas and other byproducts and biodiesel facilities, Greene said.

“We’re really at the forefront of doing a lot of exciting things,” Kennett said.

Hirono, D-2nd District, made a three-stop visit yesterday on Kaua‘i, later attending a blessing ceremony at Kikiaola Harbor and the Aloha ‘Ike Dinner, according to Joshua Wisch, the congresswoman’s district director.

Hirono voted for landmark legislation that will make significant new investments in renewable energy sources, create hundreds of thousands of new jobs, help end America’s dependence on foreign oil and slash taxpayer-funded subsidies to oil companies, a Feb. 27 House news release says.

Hawai‘i currently relies on imported petroleum to provide about 90 percent of its energy, but the state has considerable potential to develop local clean, renewable energy sources, the release says.

The House of Representatives passed the Renewable Energy and Energy Conservation Tax Act of 2008 by a vote of 236-182.

 “With oil prices reaching another record high of $102 per barrel today and Hawai‘i families paying $3.54 a gallon for gasoline, we must promote renewable energy and move toward American energy independence. This bill is good for our environment, good for our economy and good for our national security,” Hirono says in the release. “Ending our dependence on foreign oil and using renewable energy to help fight global warming will make our nation stronger. And at a time when the economy is struggling, these investments will help create hundreds of thousands of new jobs.”

The Gay & Robinson Ag-Energy operation would produce almost one-third of the state’s 40-million-gallon demand for ethanol, Maloney has said.

Nathan Eagle, staff writer, can be reached at 245-3681 (ext. 224) or neagle@kauaipubco.com