Market News

 October 08, 2014
Hot rocks in Hawaii

 At 7:45 p.m. on Friday, August 7, an emergency alert went out to some residents in this agricultural district of the Big Island. The Hawaii County Civil Defense warned of an "uncontrolled release of hydrogen sulfide" from the local geothermal plant. Residents were urged to stay indoors or, if they felt any discomfort, to evacuate. But tropical storm Iselle had just begun to pound the land with heavy rain and strong winds, downing trees and power lines and making evacuation difficult for any who tried.

The incident sparked another round of conflict between supporters and opponents of geothermal development in Hawaii. Activist Robert Petricci, a sustainable farmer with a broad network of contacts in the community, called a gathering of the Puna Pono Alliance, an anti-geothermal group he founded almost three years ago. At the meeting, residents who said they had passed out or gotten sick from the hydrogen-sulfide gas gave testimonies that were videotaped and uploaded to the group's website.

Megan Funk and Mike Hale were among those who tried to flee but had to turn back. They live less than a mile from the Puna Geothermal Venture plant, in the residential development Leilani Estates. At around 7:30 p.m., they heard what sounded like a jet engine roaring, which was followed by the rotten stench of hydrogen sulfide. They got headaches and scratchy throats. Funk's eyes began to burn, and she had a "weird feeling." When they found that fallen trees were blocking the road, the couple returned home, where Hale says he "passed out" for 12 hours straight, and Funk couldn't sleep due to a racing heart. "I've never felt like I was going to die before," she says. "I thought I was going to die laying there."

But a spokesman for PGV said that the gas release was deliberate and did not exceed regulatory limits. The plant's neighbors were never in danger, he says, and the hydrogen sulfide was actually proof that controls were working as they should: The release of the gas was an emergency response set in motion when the storm tripped the power offline.

"None of the seven workers on location [that night] got sick or passed out," says Mike Kaleikini, director of Hawaiian Affairs for PGV. "But if you tell me you're sick, I'm not going to tell me you're B.S.ing me, because I don't know and I'm not a medical person."

A fiery dispute

The district of Puna is located directly in the east rift zone, a natural pathway of lava flows for Kilauea, one of the world's most active volcanoes. It is also at the center of a fiery dispute over geothermal development in Hawaii --- one that pits environmentalists and conservationists against ... environmentalists and conservationists. The district hosts Hawaii's only existing geothermal plant, PGV, which supplies 38 megawatts of power, or 20 percent of the Big Island's needs, and is surrounded by farms and homes. At its core, the debate is about Hawaiian energy independence, the challenges of generating "clean" renewable electricity and conflicts over land use: religious, cultural, residential, agricultural and industrial. The conflict triggered the September 2013 passage of a law banning fracking in Hawaii and more recently provoked an ugly online scuffle between candidates for the U.S. House of Representatives and the state's Office of Hawaiian Affairs in the election this November.

Hawaii is currently the most oil-dependent state in the country. Roughly four-fifths of the energy it uses comes from petroleum, and virtually all of that is imported. Last year, Hawaii spent $5.09 billion on imported oil. Not only does the state's heavy reliance on oil mean that tons of carbon dioxide is belched into the air, it also costs a lot for consumers: Electricity prices here are nearly four times on average what they are on the mainland. It has gotten so bad that many individuals and businesses can't pay their electricity bills. A couple of homes in Puna burned to the ground in 2012 when desperate families turned to candles as a cheap substitute.

And yet the Big Island is rich in geothermal heat, which lives in heated rock and reservoirs of trapped steam and hot water in cracks beneath the earth's surface. It is typically generated by either volcanic magma or the shifting of tectonic plates. With at least 500 megawatts of geothermal energy available, the Big Island could theoretically supply the entire state with baseline power.

The fight over geothermal development in Hawaii has raged on and off for the past 30 years, but was reignited recently when Hawaiian Electric Light Company, one of three utilities in the state, announced plans to more than double geothermal production on the Big Island with an extra 50 MW. Given the hot magma that courses directly beneath and often above ground --- leaving molten trails of lava that flatten homes and devour beaches --- Puna was, until very recently, the favored site for future geothermal development. But last month the utility decided to cut its expansion plans in half, aiming for just 25 additional MW. It also plans to move a new project to the sunny western side of the island, which is more developed and more popular with tourists, because that's where energy demand is growing.

Risk and reward

Bob Petricci sits at a picnic table outside a high school in Pahoa, five miles from PGV, wearing a faded baseball cap and vintage Hawaiian shirt. Petricci, who moved to Puna in 1980, smiles easily but can get combative when it comes to mega-development and the disappearance of wild landscapes from Hawaii. Soon, he is joined by a handful of other Puna residents --- all retired men over 50, with the exception of former schoolteacher Luana Jones. Daniel Paleka, candidate for the office of district councilman, stops by for a meet and greet, and Petricci performs the introductions. "Tom Travis is a retired military nuclear-engineer-submarine commander. Chris Biltoft worked for the Army monitoring chemical-weapons destruction. And I'm a pot grower." He laughs.

"Right on," Paleka replies. "We've covered the spectrum."

For the next hour and a half, the group cracks jokes, snacks on homemade banana chips and schools Paleka in the history of renewable energy development in Hawaii. This is what an anti-geothermal energy strategy session looks like for the Puna Pono Alliance. It may not be much, but the group might hold Hawaii's energy future in its hands.

Puna is known for its high-quality marijuana, which locals call "Puna bud," and for its Punatics, the back-to-the-land hippies who have flocked to the district's coastline in the past several decades to buy up cheap parcels of paradise. One might be forgiven for expecting the residents to get behind geothermal energy. Petricci, the president of the Puna Pono Alliance, says, "When it first came here, I thought, 'Geothermal, wow, I want that.'" But it wasn't long before he grew to think it was a bad idea, and his counterparts in other Hawaiian environmental groups, such as Life of the Land and a local chapter of the Hawaii Sierra Club, agree.

Even though geothermal energy is billed as "clean" and cheap, the process of turning it into electricity can in fact pollute. Getting geothermal energy out of the ground requires drilling to create wells, injecting water or steam into those wells to absorb the earth's heat, and then pumping the water or steam through an industrial power plant. During drilling and injection, toxic minerals, metals and gases embedded below the surface of the earth can be released. These days most plants operate in a closed loop system: fluids and gases released during the process are contained in the well pipes and re-injected into the wells. But toxic emissions can still occur whenever a company does new exploratory drilling or if the closed loop is disturbed when the company is repairing wells and pipes, as well as during upsets like the one that took place during tropical storm Iselle.

"The only time there would be emissions is if there was a break in the pipe or some kind of venting in an emergency," explains Gary Gill, interim director of the state Department of Health. "In that case PGV has three monitors and the Department of Health has one standard monitor. This community is on the flank of a volcano, so it kind of depends on the direction of the wind what you smell on a given day." Critics argue that four air-quality monitors are not nearly enough, and individual air monitors are now being distributed to some members of the community.

Then there are the fears about fracking, or hydraulic fracturing, which many environmentalists find troubling due to its potential to cause severe groundwater contamination and earthquakes. With hydraulic fracturing, water, sand and chemicals are injected into the earth to open fractures in the shale. Oil and gas then seep into the fractures and are pumped out. Some geothermal developers, including PGV's parent company, Ormat Technologies, have begun to experiment with a process called "enhanced geothermal systems," or EGS, in which pressurized water is injected into the earth to open rock fissures underground, making room for steam and liquid that can be heated by the geothermal rock. The difference is that EGS is used to open existing rock fissures rather than create new ones, and the water injected into the ground generally matches that naturally found at the surface: It contains some minerals, but no chemicals or sand. EGS can also cause tiny earthquakes.

How fracking is defined in Hawaii will have consequences for geothermal development. Last September, state Sen. Russell Ruderman, a Democrat and an ally of the Puna Pono Alliance, pushed through legislation outlawing fracking of any kind in Hawaii. Some believe that simply injecting water and steam into the earth to extract heat, as all geothermal operations do, fits the description.

Natural hazards could also cause trouble for geothermal operations. Puna is already plagued by earthquakes and volcanic eruptions, both of which could pose a risk to the integrity of geothermal pipes and wells, which could trigger the release of toxic gases. In fact, a government map of the best places for geothermal mining on the Big Island is nearly identical to the map of severe lava hazards. The possibility of an eruption in any of these areas within a 50-year period is between 60 and 90 percent, according to scientists from the U.S. Geological Survey.

"Puna is the region of the highest rate of natural hazards on the island and arguably in the state," says Don Thomas, geochemist and director of the Center for Active Volcanoes at the University of Hawaii. In spite of the risks, Thomas believes PGV's measures to protect against such hazards are sufficient and supports geothermal development. The earthquakes, he says, are too minor to cause damage. And he argues that geothermal release of hydrogen sulfide at concentrations high enough to harm humans is very rare. "The human nose can detect it at 15 parts per billion ... It's deadly at 1,000 parts per million," he says. While prolonged exposure to lower concentrations can also cause health problems, according to Occupational Safety and Health Administration guidelines, Thomas says the scientist doing the most respected work on this subject, Dr. Michael Bates, has found that people living near a geothermal plant do not suffer long-term health effects

Thomas believes the opponents of geothermal energy in Puna are all "counterculturalists" suffering from NIMBYism, or "not in my backyard," he says. "Petricci was one of the earliest and loudest complainers." Nevertheless, Thomas is currently leading a team of scientists to identify lower intensity geothermal resources throughout the state.

"Hawaii is always going to be at risk economically as long as it is dependent on fossil fuels for its power supply," he continues. "We are at a severe disadvantage for any kind of economic development. So if we can find a way to reduce those costs with an indigenous resource, we've got to do it."

Hawaii is making a push to swap out fossil fuels for renewable energy and has pledged to get 40 percent of its power from renewables by 2030. But it has a long way to go. Development of geothermal power has lagged behind that of other renewable technologies (such as solar and wind) worldwide, in part because there are only a few places where there is sufficient heat below ground to extract it without considerable effort. But it is one of the cleanest forms of renewable resources from a greenhouse-gas perspective: The process of extracting it emits near-zero carbon emissions. And it's one of the most reliable: It can provide steady, uninterrupted power year-round. It's also cheaper to produce than petroleum-based fuels, and generally the cheapest of renewables, experts agree. (Solar, on the other hand, can only provide intermittent power, and while it can be stored in batteries for individual use, the technology has not yet been developed to enable distribution on an industrial or commercial scale. Wind, too, is irregular and has run up against opposition from those who fear wind turbines would kill birds, make noise and desecrate the grandeur of the landscape.)

"It's inappropriate to site heavy industry in the middle of pre-existing residential communities," says Petricci, who grows tropical fruits, raises pigs and chickens, runs a wood-milling business and is licensed to grow medical marijuana, which he uses to treat his arthritic knee pain. "We've got organic farms, we're sustainable, we can feed the community, we're doing everything the state and the county say they want, and what's going to happen? 'Oh that's the ideal place to build an industrial park.'"

Petricci's Alliance has notched a number of victories in the two and a half years since it was founded. In late 2012, the group won a nighttime drilling ban, which PGV says has substantially raised the cost of geothermal exploration. Last August, Alliance members made a three-day march across the island, gathering hundreds of supporters outside Hawaiian Electric Light Company headquarters to protest its plans for geothermal expansion. The next month, they got the fracking ban. And today, the county is preparing a comprehensive study of the impacts of geothermal production on the health of nearby residents, something that Puna Pono has been clamoring for for quite some time.

Hawaiians have company when it comes to concerns about geothermal energy. In New Zealand, where it contributes 13 percent of the nation's total electricity, communities have objected to the disposal of geothermal effluent containing arsenic from two plants into the country's longest river. In Iceland, where geothermal energy generates a full quarter of the country's power, researchers have linked the release of hydrogen sulfide with higher rates of asthma. And in 2010, the Chilean government revoked permits for geothermal development in a geyser field in an area in the north of the country that is popular with tourists, after exploration resulted in the eruption of a 60-meter plume of steam, which lasted for three weeks. On the other hand, many geothermal plants operate safely around the world today: 24 countries worldwide generate geothermal energy.

The G-word

Ahead of upcoming elections in Hawaii, many politicians have avoided the controversial "G-word" in favor of vague murmurs of support for renewable energy. But a racially charged scrap unfolded online recently between two candidates: Chris Lee, Democrat and chairman of the House Committee on Energy and Environmental Protection, and Mililani Trask, a nonpartisan high-profile Native Hawaiian attorney from a family with a long and colorful history in state politics. She is running for a seat on the board of trustees of the Office of Hawaiian Affairs, which is charged with protecting Native Hawaiians and Hawaiian culture.

Trask, who also consults on indigenous matters for the geothermal company Innovations Development Group, in which OHA has an ownership stake, accused Lee in an online column of using backhanded tactics to kill all pro-geothermal legislation over the past two years --- and more. "I think racism is also involved in Lee's opposition to the IDG and the effort of other Hawaiians to get geothermal development moving under the Hawaii Clean Energy Initiative," she wrote. A few days later, Lee fired back, charging Trask with putting personal financial gain ahead of the interests of Puna residents and allowing IDG to fund her campaign so that she can fast-track its projects if she wins the seat.

Trask, who is known for inflammatory statements about the state's "haole," or white, mainlander population, used to be on the other side of this fight. One afternoon in early July, she described the evolution of her thinking over the last several decades from a balcony in the lush hills of Honolulu overlooking Mamala Bay. She chain-smoked USA Gold cigarettes and paced as she spoke.

In the early 80s, while representing Native Hawaiian clients, Trask opposed the development of geothermal energy on the island. An experimental project, the state-sponsored Hawaii Geothermal Plant-A, had been erected in Wao Kele o Puna, a protected Puna rainforest considered sacred by many Native Hawaiians. Her clients, Palikapu Dedman and Emmett Alluli, sued the Department of Land and Natural Resources, arguing that the geothermal plant violated their First Amendment rights by interfering with their ability to worship the volcano goddess Pele in the forest. Trask took that case all the way to the Supreme Court but lost. The judge granted protection for the Hawaiian right to worship but said her clients could not prove they actually used the forest or the site of the plant for worship. (The HGP-A plant ultimately shut down anyway for financial reasons.)

Now Trask sees the ruling as a landmark victory. "The court said, 'You want to develop? You are going to develop in a way that is respectful of Hawaiian culture,'" she says. But you have to be a Native who really practices the culture. "Are you dancing hula for Pele? Are you picking the flowers of the forest and offering it to her? Are you going to her sacred places? Are you a Hawaiian who practices his culture or are you a Hawaiian talking big, with money from environmentalists?"

Palikapu Dedman recently restarted the Pele Defense Fund, a Native Hawaiian activist group he founded that is allied with the Puna Pono Alliance; he still objects to geothermal development on the grounds that to tap the island's heat for energy is to rape the fire goddess Pele, keeper of the island's volcanoes. "I think it's funny that we have to define what Pele is or this god or that god. But they don't ask those questions of any other religion," he says from the PDF headquarters, in a Hawaiian art gallery in Puna, on a day of pouring rain. But his group has other priorities now, Dedman says. Most Native practitioners of Pele worship, those who dance the hula, prefer not to get drawn into politics these days, according to another member of the Pele Defense Fund, Terri Napeahi, who owns the art gallery. On one wall hangs a painting of Pele's spirit rising from the center of a gaping volcano.

Today, Trask has nothing nice to say about her former clients or about her one-time ally Petricci and his Puna Pono Alliance. She believes geothermal development is completely safe, that the fracking "hysteria" is a ruse; it can be done in a way that respects and even benefits local culture and community, she says. (IDG was one of six mostly undisclosed bidders on the Hawaiian Electric Light Company's request for proposals for its new project last fall. Trask says she will scale back her consulting to IDG if she wins the OHA post.)

"Geothermal energy is a public-trust asset. It's defined as a mineral, so under American trust law it must be developed in a way that brings the primary benefit back to the beneficiaries, the Native Hawaiian," says Trask. "IDG development team, we know our bloodlines, and our bloodlines go to Pele."

IDG proposes a "Native-to-Native model," which it says would provide direct rewards to Puna residents, particularly Native Hawaiians. This would include the depositing of 2 percent of gross revenue into a community trust each year and the building of an industrial park that would provide business opportunities for local farmers, who could use excess geothermal steam to dry agricultural products such as papaya and timber. IDG has already successfully implemented a similar model with Maori landowners in New Zealand, negotiating with geothermal producers to win them higher rates for the use of their land.

Since Trask has begun pushing for geothermal development, a rivalry has sprung up between her and Petricci that sometimes descends into the personal. Like Lee, Petricci claims Trask is just in this game for the money. Trask, in turn, accuses Petricci of wanting to avoid any interference with his marijuana operations; before medical marijuana was legalized in Hawaii, Petricci was convicted of growing it illegally, for which his house and truck were confiscated until he could buy them back. "I think we all know that the big problem in Puna is not health and safety. The big problem in Puna is local drug dealers," Trask says, her voice dropping a register.

The land of Pele

The August incident at PGV was just 1 of more than 18 so-called public emergencies at the plant in the past two and a half decades, including 1 major incident in 1991 in which a major blowout during the drilling of a well shot geothermal steam, brine and gas into the air for 31 continuous hours. That single eruption spewed 180 pounds of hydrogen sulfide per hour into the atmosphere. Some residents said the fumes made them so sick, they had to abandon their homes. Petricci, who lived in Leilani Estates at the time --- where Funk and Hale reside now --- is one of them, though he didn't go far: His new home is just a few miles away in Pohoiki. After the 1991 incident, Petricci filed a class-action lawsuit against the company, which settled with residents for an undisclosed amount and set up a relocation fund.

Kaleikini, the PGV spokesperson, says, "We have tried to be proactive when the emission levels are very low," denying that the past incidents at the plants were true emergencies. But in an April report, the EPA cited PGV for 14 regulatory violations; PGV contests the report and says some of the violations were corrected in 2010, though others persist. Neither the company nor the agency would comment on PGV's objections.

On a tour of the plant, Kaleikini points out the schools of tilapia swimming in a large pond just feet from the geothermal plant, with its geometric tangles of green pipes rising up off the ground. As he drove toward one of the wells, the chickens that live on site came running toward his truck, feathers flying. Just next door, he says, 350 cattle that belong to a farmer subleasing the land graze there every day. These animals do not seem to be bothered by any contamination of water or air, Kaleikini says. They are doing just fine.

A molten trail of lava from an eruption in June is currently snaking toward Pahoa, where the plant's underground wells, control rooms and offices are located. As of early October, the lava flow was just about two miles away from Pahoa Village Road, a couple of blocks from the high school where the Puna Pono Alliance meets, not far from the geothermal plant. In an email, Petricci attributed the phenomenon to Pele "pointing at PGV, in an amazing display of power" as retribution for the latest accident at the plant. "The east rift zone is not for geothermal, it never was," he writes. "It belongs to Pele."