Big Projects in Hawaii - Why Are They Stuck?

Big projects are complex. So the question why big projects get stuck can generate enormously complex responses. However, the answer boils down to a simple bottom line: Because they don't make the grade!

There are 10 basic dimensions that account for the reasons that big projects succeed or fail. Each project has its own complex set of technical, legal, institutional and financial requirements but 10 basic reasons cover the fundamental requirements.

A project needs to fulfill a major need (or mitigate a major problem), at a low cost, with a large share of it paid by outsiders, and with minimal environmental impacts and implementation risks. It is also important that a project has a strong local advocacy and a weak opposition, and some political support at all levels. A project has a better chance if it utilizes advance technology or is ahead of its time based on proven engineering (e.g., maglev trains, fiber based structural components, etc.) A sound business plan means that a scenario of reasonable adversity keeps the project's balance sheet solvent and subsidies are kept to a minimum even for government projects.

Table 1 presents the 10 fundamental requirements and theoretical scores using a scale where 5 is best and 1 is worst. As a result, a project that garners 50 points is “excellent” and would likely be built at a breakneck speed. Thirty or more points are needed for a project to be deemed “good,” therefore worthy of serious consideration for implementation. Projects with less than 30 points are deemed to be fair or bad and should be avoided.


There have been many high scoring projects such as the successful establishment of Costco and Wal-Mart in Hawaii in less than 10 years, the H-Power and AES power plants on Oahu, the 10 miles of Tampa’s reversible toll lanes built in less than 7 years for less than $400 Million, and the I-35W bridge replacement in the Twin Cities costing $234 Million (completed 3 months early and is Light Rail-ready,) just to mention a few.

Job creation is not a factor. While privately funded projects typically generate new jobs, several taxpayer funded projects tend to be make-work projects. In addition, the job creation aspect is partly accounted for by the Local Advocacy and Political Push factors.

Table 2 presents a sample of 8 big projects in Hawaii and their scores for the 10 basic requirements based on my ratings. Three local projects made it because they deserved it, two failed because they deserved it, and three big ones are predicted to fail. Other experts may assign different scores but the average scores of a handful of unbiased assessors with knowledge of all facets of a project should yield a reliable overall score for a proposed project.


Both the H-3 freeway and the grand expansion of the Honolulu International Airport (HIA) including its controversial reef runway had major cost and environmental problems, but their superior payoff (by providing needed roadway and runway capacity), sound business plan (by paying for themselves in the long run), and generous federal cost sharing garnered them a good score. They got done and work well.

Similarly the Hawaii Convention Center had a lot going for it. The main issue was its location. Once this was resolved, the project was built expeditiously. Its business plan was and still is weak.

Two recent project failures in Hawaii are unique. Both are water transportation projects, and both were implemented and then failed. Both should never have been started. This is particularly true for TheBoat that never had a credible business plan or solved a problem. It removed the equivalent of 2 to 4 buses from the road at a cost of $32 per commuter trip. The (sometimes nauceous) commuter paid only $2; all the rest was public tax subsidy.

The SuperFerry was a fitting transportation addition in the island state of Hawaii but it needed a super-sized investment in order to succeed; roughly four times what was actually available. It needed three fully debugged vessels with no need for custom docking platforms, and it needed media campaign and political greasing similar to the 2006-2008 pro-rail blitzkriegs. Given these requirements, it is questionable that a marine company can make a profit at the level of investment needed for establishing a competitive service. There have been several attempts since before statehood, all leading to losses and closures.

At least three large projects are currently "on the table" in Hawaii: The city's rail project, B.R.Horton's Hoopili project in Ewa (over 12,000 residential units), and the Big Wind project where wind turbines on Molokai and Lanai will generate 400 MW of electric power to be used on Oahu via submerged cables.

None of these projects make the grade. This does not mean that they will not be built. But it does mean that building them is not a good idea and that the monies should have been better spent on other projects and opportunities. Here is why.

Both Rail and Big Wind fulfill a major need but with archaic or problematic technology. Their project proponents have greased the wheels well and they enjoy strong political support, but both projects are very expensive for what they offer and the cost share by outsiders is small or nil. They have large impacts mostly borne by non-users. Both have strong local advocacy and opposition so that's a wash.

Hoopili and Big Wind have credible business plans but their externalities are not accounted for, e.g., Hoopili and surrounding developments require their own freeway lane to/from town, but none is being built. As a result, over 100,000 existing residents will suffer much worse congestion upon Hoopili’s completion and occupancy (even assuming rail is there.) In addition, both the rail and Hoopili obliterate a large portion of prime agricultural land in central Oahu.

A major externality of rail and Hoopili that is not accounted for in their direct costs is the loss of a major portion of prime agricultural land on Oahu. This is a huge loss for an overpopulated remote island.

The 20 mile rail should be replaced by 11 miles of High Occupancy and Toll (HOT) lanes and point-to-point express buses. Hoopili's 12,000 units should be replaced with 12,000 units in Kalihi and Kakaako. Big Wind should be replaced with geothermal power plants on Maui and Big Island, and coal, solar and biomass on Oahu.

The scores for HOT Lanes and Better Energy are shown in Table 3 below. These are good projects that should get done!

Note 1: Those who desire a better understanding on why big projects get or don’t get done may read articles on Megaprojects by Oxford University professor Bent Flyvbjerg, and Utah University's study on Bootleggers, Baptists and Enterprising Politicians, that is, the alliance of profit-driven interests, groups of uncompensated advocates, and opportunist politicians that form the tripartite support alliances needed for a big project to muddle through the project development process.

Note 2: On June 23rd at the Plaza Club, HVCA and ThinkTech present Big Projects in Hawaii - Why are they stuck? Contact: Jay Fidell, ThinkTech Hawaii, jay@fidell.com, (808) 780-9254 for information.

A Price Point for Rooftop Solar Panels

With a flurry of proposals being floated around for renewable and other forms of energy, it is good to establish practical and realistic reference costs or price points.

In June 2011 COSTCO Wholesale through Costco.com offered for the first time a home or small business rooftop photovoltaic system with a maximum power of 5060 Watt for a cost of $18,000, which includes shipping and handling.

Such a large and involved system requires a city permit for installation and an inspection by the utility. A licensed electrician is strongly recommended for the installation. All inclusive, this system installed would cost about $25,000 or just under $5 per Watt. (This does not include Federal and State tax credits which in Hawaii would total roughly $9,000.)

The system's literature states that it will generate between 462kWh and 924kWh of electricity per month depending on placement, longitude, latitude and hours of sun exposure. By Hawaii standards, this system is big. For example, my home which houses 3 adults and 2 children consumed 420 KWh in 32 days, based on an April 2011 HECO bill. That's why I have a 1,600 Watt PV system on the roof. My system cost $13,000 or $8 per Watt installed about a year ago. Indeed PV prices are coming down fast.

Remember this figure: $5 per Watt installed. Next time a politician, legislator, salesman or contractor makes you an offer that is substantially higher either for a residential installation or as part of a utility Power Purchasing Agreement, then you are likely being taken for a ride as a customer, taxpayer or ratepayer.(1)

It should be added that the system referenced above is not the least expensive one. One can find solar panels of Asian manufacture that are sold by the palette at an even lower cost.

UPDATE: Google creates $280-million solar power fund, Los Angeles Times, 6.14.2011.

Note(1): We need to be mindful of special circumstances such as shipping and labor costs in Hawaii, specific solar exposure at each location, etc. Careful design is needed and PV is sensitive to proper orientation and as little cloud cover as possible. Given Hawaii's cost premium "substantially higher" in Hawaii (for residential installations under 4 KW) is over $7 per watt, assuming an easy installation; see note below.

Note(2): The low cost pricing assumes an easy installation and minimal safety risk for the installation crew; i.e., one floor high roof. Installations can be problematic, thus expensive.

Wind Power Misrepresentations and Lessons for Hawaii

Wind Power Generation: From the UK to NY State provide ample evidence that even a 27% capacity factor is high.

• Wind power’s actual contribution to the UK’s energy supply: The findings, based on real-time energy production from Nov 2008 to December 2010–26 months–were sobering. Wind generated at substantially below the 27% capacity factor, and low wind events (defined as output falling below 10% of capacity) occurred over one third of the time.

Much like Hawaii (1) New York state conducted a pre-deployment study: The study concluded that New York could support a 10% penetration of wind into its grid system with turbines reliably operating at 30% average capacity factor or better.

Then NY state installed over 1,200 MW of wind power, which is coincidentally the amount of daily power needed for Oahu. So... what happened?

• No wind project in New York achieved a 30% capacity factor, and most are operating at well below this figure including Maple Ridge 1 and 2 touted by wind proponents as a premier wind site. Maple Ridge was forecasted to have a capacity factor of 34% prior to construction but has consistently operated around 25% — a significant performance reduction.

• Noble Environmental’s projects produced at even lower levels. When the company sought community acceptance of its projects in upstate New York, the founder of Noble insisted their projects would operate at 30-35% capacity. In the tax agreement signed with Clinton County, NY, Noble went so far as to sweeten the deal by offering to pay a bonus of $1000/MW every time the annual capacity factor of any of their projects exceeded 35%. Result: Noble’s upstate projects operated with a 20% to 22% capacity factor in 2010.

Companies will misrepresent to get the public contracts. As we will see in the future, this happens in Hawaii as well.

Finally the article clearly describes the future in Hawaii as forecast by NY state, if Big Wind materializes:

• NY ratepayers who are subsidizing wind development in the State are also receiving considerably less than promised. Square miles of New York’s most rural areas have been transformed into industrial power plants.

Hawaii version:

Hawaii ratepayers are subsidizing large wind farms in the State are also receiving considerably less than promised. Square miles of Hawaii’s most rural areas in Kahuku, on Molokai and Lanai have been or will be transformed into industrial power plants totaling about 500 MW (in theory, of course.)

Note (1) Take a look at my article: Wind Energy for Hawaii: Great for Profits, Not so Great for Power

Renewable Energy and Hybrid Cars. Still Only at 1%.

The emphasis on renewable energy sources for the generation of electricity has a number of similarities with light duty hybrid vehicles (hybrid cars) for transportation.

Flash back to the late 1990s when hybrid vehicles where known to automotive engineers, car aficionados and some environmentalists. The odd looking 4-door Toyota Prius and the rain drop looking 2-door Honda Insight where oddities among mass produced cars. Similarly at the same time there were wind mills and solar panels worldwide, and the Puna Geothermal plant in Hawaii among other renewable energy applications.

Since then both hybrid cars and renewables had an exponential growth, at surprisingly similar pace and for substantially different reasons. Unlike renewable energy mandates, hybrid cars won their market on their merits such as quiet operation, lower maintenance and substantially higher fuel efficiency. To date their worldwide market share is about 1% among light duty vehicle fleets, and in approximate terms, 60% of hybrids are in the US, 18% in Japan, and 8% in Europe. (These change depending on the year of reference.)

Renewable energy power plants on the other hand could not develop a profitable case because of the much lower cost per watt of electricity produced by coal, natural gas and nuclear power plants. Extensive wind (Germany, Denmark) and solar (Spain) developments required major subsidies. Various studies have indicated that they actually caused losses in total national employment (e.g., King Juan Carlos university estimated that each green job cost 2.2 jobs in Spain,) and caused electricity rates to go up. This is a lose-lose outcome.

Recent data, as shown below, indicate that renewables are the fastest growing among energy sources.


Nuclear energy suffered a setback due to the catastrophe in Japan in March 2011. All countries with plans for expansion of nuclear plants will continue except for Germany. Germany has set a goal of de-nuclearization by 2020. The loss in energy generation will be replaced mostly by coal and renewables. This is another lose-lose outcome due to added pollution and the heavy use of new resources to create machines to produce power that was produced by existing nuclear power plants.

Despite governmental mandates for renewables, if their electricity production is converted to equivalent tons of oil, then their share is, much like the hybrid cars, only 1.3% in 2010, as shown below.


Given the high cost of power plants and the even higher sunk cost of the existing power infrastructure, it is likely that renewable energy will take many years to provide substantial global energy generation. China’s, India’s and Germany’s focus on coal, and US’ focus on natural gas do not support a vast expansion of the global renewable share any time soon.

Exceptions will be isolated locations such as Hawaii and Iceland (geothermal), Brazil (biomass and biofuels) and others, based on local source availability and other factors.

Source of Data: The Economist, June 11, 2001, p. 78.

Renewable Energy Sources Require Vast Amounts of Natural Resources

The National Center for Policy Analysis expertly summarized Robert Bryce's "The Gas Is Greener" which appeared in the New York Times on June 7.

In April, California Gov. Jerry Brown signed into law an ambitious mandate that requires the state to obtain one-third of its electricity from renewable energy sources by 2020. Twenty-nine states and the District of Columbia now have renewable electricity mandates, and there is also support at the federal level, says Robert Bryce, a senior fellow at the Manhattan Institute.

But while energy sources like sunlight and wind are free and naturally replenished, converting them into large quantities of electricity requires vast amounts of natural resources -- most notably, land.

Consider California's new mandate.

• The state's peak electricity demand is about 52,000 megawatts.
• Meeting the one-third target will require (if you oversimplify a bit) about 17,000 megawatts of renewable energy capacity.

Let's assume that California will get half of that capacity from solar and half from wind. Most of its large-scale solar electricity production will presumably come from projects like the $2 billion Ivanpah solar plant, which is now under construction in the Mojave Desert in southern California. When completed, Ivanpah, which aims to provide 370 megawatts of solar generation capacity, will cover 3,600 acres -- about five and a half square miles.

• The math is simple: to have 8,500 megawatts of solar capacity, California would need at least 23 projects the size of Ivanpah, covering about 129 square miles, an area more than five times as large as Manhattan.
• While there's plenty of land, projects as big as Ivanpah raise environmental concerns.
• In April, the federal Bureau of Land Management ordered a halt to construction on part of the facility out of concern for the desert tortoise, which is protected under the Endangered Species Act.

Wind energy projects require even more land -- the Roscoe wind farm in Texas, which has a capacity of 781.5 megawatts, covers about 154 square miles.

In the rush to do something -- anything -- to deal with the problem of greenhouse gas emissions, environmental groups and policymakers have determined that renewable energy is the answer. But all energy and power systems exact a toll, says Bryce.

Hawaii's renewable energy mandate is among the nation's most ambitious. Hawaii law requires electric utilities to meet a renewable portfolio of 10%, 15%, 25% and 40% by December 31, 2010, 2015, 2020 and 2030, respectively.

The lesson for Hawaii where flat space and any space in general is at a premium is that land-hungry renewable energy options are not likely to be a major part of the solution.

Brookings' Pro-transit Report Gets Slammed by Its Own Data

One thing stuck with me from the X-Files: The Truth Is Out There!

Like the City's EIS which clearly show that after spending $5.5 Billion the transit share will increase from 5.6% now to 6.6% in 2030, and that congestion with rail in 2030 will be far worse than it is now, other transit reports although word-smithed to tell a pro-transit story, actually reveal how poorly transit does, particularly rail transit.

In May 2011, The Brookings' Institution published the pro-transit report Missed Opportunity: Transit and Jobs in Metropolitan America where it made major proclamations like:

• The typical metropolitan resident can reach about 30% jobs in their metropolitan area via transit in 90 minutes.
  

The typical commute in the nation is about 30 minutes and if one has a private vehicle, he or she can reach over two thirds of the jobs in the metropolitan area. But in transit, he or she can reach only an (astounding) 4%, by Brookings' own survey numbers!

Wendell Cox had a good time this study in his Transit: The 4 Percent Solution.

• Among the 29 metropolitan areas with a more than 2,000,000 population, the 45 minute job access average was 5.6 percent, ranging from 12.6 percent in Boston to 1.3 percent in Riverside-San Bernardino.

CATO Institute's Randall O'Toole adds this: Simply putting transit close to jobs, however, doesn't mean people will ride it. The Brookings Institution recently ranked San Jose as the second-most transit-accessible urban area in America, while Chicago was ranked 46th. Yet the Census Bureau says only 3.4% San Jose commuters use transit, compared with 13.2% Chicago.

Finally let's not forget that many transit surveys are biased. They exclude, walk, wait and transfer time losses, much like the City's proclamation that Kapolei to downtown will be about 40 minutes. This excludes the access time to the Kapolei station which by itself is at least 15 minutes from the time one leaves home to the time that the train leaves the station. Add at least 5 to 10 minutes to reach the office and he or she more time commuting to work than by car, has no car to run errands or do other things after work, and has to repeat the long commute on the way home.

All this inconvenience for $5 a day leads to the ultimate result: It's a 4% solution indeed!

Price of Rail Environmental Study Doubled

Hawaii Reporter obtained this major admission from the City: The cost of the EIS doubled from the original $86 Million to $156 Million. This does not include the likely required Supplemental EIS, Preliminary Design and Final Design. All said, soft costs (paperwork, media and other fees and expenses) for the Hannemann/Carlisle boondoggle will reach one half Billion dollars, which is what other cities pay for fully installed light rail systems!

Honolulu rail is now squarely into SCAM territory.

EPA: 946 Pages to Regulate 0.5% of the Problem

The Environmental Protection Agency (EPA) recently issued 946 pages of new rules requiring that U.S. power plants sharply reduce their emissions of mercury and other air pollutants.

EPA Administrator Lisa Jackson claims that while the regulations will cost electricity producers $10.9 billion annually, they will save 17,000 lives and generate up to $140 billion in health benefits. There is no factual basis for these assertions, said Willie Soon, a natural scientist at Harvard, and Paul Driessen, a senior policy adviser for the Committee for a Constructive Tomorrow.

America's coal-burning power plants emit an estimated 41-48 tons of mercury per year. U.S. forest fires emit at least 44 tons per year; cremation of human remains discharges 26 tons; Chinese power plants eject 400 tons; and volcanoes, subsea vents, geysers and other sources spew out 9,000-10,000 additional tons per year.

All these emissions enter the global atmospheric system and become part of the U.S. air mass. Since US coal power plants account for less than 0.5% all the mercury in the air, eliminating every milligram of it will do nothing about the other 99.5% our atmosphere.

Source: Willie Soon and Paul Driessen, "The Myth of Killer Mercury," Wall Street Journal, May 25, 2011.

Rail Still Facing Key Hurdles

Construction crews are working on the rail project near Waipahu High School. Many think that construction for the city’s proposed elevated rail project has started but it’s not true. Read my article the Filipino Chronicle (page 8).

Edinburgh Light Rail Halted. The Usual Suspects. The Usual Results.

Edinburgh Light Rail called Edinburgh Trams is the second great example of what’s in store for Honolulu. The first one is Tren Urbano in San Juan Puerto Rico where the system was build at twice the original cost and five years after opening it has failed to reach 50% of its opening year ridership forecast.

The “usual suspect” is present in all three projects. Edinburgh, San Juan and Honolulu have the same consultant who prepared the rail project estimates. Here are the results so far in Edinburgh, Scotland:

• Project originally scheduled to open in July 2011. Rescheduled to 2014 if at all.
• Original cost was $640 million but now it over $1 Billion.
• 72% of the construction work remains to be done but only 38% of the budget is left.

Read full article in Hawaii Reporter.

Renewable Energy in Hawaii: Dr. Takahashi's Take

Retired UH professor Patrick Takahashi was the creator and past director of Hawaii Natural Energy Institute (HNEI) at the UH. His books on energy are fundamental readings. One of his most comprehensive posts about renewable energy for Hawaii is linked below.

Will renewable electricity be limited in Hawaii?

I am glad that he and I agree on

1. the weak potential of wind power ("capacity factor means that a 400 MW wind farm could well only provide 100 MW on average to Oahu")
2. the good potential of biomass
3. the vast potential of geothermal power

for Hawaii.

One part that he has not delved into but holds promise for Hawaii if it develops vast amounts of renewable energy is Ammonia, which holds the key to electricity and transportation fuel and food production. See Ammonia as a Transportation Fuel and Fertilizer.

Renewables and Reliability of Power

After reviewing the 2009 power reliability reports submitted by utilities to the PUC I discovered that:

• Oahu power utilizes less than 2% renewables. It has the highest reliability: HECO SAIF in 2009 was 1.1%,
• Maui power utilizes about 17% renewables (wind and biomass). It has the middle reliability: MECO SAIF in 2009 was 1.6%,
• Hawaii power utilizes about 33% renewables (geothermal, wind, hydro). It has the lowest reliability: HELCO SAIF in 2009 was 3.1%,

where, SAIF is System Average Interruption Frequency (0% is best)

HELCO reported that 20,660 customer interruptions (16% of all interruptions) were related to Independent Power Producer (non-HELCO Generation) sources. In 2009 Hamakua Energy Partners (HEP) and Pakini Nui Windfarm were the non-HELCO generation sources that caused customer interruptions. Geothermal did not have any negative effect on HELCO's SAIF.

The lesson here is that unless the right renewable energy sources are selected, reliability in the provision of power will deteriorate.

AFTER 6 YEARS AND $300 MILLION SPENT, ONLY 49% SUPPORT RAIL

The Star Advertiser published on Monday, May 16, 2011 results from a recent simple poll conducted by Ward Research. The results are remarkable. They speak volumes of the public's desperation for relief from traffic congestion and since this is the only project on the table, they barely are going for it. If asked, most would tell you that they want rail so that the other people can use it. Less than 5% of commuters will switch to it. However, the survey missed the opportunity to ask about this.

The 50.6% majority of the 2008 elections has been reduced to 49%. Incredibly, the ratio of Yes/No in 2008 was 1.10 and the ratio of Yes/No in the Star Advertiser survey is 1.09! This is devastating for the Honolulu rail lobby.

Compared to 2008, the pro-rail folks got a pro-rail President. They got Oberstar to fly over Oahu on a helicopter and proclaim it a good project. They spent millions in mass media ads and monthly mailers to households. The Council had multiple junkets to rail cities. Senator Inouye, Congresswoman Hirono, US DOT Secretary LaHood and Federal Transit administrator Rogoff descended to Honolulu last month and promised (again) approvals and monies. They got the union and special interests constantly harping rail everywhere including being on the agenda at almost every monthly meeting at Neighborhood Boards. Result?

Any desirable project with such arsenal of weapons would have had over two thirds of the public supporting it. Rail got only 49%. And, from the same survey, only 12% believe the city's cost estimates!

Has the project reached a tipping point? The project is beyond its tipping point to destruction. The tipping point came in 2010. Let me explain: In order to succeed, mega-projects (defined as any project over one half billion dollars) need a major champion with decision making power and a lot of money. In our case the champion was Hannemann and the money was the Congress.
In 2010 Hannemann was trounced, and the TEA party made it widely known that the US is in deep debt. And they helped change the control of Congress from liberal to conservative. Then Abercrombie revealed that the state had a $1.5 Billion debt. Then Congress obliterated President Obama's high speed rail and cut many new infrastructure projects. Rail New Starts were cut by 20% to just $1.6 Billion in FY11. We are well beyond the tipping point when it comes to new rail projects.

The irrelevant person in all this is our one issue mayor who as recently as yesterday issued an announcement proclaiming that everything is dandy.(1) Let's not forget that jokes are his strength.

The only unfortunate thing is that I and all the anti-rail groups never had the funds and media support needed to present our points on a equal basis. It is very satisfying to see that long before a successful lawsuit we are clearly achieving the stoppage of this disastrous project.

Note (1): MAYOR SETS THE RECORD STRAIGHT ON RAIL PROJECT FINANCING
http://www1.honolulu.gov/refs/csd/publiccom/honnews10/mayorsetstherecordstraightonrailprojectfinancing.htm

Honolulu's Special Interests Enrichment

The price tag for preparation of the Honolulu rapid transit project’s environmental impact statement was originally $86 million but has since bulged to $156 million, a City spokesman confirmed today. The current value is $156,211,000 and it is due to expire July 11 of this year. Read full article in Hawaii Reporter.

This does not include the cost of the Alternatives Analysis which was in the order of $20 Million.

Recall that in 2007 Tampa opened 10 miles of elevated reversible toll lanes ($1.50 toll per trip). Planning, design, and construction were completed in seven years for a total cost of $320 Million. In comparison, the Honolulu Rail Gang will spend $320 Million for planning, design, lobbying and PR, and 90% of it comes from local taxes.

Wind Turbines on Fire

I doubt that The Blue Planet Foundation would use any of these wind turbine images for its letterhead. Perhaps its advocacy should also be commensurate to the facts.

Electricity Travels at the Speed of Light. State PUC Is Sightly Slower.

On December 26, 2008, an island-wide outage occurred on Oahu during a severe lightning storm that resulted in a loss of electric service to HECO customers ranging from approximately 7 to 20 hours.

On January 12, 2009, the PUC initiated an investigation of the outage.

In March 2009, HECO submitted an outage report prepared by its expert consultant, which concluded that the island-wide outage was triggered by lightning strikes.

In January 2010, the Consumer Advocate submitted its Statement of Position that HECO could not have anticipated or prevented the outage through reasonable measures and could not have reasonably shortened the outage and restored power more quickly to customers. The Consumer Advocate further stated that penalties should not be assessed for the outage, but recommended that numerous studies be performed with the objective of preventing or minimizing the scope and duration of future power outages.

As of May 9, 2011, the PUC's investigation of the 2008 outage is still open.

Portland's "High Capacity Transit" Success... All 2.3% of It!

Interesting excerpts of an actual evaluation of Portland's MAX light rail in 2011:

• High Capacity Transit is desirable when there are large numbers of people moving to geographically constrained destinations within a short period of time – such as commuters traveling to downtown San Francisco or midtown Manhattan. (Nothing in common with Honolulu.)

• MAX was supposed to be a “catalyst for transit-oriented development” (TOD) at Cascade Station near the airport, but IKEA, Target and Best Buy are built away from the MAX stop and serviced by large parking lots. RESULT: 2.2% use MAX. (This will happen to the Ewa mall by Bishop Estate, Pearl Highlands, Pearl Ridge and Ala Moana Center.)
  

• Gresham Civic Station is a suburban location that has been intensively planned for more than 25 years, with expectations that this would be a showcase for suburban TOD. The entire area was bare dirt when MAX opened in 1986. Eventually, much of the site was built-out. RESULT: Although there are hundreds of apartments close to the newest MAX station at Gresham Civic Center, only 2.25% the tenants actually use light rail. (This will happen to Ho'opili and other pie in the sky TODs.)
  

• The two-day observations at Cascade Station were perhaps the most revealing in terms of assessing the oft-made claim that light rail is a “catalyst for development.” Light rail is not only irrelevant to the commercial success of Cascade Station, it is a barrier to continued development due to density requirements near rail stations. (Maybe Honolulu developers will wake up to reality.)
  

Finally, a quote describing real Transit Capacity (which is of course why I have been advocating a managed bus system since 2000):

• For comparison, the highest-throughput mass transit facility in America is a simple busway managed by the Port Authority of New York-New Jersey (PANYNJ). On weekdays between 6:00 a.m.-10:00 a.m., PANYNJ operates a 2.5 mi eastbound contra-flow Exclusive Bus Lane (XBL) along westbound Route 495 to Lincoln Tunnel from the New Jersey Turnpike. The XBL carries 1,700 buses and 62,000 passengers each morning, on average, saving about 15-20 minutes in travel time. This averages about 1 bus every 8 seconds for a 4-hour period, with roughly 37 seated passengers per bus.

Full Report -- CASCADE POLICY INSTITUTE: The Myth of High Capacity Transit, May 2011.

Got Wind? YES. Got Power? NO.

Press Release by First Wind:

Honolulu, HI—March 24, 2011—First Wind, an independent U.S.-based wind energy company, and Hawaiian Electric Company held a ribbon-cutting ceremony today to mark the commencement of commercial operations of the Kahuku Wind project. State, local and community leaders gathered at the project site on Oahu’s North Shore to recognize the environmental and economic benefits of the 30 MW project, which features an innovative battery storage system and has the capacity to generate enough renewable energy to power up to 7,700 Oahu homes each year.

My investigation five weeks later (April 30, 2011)

A picture is worth a thousand words... watch this:



(Alternate link if this video does not load)

The bottom line is that both HECO and government got it wrong. Even when wind is present, the turbines are doing nothing.

Problems Big and Small. Sensible Solutions for All.

[This is an enriched version of my TEA 2011 speech at Hawaii Capitol on April 15, 2011]

We got big Problems. So does everybody else… states, the whole country, other countries. What we need is Sensible Solutions. Instead we get more government solutions and more taxes.

Pension accounts for city and state government employees will be broke soon-- they face huge account deficits and Hawaii leads the way in this. Their solution? Tax pensions or bury their head in the sand. The sensible solution is to raise the retirement age to 70 years of age.

Homelessness. Their solution? Build more public housing. The sensible solution is to take care of the homeless needs and provide transitional housing. Transition the homeless back to normal life. Do not warehouse them. Empower, consolidate and better organize non-profits that care for the homeless. Set limits on the benefits that the homeless receive.

Power. We pay the most for electric power. We complain about the price of gasoline but it’s only 15% more expensive than the mainland average. Our electricity is about 300% more expensive. Whose fault is this?

The legislature's with their "green" objectives that put into effect without any cost analysis, the PUC's controls, and HECO's monopoly. The monopoly buys wind and solar power for 15c per KWh and sells it to ratepayers for 30 to 40 cents.

The sensible solution is to deregulate. Within 20 years we can have a competitive energy market with solar, geothermal, coal, OTEC, biomass, algae, etc. distributed power providers.

Planning is a big problem. We have the Oahu Metropolitan Organization (OMPO) that coordinates all transportation plans in the city and county of Honolulu. But the key people on the all-important policy committee are the Transportation Committee chairs of the Senate and the House. For many years they are both from Maui. So the county of Maui decides the transportation plans of the county of Honolulu. This absurdity is going on for a decade now and has lead to gross miss-allocation of funds with Honolulu at the losing end.

Traffic is a big problem. We need roads to move over 90% of the people who use vehicles. Instead government plans to waste 6 billion dollars to help the 1% of people on the rail. And cutback TheBus in the process.

TheHandiVan is a costly service. Its archaic and inflexible booking system requires 1 or 2 day advance reservations. This inconvenience costs $35 per rider. TheHandiVan services can be fully substituted by private modified vans of which there are several on island in private transportation. They provide quick and courteous service, local jobs and a modest profit at about $25 per ride. TheHandiVan is proof that Sensible and Government do not go together.

Waste Management is a problem. Their solution? Business as usual: Landfills and expensive, fake recycling. Best solution? Privatization and incentives for remanufacturing. The private sector can deal with landfill issues, burning and recycling. Or sending trash to mainland or Asia. Leave environmental requirements as is, and let the private sector find the solution set including the remanufacture of recycled paper, plastic, fats, oils and lubricants.

Pavements and potholes. Their solution? Neglect, followed by expensive contracts and sloppy pothole plugging by city crews. The sensible solution is to go on routine pavement maintenance so that our local refineries can plan their asphalt production. (I understand one of them has quit making asphalt because of the unpredictability of demand.) Sign 10 year contracts with quality guarantees and price discounts. Get the City out of the pothole repair business.

Sensible Solutions have these basic ingredients: Less centralization, less taxation, less regulation and greater private sector participation.

Flywheels

Every vehicle on the road has a flywheel. It smooths out the fuel explosions in each cylinder and makes gear change possible.

An over-sized flywheel can propel a light vehicle but due to the constant speed transitions in regular traffic this application is problematic.

A "mega-sized" flywheel can become a formidable energy storage device that can avert blackouts, facilitate the smart grid and even store energy from daytime production (solar) for nighttime consumption.

This Washington Post article... Reinventing the (Fly)Wheel contains a lot of useful development including the first in the nation 20 MW electricity power plant located in Massachusetts.

The New York Times Investigates Hawaii's Big Wind

I sent this message to my friends in the media today.

I find it a bit ironic that we have to read a newspaper from 5,000 miles away to find out what's going on at our back yard: Hawaii Doubles Down on Big Wind

In it there is this comment: "U.S. EPA, questioned why the state considered only two alternatives." My immediate reaction to this concern? ... Because in Hawaii we plan like dictators: Like Heavy Rail or Nothing!

My thoughtful reaction is here: Wind Energy for Hawaii: Great for Profits, Not so Great for Power (I note that the Star Advertiser did not publish this submission.)

My energy plan in one page is shown below.



A huge part of Hawaii's future rides on its energy plan. I must tell you that I do not like what I see so far. I was at a public forum with the Governor and PUC Chair Mina Morita last night. Their heart is in the right place but they seem to have received tremendously biased information and we'll be spending billions for minor payoff. (Obviously we are developing a tradition on this.)

I look forward to your frequent investigative coverage of Hawaii's energy plan. Please set any green glasses you like to wear aside. Open your minds and your wallets and then look at the issues.

Please remember that next time "global warming" comes up Hawaii's way ahead in the green accomplishment scale because of our ...
... fleet of smaller cars used over shorter distances,
... lack of need for heating oil,
... lack of guzzling heavy industry
... household energy improvements (we're tops or near tops in the nation on sun water heating and photovoltaic panels,)
... use of cold ocean water to cool high rises, etc.

Given that we already pay 230% to 300% more than the U.S. average for electricity (30 cents versus 10 cents for a KW-hour), we need to be extremely careful with expensive and inefficient proposals for renewable energy sources.

Natural Gas for Transportation

Here is the summary of congressional action from Townhall.com: Last week was the culmination of a process begun years ago. A bill was introduced to Congress that could end American dependence on foreign oil. What is called the New Alternative Transportation to Give Americans Solutions Act -- more simply put, the NAT GAS Act -- was introduced to Congress on April 6. It has bipartisan support. It ought to pass and pass promptly. It could be called the Boone Pickens bill.

This article from Center for American Progress provides on the realities of natural gas usage in heavy vehicles as a transitional fuel for the next five to 10 decades. It will not end US dependence on oil but it has a good potential to substantially curb it as shown below.

Pension Congestion? Life is a Freeway. Lift the Limit from 65 to 70.

In 1940, an American enjoyed 12 years of life upon retirement, on the average. In 2007, an American is expected to enjoy over 17.5 years upon retirement. This long retirement period of 17.5 years is both the good news and the bad news.

The good news is of course that we all wish to live long lives and the outlook is good. The bad news is that retirement systems worldwide cannot support so many retirees living for so long.

This is one area where indeed Hawaii is not alone, but its government employee retirement system is among the five most troublesome in the U.S. George Berish, an expert in the field, has explained this in a series of articles in the Civil Beat.

The critical measure for the future health of a state's or country's overall retirement system health is the Support Ratio. This is the number that shows how many working people support one retiree.

In 1970 the U.S. had 5.3 workers supporting one retiree. In 2010 the number of workers per retiree dropped to 4.6. This is alarming enough but it gets much worse. In 2050 the estimation is that there will be only 2.6 workers per retiree, so over 25% of their earnings will have to go to the retirement fund to support retirees. At that point overall taxation will surpass 60%, and in theory it is best to move to another country.

Not so fast!

Read my full article in HAWAII REPORTER.

Transportation 2050

In March 2011 the European Commission published a proposed rulemaking for long term transportation standards in Europe titled TRANSPORT 2050. I drafted a similar policy for the US and developed this side by side 2-page presentation.

You may be interested to see the EU's proposed draconian measures against the automobile: Halve the use of gasoline, diesel and LPG fueled cars in cities by 2030 and phase them out in cities by 2050.

While EU's planning for a CO2-free utopia continues unabated, China picks up all the slack: In 2010, China's 18 million vehicle sales far surpassed U.S. light-duty vehicle sales of 12 million, making China the world's largest new car market. From 2003 through 2010, China's vehicle population grew at an annual rate of 18.6%, far faster than even the most ambitious projection.

For Every Green Job, Four Other are Lost

A few posts below you can read my opinion about Wind Energy for Hawaii
http://fixoahu.blogspot.com/2011/04/wind-energy-for-hawaii-great-for.html

Today I was sent this revealing study done at the UK:

Part of the summary in offshoreWIND.biz reads as follows: A study of renewable energy in Scotland shows that for every job created in the alternative energy sector, almost four jobs are lost in the rest of the economy.

Not only has the sun set on the British Empire, but the promise of wind apparently is deserting it as well. A new study called “Worth The Candle?” by the consulting firm Verso Economics confirms the experience of Spain and other countries: The creation of “green” jobs destroys other jobs through the diversion of resources and the denial of abundant sources of fossil fuel energy.

Here is the full report: “Worth The Candle?”

Board of Water Supply: For Crying Out Loud!

In 2009 and 2010 the Board of Water Supply tore up the upper half of Pacific Heights Road to upgrade the water lines and meters. The bumpy condition of the road (in part) cost me $800 in replacing the front suspension bushings of my car at 45,000 miles (normal wear should be 100,000 miles or more.) At the end of 2010 MIRA contractor spent over a month paving the road. They did a decent job.

Four months later the same road is marked to be torn up to fix the sewer lines, by the same Board of Water Supply. It really does not get more costly and disruptive than this…. Heavy machinery… Line up in single stack… Off duty police officers at both ends… Etc.

As can be seen in the photos below, the asphalt is dark black; brand new with a likely service span of 15 to 20 years. Actively being destroyed today.

Huge Combustion Efficiencies Are in the Works

The York Times article Start-Ups Work to Reinvent the Combustion Engine reports that

• Pinnacle Engines is working on an engine that "will be up to 50% more efficient than today's power plants,"
• EcoMotors, "a Detroit area start-up backed by Khosla Ventures(1) and Bill Gates," and
• Achates Power of San Diego

are developing variations on an opposed piston engine...long considered too expensive and unworkable for automobiles. The goal is to reduce the amount of energy "wasted as heat," so as to "to tap more energy to propel a vehicle." Pinnacle says that its current engine is "30% more efficient than current scooter engines." EcoMotors "is also claiming up to a 50% improvement in efficiency for its two-stroke diesel opposed piston engine." Achates Power says that its engine is "15% more efficient than conventional diesel."

In addition I recently read that both the Engine Research Group of University of Wisconsin-Madison is working on dual fuel engines to achieve high efficiencies and low emissions. An example of dual fuel is engine uses 90% gasoline on high load (acceleration), 90% diesel on low load (cruise) and 100% diesel at idle. Fuel efficiency improved 20% to 25% or large engines for trucks and heavy equipment.

At the same time and the Oak Ridge National Lab is conducting similar experiments using 1.9 liter Euro spec GM diesel engines with good results.

These are all positive and telling signs that the "classic" engine and the automobile are nowhere near their "dawn" days.

(1) Vinod Koshla, of Khosla Ventures, a Silicon Valley venture-capital firm. His profile in The Economist is worth reading. I liked this quote of his: “ENVIRONMENTALISTS are fiddling while Rome burns. They get in the way with silly stuff like asking people to walk more, drive less. That is an increment of 1-2% change. We need 1,000% change if billions of people in China and India are to enjoy a Western, energy-rich lifestyle.” Forget today’s green technologies like electric cars, wind turbines, solar cells and smart grids. None meets what Mr Khosla calls the “Chindia price.”

Wind Energy for Hawaii: Great for Profits, Not So Great for Power

Electric power is all about baseload and predictable peaks of usage. Wind is all about unpredictability. Among all major resources for the production of energy, wind is among the least predictable and dependable. Full article published in Hawaii Reporter.

Wind Speed Variability Sample as Reported in a Presentation by Renewable Energy Laboratory:

"Smart Technologies" Could Improve Transportation

The post below is excerpted from the American Society for Engineering Education (ASEE) daily newsletter. It summarizes an attempt of Congress to improve transportation conditions by employing Intelligent Transportation Systems (ITS).

I have been teaching these methods for over a dozen years as part of my CEE 661: Intelligent Transportation Systems graduate course at the UH-Manoa. What is different this time is $1.2 Billion dollars in federal funding over six years for the pilot deployment in six competing cities.

I hope that the bill will go forward and I hope (but do not expect) that Honolulu and State of Hawaii will vie for this ITS initiative. Besides being substantially congested, Honolulu presents an excellent, fully controlled traffic laboratory. By that I mean that 100% of the traffic is local, as opposed to, say, Chicago, that at any time 5% to 15% of its traffic is from neighboring Indiana, Wisconsin and other states, thus its local ITS initiative is diluted by a large number of non-participating vehicles. ===========================================

The Hill (3/30, Laing) reports, "A bipartisan pair of lawmakers on Tuesday announced a bill to create six pilot 'intelligent transportation systems' they say will use technology to ease transit woes in cash-strapped American cities. Reps. Mike Rogers (R-Mich.) and Russ Carnahan (D-Mo.) said their 'Smart Technologies for Communities Act' would make improvements to transportation that federal and state governments could not otherwise afford." Notably, "the bill would create pilot programs in six cities to test whether technologies such as cars with crash sensors, bridges that can sense stress from vehicle weight, electronic toll systems and live updates to commuters improve overall commutes."

The Detroit News (3/30, Shepardson) reports the bill "would provide grants to make 'Intelligent Transportation Systems' a reality." They support "spending $1.2 billion over six years" on the initiative. The News says "the pair will tout their bill along with Intelligent Transportation Society of America CEO Scott Belcher in a press briefing Wednesday." Their bill has the support of "the Alliance of Automobile Manufacturers and its members, including General Motors Co., Ford Motor Co. and Chrysler Group LLC." It would "create a pilot program in up to six communities across the country to serve as model deployment sites for large-scale installation and operation of ITS to improve safety, mobility and the environment on the nation's highways."

Real Energy, Real Jobs

By looking at the title, for a second I thought that I wrote this article and forgot about it, but the Real Energy, Real Jobs article was written by Robert Bradley Jr., CEO and Founder of the Institute for Energy Research and author, Capitalism at Work: Business, Government, and Energy.

Indeed Energy is Big Business and critically important for the US, Hawaii and indeed all civilization. For each location, there is an optimum mix of energy options for abundant, affordable energy, energy jobs and energy profits. There are many sub-optimal mixes that may lead to huge profits, short-term jobs, and unreliably and expensive energy. You can read some of these in Bradley's article.

In addition to the points raised in the article Real Energy, Real Jobs, my own research has revealed that:

• Denmark: 20% of the electricity is from wind, but much of it is exported at no cost to Norway in return for baseload electricity when the wind does not blow!
• Spain: For every 1 green job financed by Spanish taxpayers, 2.2 jobs were lost as an opportunity cost. Since 2000, Spain spent $753,778 per “green job.”
• Germany: Green jobs created by government actions disappear as soon as government subsidies end.
• Texas: After 30 months, countless TV appearances, and $80 million spent on an extravagant PR campaign, T. Boone Pickens has finally admitted the obvious: The wind energy business isn't a very good one. The Dallas-based entrepreneur, who has relentlessly promoted his Pickens Plan since July 4, 2008, announced that he's abandoning the wind business to focus on natural gas. (Wall Street Journal quote.)
  

Nuclear Power Plant ... Oxymorons and Solutions

The Economist has a useful tool for looking up which have nuclear power and how much electricity they produce in a year. The U.S. leads the pack.

One of the oddities of nuclear power is that some countries like Greece are strongly opposed to nuclear power, yet less than 100 miles away their Bulgarian neighbors already have nuclear power plants ... This reminds me of Hawaii with its nuclear power plant constitutional prohibition and the 15 nuclear submarines home ported in Pearl Harbor.

The difficult management of a failing power plant due to major force of nature as witnessed in Japan makes a strong case for locating them on off shore floating platforms (e.g., refurbished decommissioned air carriers.) These platforms, like off shore rigs can be manned as required by helicopter flights but they can be engineered for self power and management by remote control (like the unmanned drones of the air force.)

In the extremely rare care of nuclear reactor failure the floating platform can be de-anchored and de-tethered, and then robotically powered away from populations. This plan offers significant economic, safety and psychological benefits. Perhaps the state of Georgia should look into a floating platform 10-20 miles out in the Atlantic among its alternatives for locating a very large nuclear power plant.

Higher Gas Prices. Go for Trains and Electric Cars?

Fuel prices are trending upward in a hurry due to world events.

Local governments, including Honolulu's also are increasing fuel taxes.

The damage to people's wallets and family budgets will worsen.
So is it more economical to switch to a train or an electric car? This is definitely not a good choice in Honolulu.

Hawaii has by far the highest price per kilowatt-hour of electric power in the nation. The current price on Oahu is about 28 cents per KWh or 230% higher than the U.S. national average. AAA reports today's regular gas price in Honolulu at $4.084 per gallon or 15% higher than the U.S. national average.


Over 75% of the electric power on Oahu is produced by oil.


So it is pain at the pump and pain at the plug. But in relative terms, gasoline is a bargain. Honolulu pays a 15% premium on gas and a 230% premium on electricity.

This has two important implications for transportation in Hawaii:

1. The 100% electric car Nissan Leaf is rated by EPA at 99 MPGe (miles per gallon equivalent) assuming the average price of 11 cents per KWh in the US. This reduces to about 40 mpg in Hawaii because power is 230% more dear. As a result, the Nissan competes with similarly fuel efficient Ford, Honda, Hyundai and Toyota hybrids which cost less and have a range of 400 miles instead of 100 miles.
2. The operating cost and pollution impact of the proposed rail will be staggering because it draws several megawatts of electricity, runs almost empty for 16 out of 20 hours of its daily operation, and has a minimal benefit on traffic congestion.

(Of course by now it is clear that rail is the way for billions of taxes to be reallocated to special groups and politicians -- both of them pushing it madly.)

Recession 2011

Many economists were warning that the 2008-2009 will be a "double dip" recession because of the mounting federal, state and local debts in the U.S.

2010 was not a "banner year" and expectations were that 2011 would be a better one. Did you realize what happened in the first quarter of 2011?

• Momentous changes are occurring in the Arab world including change in regimes, bloodbaths and large increases in oil prices. This in turn makes the recovery of the world economy from the long 2008-2009 recession harder. (See trend below.)
  
• Then a few days ago the world's third largest economy was hit with (perhaps) 10,000 deaths and well over one trillion dollar bill in damages.
  
• Japan, a country of about 127 million people accounts for about 16% of the annual tourist revenues of Hawaii and Japan's debt situation is actually worse than USA’s (at least the federal portion of it.)
• Australia is now expending over $6 billion to cover the damages of extensive floods in late 2010.
• New Zealand's second largest city was hit by a strong earthquake on February 22 causing 166 deaths and damages estimated at $11 billion, or 7% of the country's GDP.
• Australia, population 22 million and New Zealand, population 4 million account for 1% of of the annual tourist revenues of Hawaii.

The direct impacts of these to Hawaii will be more expensive energy, more expensive air fares and much fewer visitors from Japan and from economies that are strongly linked to the economy of Japan, and fewer visitors from Down Under

Higher consumer basket prices and lower revenues and taxes from the tourist industry are a given. Expect that the second half of 2011 will be a mild (at best) recession for Hawaii.