[Congressional Record Volume 151, Number 18 (Thursday, February 17, 2005)]
[Senate]
[Pages S1653-S1654]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. AKAKA (for himself and Mr. Inouye):
  S. 436. A bill to require the Secretary of Energy to assess the 
economic implications of the dependence of the State of Hawaii on oil 
as the principal source of energy for the State; to the Committee on 
Energy and Natural Resources.
  Mr. AKAKA. Mr. President, in the shadow of crude oil prices that have 
reached nearly $50 per barrel, and with the specter of higher gasoline 
prices forecast by the Department of Energy's Energy Information 
Administration, I rise today to introduce a bill that will help Hawaii 
and potentially other insular areas grapple with the difficult choices 
ahead with respect to energy independence.
  The bill directs the Secretary of Energy to assess the short- and 
long-term prospects of oil supply disruptions and price volatility and 
their impacts on Hawaii. It also directs the Secretary to assess the 
economic relationship between oil-fired generation of electricity from 
residual fuel and refined products consumed for transportation needs of 
Hawaii. Hawaii uses crude oil to produce electricity, gasoline, and jet 
fuel. Changing the mix of these products will have significant economic 
implications for Hawaii. We need to have a clear picture of the impacts 
of going down these roads to a different energy mix. In addition, the 
study would address the technical and economic feasibility of 
increasing the contribution of renewable energy resources and the use 
of liquified natural gas, LNG, for generating electricity and other 
needs. In Hawaii, the costs of gasoline, electricity, and jet fuel are 
intertwined in an intricate relationship, because they all come from 
the same feedstock, and changes in the use of one could potentially 
drive consumer prices up or down. We need to know the implications of 
increasing the percentage of renewable sources of energy or switching 
to LNG, and whether these choices will leave us enough residual fuel 
for our transportation system and jets. Finally, the bill calls for an 
analysis of the feasibility of production and use of hydrogen from 
renewable resources on an island-by-island basis, an energy source I 
have championed for a long time.
  Hawaii is heavily dependent on imported oil. About 90 percent of the 
State's energy needs for residents and visitors is produced by refining 
and burning crude oil. We import 28 percent of our oil from Alaska, but 
72 percent comes from foreign sources including Indonesia, China, Papua 
New Guinea, and Vietnam. We use 26 percent of the oil for generating 
electricity. Being an island State, marine transportation between the 
islands is very important. Air transport for residents of Hawaii, as 
well as for our tourism industry, is critical. For many high school 
athletic and academic teams to compete in intramural activities, it 
means getting on planes to go to another island. Many families live on 
multiple islands. We use 32 percent of the oil for air transportation, 
and 23 percent for ground and marine transportation. My State's 
dependence on oil poses potential risks to Hawaii from sudden price 
increases or supply disruptions as were experienced several times in 
the last five years alone.

[[Page S1654]]

  Hawaii uses its energy very efficiently. Our per capita energy use is 
well below the national average. In part, this is due to the fact that 
Hawaii is blessed with comfortable climate and short driving distances. 
Nonetheless, we have been paying some of the highest prices in the 
Nation for our energy. We continue to have the highest gasoline prices 
in the country. For a long time our electricity rates also have been 
the highest in the country. Consistent high energy prices affect the 
economic vitality of the State. Before we invest in a different energy 
mix and infrastructure, we need to make transparent all the relations 
between fuels and the consequences of the directions we choose.
  Our State has been proactive in seeking energy solutions. The State 
of Hawaii has income tax credits for the installation of solar, 
photovoltaic, and wind energy. Hawaii has the largest solar water 
heating program in the Nation. Governor Linda Lingle has called for a 
20 percent renewable energy standard by 2020. Last year we obtained 
about 7 percent of electricity sales from renewable sources, compared 
with a national average of about 2 percent. The Hawaiian Electric 
Company, HECO, Hawaii's largest utility, announced in January 2003 the 
formation of a new subsidiary that will invest in renewable energy 
projects for Hawaii.
  The Hawaii Energy Policy Forum, a deliberative body of over 40 
community leaders and energy stakeholders, met many times over a period 
of a year and developed an energy vision for Hawaii through the year 
2030. Its report, ``Hawaii at the Crossroads; A Long-Term Energy 
Strategy,'' identifies strategic principles for Hawaii's future, 
including diversifying the sources of imported energy and beginning the 
transition to a long-term hydrogen economy.
  Mr. President, energy security includes supply security, price 
security, and economic security. Supply security means ensuring that 
energy is available despite market disruptions elsewhere. Price 
security means that energy consumers are protected against price 
fluctuations and chronically high prices. Economic security results 
from both of the above. Hawaii is dependent on oil for both 
transportation and electricity in ways that are without parallel in 
continental States. Hawaii also has an abundance of renewable energy 
resources. It is the intent of this bill to assess these challenges and 
opportunities, and to help us develop a suitable roadmap for Hawaii's 
energy future. This bill will help Hawaii identify the challenges and 
decision points along the way to energy security.
  I urge my colleagues to support this bill and ask unanimous consent 
that the text of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 436

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. HAWAII ENERGY ASSESSMENT.

       (a) Assessment.--The Secretary of Energy shall assess the 
     economic implications of the dependence of the State of 
     Hawaii on oil as the principal source of energy for the 
     State, including--
       (1) the short- and long-term prospects for crude oil supply 
     disruption and price volatility and potential impacts on the 
     economy of Hawaii;
       (2) the economic relationship between oil-fired generation 
     of electricity from residual fuel and refined petroleum 
     products consumed for ground, marine, and air transportation;
       (3) the technical and economic feasibility of increasing 
     the contribution of renewable energy resources for generation 
     of electricity, on an island-by-island basis, including--
       (A) siting and facility configuration;
       (B) environmental, operational, and safety considerations;
       (C) the availability of technology;
       (D) effects on the utility system including reliability;
       (E) infrastructure and transport requirements;
       (F) community support; and
       (G) other factors affecting the economic impact of such an 
     increase and any effect on the economic relationship 
     described in paragraph (2);
       (4) the technical and economic feasibility of using 
     liquefied natural gas to displace residual fuel oil for 
     electric generation, including neighbor island opportunities, 
     and the effect of the displacement on the economic 
     relationship described in paragraph (2), including--
       (A) the availability of supply;
       (B) siting and facility configuration for onshore and 
     offshore liquefied natural gas receiving terminals;
       (C) the factors described in subparagraphs (B) through (F) 
     of paragraph (3); and
       (D) other economic factors;
       (5) the technical and economic feasibility of using 
     renewable energy sources (including hydrogen) for ground, 
     marine, and air transportation energy applications to 
     displace the use of refined petroleum products, on an island-
     by-island basis, and the economic impact of the displacement 
     on the relationship described in (2); and
       (6) an island-by-island approach to--
       (A) the development of hydrogen from renewable resources; 
     and
       (B) the application of hydrogen to the energy needs of 
     Hawaii
       (b) Contracting Authority.--The Secretary of Energy may 
     carry out the assessment under subsection (a) directly or, in 
     whole or in part, through 1 or more contracts with qualified 
     public or private entities.
       (c) Report.--Not later than 300 days after the date of 
     enactment of this Act, the Secretary of Energy shall prepare, 
     in consultation with agencies of the State of Hawaii and 
     other stakeholders, as appropriate, and submit to Congress, a 
     report detailing the findings, conclusions, and 
     recommendations resulting from the assessment.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.
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