What happens when the last coal ship leaves Hawaii?
by John Konrad (gCaptain) Coal shipments from the Hawaiian Islands end. The bulk carrier carrying the state’s last load of coal will depart this week after refueling the state’s last coal-fired power plant. This plant is due to close in September, forcing state energy suppliers to compete with the US Navy for tankers.
AES Hawaii, operator of Oahu’s largest power plant, has received 15,000 tons of Indonesian coal from the Liberian-flagged bulk carrier MV Flying Tiger. The 180 megawatt plant is the island’s largest source of electricity and provided 13% of the state’s total electricity in 2018.
“In its day, coal was an important resource for Hawai’i and I want to thank the workers who ran our last coal plant,” Governor David Ige said. “Even though we face challenges making this transition, it is the right decision for our communities and our planet. More importantly, it will leave Hawaii a better place for our children and grandchildren.
According to the US Energy Information Administration, renewable energy has made significant inroads in recent years. Solar installations nearly doubled from 2015 to 2020, thanks to an increase in rooftop panels, but other renewable projects have lagged.
According to Gizmodo, Hawaii uses more oil for electricity than any other state. In 2015, more than 67% of its electricity production came from oil, while more than 15% came from coal. These fossil fuels are all imported from out of state, which helps make Hawaii’s electricity costs the highest in the nation and nearly three times the national average.
The issue is further complicated by the Jones Act which requires oil imported from other US states to be transported on US-flagged tankers operated by US shipping companies. But these companies, like Overseas Shipholding Group ($OSG), lack available ships.
The state will also compete with the US military for tankers.
The Army is struggling to meet tanker needs in the Pacific after a leak at the world’s largest underground fuel tank storage facility – Red Hill in Hawaii – forced the Secretary of Defense to shut it down in March.
The US Army faced a major problem with the lack of tankers, even before Red Hill was closed.
During the Trump administration, Rear Admiral Mark Buzby repeatedly warned Congress that the United States did not have enough qualified tankers or merchant seamen to supply enough oil to Hawaii and the Pacific Rim, even during a limited war. In response, Congress passed an emergency measure in 2021 called the US Tanker Security Program. In this bill, the United States pays the two private companies like Maersk an allowance to rename their American tankers.
“The tanker’s security measure was an emergency measure,” a MARAD gCaptain official said when interviewed in March. “It barely meets the most basic needs of our military and can in no way replace the capabilities of Red Hill. The Secretary of Defense is either completely misinformed or delusional if he thinks otherwise.
While the U.S. military is required to use expensive U.S.-flagged vessels, private energy companies like AES Hawaii could import foreign oil on cheaper foreign vessels, but would then compete in the open market with China. and other oil-starved Asian countries. Even if AES Hawaii decides to take that option and hire companies that operate foreign vessels at a lower cost – like Scorpio Tankers ($STNG) – those companies also expect big rate increases this year.
Also Read: Scorpio Says Russian Oil Ban Will Boost Oil Tanker Market
This is a major problem for Hawaii because the transition to renewable energy will take longer.
“We have a tougher race ahead because we’re taking six self-sustaining arrays, in the middle of the ocean, to 100% renewable energy for electricity,” Scott Glenn, head of the Hawaii State Energy Office, told UtilityDive. . this month. “And we are starting from a starting point that is rich in fossil fuels,”