The dream of producing clean, efficient ethanol on Kaua‘i just might have hit a huge pothole. State Senate Bill 3170, which would have exempted ethanol-blending rules from the public rule-making process and set January 2006 as the deadline to get
The dream of producing clean, efficient ethanol on Kaua‘i just might have hit a huge pothole.
State Senate Bill 3170, which would have exempted ethanol-blending rules from the public rule-making process and set January 2006 as the deadline to get the industry moving in Hawai‘i, was vetoed by Republican Gov. Linda Lingle Friday.
“This bill is objectionable because it would exempt the ethanol-blending rules from the public rule-making process,” Lingle said in announcing her intent to veto the bill.
“Furthermore, current law requires the state to adopt rules to require that gasoline sold in Hawai‘i contain 10 percent ethanol by volume, and these rules have been approved for public hearing.”
State Rep. Hermina Morita, D-North Kaua‘i, thinks the governor succumbed to pressure from officials in the oil industry, whose profits may be threatened by local production and use of the sugar-cane-based fuel.
“Yeah, I think they got to her,” Morita said, referring to the oil-industry’s lobbying to pressure the governor to allow them to continue doing business as usual.
“Hawai‘i is a market they don’t want to give up. It’s just too profitable,” Morita said.
The bill gave every distributor and every refinery here until a January 2005 deadline to produce a 10-percent ethanol/90-percent gasoline fuel blend, Morita said.
“With the rule-making process, the oil industry can stall it out beyond who knows what point,” she said.
Even more, the deadline would have bolstered the confidence of investors in ethanol production here, Morita said.
Any investment could now be stymied by what investors perceive as an ethanol-unfriendly business climate.
“The sugar industry needs to know how to start planning their crops, and everyone has to make a sizable investment to move in the right direction,” Morita said.
Legislative leaders stated earlier this year that they would likely not call a special session to override bills.
Earlier this month, it seemed everything was on track for a positive, pro-ethanol business environment, when the governor signed two other bills into law.
One gave up to $12 million in tax credits to companies that built ethanol-production facilities here.
The other, House Bill 1944, extended the time from June 30, 2004 to June 30, 2009 in which $50 million in special purpose revenue bonds could be issued to Worldwide Energy Group, Inc. for the purpose of developing an ethanol-fuel project on Kaua‘i.
With the signing of the last bill, the one Lingle vetoed last week, the final building blocks would have been in place to support the foundation of an ethanol industry on Kaua‘i, Maui and O‘ahu.
Bob Shleser, technical director with Worldwide Energy Group, said earlier this month that investors in Hawai‘i’s ethanol industry needed to be convinced that the state was ready to do what was necessary to make ethanol production here viable.
“The business community needed more legislative support to get this going,” Shleser said. “Investors had been waiting to see what happens with this legislation.”
The latest governor veto won’t help, Morita concedes.
It was hoped that Kaua‘i’s Gay & Robinson could be producing sugar-based ethanol as early as January of 2006, according to Shleser.
Indeed, it was hoped that ethanol production here would help stabilize the dwindling sugar industry by allowing a higher-value product, and possibly saving 300 sugar jobs — and many more indirectly.
National standards call for a blend of 10-percent ethanol, 90-percent fuel. Already, some 40 states across the country use the blend, and there has been little outcry from the petroleum industry over ethanol use and production in those states, Morita said.
Phil Hayworth, business editor, may be reached at 245-3681 (ext. 251) or mailto:phayworth@pulitzer.net.
