Kauai partnership plans to open $40 million facility by next year

More than two years after the state began requiring gasoline to be blended with ethanol, Hawai’i has yet to see local production of the fuel.

Ethanol is an alternative, grain-based fuel that can be produced locally from sugar cane or one of its byproducts. Corn is the primary crop used to make ethanol in the United States.

Ethanol proponents in Hawai’i had projected local production would begin by 2006, but so far no facilities have even broken ground.

Some plans have been held up because of financing, engineering and other challenges. Others appear to have stalled or may have been abandoned. Companies are looking into the possibility of producing ethanol but have yet to announce any concrete plans.

Meanwhile, millions of gallons of ethanol continue to be imported into the state.

“We, of course, had been hoping that it would be quicker,” said Maria Tome, energy engineer with the state Department of Business, Economic Development and Tourism. “Diversifying away from petroleum is a good objective, and diversifying toward things that we can produce here is the ultimate objective.”

The state’s ethanol mandate, which took effect in April 2006, requires most gasoline sold here to be blended with 10 percent ethanol. The mandate is intended to reduce Hawai’i’s dependence on imported oil.

It was also touted as a way to expand sugar cane production and generate millions of dollars in investments and additional jobs.

But state tax credits to encourage the local production of ethanol have so far gone unused.

Meanwhile, Isle-based oil companies are importing ethanol from countries such as El Salvador. Hawai’i imported about 87.6 million gallons of foreign ethanol from February 2006 through April of this year, according to the U.S. Energy Information Administration.

Local production would keep money in Hawai’i, which can help to reduce the economic impact of the rise in oil prices, Tome said.

Read more …

(Source: Lynda Arakawa, Honolulu Advertiser)