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Why has Hawaii historically depended on oil?
In the past, it was efficient and economical to import crude oil, refine it into jet fuel, marine fuel and gasoline and burn the low sulfur fuel residue (about 30 percent of the total) to generate electricity. Today, concerns about energy security, our island economy and the global environment require that we move to a more sustainable way to power our lives.
In late 2014, the price of oil began to decline, reducing customers' electric bills as well. This was a welcome relief after more than three years of higher bills due to record high oil prices following the 2011 Japan earthquake and tsunami which caused Japan to shut down its nuclear generators and reactive oil burning generation. However, most energy experts believe oil prices will increase again in the future. That is why we're so committed to increasing our use of renewable energy and increasing energy saving options for our customers.
The Hawaiian Electric Companies are at the center of efforts to increase use of clean and renewable energy. As we transition to ever cleaner, less expensive renewable energy we believe switching from oil to natural gas is a better fuel for this transition. Natural gas is a clean and low-cost fossil fuel abundantly available in North America. Our plans call for beginning to replace oil with natural gas for generation by about 2021 and end use of natural gas in 2040 as Hawaii approaches our 100 percent renewable energy goal in 2045.
The Hawaii Clean Energy Initiative
In October 2008, the State of Hawaii and Hawaiian Electric Companies signed an historic agreement that set aggressive goals for a state that was then 90 percent dependent on imported fossil fuels for energy needs. Hawaiian Electric had been an experimental leader in working toward more renewable energy since the 1970s, but this agreement increased and focused our efforts.
The energy agreement, part of the Hawaii Clean Energy Initiative, put Hawaii on a path to 70 percent clean energy (30 percent through energy efficiency and 40 percent through renewables) by 2030. In 2009, the Hawaii State Legislature turned this voluntary goal into law. Act 155 increased Hawaii's renewable portfolio standard to 40 percent and established an energy efficiency portfolio standard of 30 percent by 2030. In 2015, with the support of the Hawaiian Electric Companies, the Legislature passed and the Governor signed into law the most aggressive clean energy target in the nation, 100 percent renewable energy by 2045.
In 2014, the Governor of Hawaii, Hawaiian Electric Companies, the Hawaii Consumer Advocate and the director of the Hawaii Department of Business, Economic Development and Tourism agreed to end the Hawaii Clean Energy Initiative Energy Agreement to make way for "HCEI 2.0." This next phase of the initiative includes recommitting to goals to reduce oil use for land, sea and air transportation, which together use about two-thirds of the oil Hawaii imports.
Global Warming Position
In January 2007, the Hawaiian Electric companies' Board of Directors established this position on global warming:
"Hawaiian Electric Company shares the very serious concerns of many regarding the potential effects of global warming and human contributions to this phenomenon, including the burning of fossil fuels for electricity production, transportation, manufacturing, agricultural activities and deforestation.
To address global warming effectively, actions addressing all contributing sources must be taken with priority given to those that provide the greatest benefit for the costs involved. To be successful, the response to global warming requires commitment by private sector businesses, all levels of government, and every member of the public.
At Hawaiian Electric, we remain committed to taking direct action to mitigate the contributions to global warming from electricity production. Such action has and will continue to include promoting aggressive energy conservation and transitioning to clean, efficient and eco-effective energy production in all markets that we serve."