Cast of Characters in Hamakua Land Grab

posted in: January 2009 | 0

Here is a short description of the businesses that have so far made public their interest in obtaining the use of state land in the Hamakua area for biomass, biofuels, or timber production:

Hamakua Biomass Energy, LLC: This company has announced plans to use wood chips to fuel a 30-megawatt power plant on roughly 63 acres of state-owned land just off Highway 19 about 30 miles north of Hilo. According to company CEO Guy Gilliland, who presented information about the company’s plans in Honoka`a on December 9, HBE “has ownership rights and responsibilities for forest biomass from Honoka`a to Laupahoehoe,” roughly the area of Kamehameha Schools land that has been planted in eucalyptus. (A source with Kamehameha Schools said that HBE actually doesn’t have ownership rights to the trees yet, but that it is serious talks with GMO Renewable Resources, which does own the trees planted about 13 years ago as part of a now defunct plan to ship wood chips to Japan.) Gilliland also said that the company is in negotiations with the island utility, HELCO, over a power-purchase agreement.

The existing eucalyptus forest, said Gilliland, is sufficient to provide fuel for the first decade or so of plant operation. In anticipation of meeting demand beyond that, the company is hoping to lease state land, which will be planted with the next generation of biomass crop sometime after 2010, to be ready for harvest by 2020. On November 14, the Board of Land and Natural Resources approved in principle the lease to the company of 10,500 acres of as-yet unidentified state lands in the Hamakua area.

Several of the company’s principals are also involved with the Kahe`awa wind farm on Maui: founders Hilton Unemori and Kent Smith, chief financial officer Russell Yamane, and comptroller Randal Taniguchi.

SunFuels Hawai`i, LLC: SunFuels was one of the two companies awarded a lease in principle by the Land Board on November 14. Its business plan calls for using trees or other crops to produce what general manager John Ray calls “liquid transportation fuel.” Unlike most other biodiesel products, the SunFuels process involves not the extraction of oil from plants such as oil palms or jatropha, but the production of a synthetic diesel through the breakdown of cellulosic fiber.

Of all the companies that have expressed an interest in obtaining state land, SunFuels’ plans have the longest turnaround time from the anticipated award of lease to the production of fuel: between eight and ten years, according to Ray.

The company’s founder and sole member, Michael Saalfeld, has developed the process, which is being tested at a “beta” plant in Freiburg, Germany. Saalfeld is a renewable energy baron of sorts in Germany, where electricity users can choose to be billed according to the cost it takes to produce energy from their preferred energy sources (nuclear, fossil fuel, or renewable). Saalfeld’s “eco-utility” Lichtblick, based in Hamburg, has been reported to sell about 1.4 billion kilowatts per hour, all said to be generated from renewable resources.

At a hearing in Hilo last month, Ray dismissed the controversy over the number of acres – more than 37,000 – his company had initially put on its application to the Land Board. “Acreage isn’t a useful metric,” he said. How much productivity you get depends on the density of plantings, richness of the soil, rainfall, and other qualities of a given site, he pointed out. He suggested his company’s plans could be compatible with ranching, using a “silvo-pastoral” model, where cattle can graze under established trees.

Hu Honua Bioenergy LLC: This company has acquired the plant at Pepe`ekeo, which was originally fired with bagasse from the C. Brewer plantations near Hilo. After Hilo Coast Processing Company went out of business, the plant was converted to coal before shutting down four years ago.
Daniel KenKnight, one of Hu Honua’s principals, was involved with the efforts of O`ahu Ethanol to start an ethanol production facility about three years ago. Hu Honua has leased the plant, which it is now planning to refurbish as a 24-megawatt plant producing power from biomass.
The plant itself has been leased from an entity owned by Continental Pacific, which purchased the plant and surrounding cane lands after C. Brewer’s demise. It subdivided most of the land into one- to five-acre “agricultural” lots, which it sold as upscale residential lots. Many of those who purchased the lots have built expensive homes on them and have organized opposition to the proposed reopening of the plant.

Tradewinds Forest Products, LLC: As is reported elsewhere in this issue, Tradewinds has a license to harvest timber from state land in Waiakea, just south of Hilo. As part of that, it is to build a veneer mill, where it is hoping to process not just eucalyptus from the Waiakea plantation, but quality hardwoods from elsewhere around the island. It also plans to generate energy by burning waste from the mill.

Haina Hawaiian Hardwood Mills, Inc.: Owner Bob Marr, who has a logging business on the Big Island, last year purchased the 50-acre site of the old Haina sugar mill near Honoka`a, where he plans to establish a hardwood processing mill. The company intends to process high-quality hardwoods into furniture, veneer, and other uses, with the remaining biomass used to fuel a co-generation plant.

In late December, Marr was reported to have asked the Department of Land and Natural Resources for a lease of at least 10,000 acres in the Hamakua area. According to a published report, Marr wants “all available state agricultural forestry land on the Big Island of Hawai`i, for the present time geographically confined to the Hamakua coast between Hilo and Waipi`o Valley.”

Hawai`i Biocrude, Inc.: According to vice president Robert Numbers, this company, formed about a year ago, intends to grow oil crops that will provide “raw material for the biodiesel producers or the electric companies to use in their generator systems.”

“We are seeking funding at this point,” he said, which is why the company has not been actively seeking lands on which to plant jatropha or oil palms, the two species it has identified as “optimum” for the extraction of biofuels.

“Because of the rush to get land by other renewable energy operatives on the island,” Numbers told Environment Hawai`i, “we decided it is time to let the DLNR know that wee, too, will be seeking state land, and we’ll be talking with DBEDT and the DLNR about this.”

Numbers said he had no previous experience with renewable energy, but that for three years, he had been doing research and had been working with the Hawai`i Agricultural Research Corporation and the University of Hawai`i-Hilo.

— Patricia Tummons

Volume 19, Number 7 January 2009

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