Monday, October 28, 2002


Gas price-cap critics
should offer options


A university economist has criticized state gasoline price caps.

A law that authorizes the governor to place caps on gasoline prices doesn't go into effect until 2004, but it will continue to undergo intense scrutiny. Democratic gubernatorial candidate Mazie Hirono sees a need for gas caps while GOP candidate Linda Lingle talks of creating competition at the gas pump. A University of Hawaii economist is critical of both views but offers no alternative plan.

Lingle says the law is flawed because it would cap only regular gas, and the petroleum companies would respond merely by selling only premium. Her criticism seems valid; perhaps the law should be changed to close the loophole. She favors creating more competition in the gasoline market by repealing laws that require service stations to be at least an eighth of a mile apart.

"Those proposals may have some effect on competition, but it strikes me on the surface that the problem is upstream," says Christopher Grandy, a UH professor of public administration. "We have two refiners in Hawaii, and the problem lies there and not at the retail level, because we have lots of retail outlets." In an essay, Grandy calls for "a more measured response that addresses the apparent lack of competition" at the wholesale level, but he offers no strategy.

An oil industry attorney has described Hawaii as an oligopoly, with only two refineries and no real competition. While the state's lawsuit against the industry failed to prove the existence of price-fixing, uniform pricing led by industry leaders in other areas has been found to be legal. The oil industry has blamed Hawaii's high gasoline prices on shipping and refining costs, but the state's lawsuit revealed that oil companies have been making exorbitant profits from gasoline sold in Hawaii.

Competition certainly is preferable to price controls. The challenge is finding a way to inject competition into Hawaii's wholesale gasoline market. D.G. "Andy" Anderson's poor finish in the Democratic gubernatorial primary indicated Hawaii voters were less than enamored by his proposal that the state go into the gasoline business in competition with the oil companies.

The delayed start-up date for gasoline price caps provides time to reassess the problem. Pegging Hawaii caps to West Coast prices may result in artificial market conditions, as Grandy suggests. However, that would be preferable to gasoline prices that float far above those in areas where true market conditions exist.


Aquifer and landfill
would be uneasy fit


A proposal would place a landfill above a key source of drinking water for Oahu.

APPROVAL of a preliminary study for a private landfill at a location that could pose a threat to a chief source of drinking water on Oahu indicates the acute problems the city faces in searching for alternatives for waste disposal on the island. However dire the need, the cautious approach city and state officials are taking is appropriate since solving one problem could create a more serious one.

Honolulu Disposal Service, one of the largest commercial waste disposal companies in Hawaii, is proposing a landfill in Kunia on former pineapple land owned by Campbell Estate. The 250-acre site is located above the Pearl Harbor groundwater aquifer, which is the cause of concern.

Tim Steinberger, director of the city's Department of Environmental Services, told a City Council committee last week that the administration is willing to look at the plan, but that historically such land uses have not been considered because of possible contamination of drinking water. The state Department of Health, the city Board of Water Supply and the U.S. Fish & Wildlife Service also raised concerns.

An engineer for URS Corp., which is representing Honolulu Disposal, says his company has the expertise and experience to guard against polluting water sources. URS is a San Francisco-based company that has worked with federal and state agencies as well as private clients in "chemical, manufacturing, pharmaceutical, forest products, mining, oil and gas and utilities industries," according to its Web site. The company says "a redundant system" of liners would protect the aquifer and that it would recycle an impressive 50 to 80 percent of the waste it processes.

City Councilman Gary Okino wants to explore the plan because of the city's growing problem with refuse disposal. The recent conflict with the Leeward community over increasing the capacity of the Waimanalo Gulch landfill illustrates the pressure the city is under as it searches for new methods to get rid of wastes. If private disposal companies can find other places to dump refuse, city landfills will feel the relief, he says. Okino hopes the location -- less than a mile from Kunia Road across from Hawaii Country Club -- is far enough away from homes that it will not draw opposition.

That remains to be seen and the proposal must overcome numerous hurdles before it will reach the final approval stage. In the meantime, officials should diligently examine the project. A clean source of drinking water is at stake.


Published by Oahu Publications Inc., a subsidiary of Black Press.

Don Kendall, Publisher

Frank Bridgewater, Editor 529-4791;
Michael Rovner, Assistant Editor 529-4768;
Lucy Young-Oda, Assistant Editor 529-4762;

Mary Poole, Editorial Page Editor, 529-4790;
John Flanagan, Contributing Editor 294-3533;

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