Self-reliance as important as profit in energy production
A report questions whether sugar-based ethanol will be profitable in the long run.
A FEDERAL study on the long-term profitability of sugar-based ethanol production
readily acknowledges that lack of data could discount its conclusions.
That, along with other generalities that do not conform to conditions in Hawaii, lessens the significance of the Department of Agriculture's report, which determined that making the fuel from sugar would not be financially practical.
Research being conducted on Hawaii's alternatives to oil-based energy generation should not exclude ethanol from sugar or sugar products, based on the USDA study.
The study says sugar-based ethanol might not be profitable long-term on a nationwide scale, favoring corn instead.
It cited the high costs of establishing sugar crops -- or "feedstock" -- where currently none grows, the capital expense of building facilities to process sugar and the need to have ethanol production facilities close to cane supplies.
Those problems do not appear to be major ones for Hawaii. High-yield sugar has been grown in the islands for generations. Though many processing facilities have been dismantled as the industry declined, some remain -- along with the expertise for forging them.
Moreover, in hopes of encouraging investment in the fuel's production, Hawaii allows a 100 percent tax credit for plant construction costs, one of the most generous in the nation. Proximity to feedstock could be the sole obstacle unless all major islands grow their own to mitigate transportation costs.
The state only this year began requiring that 85 percent of gasoline sold here contain a portion of ethanol. The idea is to reduce oil dependence and encourage agriculture at the same time, but critics contend that ethanol is expensive to make and relies too much on oil-generated energy for production. However, besides its use as a transportation fuel, ethanol also could fire electricity plants, as Hawaiian Electric Co. has suggested for its proposed Campbell Industrial Park facility.
The report gives better profit marks to molasses, which can be derived from sugar, and one local ethanol processor plans to use that until it can start growing sorghum as feedstock.
The study measures sugar's profitability against corn, a crop widely available on the mainland, but demand has pushed corn's current production limits, leaving no room for crop damage or bad weather conditions.
Whether from sugar, corn or sorghum, profitability for ethanol is tied to the price of oil, a commodity "highly sensitive" to world events, the report says. For Hawaii, 90 percent dependent on fossil fuels for energy needs, a chief measure should be the profit of self-reliance.