Maui biodiesel plant needs OK of bonds

Answer: The state Legislature recently approved $59 million in special-purpose revenue bonds to fund the first phase of the biodiesel plant's construction.

Gov. Linda Lingle must sign the bond-issue bill, let it become law without her signature or veto the bill.

The project will not use state money, but the state's credit rating will get a better interest rate on the bonds for BlueEarth Maui Biodiesel LLC, said company spokesman Ray Sweeney.

BlueEarth Maui Biodiesel is a still-forming partnership between Hawaiian Electric Co., parent company of Maui Electric Co., and the mainland firm BlueEarth Biofuels LLC. The new company plans to build and run a biodiesel plant on 15 acres of MECO land in Central Maui.

The company hopes to start the biodiesel plant operation in 2009 using imported vegetable oils, but eventually to use Hawaii-grown oil crops.

The company has agreed that it will use only oil feedstocks that are approved as being sustainable by the National Resources Defense Council, said managing partner Landis Maez.

The sustainability issue was raised in legislative discussions because there are concerns that some palm oil suppliers destroy forested areas to plant the crop.

The facility would generate 40 million gallons of biodiesel in its first year, and up to 120 million gallons per year by 2011, according to Maez and Robert Wellington, managing partners of BlueEarth Biofuels.

The Maalaea power plant produces 215 megawatts of power, or 85 percent of Maui's power. The entire island used about 3.15 billion gallons of diesel fuel in 2005, said HECO spokesman Peter Rosegg.