Good intentions,
results on ethanol


Lawmakers are finalizing measures for ethanol production and use in Hawaii.

ASSISTING remnants of the sugar industry and attempting to pare dependence on fossil fuels are worthy objectives in measures that would spur ethanol production and use in Hawaii. Consumers, however, will not be pleased if the cost of adding ethanol to gasoline pumps up the price of driving a car.

The bills headed for final legislative approval would allow tax credits for building and running ethanol facilities that would convert sugar cane syrup, molasses and bagasse -- the fibrous cane residue -- and renew authorization for tax-exempt revenue bonds for a Kauai plant.

The intent is to stabilize what was once the islands' chief agricultural industry and provide continued employment for its workers. At the same time, lawmakers hope to maintain land in agriculture for its green views, shave the need to import oil for gasoline and conceivably reduce air pollution.

Uncertain is whether the additive will generate less pollutants as experts and studies go back and forth on the matter. Some say ethanol in combination with certain gasoline formulas actually results in more smog in warm weather.

As expected, the petroleum industry objects, saying inexplicably that ethanol addition will force gasoline producers to cut jobs. The issue is more likely that it will force refineries to install new equipment to mix ethanol and gasoline, which will cost them money, even as they save in other areas, such as reduced energy use.

Their increased costs will probably be passed on to Hawaii consumers trapped in a highly uncompetitive market, even though the bills' advocates say drivers will save money in the long run because ethanol increases fuel efficiency. Moreover, there is no way to predict how capricious oil companies will react when faced with government mandates.

In California, where gasoline prices are already among the highest in the nation, federal requirements for ethanol use may raise the price for a gallon of gasoline by as much as 20 cents. The mandate, a campaign promise from President Bush, is largely seen as a boost for Midwest agricultural conglomerates, among them Archer Daniels Midland Corp., the biggest ethanol producer in the country. Support in Congress also came from Democrats representing states with big corn-growers since corn is the primary crop from which ethanol is made.

Hawaii was exempt from the federal requirement because the cost of shipping ethanol to the islands was deemed too high. With local production, lawmakers could require ethanol-gasoline mixes, but that bill remains pending. Production is planned on Kauai and Maui where sugar is still grown. However, an Oahu plant would have to import a sugar product and if there is no production on Hawaii island, the requirement would be problematic.



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