 Monday morning, after a long weekend at home, I'm Jay Fidale. This is Think Tech, and we're talking about energy this morning. Hawaii, the state of clean energy. We're talking about Eurus. Eurus Energy, with its project in Waianae, pulls back from the Pahlehua wind project. Very interesting and really troublesome, actually, also. It cited too many risk factors for wind developers in Hawaii, so it pulled back. And to discuss this is a representative of the, I guess, the landowner. That is a Gil Evalands organization. Tony Gil. Hi, Tony. Morning. Morning. So, you know, let me open it up by saying, what happened here? What happened in the pullback? Well, I can give you a pretty good summary. They're probably, with any big corporate decision, there is a decision made by a board. Now, I was not in the room. The room was in Tokyo. I understand roughly the considerations that have been made. And it's a real good business school test case. There are a couple of factors. Do you want to go down the list, or should I just start with one? Start with one and then go to the other. Probably the key thing here is that, as you know, time and money are linked the same way as space and time are linked in some physical process. If you're going to play with money, you're also playing with time because you make commitments and you borrow money. You do construction. You do other things. And at a certain point, you have to have revenue coming in to offset that or you're in big trouble. This is a situation of probably, I don't know, what I won't speak specifically, but well north of 100 million bucks to get the thing started and running. If you can't guarantee that a thing will come through on time, you can't do the deal. So you look in the process and you figure out why would a company back off? You look at all the kinds of ways time gets wasted. I can go into this in a lot of detail. There's a lot of blame to go around. Secondly is the problem. And if you go through the long and arduous process of getting something up ready and permit in hand, it looks too much of the rest of the world like Hawaii is a pretend state with pretend law that cannot be enforced. So what good is your permit? There are other kinds of internal frictions. There's a general problem that to do things in Hawaii is about 400% more expensive for this kind of project than any place else. And there are a lot of other opportunities to put money. The difficulty of developing wind continues to rise as partially offset by increases in, sorry, I'm just getting rid of other tech here, increases in effectiveness of say bat mitigation. So there are a series of factors that are involved and they're kind of macro factors. Some of them deal with local situations, some are just global. Tell me what you want me to talk about. It's a confluence, isn't it? It's a confluence of factors we've been talking about for a long time. We've all been talking about it for a long time and you're at the cutting edge because you're at the cutting edge of this project. But let's back up for a minute. The fact is that a wind project at this particular mountain range there above Kahi Point, above the generation station at Kahi Point, it's the best wind in Oahu, so I understand it. And it's the best location in Oahu because all you have to do is run a cable down the hill to the generation station, now you're connected with the whole island. So we haven't been able to, I'd like to talk about this, we haven't been able to transmit energy from the neighbor islands. I mean, for example, the cable from Lanai years ago, that was a dull sight. A lot of activism there, hard to understand, a lot of misunderstanding misinformation. But the end of it was over and it becomes radioactive. That is also going to be on the final exam, radioactive in Hawaii. Some things get radioactive and they're dead, maki dead, such as the super ferry, we'll talk about that in the same context. But this project started GWIS in the early 2000s under an owner different than Eurus Energy. And the utility tried to get it through the local residents who opposed it. Mufi Hanuman said the city would never give a permit to the project and it laid dormant for a long time. Then there was a predecessor to Eurus and then there was Eurus, a fellow named Nick Hendrickson in San Diego. And he tried so hard and put so much money and it raised so much capital that I think we had him on the show a couple of times. I was encouraged. I was even optimistic. Maybe I should not have been that this project would actually get done. And part of that, Tony, is your organization, so local family thing. So it's not like somebody else owns the land, somebody far away. It's you guys, our neighbors and friends. And then to find that the guy was running into trouble really, really sad. So you have this confluence of things. One is a long time to get a permit. Two, as you mentioned before, you get the permit. You're not sure it's a real permit or a make-believe permit. It's a pre-10 permit. Look at TMT. That was a pre-10 permit. Didn't really work. Okay. I can tell you're excited, Jay. I can tell you're excited. Look. Well, I guess I'm excited because I see this kind of project as progressive, as necessary, as giving us all money without any negative aspect to it whatsoever. And the project that yours set up was not going to bother anybody. And yet we in our special culture stopped it. We did. Well, we did. Now, you've covered a tremendous amount of area. The case for this site is that it is superior wind and it's adjacent to the trunk line that feeds half the island. It's the easiest possible interconnect. You don't need to run power from Kahuku all the way back. You plug right in to the backbone of the island. And we've arranged this plan, we attempted to make it invisible for most Ananakuli because you can't see through rock. This doesn't seem to penetrate the public consciousness yet. But these are the problems. If you're going to develop a project in Hawaii, it's like running a gauntlet where people dump boiling oil on you. They insult you. They defy your ancestry. They try to run you off the road in 150 ways. And you get to the end of the project. You're not sure you have a permit that can go. That's just how we do it. We like to do things that way in Hawaii. We love this kind of process. So it's always difficult to do anything new, especially anything big, and especially anything essential. But what people haven't got through their head yet, and this is the coronavirus teaching moment, is if you think coronavirus is an issue for the economy, you had better think ahead about the much larger bulldozer that's coming in the world of energy and the world of global warming. I've personally been upset about that since 1972. I don't understand why people are not as activated about the problems of energy supply, carbon dioxide, and overheating as they are about coronavirus, which will go away in a couple of months. And then we will have the same future coming. But this is the big problem. Let's start from the top and work down. The whole state is going to go conveniently to renewables very easily except for Oahu, where most of the people are and most of the industry is. Kauai, easy case. Maui, they're on it. Big Island can be done. Oahu probably never. And I say probably never because if you can't build wind, what you'll find out is that you need hundreds and hundreds acres of solar to get anywhere close to what wind can produce on a tiny spot. And when you multiply out the amount of energy that's going to be required with commercial solar, you've got nowhere near the solution. So naturally, the people who don't like wind that all are already against offshore wind, which if you have no offshore wind, no onshore wind, no commercial scale solar, rooftop isn't going to do it. Where are you at, nuclear? I mean, the problem is a small island with an incredible energy draw. So here's a solution. Two thirds of everybody move out. That would work. Oahu is going to be an extremely hard case. And the only way people will get this ultimately is when the power starts to flicker, or else we continue to be a horrid polluter and degrade the planet. Now, I don't think we need to be in that world, but that's kind of the world we're drifting into if there can't be correct policy solutions that enable things to fit in. Everybody's going to have to pull their elbows in. Hard question. What exactly do the opponents of this project argue? Now, in the North Shore, they argue NIMBY, I mean, among other things. And there are a couple of wind projects there that people are posing. This one is different. This one is like hidden. You wouldn't see it. It's not in anybody's backyard. It's not the spoiling the environment in any way. It is not even a visual obstruction. So what exactly is the objection that people have raised to this project? Well, you're going to have to ask them. Now, a lot of people feel they can see it when they wouldn't be able to. A lot of people feel that they will be affected by some mysterious process. They're probably too distant to experience. Some people will claim that they know it's there and they don't want it. But a primary argument against doing something like Polly who will win is, oh my gosh, we don't need to do this. It will only spoil the countryside. Why don't we just do it all with rooftop solar? Okay, that's the closest thing to a coherent counter argument that I've heard. And the answer to that is because everybody in the industry and HECO and everybody who's read the PSIP know that you can't do it with rooftop solar. That's the short answer. Well, also, rooftop solar capitalizes on disparity of income. Indeed. If I have 40,000 bucks lying around, I can do rooftop solar. And a lot of people have that as a matter of fact. If I don't have that lying around, then I can't do it. And it's benefiting mostly me. So for the average Joe, it's really, really unfair to rely on rooftop solar. I'm sorry. It should be community solar. It should be large solar facilities operated under the utility. It should not rely on rooftop solar. We've already, we picked that fruit. And now we have to find a way to be equitable. The 2016 PSIP, which you can find online is Power Supply Improvement Plan. HECO's got it. You can read it. I think a person with high school math and physics should be able to understand it. If this is the problem, rooftop solar maxed out is going to get us about here. Commercial solar at large scale is going to push up and push up until it runs into resistance because of the amount of area that it takes. It leaves you with a significant shortfall that has to be supplied by something else. So what I've been telling people is we can do on three quarters of an acre of footprint on the ground, what would take 500 acres of solar. This is because wind is immensely more productive than solar on a footprint basis. So we're able to use the land for agricultural purposes or forestry or some other function, whereas you can't use that land for anything else other than solar while it's there. So on an island which is very compressed, somebody's got to do the thinking. And actually, I think this is a major impediment and one that the legislature could solve pretty quickly. Nobody has really seriously sat down and tried to parse out exactly what land would have to go to what purpose to get the job done. There's a bill in the legislature to study this, which is like 10 years behind the curve. Normally you do the plan before you announce the goal, but we do it the other way around. And that's fine. Isn't that easy, Tony? Isn't that easy? You put some knowledgeable people in the room and you give them a couple of days that come up with a plan. This is not complicated, is it? Well, yes or no. It's not complicated to do a concept plan, but what people don't understand is that this is solving the energy problem depends on hundreds of volunteers. All right? There's no governmental authority that declares there shall be a wind farm here and a solar farm here. You can plan for it, but somebody has to decide, I want to take that jump. That would be me, you know, in other dummies like me, who try to volunteer to do something in the public interest. Every single case depends on somebody stepping up to say, I'm willing to use some land like this to get the job done. And that is an economic analysis and a social analysis and a political analysis in each individual case. It doesn't happen in any central league group in white. HECO cannot drive it. HECO depends on volunteers to step up to solve the energy problem. And state government depends on volunteers to step up. So the public policy question is, are you going to create a process that is even workable for somebody to step up and solve the problem? Well, that's why this is so profound that a company like this, putting all that money in already, you know, organizing it right down to the nines backs off and it's making a huge statement about Hawaii, not dissimilar from the TMT program, in which Japanese part of the consortium is that it's not going to fund it anymore. And so, okay, well, the activists seem to have won that, at least in part. And so where are we there? It's the same thing. I think that you give activism too big a credit in this picture, because it is complex. Certainly that's a component. Nobody wants to be the bad guy and cause demonstrations and disrupt everybody's auntie and nobody wants to be that guy. But on top of that kind of problem, the to get anything done, as I said in the beginning, requires some kind of a foreseeable time schedule. If you're dealing with money, you're also dealing with time. If developers now have to plan in advance for litigation, they budget in X years of litigation costs, how many trips to the Supreme Court, you know, and so forth. And the problem of this process is you can't get a thing done on schedule because the purpose of most, most complaints, some are very valid and founded in legal process. Some are purely for delay. Isn't that intentional? It's intentional. Of course. In other words, I don't want this project to happen, whether it's NIMBY or some philosophical, cultural, historical reason. I don't want it to happen. So what's my best leverage to stop it? Well, I delay it until no developer can afford to delay. And that's what I'm sure that's what happened here. That's what happened elsewhere. You can, you know, you can litigate somebody right out of business. Look at TMT. Look at the super ferry. Look at the super ferry. Nobody would disagree with that process. I think that, and I have a foot on both sides of this argument. I come from a long environmental background, and I can tell you that delay is the best weapon because many times the law does not address the real issues. If you want the real issues addressed, you've got to change the law in some manner. But in the absence of having the real issues addressed in the law, then delay is your best tool. Of course. I mean, as a guy who's litigated my share, I completely agree with that. But the problem is that we don't have an infinite amount of time left on the earth. And so to get to where we need to get in relatively short order is a challenge. And it means everybody's going to have to find a way to accommodate what they don't really want. You know, that's it. Everybody's going to understand what the stakes are. You know, if I gave you a state with 1.3 million people, all of whom understood about clean energy, all of whom understood about climate change, all of whom were willing to, what did you say, volunteer and cooperate in initiatives, progressive initiatives to get there, to get to our goals, we wouldn't be having this conversation. Hell, who would be going forward, you know, in great guns? But people do not, population does not understand what the ultimate target is and what their role is in helping it. Yeah, I think that that's broadly true. I think that large numbers of people understand generally that we have a serious global problem and that Hawaii has to do its share. And that we need all to pull together in some way around some common plan to get there. But what there is not present in the society is a clear vision of what that would constitute. And I think we have a real difficulty here locally because that discussion is not mature. So what we have to do is we have to start creating a fairly vivid image of what the target is. Now, I'm going to tell you, I think I alluded to this before, in this state we have an incredible reverence and nostalgia for our past. It is sentimental. It's, it moves thousands of people to do things, you know, that some notion of a lost or imagined past drives an incredible amount of political behavior here. This is not a forward thinking culture by and large compared to many places. You can go to all places around the world and you'll find people who are earnestly trying to get rid of their past and solve the incoming problem. We're busy trying to think about how to survive in 1550, not 2050. So we have a serious impediment here. We do not have a clear image of what it's going to take to get past the problems of the next 50 to 100 years. We don't even have an image of exactly what's going to look like in August after coronavirus, but that is going to have a severe impact. It'll be a teachable moment. What we have to assemble is what does it look like? And here's the principle that I want, I want to kind of put out to you. Properly viewed, everything valuable interrupts everything else that's valuable. We're in a paradoxical world, particularly on Oahu. Do you want food sustainability? Then you cannot have in the same area, solar panels, you cannot have in the same area, outdoor recreation, you cannot have unimpeded forest land to gaze on. All right, well, what do you want? You want energy? All right, well, if you want energy, that impedes other things. If you want agriculture, that impedes other things. So I say with tongue in cheek, everything worth doing interrupts everything else worth doing. And we're in that kind of a problem because we've got so many people in such a small space with so few resources. But it's just priorities to create a new solution. And I'll go a step further. As you implied, it's a matter of leadership. So if I have a strong leader, let's let's make you and me a dual duality, we're going to lead this thing. We get up one morning, we say, come on now, we need the energy straight away. I give up and you're in charge, Jay. Okay, I'll let you be in charge. I'll just be a consigliary. We need the energy. We need to move ahead. We can't get stuck like this. We've lost too many projects. Let's do this one. And, you know, and I, you want to make a think about it, go to court, go to court and see if you win. And hopefully, you know, get that done early and not get all bogged down. And as for the government, you know, I've seen you've probably seen this too, the government will consider an initiative. I was at a table in the governor's office in the Lincoln time when this came up, where somebody said, but wait, they're going to their activists out there, they're going to oppose us, they're going to object. And the ruling group, you know, the group with the power said, oh, well, we can't do that. If there's going to be activists, we can't do that. So they're afraid, they're scared away of it, and they don't have any political will, and the project gets killed. I saw this happen. So, you know, my concern is who's the leader? Who's saying, let's do it, boys. Follow me, boys. We're going to do this. We don't have that. And, but finally, I wanted to go back, I want to go back to something you said, because it isn't as simple as this. I mean, if the picture you're painting, okay, is that, is that Pelehua is really probably dead for whatever reasons, unless those reasons are fixed, it's dead for now. The wind didn't go away. So those reasons have changed. And say TMT is in deep kimchi, it's not likely to proceed, I'm telling you. And then, you know, we know that the cable from Linai, that's dead and radioactive. We know that the super ferry is dead and radioactive. You know, I talked to one guy who was on the inside of that. And I said, what'll it take? What'll it take to make TMT rather than the super ferry happen again? And he said, well, it's not going to be Wall Street. It'll have to be government. I said, really, you got to be kidding me. Government's not going to build a ferry. Trust me, Tony, government's not going to build a ferry. Not here. Maybe you say to Washington, but not here. Anyway, so, you know, it seems to me, these, all these projects are dead and, or dead and radioactive, they're going to happen. So here we are, then enter, enter coronavirus. Okay, you said before, it's going to be two months. I beg to differ. It's going to be a year. I agree with you. We're probably looking at six months to a year of sequelae if we ever get back. I mean, if you look at sequelae, so what happens then is the economy of the state collapsed. It's already collapsed. It's collapsed. You may be in your office, and I may be able to do this with you here on ThinkTech, but the economy of the state is stopped cold. You know, it's got to have an effect on everybody and every project in every way. And so it's not only this project, it's every project is going to be stopped. The economy is really going to be, you know, diminished, tremendously diminished, and maybe some of it permanently, maybe a lot of it permanently, to say nothing of the national. I'm really glad I got a chance to interview you today, Jay, because this has been pretty, pretty productive. Well, I haven't heard you disagree yet. Well, I don't so much. But here's the political problem is this. We can satisfy one element of the society here by declaring grand goals. We're going to hit food sustainability. We're going to hit energy, self-sufficiency with renewables on this schedule, and we declare these grand goals. Of course, there's, like I say, only volunteers can solve these problems. But on the other hand, having declared these grand goals and satisfied the one general constituency, it's still politically possible to walk back into a neighborhood and go, yeah, you know what, don't fuss with these guys. Or yeah, they're angry, don't fuss with them and so forth. And so there hasn't been a political solution yet, which says, this is our collective goal. We've all bought into it and we're going to bloody well do it. That has not happened yet. We're still able, as politicians, to declare a grand goal on the one side and all kinds of impediments on the other to satisfy the individual constituencies. And until that paradox is resolved, the island can't move forward. We need to create the general goal. Now, I've said before that there are all kinds of blame to go around if a project like this fails. But another way to look at it is it's an opportunity to see why it went wrong. And there are probably five or six reasons just under the delay category. It takes a long time for somebody like me to find an appropriate developer and the appropriate developer has to deal with Hawaiian Electric. And the terms of that deal, the so-called PPA deal, may take a long time to develop because that means those are the terms under which money is made and powers allocated. This is a serious bit of business. And until that's been done five, six, seven, eight hundred, hundred, two hundred times, it's not really in a pattern. So Hawaiian Electric struggles, the developer struggles to reach some common ground because the needs of a small grid like this are different than the needs of a place that has developed to win for a long time. So there's delay. What happens when there's delay? You know, tax credits step down and that's the end of the economics of the project. Never mind all the other stuff we're talking about. So we just have to keep trying and trying and trying and trying and getting some kind of general consensus about the proper balances so that we can move ahead. I don't intend to quit. No, but stay healthy because you're gonna need a lot of years for that. So I want to ask you one last question, Tony, and that is this. So all the things we've talked about, all the vectors and factors and considerations, what is the future of a project like the Eurus project, wind and whine eye, what is the future of that? I mean, it's important to you because this is your land. What is going to happen here and build it all in. Tell me what your projection is. Well, first of all, it's not in whine eye and it's not in non-acoolie. It's in an area in between non-acoolie and roughly ridges above couple A. Well, I wish I could tell you exactly what the future holds. I can tell you what the future does not hold. It does not hold what we had hoped for, which was to use the revenue from a wind or alternative energy project as the keystone to ecosystem restoration. That's what we're about, mainly. I would like to be a contributor in the alternative energy scenario, but I also want to do ecosystem restoration. You've got land there that bleeds away because it's been overranched for 150 years. Topsoil's gone. Forest needs to be replaced. Fire needs to be suppressed. If we did that, we could regrow something like a native forest. We could put water back into the ground. Possibly the folks on either side of the ridge would have their springs recover and they could do something useful with the water. I'm not going to happen any time soon because I don't have a big enough checkbook. But if we could get a keystone project, we could achieve many of these valuable sustainability goals, including soil restoration projects. We could possibly find a way to help the busted Ag2 land recover some productivity, which we will need. The way forward isn't clear. I can tell you the things you're going to have. There's so many uncertainties in our world, much less our state right now. We seem to be one crisis, one trouble to another. But let me ask you this, though. Let's assume that everybody, 1.4 million people are watching this program, hopefully so. What message would you leave with them? What would you urge and advocate for them to do and think in order to deal with the various factors that led to the withdrawal of yours energy and the factors we've discussed here in this discussion? This will sound a little tongue-in-cheek, but I have no other way of coping. Okay. I'd say let's look at the use of language. The first use of language in the most common is gossip. That's what people do mostly. The second use, the second most common, is spreading all kinds of nonsense mythology. And only after you've exhausted your interest in those, do you get to the use of language as a means of communicating facts and plans and data that matter for common survival. And that's the realm of science. People are going to have to turn the temperature down, get rid of the first two, keep everybody out of the room who can't get rid of the first two uses of language, and start talking very seriously about planning forward. And it's going to take a lot of minds and a lot of time at the rate we go. But first and foremost, I think that people have to start talking again about building a society. You know, I'm a Democrat by birth, as you know. One of the things that we used to talk about quite a lot was building a common society that worked for everyone. We have lost the ability to articulate that. I know that various governors and politicians have tried to, but we've lost the ability to say how we are all in it together and how we need to set aside the schismatic elements of race, ethnicity, background, and culture. If we don't do that, I think the future is very predictable. The standard of living will drop. Opportunities will drop. We will not solve the energy problem. We will not solve the resources problem. And we're going to be in one big hurt. And it's only to the extent that we can see our common interest above all the schismatic elements and get calm people in a room to slice out what the proper balance is that we're going to survive. It is a question of survival. It is not a light matter. The coronavirus is a drop in the bucket, folks. The big bulldozer of the future is bearing down on you and you have got to pay attention. There's nobody with any credibility who thinks that this is going to be an easy solve. We're going to have to do things that have not been thought of before with tech that doesn't currently exist. Either that or two-thirds of the people on the earth can just vacate. It's a simple problem of the bulldozer bearing down on us from the future. And until we take that seriously, we're not going to get anywhere. I mean, I don't have any claim to omniscience, but I can see the problem. I want to thank you, Tony. Tony Gill, landowner, part of the Gil Evelands Trust, I guess, and environmentalist at the same time. Thank you so much, Tony. It's really wonderful to hear your thoughts on this. Aloha and stay well. You too.