 Okay, we're back. We're live. This is Think Tech. I'm Jay Fidel. This is our flagship energy show, Hawaii, the state of clean energy. And my co-host today as before, Jeff Ono. Hi, Jeff. Good afternoon, Jay. Jeff is a lawyer. He was, for a long time, the consumer advocate of the state of Hawaii, did a fabulous job there. Now he's with Watanabe Ng, which is a very notable law firm down the street. And we are happy to have him here with us. Thanks, Jay. So let's talk about the show today first. This is going to be a discussion of the global energy perspective and its impact on Hawaii. And we have David Isaac on the line, and we hope to have Mark Lick here, too. But before we get into that, we always have our Hawaii Energy introductory piece, okay? And we have today Ramsey Brown, who's one of the regulars at Hawaii Energy, and who is excellent in presenting some of their programs. And the program he's talking about today is ADU. Welcome to the show, Ramsey. Thank you, Jay. Tell us about it. Yeah, nice to be here. So the ADU, the accessory dwelling unit, is part of the mayor and specifically the city and county upon a lose plan for more affordable rental housing. And Maui is actually already ahead of this. They have about 29% of lots on Maui that can have an ADU, have an ADU, and less than 1% here on Oahu. And so what am I talking about? An ADU is an accessory unit placed on your homeowner's lot. So if you have less than 5,000 square foot lot, you can have up to 400 square feet of accessory dwelling unit living space. And greater than 5,000 square feet, you can have an 800 square foot. It's up to 800 square foot accessory dwelling unit. And a lot of times this is good for students and young couples. This is also good for kupuna aging in place. And we have a video to show you exactly kind of what the layout could look like. Let's take a look and we'll get a better handle on ADUs and what we can do for them. We don't have to leave. Certainly, government has to be very assertive and aggressive in dealing with this. But today with this ADU, this is an opportunity where local families, local homeowners and landowners can get involved and at a cost effective way, build one of these, rent it out and possibly even earn some income. I think it's really, you know, kind of fitting that we have this ADU on state property here at the capital grounds and we have our state legislature here. Because we don't tackle affordable housing unless it's part of a partnership between the city and the state. And this is an example of that. Teaming up with the private sector. The ADU program holds much promise. Clearly, more needs to be done and the city needs to explore ways in which we can improve and strengthen the program. And in that regard, I look forward to working together with Hawaii Appleseed Center, Habitat for Humanity and other affordable advocates. Okay, we're back. We're live. We're here with Ramsey Brown and he's going to tell us what we just saw. How about an interpretational discussion? Sure. So that was Habitat for Humanity's Buildathon for 2017 and they decided to partner with Hawaii Appleseed and they created this accessory dwelling unit kind of for show there on the corner of Baritannia and Richard Street so that to raise awareness, they've had 100 people an hour coming through this ADU, picking up forms, learning more about some of the waived fees that Department of Planning and Permitting has promoted to get more of these built, over $10,000 worth of fees that will help homeowners now make the decision to dive in and build an accessory dwelling unit. So that's where Hawaii Energy comes in because we know that as you build more on your property and expand, your electric bill is going to go up. So why not get out in front of this and in the design phase work in some energy efficient appliances, LED lighting. So we created this pledge form. I'll show you here. Please show the camera. Okay, pledge form. Pledge form. You can download it online. I'll leave some here with Jay at ThinkTech. And basically it says that as I design my ADU, I pledge to install energy efficient appliances and lighting and that sort of thing. And if you send us back one of these pledges, then we'll gladly mail you a $60 valued home energy kit absolutely free. That's great. It's like just makes you friendly with the government. Were we unfriendly with the government? I'm just saying that. Anyway, cross-examination, Jeff? I think it's a worthy cause. It's a wonderful program. I hope you can expand it to a lot of ADUs. What do you expect will happen? I don't know. We're hoping that this will help to curb some of the housing prices that we see here on Honolulu especially. And we'll be glad to get out in front. Like I said, this is a new construction project and it's fun for us to be able to dabble in the what ifs as people design their new homes as we continue to help and retrofit people's existing homes. Well, it goes with the proposition and I'm sure you've seen this as the consumer advocate. Incentives change conduct. This is an incentive. Hopefully it will change conduct in the right direction. Ramsay, you're terrific. Brian, did you know that? Michael, oh, how did you know that? Ramsay, terrific. Will you come back soon? Certainly. Thanks. We'll take a break. We'll come back with David, Isaac, and hopefully Mark Lick. Hey, Stan the Energyman here. Thanks for joining us on Think Tech Hawaii. And I invite you to join me every Friday on Think Tech Hawaii at 12 o'clock where I give you all the energy news that's worth talking about here in Honolulu. And I love to talk about hydrogen. So join us on Friday on my lunch hour here at Think Tech Hawaii. Be there. Hi, this is Jane Sugimoran. I'm the co-host for Kondo Insider. And we're on Think Tech Hawaii every Thursday at 3 o'clock. And we talk about condominium living and issues that affect condominium residents and owners. And so I hope you will join us every week on Thursday. And we appreciate you viewing our show. Aloha. Hi, I'm Carol Cox. I'm the new host on Eyes on Hawaii. Make sure you stay in the know on Hawaii. Join us on Tuesdays at 12 noon. We will see you then. Aloha. Aloha. This is Reg Baker, host of Business in Hawaii with Reg Baker. We're a show that broadcasts live every Thursday from 2 to 2.30 and highlights successful stories about businesses and individuals in Hawaii. We learn their secrets to success. And it's a show just packed full of information. Hope to see you on our next show. Aloha. Aloha. This is your host Beatrice Cantelmo. Come and join us every Friday at 4 o'clock on Perspectives of Global Justice. Okay, we're back. We're live. Jeff Ono and me. He's my co-host. He's an attorney with Watanabe Ng down the block. And he's the former consumer advocate of Hawaii. And he's going to be able to ask some good questions here. We're going to start talking with David Isaac now. Welcome to the show, David. Ah, thanks for having me. Yeah, we see you there. And you know, we want to get a handle on what's happening with global energy. Because, you know, we haven't talked to you or Sasha Fischer Rocky in a while. We need to get a handle on, you know, where it's going, what are the factors, what are the influences, what are the prospects for the price of oil, the availability of oil and LNG. Okay. Can you talk about that? Sure. There's a lot of oil around right now. You know, there's too much of it. Obviously, a lot of things Saudi Arabia did were designed to shut down as much oil production in the U.S. as possible. But it hasn't been all that effective. So we're looking at a fair amount of oil for quite some time to come. That doesn't mean it's always going to be cheap. It will go up and down. That's what it all does. But it's there for at least 10 to 15 years. Now, LNG is oversupplied. So LNG prices are collapsing. People are trying to make all kinds of deals. A lot of the big projects that were planned have been shut down even though they're partially built. So LNG is going to be cheap for quite some time to come. And in fact, some of the people in the LNG business are talking about offering fixed prices, which is that's been unheard of in the LNG business. Taking the risk of the market. That's pretty interesting. Yeah. Well, they're desperate. Yeah. They got to sell it. They have the investment in the infrastructure. Exactly. Exactly. And they need to claw back some money somehow. So what effect is the Trump administration having on all this? I suppose they favor fossil fuel and they're trying to take the stops out on it and make it even cheaper and put more investment into, I guess. Yeah, but the crazy thing about that is that they have all these theories that we can produce more of everything. And you don't really need more coal if you're producing more gas. And you don't really need more gas if you're producing more oil. You can't pursue all those goals at once. So it's more smoke than fossil fuel. Yeah, coal smoke specifically. So what about coal? Where does coal fit in the picture of these three? I think coal's in big trouble no matter what they do. I mean, we don't need it. We're already sending a lot of our coal overseas to other people. And it wasn't really the environmental legislation that pushed coal out of the picture. It's the big wave of cheap gas that we've had from all the domestic production. Yeah, what about the role of workplace danger and all that in the coal mines? I always thought that was a pretty dangerous job to have. What is that? Is that affecting the development of coal mines? Well, you know, more and more, I mean, the really big sources of coal are all mined above ground in places like Wyoming with huge machinery. Yeah, there is, you know, back east, there are still some some underground mines, but even that's being automated a lot. So a lot of this a lot of this concept that it's all been shut down because of government policy, the jobs are just disappearing on their own. Yeah. Well, I guess the question now is to drill down and find out what you mean when you say that it's going to go up and down. I love that. Ask a guy about the stock market and says, oh, it's going to go up and down. Well, thank you. What about the oil market and the LNG? You told us about LNG and I would like to hear more about exactly how high and how low we can expect it to go, not necessarily in 10 or 15 years, but in five years. What can we expect? And then hopefully we'll ask Mark Lick how we compensate for that and plan against that here in the Hawaii energy market. But what do you thought more specifically about how high and how low it's going to go on all of these counts? Well, in the case of oil, we're expecting it to bang around someplace between 40 to $60. It could go as low as 35 occasionally. It could go up above. It depends obviously on the market and how panicked people get about things. War on the Middle East could make a difference. But if you look at what's been going on for the last few years, you had Libya go completely belly up, and it didn't affect anything. So there's a lot of oil out there chasing buyers. The versus sources are good. Jeff, what do you got on this? Well, a couple of things, David. Can you bring this home locally to us? What effect has the low price of oil had on our refineries? Are there profit margins greater because of it? And is that going to extend the life of the refineries so that we're not likely to see them shut down in 2020 as predicted by the refinery task force? Well, I don't, I mean, basically with renewables coming in and fairly effective conservation programs in Hawaii, we just don't need two refineries. It's at least one too many. The refiner task force might be right that both of them are going to shut down. But the big, with the exception of the mainland US, the new sources of oil that we're seeing tend to be traditional heavy high-solver crudes. And Hawaii can't work with those. Hawaii has to have low-solver crudes to make low-solver fuel oil and to make the other products that we need because the refining system isn't very sophisticated. It's not a high-tech business. It was high-tech in the 1970s, but it's an old-fashioned kind of refining industry now. Two things come out of that for me. One is, doesn't two of any company make for competition and other benefits to have two and that competition? Or are you saying that we could do with one and it would not affect the price? Well, to tell the truth, you don't get too much competition to begin with because they control the import infrastructure. Right. So they're dealing with the same import costs. Yeah. And there's no other way for anybody else to get product into the state. So there's... If that's for us, one more question. So, Jeff, what's your reaction on this so far? Is David back? David, are you there? Yeah. Okay. We're hanging loose around here. You get what you pay for, too. So the other thing is the logical possibility, and we've talked about this before the show, that there will be a run-on oil at some point and maybe a shrinkage because the Middle East and otherwise of source. Also, you mentioned that we need LSO for low sulfur for all of our generating systems here in Hawaii and petroleum generating systems. And that means we only have a subset of the world market. We are dependent on LSO. And that means that if LSO shrinks at the source, we're going to be paying more for a limited piece of that pie. So I'm asking you, are we going to have the old drama of having the price go away sky high again? Oh, yeah. You can expect the prices in Hawaii to be much, much higher in the future just because of the requirements for LSFO. The volumes, the number of crudes that are accessible from Hawaii that are low sovers, just a tiny handful of crudes, mostly in Indonesia, a little bit in Malaysia, basically Southeast Asia. And they're very expensive. The other thing that's going to happen in the next couple of years, the fuel oil we use in Hawaii is 0.5% sulfur, half a percent. So that's really sweet and clean by world terms. But what happens in 2020 is the international maritime organization is making all bunker fuels for all ships worldwide a maximum of 0.5. And so suddenly they're going from 3.5% down to 0.5%. Suddenly we're going to be competing with all of the ships all over the world. Millions and millions of barrels of new demand for low sulfur material. And we're not sure how that's going to play out in the shipping industry. Nobody knows where it's all going to come from. A lot of people may start burning diesel instead of fuel oil and ships. But whatever happens with that, it is going to drive up the price of the exact kind of fuel that the power industry in Hawaii uses. Any chance that rule could be changed if times get tough if the price goes too high? I don't think so. It's already done deal, huh? Yeah, it's a done deal. It's a done deal. Everybody's rolled it in. Everybody's arguing about what it means. And for a while they said, well, we're going to institute this in 2020, but we're going to go, we might go to 2025. Last year they said, nope, it's going to be 2020. Who's there? The International Maritime Organization. And everybody is actually bound by their rules. Well, David, I wanted to ask a little more about importing refined petroleum products to Hawaii. Do you think we're ready to do that? We have the Aloha Terminal. We have the two single point moorings that are owned by the refineries. Do we have the necessary infrastructure to import refined product when that time comes and the two refineries shut down? Oh, sure. Sure. It requires doing it efficiently would require a little bit of work. But yeah, we could turn things into an import terminal fairly rapidly. What do you need for an import terminal? You basically just need a good clean products line and places to park your ship. So, does it come in by tank on the ship or does it come in barrels or what? No, it would come in on ships. And actually a lot of our jet fuel already comes in on ships. It's not all made in Hawaii. And a lot of material is actually leaving Hawaii. If you look at the situation par petroleum that's in these days, they're buying because they lost the HECO contract for fuel, they're buying the cheapest crude they can find which is high-salt for material and exporting all of their high-salt for fuel oil. So, I mean, you're dragging crude from Alaska or Mexico or parts of the United States to Honolulu, you're refining the crude then you're having to sell the fuel oil you're producing off in Asia. It's kind of a sketchy proposition economically but they're making it work because they're buying such cheap crudes. But it's not how anyone would design something. What do you say we move to the second part of our discussion? Well, before we do that, can I ask one other question? I want to ask about petrol lithium extraction, David. It's something new, but, you know, it's a way to extract lithium from the wastewater that's coming out of some of these petroleum oil wells and, you know, what's the technology there? Is it commercially viable and is it going to change the battery industry? Pepsol lithium extraction. My wife and I at dinner speak of little else. Yeah, that's kind of an obscure technology. I don't think anybody knows what the costs are going to be and whether we'll be competitive. But I suspect it will be because you're dealing with a substance. You know, this brine has got to be disposed of somehow. And so they're talking about cleaning up the brine. Lots of people would support that. Places like Oklahoma where they're doing a lot of fracking and you need to re-inject it into the groundwater. If you were injecting clean water instead, that would have a direct benefit. So it costs money, doesn't it? It does cost money. But it costs money to mine lithium too. We might be looking at a situation here kind of like the situation with sulfur in oil. You know, if you go back 50 years, there were lots and lots of sulfur mines around the world. I don't think there's a single one operating anymore because they've started extracting sulfur from oil because of environmental cleanup reasons. So now refineries have big piles, big yellow piles of sulfur outside them. They just loaded on ships and send it off. That's great. It's completely out of business. I'm lucky you're living the 21st century. Okay, now, Jeff, I'll reply. All right. So now with that behind us, Mark, Rick is not here. Can I add just one other thing on your navigation? Sure. Well, you were asking about the lithium, lithium for batteries. Have you been following any of the developments from the guy who invented the lithium ion battery? I know they're improving. Well, he's called, his name is John Goodenoff, and he's actually working on solid state batteries. He claims the lithium ion battery is outdated and will never really do what we need it to do. What's a solid state battery? It's, most of them are a version of some kind of glass-like material that can maintain a charge. It's a very recent concept, but it's kind of like a thumb drive or a flash drive on your computer. It's got no moving parts. It doesn't catch on fire like lithium ion batteries, and it can charge really, really fast. Now, nobody knows what the costs are, but he seems pretty convinced that we're going to have a battery breakthrough in the next five to 10 years and talk about a game changer. Yeah. How does that differ, or maybe it's close or the same as graphene? Well, some people are talking about using buckyballs and graphenes and things like that for solid state batteries. When you say solid state, there's a large number of materials out there that might be used. But ultimately, our energy problem is really an energy storage problem. You bet. There's a lot to energy. You bet. We came back on Friday from the Tesla facility in Kauai. That was a statement of it. In fact, one of the reasons oil is so popular is because it's stored energy. It's solar energy, in fact. It's just a few hundred million years ago. Yeah. Unfortunately, you can't recreate it or put the energy back in. Well, you can't. That's the benefit of a battery. You can, but you have to be really patient. Thank you for that. And thank you for the talk about the solid state batteries. That sounds very, very promising. So we only have a minute left, a couple of minutes maybe. And I wanted to ask you what you think Hawaii can do to deal with the uncertainties in the market for oil, for LSO, for LNG, and I suppose for coal. We do use a little of that out at what is it, A-E-S, A-E-S. A-E-S, yeah. So what do you think we can do? Give us some planning points. Well, I guess the big choice that needs to be made at some soon, preferably soon, is the choice between LNG versus oil. That's, you know, their large volumes of LNG are needed for it to be economic. You can't bring it in barrels. And that's incompatible with running the power system on oil. So that's the crossroads that we're at. Didn't the governor say he didn't want to do LNG? I'm trying to remember that. He was pretty definite about that, yes. But he said for electricity generation is my recollection. So it leaves open the possibility that marine transportation, motor transportation, you know, that might still be open for LNG. We're just about out of time, guys. Sorry about that. Wish we had six hours more to conduct this properly. But, Jeff, can you as a co-host summarize what we've learned today and where we're going on this? Well, what I've been hearing is that, you know, oil prices are unpredictable, but David, Dr. Isaac, you know, he's saying oil is going to hover around $40 to $60 a barrel. And I think, you know, that's still low oil. So, you know, we have opportunities here when oil prices are low to make investments in our electric utilities grid and, you know, modernize that grid and keep electricity prices down. Gives us a breather and maybe more capital to spend on developing clean energy. Okay, thank you, David. I'm lovely to have you with us. I hope we can have you on again soon. Talk more about this going forward. And thank you, Jeff. Thank you for being co-host. Thank you for coming down and organizing the show with Sharon Moriwaki, who's sitting there in the bleachers. Oh, hi, Sharon. Thank you for watching. I'm Jay Fiedel. This is Hawaii, the state of clean energy, a product essentially of the Hawaii Energy Policy Forum. We'll see you next week. Same time, same station. Thanks.