Hawaii's Geothermal Project is investigating the occurrence of geothermal resources in the archipelago, initially on the Island of Hawaii. The state's interest in geothermal development is keen, since it is almost totally dependent on imported oil for energy. Geothermal development in Hawaii may require greater participation by the public sector than has been true in California. The initial exploration has been financed by the national, state, and county governments. Maximization of net benefits may call for multiple use of geothermal resources; the extraction of by-products and the application of treated effluents to agricultural and aquacultural uses

Kamins, R. M.

English

NASA Technical Reports Server

" N I 5  20840  
HAWAII GEOTHERMAL PROJECT 
Robert M. Kamins 
University of Hawaii 
Honolulu, Hawaii 
Hawaii's Geothermal Project i s  investigating the occurrence 
of geothermal resources in the archipelago, initially on the Island 
of Hawaii. 
since it is almost totally dependent on imported oi l  for energy. 
The state's interest in geothermal development is keen, 
Geothermal development in Hawaii may require greater par- 
ticipation by the public sector than has been true in California. 
initial exploration has been financed by the national, state, and 
dounty governm'ents. 
tiple use of geothermal resources; e. g . ,  the extraction of by-products 
and the application of treated effluents to agricultural and 
aquacultural us e s . 
The 
Maximization of net benefits may call for  mul- 
A guiding role  for the Hawaii Government is made the more 
likely by the 1974 statute which defined geothermal resources as  
"mineral, I '  and so reserved ownership t o  the state. 
law, the Department of Land and Natural Resources has immediate 
responsibility for fostering geothermal development, a task in which 
other public agencies necessarily wi l l  be involved if  Hawaii strikes 
it rich in geothermal fields. 
Under that 
The State of Hawaii is totally dependent for energy on sea-borne petro- 
l e m .  Hawaii has no known fossil fuel reserves;  there is no coal coming into 
the State by rail; no natural gas  by pipeline: and no regional electric grid to 
interconnect its electrical systems with those of other states or  even with i ts  
separate i s  lands, 
vulnerable to dislocations in the global energy market resulting from rea l  o r  
imagined shortages of petroleum. 
- 
This complete lack of flexibility makes Hawaii particularly 
This is most ironic, since the State i s  generously endowed with a variety 
and abundance of natural energy resources: geothermal, solar radiation, ocean 
temperature differential, wind, waves, and ocean currents - all potential non- 
polluting power sources. 
sources which shows the highest promise for early power generation at  
commercial levels i s  geothermal energy. 
The candidate from among these natural energy 
The Hawaii Geothermal Project (HGP) was organized to focus the 
resources of the University, the State, and the County of Hawaii on the identifi- 
cation, generation, and utilization of geothermal energy on the Big Island of 
115 
https://ntrs.nasa.gov/search.jsp?R=19750012768 2020-03-22T23:18:08+00:00Z
Hawaii. 
Hawaiian chain. 
encing growth from recent activity of the Mauna Loa and Kilauea volcanoes. 
Consequently, the Big Island was selected a s  the obvious site for  initial geo- 
thermal exploration, but subsequent surveys wi l l  proceed up the is land chain. 
Figure 1 shows the five volcanoes that form this largest island in the 
Hawaii is also the youngest of the islands and is still experi- 
Whether a conventional geothermal resource exists - such as  the vapor- 
It is cer-  
dominated systems at Larderello, o r  at The Geysers, or a water-dominated 
system, as encountered in New Zealand - is subject to speculation. 
tain that enormous amounts of geothermal energy a r e  present in the f o r m  of 
molten magma at  1200°C and in the adjacent hot rock. Ultimately, the HGP 
intends to  look into conversion systems for  utilizing this energy of the molten 
magma directly, but first efforts will be made to identify and develop a conven- 
tional geothermal resource. 
Phase I of the Project was organized into three separate programs, 
encompassing the following research tasks: 
Geophysical Program - Augustine S. Furumoto 
Photogeologic (Infra r e d S canning) Survey 
Electromagnetic Survey 
Electrical  Resistivity Survey 
Microearthquake and Microseismic Surveys 
Geochemical Survey 
Thermal Survey of Wells 
Engineering Program -Paul  C. Yuen 
Reservoir Mode ling 
Well Test Analysis 
Ghyben-Herzberg Lens Analysis 
Energy Extraction F r o m  High Temperature Brine 
Environmental-Socioeconomic Program - Robert M. Kamins 
Regulatory and Legal Aspects 
Land Use and Planning 
Economic Analysis 
Environmental Bas e line Studies 
The major emphasis of Phase I has been on the Geophysical Program, 
since the issue of if and where geothermal resources exist i s  crucial to the 
project. 
so that some progress has been made in identifying and clarifying the techno- 
logical, environmental, legal, regulatory, social, and economic problems that 
could obstruct the development of geothermal power in Hawaii. 
However, parallel studies were initiated in all supporting programs, 
Although the completion of surveys and interpretation of field data w i l l  
continue through 1974, it has become obvious -both on the basis of preliminary 
results f rom Phase I and from complementary studies conducted on the Big 
Island over the past several  decades -that an exploratory drilling program is 
essential to  establish identity of the subsurface conditions predicated by the 
surveys. 
116 
Figure 2 is an organizational chart for Phase 11 of the HGP. In addition 
to continuing the three research programs from Phase I, an exploratory drill- 
ing program will be initiated under D r .  Agatin T. Abbott. 
and management is provided by Dean John W. Shupe. To assure  that the P r o -  
ject has both local and national relevance and visibility, a 16-member Hawaii 
Advisory Committee and a 9-man National Liaison Board were appointed. 
Overall coordination 
The HGP came into being when the 1972 Hawaii State Legislature allo- 
cated $200,000 for geothermal research - $100,000 to be administered through 
the County of Hawaii budget. 
and was a farsighted step for a state governing body to take. 
major source of funding for this Project  has been the National Science Founda- 
tion. Total support for the HGP through December 31, 1974 is as follows: 
National Science Foundation $ 252,000 Year 1 
(Research Applied to  National Needs) 335,000 Year 2 
This action was taken pr ior  to the energy cr i s i s  
Additionally, a 
State of Hawaii 
(appropriated) 
100,000 
500,000 
Year 1 
Year 3 
County of Hawaii P 00,000 Year 1 
Other Public and Private  Funds 39,000 
$1,326,000 
Except for the $500,000 appropriated by the 1974 State Legislature for 
exploratory geothermal drilling - contingent on additional federal matching 
funds for a research drilling program - essentially all of the above funds will 
be expended by the end of this calendar year on completing Phase I of the pro- 
ject. Referring again to Figure 1, tentative plans for Phase 11 call for initial 
drilling in the Puna Area along the Eas te rn  Rift of Kilauea. 
been submitted to  NSF to assist with the drilling program, to get under way in 
early 1975. 
A proposal has  
With this overall picture of the Hawaii Geothermal Project  in your mind 
1 want to address a basic problem we a r e  studying in  the socioeconomic portion 
of the Project  -how to establish rationally the level of investment in geothermal 
development appropriate to a limited area within the U.S. Most discussions of 
the economic rationality of energy development until now have been in national 
terms. 
calculation of optimal investment and how a r e  they related to state policy? 
How does it look at the state level? What factors are relevant to the 
Most of the factors which I will discuss derive in one way or  another f rom 
uncertainty - that inability to ascr ibe probability values for success in action - 
which is such a key consideration in geothermal resource development any- 
where i n  the world. The resource is so idiosyncratic in  its occurrence that 
even in  KGRA's, indeed, even within established productive fields, it is chancy 
that a well drilled at any given location will hit a useable geothermal supply -- 
and if  it does, how productive the flow w i l l  be or  how long it will last. Calcu- 
lating the odds under such conditions is a major task for every management 
group concerned with investment in  geothermal production in the State of 
Calif o r  nia. 
117 
Now i f  uncertainty presents a problem for investment decisions here,  
among the best-proven geothermal fields of the nation, consider what a problem 
it is in Hawaii, where there  a re  many good reasons for expecting that the 
resource exists, but where no production wells have yet been drilled. Given 
the inherent uncertainties, it is easy to understand why private industry has not 
yet been willing to invest much to find out if the resource exists in  commer- 
cially exploitable conditions. There a re  much less  risky investment opportu- 
nities here  on the mainland. 
However, despite the uncertainty, the State and County of Hawaii have 
appropriated scarce public funds to  help finance the study and development of 
this chancy resource. W a s  this investment decision rational and in the public 
interest? 
needed for one. 
I won't offer a categorical answer, but will suggest the considerations 
The primary consideration is that a geographically isolated state such as 
Hawaii faces conditions of uncertainty that in social context dwarf those per- 
taining to geothermal discovery. 
Hawaii's small  dot in the national energy picture. 
dependent on imported petroleum to light every room, cook every meal, and 
turn every motor in the state. The recent fuel shortage drove home the point 
that an oil embargo, shipping tieup o r  any other prolonged stoppage of the oil 
flow would quickly cripple the economy of the state. This kind of uncertainty 
i s  difficult to live with in a power-dependent society, and so the development 
of an indigenous power source becomes extremely valuable to the state a s  a 
kind of energy insurance. 
Consider what I have already said about 
It is almost completely 
Not only is the Hawaii government concerned with safeguarding the energy 
supply to maintain the local economy, it is also increasingly concerned with 
economic growth to provide more jobs. 
parts of the U.S. ; in.Hawaii it is a bad problem, running over 8% -which is 
well above the national average - and still rising. Public welfare applications 
in Hawaii have doubled over the past 12 months and are also rising. 
these circumstances, a new energy source that provides a base for growth and 
jobs may have a social value far exceeding the profits which may be realized 
by firms engaged in producing and using geothermal power. 
Unemployment is a problem in many 
Under 
It is important to Hawaii that expansion of the energy supply be low in 
The land mass i s  so small that geography a s  well as economics 
It 
pollutants. 
dictates that most generating plants be near residential o r  resor t  areas .  
would be costly in  many ways for Hawaii to accept high-sulfur oil o r  other 
polluting fuels, as is proposed to help the nation in the energy bind. 
Another consideration in Hawaiils energy development policy is inflation. 
The brutal ra te  of price increases which Hawaii is  experiencing, along with the 
r e s t  of the nation, gives additional incentive to find indigenous energy sources 
which may be cheaper, as well as cleaner, than fossil  fuel. Electricity rates 
and gasoline prices in  Hawaii a r e  among the very highest in the U.S., and they 
contribute to an overall cost of living that is second only to  Alaska's. The 
development of geothermal power could not only bring some relief to family 
118 
budgets but could also help overcome the cost disadvantage under which Hawaii 
suffers in competition wi th  other a reas  in  attracting industries, other than in  
tour i sm. 
Finally, the development of geothermal power on the Island of Hawaii 
could help the state government achieve another policy objective - to decen- 
tralize the population of the tiny state. 
lives on Oahu (most of them in or  near Honolulu), already one of the most 
densely occupied communities in the nation, with more people crowding in  
every year to be where the jobs are.  Lacking constitutional means of turning 
away new residents, the state is  seeking ways of encouraging them to move to 
the uncrowded outer islands; however, the economic base (the jobs) has been 
lacking there. 
Island of Hawaii, that base could be created on the largest land mass in the 
archipelago. I might point out that such development could offer public eco- 
nomies as well as esthetic advantage in helping to preserve the last, unsub- 
divided valleys and open beaches of Oahu. 
capita costs of local government are higher in Los Angeles than in Honolulu, 
and higher in Honolulu than in  Hilo. 
Now, more than 80% of the population 
However, if a major energy source were to  be developed on the 
Crowding costs more,  the per 
Decentralization should save tax dollars. 
There a re ,  then, several  social benefits which a state in Hawaii's c i r -  
cumstance s could receive from geothermal development: energy insurance, 
creation of a new economid base and more jobs, anti-inflationary help, envi- 
ronmental protection, and population dispersal. Attaining these benefits may 
be worth tens o r  hundreds of millions of dollars annually to overall Hawaiian 
society, yet worth much less to  the private firms that would decide whether o r  
not to  invest in geothermal development. In the vocabulary of economics, this 
may be a case where externalities a r e  of critical importance. There may 
exist a discrepancy between perceived private benefits and social benefits of a 
large order,  so that when the difference is accounted for, total benefits would 
equal or  exceed the total costs. 
If analysis shows that the discrepancy does exist, and that by best judg- 
ment it is large, then the state may be justified to  act to bring about a scale 
and pace of geothermal development greater than would result f rom private 
enterprises operating in the absence of government stimulation. 
A broad cost-benefit analysis of the kind I have just sketched has not yet 
been made; we are just starting on it for Hawaii. 
salient points have been intuitively understood by political leaders in the state 
for  they have appropriated funds to support research and drilling programs for 
geothermal development, and additional funds for other alternative energy 
sources. 
geothermal development, this rationale and understanding may again be appealed 
to e 
And yet I think that its 
And, if other social investments are indicated in  order  to  stimulate 
For  example - returning again to the theme of uncertainty - it is quite 
possible that geothermal resources will be discovered in a corner of the Island 
of Hawaii, which in recent times has received lava flows from eruptions of 
Kilauea. 
insurance to cover a generating plant and other capital investments at a 
This must be known to Lloyd's of London. The premium rates on 
119 
geothermal field in Puna might be prohibitively high for a private enterprise 
and yet readily covered by the social benefits reasonably attributable to the 
development. In that case, it may be good and politically acceptable public 
policy for the Hawaii government to share some of the inherent uncertainty by 
subsidizing some or  all of the extraordinary insurance that may be necessary 
for  the geothermal developers who undertake the r i s k  of working in an active 
volcanic area.  
The Hawaii government has already acted to reduce a different kind of 
uncertainty in geothermal development by answering the question as to who 
owns whatever geothermal resources there may be in  the state. Ac t  241 of the 
1974 Legislature asserted that the State of Hawaii owns them, as successor in 
title to mineral reservations kept by the Kamehamehas when they reigned in 
the Kingdom and divided the lands more than a century ago. Like any statute, 
this declaration of ownership is subject to challenge in the courts, but unless 
it is overturned, parties interested in drilling for geothermal resources in 
Hawaii will have the certainty that they w i l l  deal with the State Department of 
Land and Natural Resources. 
However the question of resource ownership is ultimately settled, it 
seems likely that in Hawaii's circumstances the government wi l l  retain a 
lively interest and play an active role in geothermal development in the Island 
State. I have tried to identify the basis of that interest and outline the factors 
to be considered in arriving at a rational policy for public investment in the 
potential new energy source. 
be made by direct subsidies, by indirect subsidy through tax incentives, by 
providing roads and other facilities needed for geothermal field development, 
by loans o r  loan guarantees to private companies, o r  by the state entering into 
joint enterprises with them - o r  indeed undertaking geothermal development 
a s  a public enterprise - a l l  these alternatives remain to be explored. 
research we a r e  not attempting to determine what the role of government should 
be in Hawaii's geothermal future, but rather t o  lay out a rationale which 
decision-makers and the electorate may find helpful in making that judgment. 
Whether public investment would most effectively 
In our 
We are interacting with several  state agencies - Planning and Economic 
The results should have 
Development, Land and Natural Resources, the Office of the Attorney General - 
and with the County of Hawaii in conducting our study. 
immediate applicability to the 5 0th State. 
However, we also perceive that the public policy considerations we a r e  
trying to  elucidate will be applicable to  other parts of the nation, particularly 
those states which, like Hawaii, have strong incentives for developing indigenous 
sources of energy. 
120 
20"- 
19"- 
I 
6" 155" 
0 IO 20 MILES -
CONTOUR INTERVAL 
20" 
19" 
I 
3" 155" 
Fig. 1 .  Volcanoes and rift zones on the island of Hawaii 
Project Director 
Fig. 2. Hawaii Geothermal Project, Phase 11, organization char t  
121 BBLGINAL PAGE 18 
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Hawaii geothermal project

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