HONOLULU (HawaiiNewsNow) – Japanese energy company JERA has applied for a federal permit to build an offshore terminal for liquid natural gas on Oahu.

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The application is the first step toward approval of a $1.5 billion power plant that could provide nearly half of the island’s electricity.

But the plan is being questioned by environmentalists and lawmakers who fear it will slow progress toward renewable energy.

JERA says LNG could cut costs quickly

JERA says burning LNG instead of oil would be cheaper and more efficient and would reduce electric rates. The LNG would arrive frozen and pressurized at a terminal off Campbell Industrial Park, be processed into gas in a floating gasification plant, then piped to a 500-megawatt electric power plant.

“This is about displacing oil right now and reducing costs and reducing carbon today with a solution that works,” said Erik Montague, JERA Americas vice president for development.

A University of Hawaii study of the plan agreed that “the fuel price case for LNG is genuine but narrower than often presented” and is based on “oil prices staying high enough… and renewable energy deployment being slow enough.”

Opponents say renewables, not LNG, should drive affordability

Life of the Land’s Henry Curtis said the study found that the proposed LNG plant would cut into the growth rate of renewables.

Environmentalists like Curtis see renewables like solar as the answer to affordability. LNG is a fossil fuel that is supposed to be phased out in Hawaii by 2045 to meet the state’s goal of 100% of electrical generation from renewables.

“The trajectory is falling far short of what is needed to meet that goal,” Montague said. “There’s a lot of things we hope we can help support in increasing the rate of adoption of renewables here.”

The company says its plant would be a hybrid capable of switching to a new non-fossil fuel, although what that fuel would be is unclear.

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“What they have said is that the plant can be converted to hydrogen or ammonia or biofuels or something else,” said Curtis. “They have not laid out how much it would cost to convert. They have not laid out whether those are viable.”

Critics question preliminary agreement with governor

Critics are also skeptical because Gov. Josh Green has already signed a preliminary collaboration agreement with the company.

“So what this proposal is, pre-selecting one company and pre-selecting one proposal,” Curtis said. “In other words, we will go with LNG and we will go with JERA — two things that violate the fundamentals of competitiveness.”

Montague says the agreement doesn’t commit the state to the project, just research and collaboration on a number of energy goals.

Curtis says technical and financial competition, and their impacts on the community and environment, should be judged by the Public Utilities Commission.

“None of that exists for this project,” Curtis said. “It is like a blank sheet of paper that is turned over from time to time with PR scribbles.”

“It has a few people uncomfortable about that, but I want to reiterate, we anticipate all of this going through a full regulatory review,” Montague said.

If approved, JERA says its plant could be running by 2030 and could reduce electric bills by 20 percent.

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