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  • Hawaii Refinery Task Force Final Report April 9, 2014

    Adopted April 9, 2014

    Submitted to: Hawaii Department of Business, Economic Development & Tourism

    Submittedby:ICFInternational9300LeeHighwayFairfax,VA22031

    &Poten&Partners,Inc.

    805ThirdAvenueNewYork,NY10022

    ICFContact:

    TomOConnor7579034367

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  • Hawaii Refinery Task Force Final Report

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    TableofContentsListofExhibits.....................................................................................................................................iii

    ListofAcronymsandDefinitions..........................................................................................................v

    ExecutiveSummary.............................................................................................................................1

    1. BackgroundandContext..............................................................................................................7

    2. ProjectedDemandforConventionalFuels....................................................................................9

    2.1HCEIPowerSectorInitiatives..........................................................................................................9

    2.2PotentialExpansionofLNG..........................................................................................................16

    2.3TransportationSector...................................................................................................................21

    2.4TotalProjectedDemand...............................................................................................................26

    3. TransitionalMeasuresthrough2020..........................................................................................29

    3.1.EnhanceFuelInfrastructureFlexibility........................................................................................29

    3.1.1AccesstoExistingInfrastructure...........................................................................................31

    3.1.2KalaeloaBarbersPointHarborPlanning...............................................................................34

    3.1.3FuelReserve..........................................................................................................................37

    3.1.4HawaiiGasolineSpecifications.............................................................................................38

    3.1.5Pier51PrioritizationProcess................................................................................................38

    3.1.6JonesAct...............................................................................................................................39

    3.1.7EnergyAssurancePlans........................................................................................................42

    3.1.8NeighborIslandInfrastructure..............................................................................................43

    3.2ManageRegulatoryIssues............................................................................................................43

    3.2.1MercuryandAirToxicsStandard(MATS).............................................................................43

    3.2.2FederalTier3GasolineSpecification....................................................................................45

    3.2.3StateGHGReductionInitiative.............................................................................................46

    4.TaskForceConclusionsandAchievements.....................................................................................51

    Appendices........................................................................................................................................55

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  • Hawaii Refinery Task Force Final Report

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    ListofExhibits

    Exhibit1:EEPSElectricityReductionTargets,byPerformancePeriod.......................................................10

    Exhibit2:AnnualEnergyEfficiencyAccomplishments,Statewide.............................................................10

    Exhibit3:CumulativeInstalledPVthrough2013,HawaiianElectricCompanies(MW).............................11

    Exhibit4:EstimatedDistributedGeneration,HawaiiElectricCompaniesandKIUC..................................12

    Exhibit5:LikelyNewUtilityScaleRenewableGenerationinHawaii,through2020.................................14

    Exhibit6:ImpactofEnergyEfficiency,DistributedGeneration,andRenewableEnergy...........................15

    Exhibit7:LiquidFuelDemandforPowerGeneration................................................................................16

    Exhibit8:LiquidFuelDemandforPowerGeneration................................................................................19

    Exhibit9:TransportationFuelConsumption,2012....................................................................................21

    Exhibit10:GasolineConsumptionandReductionfromCAFEandPHEVs.................................................23

    Exhibit11:JetFuelConsumptionandReductionfromRenewableJetFuel..............................................24

    Exhibit12:ProjectedCumulativeReductionofFossilFuelConsumption..................................................26

    Exhibit13:TotalImpactofOptionsonFossilFuelDemandby2020.........................................................27

    Exhibit14:HawaiiPetroleumSupplyInfrastructure..................................................................................30

    Exhibit15:KalaeloaBarbersPointHarbor..................................................................................................34

    Exhibit16:KBPHProductImports,b/d.......................................................................................................35

    Exhibit17:HawaiiTotalReportedDirectEmissions,metrictonnesperyear............................................47

    Exhibit18:LiquidFuelforPowerGenerationandResultingGHGEmissions.............................................48

    Exhibit19:ExpectedNewUtilityScaleRenewableProjectsinHawaii......................................................60

  • Hawaii Refinery Task Force Final Report

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  • Hawaii Refinery Task Force Final Report

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    ListofAcronymsandDefinitions

    b/d Barrelsperday

    Blendstocks Motorgasolineblendingcomponentsthataretobeblendedwithoxygenatestoproducefinishedgasoline.ThiscanalsorefertoforeigngasolinethatdoesnotmeetU.S.specificationsandmustbeblendedorrerefinedtobesoldintheUnitedStates.

    DBEDT TheHawaiiDepartmentofBusiness,EconomicDevelopment,andTourism

    Demurrage Costsincurredfordelayingtheloadingorunloadingofashippingvessel;causedbyarangeoffactorssuchasbusychannels,occupiedberths,lackofshoretankage,etc.

    DG Distributedgeneration

    DOE U.S.DepartmentofEnergy

    E10 Gasolinecomposedofacertainproportionoffuelethanol.E10indicatesgasolinewithethanolcontentbetween5percentand10percent.

    EIA U.S.EnergyInformationAdministration

    EIIRP EnergyIndustryInformationReportingProgram

    EPA U.S.EnvironmentalProtectionAgency

    EV Electricvehicle

    GHG Greenhousegas

    GWh Gigawatthour

    HECO HawaiianElectricCompany,Inc.

    HELCO HawaiiElectricLightCompany,Inc.

    HFFC HawaiiFuelingFacilitiesCorporation

    HIBOB Hawaiiblendstockforoxygenateblending

    HRTF HawaiiRefineryTaskForce

    ISO InternationalOrganizationforStandardization

    ISOcontainer IntermodalshippingcontainerwithISOstandardizeddimensionsandmarkings.

  • Hawaii Refinery Task Force Final Report

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    KBPH KalaeloaBarbersPointHarbor

    KIUC KauaiIslandUtilityCooperative

    KPLP KalaeloaPartners,L.P.

    LNG Liquefiednaturalgas

    LSD Lowsulfurdiesel

    LSFO Lowsulfurfueloil

    Mbbl Thousandbarrels

    Mcfd Thousandcubicfeetperday

    MECO MauiElectricCompany,Ltd.

    mgy Milliongallonsperyear

    MMcf Millioncubicfeet

    mpg Milespergallon

    MWh Megawatthour

    ppm Partspermillion

    PHEV Pluginelectricvehicle

    PUC HawaiiPublicUtilitiesCommission

    SEO HawaiiStateEnergyOffice

    SNG Syntheticnaturalgas

    SPM Singlepointmooring

    tpa Metrictonnesperannum

    VMT Vehiclemilestraveled

  • Hawaii Refinery Task Force Final Report

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    Executive Summary

    ThisisthethirdandfinalreportoftheHawaiiRefineryTaskForce(HRTF),whichwasestablishedbyExecutiveOrderin2013toassesstheimpactsofchangesinHawaiisrefinerycapacityandprovideadviceandrecommendationstoGovernorAbercrombieandtheDepartmentofBusiness,EconomicDevelopment&Tourismonmattersinvolvingafuturefuelsecosystem.TheTaskForcesfirstreport(hereafterreferredtoastheInitialReport),issuedinJune2013,focusedonevaluatingtheimpactsofthepotentialclosureofTesorosKapoleirefineryonHawaiimarketsandrecommendedactionsformitigatingtherisksofpriceanomaliesandsupplydisruptions.FollowingthesaleoftheTesororefinerytoParPetroleum,theTaskForceissueditssecondreport(referredtoastheInterimReport)inNovember2013,whichfocusedonseveralchallengestothesustainabilityofongoingrefineryoperationsinHawaiiandexploredoptionstomitigatetheimpactsofpotentialrefineryclosures.TheInterimReportconcludedthatoneorbothofthestatesrefineriesarelikelytocloseby2020and,sinceHawaiiwillstillbeheavilydependentonfossilfuelsoverthecomingdecades,emphasizedtwosetsofactionsneededtohelpensureasmoothtransitiontowardthestatesfutureenergyecosystem:(i)workingtoresolveseveralspecificregulatorychalle