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Statewide Fuel Facilities Development Plan

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Statewide Fuel Facilities Development Plan Statewide Fuel Facilities Development Plan Proposed Fuel Facilities in Hawaii’s Commercial Harbors PDF of Report in Sections PART 1 of 2 : Sections 1 through 6.3 Prepared by: Prepared for: Marc M. Siah & Associates, Inc. State of Hawaii - Department of Transportation, Harbors Division March 2009 PREFACE Marc M. Siah & Associates, Inc. Consulting Civil • Structural • Environmental & Ocean Engineers 820 South Beretania Street, Suite 201, Honolulu, Hawaii 96813 SECTION ONE PREFACE With Hawaii’s oil dependency for all its energy needs at about 90 percent, Hawaii has by far the highest oil dependencies among all states. Hawaii’s economy depends on a secure and un- interrupted supply of oil. Therefore, Hawaii is vulnerable to changes in cost and availability of crude oil and petroleum products. Over the past two years, while this study was developed, the global oil markets have experienced far-reaching changes and have shown significant price volatility. Many oil analysts now agree that the era of “cheap-and-easy-oil” is over and that the world economy will have to face much higher oil prices because of possible supply constraints in the coming years. As recent as in 2003, oil experts in Hawaii predicted stable oil market through the year 2015, with projected oil prices around $25 per barrel. Now, only five years later, many oil analysts concede the fact that the global oil supply has entered a new era, where short-term price-hikes between $150 and $200 per barrel are realistic scenarios, as proven by the oil price spike in summer 2008. The International Energy Agency (IEA), the Paris-based “energy watchdog” of the Organization for Economic Co-operation and Development (OECD), has recently warned in its World Energy Outlook 2008 that the world is facing a severe future “supply crunch” if future oil production projects that will provide an increase in net-supply gain are not implemented on schedule. Since no easy short-term solutions seem available or realistic, a tight supply-to- demand situation might then be likely for years to come. According to the IEA, the evolving credit crunch that started in the second half of 2008, will only have a limited effect on the future of the oil supply, although the global oil demand is showing some slacking as many economies slide into worsening recession. IEA sees the future energy world as very different from the current one and Hawaii’s energy future might be also significantly different from the current status quo. After the oil price spike of 2008, when the oil price approached the $150 per barrel mark, the oil price has retreated to a range of currently $40 to $50. While low oil prices are good in the short-term for the consumer and economies reeling under heavy financial burden they are problematic in the long-term. Safeguarding a secure future supply of oil, which is increasingly coming from oil fields that are costly to develop or are in areas that present harsh physical or political climates, will require very high investments. If the anticipated oil price will not guarantee a favorable return of investment many oil production projects might not be developed in time to avert an oil supply crunch down the road. The IEA suggests very high investments in new oil capacities and mitigating the accelerating decline in existing oil production capacities will be a crucial need of a securely supplied oil market. The recent “collapse” of the oil price might be a short-term indicator of the highly volatile global oil market; and prudent energy policies should keep an eye on the expected tight long-term supply outlooks. Since Hawaii is so overwhelmingly dependent on imported crude oil and petroleum products the development of renewable energies and biofuels is a priority concern for the State of Hawaii to mitigate this high dependence of imported oil. Hawaii has already implemented many promising pilot projects over the past years and Hawaii will surely be an important center of alternative energy in the years to come. But even with an aggressive development of alternative fuels and renewable energies, Hawaii cannot stop its dependency on oil “overnight” and for many years petroleum will remain the main provider for its energy demands. In fact, while the new alternative energy systems will be implemented in Hawaii in the years ahead, Hawaii’s Marc M. Siah & Associates, Inc. PREFACE -1 1244/Statewide Fuel Facility Development Plan PREFACE STATEWIDE FUEL FACILITY DEVELOPMENT PLAN conventional oil based infrastructure has still to be upgraded to allow for a continuing safe and secure supply chain. As stressed in the findings of this report “Statewide Fuel Facility Development Plan”, flexibility in design and construction is deemed a key consideration for future fuel facilities in the commercial harbors, in order to accommodate Hawaii’s changing future fuel and energy needs. The unprecedented recent changes in the global oil market and the evolving challenging long- term outlook for crude oil give the recommendations contained in this report a stronger and more urgent significance than was envisioned at the time when the study commenced, only two years ago. Marc M. Siah & Associates, Inc. PREFACE -2 1244/Statewide Fuel Facility Development Plan TABLE OF CONTENTS Marc M. Siah & Associates, Inc. Consulting Civil • Structural • Environmental & Ocean Engineers 820 South Beretania Street, Suite 201, Honolulu, Hawaii 96813 TABLE OF CONTENTS SECTION TITLE PAGE PREFACE EXECUTIVE SUMMARY ………………………………………………………………….. ES-1 1 INTRODUCTION ……………………………………………………………………… 1-1 2 HAWAII ENERGY DEMAND ………………………………………………………... 2-1 2.1 Total Energy Consumption in Hawaii ……………………………………….. 2-1 2.2 Future Outlook for Hawaii’s Energy Situation ……………………………... 2-5 3 HAWAII FUEL SUPPLY SITUATION ……………………………………………….. 3-1 3.1 Current Fuel System of Hawaii ……………………………………………… 3-1 3.1.1 Hawaii’s Fuel Supply System ……………………………………… 3-1 3.1.2 Crude Oil Supply to Hawaii ………………………………………... 3-2 3.1.3 Consumption of Petroleum Products …………………………….. 3-3 3.1.4 Refinery Operations ………………………………………………… 3-5 3.1.5 Inter-island Fuel Transport ………………………………………… 3-6 3.2 Evolving Challenges and Opportunities …………………………………….. 3-7 3.2.1 Changes in Oil Supply to Hawaii …………………………………. 3-7 3.2.2 Fuel Replacement through Biofuel ……………………………….. 3-11 3.2.3 Fuel Replacement through Coal and Natural Gas ……………… 3-12 3.2.4 Opportunities through Renewable Energies and Energy Conservation ……………………………………………………….. 3-13 3.2.5 Ramifications for Hawaii’s Refineries ………………………….…. 3-13 3.3 Description of Current and Possible Future Energy Systems for Hawaii .. 3-14 3.3.1 Continuation of Status Quo ………………………………………... 3-15 3.3.2 Emergence of Biofuels ………………………….………………….. 3-17 3.3.3 Introduction of Natural Gas ………………………………………... 3-20 4 DESIGN APPROACH FOR FUEL FACILITIES IN STATE HARBORS ……….. 4-1 4.1 Three Design Schemes for Fuel Transport ………………………………… 4-1 4.1.1 Design Scheme 1: Status Quo ……………………………………. 4-1 4.1.2 Design Scheme 2 – Emergence of Biofuels ……………………. 4-4 4.1.3 Design Scheme 3 – Introduction of Natural Gas ………………… 4-6 4.1.4 Discussion of Design Schemes 1 through 3 ………………….…. 4-9 4.2 Overall Design Components of Fuel Facilities ………….………………….. 4-12 Marc M. Siah & Associates, Inc. i 1244/Statewide Fuel Facility Development Plan TABLE OF CONTENTS SECTION TITLE PAGE 4.3 Pier Configurations and Other Considerations ……………………………. 4-13 4.3.1 Multi-Use Piers ……………………………………………………… 4-14 4.3.2 Dedicated Fuel Piers ………………………………………………. 4-15 4.3.3 The Dedicated Fuel Pier System …………………………………. 4-16 4.4 Design Parameters for Barges and Tankers ……………………………… 4-19 4.5 Pipe Installation Methodologies ……………………………………………… 4-23 4.6 Key Design Guidelines ………………………………………………………. 4-28 4.7 Fire Suppression System ……………………………………………………. 4-29 4.8 Vapor Control System ……………………………………………………….. 4-30 4.9 Fuel Transfer between Pier and Barge or Tanker ………………………... 4-32 4.10 Oil Spill Protection ……………………………………………………………. 4-34 4.11 Description of Pertinent Fuels ………………………………………………. 4-36 4.12 Biofuels ………………………………………………………………………... 4-38 4.12.1 Ethanol Fuel ………………………………………………………… 4-38 4.12.2 Biodiesel ……………………………………………………………. 4-41 4.12.3 Handling Large Volumes of Biofuel Feedstock ………………… 4-43 4.13 Proposed Design Guidelines of Future Fuel Facilities ……………………. 4-44 4.14 Fuel Facility Security in a Post 9/11 World ……………………………….... 4-48 5 EXISTING FUEL TRANSFER FACILITIES ………………………………………... 5-1 5.1 Description of Existing Fuel Facilities ………………………………………. 5-1 5.1.1 Honolulu Harbor …………………………………………………….. 5-1 5.1.2 Kalaeloa Barbers Point Harbor …………………………………… 5-2 5.1.3 Kahului Harbor ……………………………………………………... 5-4 5.1.4 Nawiliwili Harbor ………………………………………………….... 5-5 5.1.5 Port Allen Harbor ………………………………………………….. 5-6 5.1.6 Hilo Harbor …………………………………………………………. 5-8 5.1.7 Kawaihae Harbor ………………………………………………….. 5-9 Marc M. Siah & Associates, Inc. ii 1244/Statewide Fuel Facility Development Plan TABLE OF CONTENTS SECTION TITLE PAGE 5.2 Future Fuel Facility Needs Identifications …………………………………... 5-10 6 FUEL FACILITES ALTERNATIVES ………………………………………………… 6-1 6.1 Fuel Facility Alternatives in Honolulu Harbor …………………………….…. 6-1 6.1.1 Identification of Fuel Facility Alternatives …………………….... 6-1 6.2 Fuel Facility Alternatives in Kalaeloa Barbers Point Harbor ….…………... 6-2 6.2.1 Design Framework for the Future Fuel Facilities ……………….. 6-2 6.2.2 Proposed Fuel Pier ………………………………………………….. 6-4 6.2.3 Ancillary Facilities Conceptual Design Alternatives …………….. 6-8 6.2.4 Ancillary Facility Alternative A ……………………………………… 6-8 6.2.5 Ancillary Facility Alternative B ……………………………………… 6-9 6.2.6 Ancillary Facility Alternative C ……………………………………... 6-10 6.2.7 Proposed Configuration of Pipeline Racks and Pipeline Galleries 6-10 6.3 Fuel Facility Alternatives in Kahului Harbor …………………………………. 6-20 6.3.1 Alternatives Presented in the Kahului Master Plan Efforts ……… 6-20 6.3.2 Preferred Master Plan Design Scenarios …………………………. 6-27 6.3.3 Design Alternatives for Kahului Harbor …………………………… 6-27 6.3.4 Design Framework for Future Fuel Facilities …………………….. 6-28 6.3.5 Conceptual Design Alternative A ………………………………….. 6-30 6.3.5.1 Pier 1A Modifications for Fuel Barges and Tankers ….
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