liquid fuel requirement is for jet fuel, but research and new
sources for all transportation fuels are needed.

There are a number of options for Hawaii to convert its biomass
resources into liquid fuels: any combination of gasoline,
distillates, methanol ethanol, and vegetable oils can be derived
from biomass. Biomass may be classified as fermentable or
combustible. Possible sources and conversion processes for Hawaii

are:

a. Fermentable

(1) Sugars and starches are directly fermentable to ethanol.
(2) Lignocellulosics are hydrolized to sugars for fermentation;
this is an old technology, not competitive in present
markets.

b. Combustible: Current use of combustion is for boiler fuel, with
the option of cogeneration for electricity, steam, and process
heat. Direct combustion of biomass is not currently used for
transportation fuels.

An assessment was made by the Governor's Task Force on
Alternative Transportation Fuels, chaired by the Coral
Industries Professor of Renewable Energy Research, Michael
Antal, of the current status of the different technologies for
producing alternative transporation fuels from biomass.
assesssment is contained in the following table:

This

2. Priorities

Biomass conversion technologies were evaluated for Hawaii.
Priorities were assigned as follows:

a. Thermal conversion

(1) Direct liquefaction of biomass to oil: very low priority for near-term production because it is expensive and inefficient; but may have long-term research interest.

(2) Indirect liquefaction (gasification, pyrolysis):

(a) Syngas to gasoline, diesel, and jet fuels meets current market demands for hydrocarbon fuels, that is, these fuels can be manufactured to run present unmodified vehicles. FIRST PRIORITY.

(b) Syngas to methanol is a nearer term technology than syngas to hydrocarbons. Although it is less marketable, present unmodified vehicles can use it as an octane enhancer or fuel extender (up to about 6 percent methanol). Use of neat methanol fuel, however, requires major engine modification. SECOND PRIORITY.

b. Biochemical conversion

(1) Lignocellulosics to ethanol: breaking down cellulose to sugar, then fermenting the sugar to alcohol.

(a) Acid hydrolysis, although a new technology, is near commercialization, but not yet competitive in the market.

(b) Enzyme hydrolysis is promising but more research is needed. Ethanol has similar marketing problems to methanol, with even higher production costs. THIRD PRIORITY.

c. Gaseous transportation fuels

(1) Methane production is near term, technically feasible but not economically competitive with natural gas from the Mainland or petroleum-derived gases.

(a) Thermochemical conversion of syngas is technically easy.

(b) Biochemical conversion (anaerobic digestion) is technically feasible, but the economics are marginal.

There is minimal use of gaseous fuels in Hawaii (less than 3 percent of total energy consumed). LOW PRIORITY.

(2) Hydrogen

(a) Electrolysis is the present most widely used method for present production, but very expensive.

(b) Biological production by a number of photosynthetic bacteria species that can produce hydrogen is technically feasible.

(c) Direct solar conversion to produce hydrogen and high-energy chemicals is technically feasible.

Hydrogen as a fuel is not in the near future (10-20 years); its
use as transportation fuel would require new engines and a new
fuel distribution system. Production is therefore LOW
PRIORITY. Basic research, however, is HIGH PRIORITY.

3. Action Program

The following recommendations concerning biomass conversion were endorsed by all panel members. The action program is R&D that is recommended, subject to the priorities given above. The state should: a. (1) Establish a small fleet of vehicles fueled by neat methanol.

(2) Establish a small fleet of vehicles fueled by CNG (methane).

(3) Consider mandating the use of ethanol or methanol based octane enhancers in all State vehicles.

b. Create tax incentives to encourage the production of biomass derived fuels.

c. Provide matching dollars for studies by private industry of fuel production based on local biomass and actively solicit good proposals.

d. Explore the installation of a prototype medium Btu gasifier. e. Consider committing sufficient resources to attract the Arizona State University's Cellulosic Wastes to Liquid (Jet) Fuels demonstration project to Hawaii, posibly with local industry cooperation (discussed after formal session).

f. Pursue the development of CNG (methane) as a transportation fuel.

g. Support the formation of a regional biomass program (perhaps with the Pacific island communities).

h. Support research and development activities pertaining to alternative sources of transportation fuels at a level

commensurate with their importance to the State's economy and the State's investment in other energy technologies.

i. The State should disallow lead additives as octane enhancers from gasoline as soon as possible.

The discussion revolved around four primary issues: political, R&D, funding, and industrial partnerships.

a. Political

(1) At the national level, the biomass program is not well organized (compared to other solar technologies such as photovoltaics), and therefore, has not been able to gain a fair share of the budget. In addition, the major blue chip companies are not closely involved. One obvious goal is to organize the field. Hawaii does not even belong to a regional biomass program.

(2) Promotion of biofuels as a field for major support is needed.
Arguments should be made relating the high cost of energy
imports to their impact on the local economy. For example, if
half the oil import bill for generating electricity can be
substituted with indigenous sources, with the multiplier
effect, justification can be made for tax incentives and
establishment of an R&D pool of funds.

(3) Energy has become increasingly important over the past decade but funding has not kept up. The president or chancellor of the University of Hawaii should assess the imbalance of funding and positions through the appropriate mechanisms, including positions and funds transfer to increase HNEI's capacity to carry on the needed work.

(4) Hawaii should have two goals: Self sufficiency for its electrical needs as soon as possible using the most economic means, which might be biomass, and investment in long-range R&D for transportation fuels.

b. R&D and Funding

(1) At the national level, it appears that the Office of Energy Research is doing research that is too basic, and very little of that is in biomass; while the biomass program does not have a mission to do basic research. There is thus a gap of the appropriate kind of fundamental research necessary to carry on a sensible long-term program.

(2) The Department of Energy should do more developmental work involving the private sector in shared risk taking.

Cost-shared pilot plants and guaranteed loans are examples.

(3) The national biomass program is funded at a rate of about $30 million/year. This figure should rightly be in the $50-100 million range.

(4) Hawaii can play a part in information and technology transfer in the Pacific.

(5) There was sentiment that the Department of Energy should
support projects where chemicals (such as lubricants, etc.)
can be products. There is an economic transition period when
certain products gain commercial viability. Industry will not
actively participate with their own funds unless there can be
some hope for profits. These energy-related products can
especially be justified where in the whole life cycle total
system, energy is conserved.

(6) Biomass is a sleeping giant that has not been given its turn at the funding trough. Why not a biomass program at a level equivalent to fossil fuels, nuclear, or solar? The impact of biomass alone can approach natural gas and can exceed many of the solar options in total.

(7) In Hawaii some means should be set up to ensure a continuous source of research funds, such as through a percentage of all avoided cost revenues or a percentage of the oil import bill. Tax credits should also be provided, especially to pave the way for introduction of alcohol fuels. A suggestion was made for allowing only locally produced fuels to qualify for this credit, but the constitutionality of such legislation is in question.

(8) Hawaii gets no funds for fossil fuel or nuclear R&D, which take up the lion's share of the USDOE budget. As a result, Hawaii should receive a disproportionately larger percentage (on a per capita basis, about 5 to 10 times more the national average) of the available renewable energy funds for equal treatment on energy programs.

(9) As the current administration prefers block grants, energy R&D block grants might be one approach.

c. Industrial Partnership

(1) There was a strong consensus that the government and

universities should work more closely with industry. As much as possible, energy projects should be conducted on a joint basis with cost sharing.

(2) The sugar industry should be involved with many of these biofuel projects, including cost sharing for the long term. The infrastructure, fundamental techniques, planning time frame, and institutional constraints mean that an actual energy plantation is five years away. In anticipation of the inevitable, much higher energy prices and more supply

dislocations, congressional support should be obtained now.

2. Program Policy Action

a. Planning: It was strongly encouraged that careful planning be Initiated with the objectives clearly spelled out. There is a desire and a need to get significant activities started, but only