HONOLULU, Hawaii – Last week we brought you a story on a bill moving through the state that would ban hydraulic fracking in Hawaii. The measure had geothermal implications, proposing to prevent the use of Enhanced Geothermal Systems in Hawaii, should a future developer wish to explore such a technology. The bill attracted the usual advocates and opponents of geothermal energy on Hawaii Island.

But that wasn’t the only geothermal bill on the agenda that day in the House Committee.

Geothermal energy bills debated in House Committee

HB 2639 (introduced by Rep. Cindy Evans) is considered favorable to development. At the time the committee heard the measure – Feb. 13 – HB 2639 clarified permitting procedures for regulators, required the use of an area within a conservation district to be governed by the land board, and authorized certain county authorities to issue geothermal resource permits. It also reserved all minerals in, on, or under reserved lands to the State. It has since been amended (see below)

On the other hand, HB 1766 (introduced by Rep. Faye Hanohano) – backed by geothermal opponents – would have restored the geothermal resource subzones that were repealed in Act 97, and established a permitting process for geothermal resources development.

The bill also would have required the BLNR and the counties to implement the recommendations of the 2013 Final Report of the Geothermal Public Health Assessment Study Group prior to issuing permits for future geothermal development.

In the end, the first measure passed, with amendments. HB2639 now advances to the Finance Committee. The second bill was deferred.

Status of bills represent up-to-date information via State Legislative website

HB2639 HD2 – Establishes the framework to regulate geothermal development activities through a permitting process administered by the Board of Land and Natural Resources; provided that the appropriate county authority may issue a geothermal resource permit under certain circumstances. Effective January 28, 2878.

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HB1766 – Restores, amends, and repeals certain statutory provisions relating to geothermal energy production that were repealed or enacted by Act 97, SLH 2012, including the restoration of geothermal resource subzones. Establishes a permitting process for geothermal resources development. Requires BLNR and the counties to implement the recommendations of the 2013 Final Report of the Geothermal Public Health Assessment Study Group prior to issuing permits for future geothermal development.

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Select testimony, both for and against, comparing the two bills. First, from farmer Richard Ha, in support of the bill preferred by the developers:

The Big Island Community Coalition (BICC) strongly opposes HB1766, but supports HB2639.

There are adequate safety provisions in HB2639. It is a matter of risk assessment.

On the mainland, the people own the mineral rights. This gave land owners incentive to pursue shale oil and gas projects on their land. That is why there are thousands of oil and gas wells around Dallas and Ft Worth. And, that is why the shale oil and gas boom proceeded so rapidly.

In Hawaii, mineral rights are owned by the state. There is little individual incentive to support geothermal projects.

One of the greatest risks Hawaii faces is the danger of rising electricity rates. We are more dependent on oil for our electricity than most places in the world. Folks on fixed incomes are especially vulnerable — kupuna, single mothers, the working homeless, etc.

The average shale oil/gas well is 90+ percent depleted in five years. This is based on analysis of 16,000 wells. This is clearly not sustainable and cannot continue at its present rate and affordability for very long–five to ten years max. Time is not on our side. The Pahoa School complex, which is close to the geothermal site, has the highest percent participation in the free/reduced school lunch program in the ENTIRE state. Eighty-nine percent of the students participate in the free/reduced school lunch program. Participation is based on family income.

HB 1766 anticipates contested case hearings for its dispute resolution. HB 1766 can be dragged on and on for those who want to kill geothermal. These provisions result in unneeded delays. The rate payer will pay for any inefficiency. This bill requires geothermal sub zones. This is not needed; there are adequate checks and balances via the provision in HB2639, which we prefer.

I went to the Phillipines to visit geothermal operations there. We visited a geothermal plant that was located on the slopes of a volcano that last erupted 100,000 years ago. By contrast, Mauna Kea last erupted 4,000 years ago. We should not add cost to a potential developer to find what out what most of us already know– there is heat under Mauna Kea. What happens if the developer that funds the development of a new geothermal resource zone designation and loses the bid? No one would voluntarily spend money for a project someone else could win.

Defeat HB1766. Approve HB2639.Richard Ha, Big Island Community Coalition chairman

Bob Petricci and the Puna Pono Alliance took the opposite position in this lengthy testimony evaluating both bills:

The first geothermal permitting law created by Act 296 in 1983 provided for a contested case₂ in permit applications. In 1987 Act 378 removed contested case provisions and substituted mandatory mediation (“to provide for a simpler procedure to consider and act on permits for geothermal development ….” Senate Committee Report 1118.). In 2012, Act 97 repealed all of

₂ Act 296 (1986) said, in relevant part, “[t]he board and/or appropriate county agency shall, upon request, conduct a contested case hearing pursuant to chapter 91 prior to the issuance of a geothermal resource permit….” Contested case is defined by HRS § 91-1 as “a proceeding in which the legal rights, duties, or privileges of specific parties are required by law to be determined after an opportunity for agency hearing.”

the laws relating to geothermal permitting and geothermal resource subzones, apparently with an intent of eliminating a so-called ‘go-slow’ approach to geothermal development?₃

Early thoughts regarding streamlining geothermal permits to make the process simpler (and easier for developers) weakened the process to the point where it failed to appropriately consider public health and safety. Those thoughts eventually reached the ultimate absurdity of simply wiping out all geothermal regulatory statutes in 2012 by Act 97. Obviously, the resulting vacuum provides for no consideration of public health and safety. Now, for the second year in a row, the Legislature is re-visiting that elimination of laws governing geothermal development. A final step in the unsuccessful efforts to restore geothermal laws in 2013 saw a rare Senate floor amendment that removed mandatory meditation from HB252 (the last bill geothermal still standing in 2013 before it died in a conference committee.)

Before you now is HB2639 that would restore only part of the minimal and insufficient streamlined geothermal permitting procedure that was repealed by Act 97. We strongly oppose HB2639 in its present form. On the other hand, we strongly support HBl766 that would restore improved permitting procedures, including lessons learned fiom the Geothermal Public Health Assessment Final Report that resulted from a working group funded by the County of Hawai‘i. The County’s pro-geothermal mayor has embraced the report and promised to implement its recommendations. Puna is the only community in the State with actual geothermal experience. The report offers some hope that future geothermal development in Hawai‘i could come closer to assuring the health and safety of affected communities. It is a misfortune for our optimism that HB2639 disregards Hawai‘i County’s recent assessment report. Our community’s support for HB1766 could extend to supporting HB2639 it is duly amended.

The report, validating a number of community concerns expressed over the years, states that risks from geothermal energy production and harmful effects require better monitoring and reliable health data. The report includes several valuable recommendations, such as establishing a better toxic emission monitoring system based upon a finding of risks that relate to geothermal energy production’s hazardous chemicals escaping to the air, water, or at surface level. Also, the report recommends evaluation of the effects on drinking water and the near-ocean environment (including baseline studies prior to further geothermal development.) Those recommendations could — after thirty years, finally — better assure the health and safety of affected communities.

₃ A draft report, Senate Energy and Environment Committee Accomplishments for 2012, said Act 97 “relaxes the restrictions on geothermal development by: requiring geothermal resources exploration and development, as defined in the Act, to be permissible uses in all state land use districts; and repealing provisions relating to geothermal resource subzones the provisions that mandated a ‘go-slow’ approach to geothermal energy….

From the report it can be seen that streamlined geothermal permitting methods first put in place in 1983 and trimmed even further in subsequent years (before being eliminated altogether by Act 97 in 2012) were not suficient to prevent community risks and harm. The County of Hawai‘i, as a result of actual experience with geothermal development, has formally recognized the existence of community risks and harm. That reality needs to become part of the discussion of laws pertaining to geothermal exploration and development. A formerly widespread thought that geothermal is inherently clean and safe is no longer reasonably acceptable as a given.

HB2639 reinstates part of the former geothermal permitting law repealed by Act 97, but without restoring geothermal resource subzones and without including an awareness of Hawai‘i County’s report. The bill perpetuates mandatory mediation as a substitute for contested cases, despite last year’s Senate floor amendment to HB252 that rejected such provisions. HB2639 does not address recognized public health and safety concerns and fails to include permitting standards in that regard. New geothermal legislation should not only restore the essential vehicle of geothermal permitting as it existed before Act 97, including reinstatement of the designated geothermal resource subzones. In keeping with last year‘s Senate floor amendment, mediation requirements should be removed from the HB2639. Permitting standards addressing recognized public health and safety concerns based on the report — and the recommendations of the report — should be included as elements of the new geothermal permitting process.

In other words, the new law should show concem for the community’s experience with geothermal development as studied, analyzed and reported in Hawai‘i County’s Geothermal Public Health Assessment Final Report. It may be difficult for some proponents of geothermal energy to accommodate the County’s report in their views, but it is a responsibility and duty of the Legislature to enact laws in the light of day.

The report recommends a community health study, particularly looking at toxic effects of the hydrogen sulfide (H2S) emitted by geothermal plants (and many other industrial sources.) If you want an illustration of the strong lobbying that supports disregard of perils associated with chronic exposure to H2S, please take a look at industry positions as described in the publication by the federal Environmental Protection Agency (EPA) titled Hydrogen Sulfide; Community Right-to-Know Toxic Chemical Release Reporting (page 64022 of the Federal Register, Volume 76, No. 200, Monday, October 17, 201 1.) It says that the “EPA has determined that hydrogen sulfide can reasonably be anticipated to cause serious or irreversible chronic human health effects at relatively low doses and thus is considered to have moderately high to high chronic toxicity.” The main substance of the publication is a chronicle of how H2S emitting industrial lobbies succeeded in delaying the publication for eighteen years, after it was initially proposed by the EPA in 1993.

Geothermal resource subzones were a principal part of the first geothermal permitting laws created by Act 296 in 1983. Those subzones — part of the State’s comprehensive zoning statutes — were designated by the Board of Land and Natural Resources based upon scientific studies that were followed by public hearings. Criteria for establishing the subzones included the presence of geological factors necessary for geothermal development (i. e., hot geothermal brine that could be accessed from the surface to transfer energy to electric generators) and also certain community-related considerations. As a result, potential developers and homeowners were informed that particular, designated locales could be suitable for geothermal development.₄

Last year, testimony on behalf of the BLNR lamented the costs associated with the effort of recreating geothermal resource subzones. That lament is not unfounded, but it is also not such an obstacle since the work has already been done in designating previously existing subzones. It is therefore appropriate in remedying Act 97 to restore the geothermal resource subzones nunc pro tunc (meaning literally now for then, to retroactively correct their repeal under Act 97) and simply reinstate them as if they had never been repealed (without additional cost or effort.)

The 2013 legislature passed Act 284 creating Hawai‘i Revised Stautes (HRS) Chapter 658H, the Uniform Mediation Act. Mediation is defined in HRS § 658H-2 as “a process in which a mediator facilitates communication and negotiation between parties to assist them in reaching a voluntary agreement regarding their dispute.”₅ The legal definition of the term thus seeks to mediate voluntary agreements regarding disputes. Contested case is defined by HRS § 91-1 as “a proceeding in which the legal rights, duties, or privileges of specific parties are required by law to be determined after an opportunity for agency hearing.” A quasi-judicial contested case is intended to formally consider disputes on the basis of due process, evidence

₄ “HRS § 205-5.1 authorizes the issuance of geothermal resource permits to allow geothermal development activities in geothermal resource subzones established within urban, rural, agricultural, and conservation districts by the Board of Land and Natural Resources in accordance with the procedures set forth in HRS 205-5.2. The purpose of HRS § 205-5.1 and -5.2 is to ‘assist in the location of geothermal resources development in areas of the lowest potential environmental impact.” Medeiros v. Hawaii County Planning Comm ‘n, 8 Haw. App. 183, 184, 797 P.2d 59, 6O (1990). “[T]he statutory scheme explicitly contemplates the Boards use of its discretion in determining the appropriate boundaries for designation of the geothermal resource subzone.” Dedman v. Board. ofLand & Natural Resouorces, 69 Haw. 255, 264, 74 P.2d 28, 34 (1987). ₅ In written testimony dated March 14, 2013, addressed to the House Committee on Judiciary, the Director of the Center for Alternative Dispute Resolution wrote on behalf of the State Judiciary that a purpose of the Uniform Mediation Act was to “advance the policy that the decision-making authority in the mediation process rests with the parties.” That purpose is not compatible with using mediation as a prelude to a decision that will be made by a third party (in this case the governent entity considering a geothermal resources development permit.)

and a reasoned decision. Mandatory mediation (as first required in 1987 in former geothermal permitting laws) is inconsistent with the statutory definition of mediation’s purpose as voluntary agreements regarding disputes — especially if mediation is imposed as a substitute for contested case proceedings. Mandatory mediation is not appropriate element for geothermal permitting procedures. That is not to say mediation is entirely inappropriate in geothermal permitting, as HRS § 91-8.5 provides that as part ofa contested case proceeding the parties may be referred to a mediator to see ifsome issues can be voluntarily narrowed or resolved. The appropriate use of mediation is an existing part of the statutes governing contested cases.

In sum, this testimony strongly opposes HB2639 because it it perpetuates mandatory mediation in geothermal pennitting, it fails to restore geothermal resource subzones (as repealed by Act 97 in 2012), it fails to assure appropriate geothermal environmental review and it ignores Hawai‘i County’s recent Geothermal Public Health Assessment. In that regard, please consider the four proposed amendments to HB2639 SDl addressing each of the four objections separately. If HB2639 is appropriately amended, we could support the bill.

Please amend HB2639 pursuant to the proposed amendments. If you are unable to do so, then please do not let HB2639 advance beyond these committees and instead take up, consider and advance amended HB1766. Thank you for considering these thoughts.

Bob Petricci of Puna Pono Alliance

Standing committee report following the EEP/WAL recommendation to pass HB 2639 as amended in House Draft 2:

Your Committees on Energy & Environmental Protection and Water & Land, to which was referred H.B. No. 2639, H.D. 1, entitled:

“A BILL FOR AN ACT RELATING TO GEOTHERMAL RESOURCE DEVELOPMENT,”

beg leave to report as follows:

The purpose of this measure is to establish the framework to regulate geothermal development activities through a permitting process by, among other things:

(1) Authorizing the Board of Land and Natural Resources to issue permits for geothermal resource development within a conservation district;

(2) Restoring the county process by authorizing the appropriate county authority to issue permits for geothermal resource development within agricultural, rural, and urban districts if the proposed activities are not expressly permitted uses under the applicable county plan and zoning ordinances;

(3) Requiring renewable energy producers to apply to the Board of Land and Natural Resources for a mining lease on state lands; and

(4) Prescribing penalties and remedies for violation of laws and rules relating to state mineral rights and requiring penalties, fees, and costs that are collected in connection with regulation of state mineral rights to be deposited into the Special Land and Development Fund.

The Department of Land and Natural Resources; Department of Business, Economic Development, and Tourism; Mayor of the County of Hawaii; Big Island Community Coalition; Japanese Chamber of Commerce & Industry; Kapolei Community Development Corporation; Hu‘ena Power; Indigenous Consultants, LLC; Waimanalo Hawaiian Homes Association; and Innovations Development Group testified in support of this measure. Life of the Land; Puna Pono Alliance; Malu ‘Aina; Paradise Action Womens Alliance; and numerous concerned individuals testified in opposition to this measure. The Office of Hawaiian Affairs and a few concerned individuals commented on this measure.

Your Committees have amended this measure by:

(1) Ensuring that prospective geothermal resources development will have the least detrimental environmental and social impact by requiring that any geothermal resource development requires a geothermal resources development permit that shall be issued according to set guidelines;

(2) Clarifying that the counties may issue geothermal resources development permits in agricultural, rural, or urban districts;

(3) Clarifying that the Board of Land and Natural Resources shall govern the issuing of geothermal resource development permits in conservation districts;

(4) Requiring that the Board of Land and Natural Resources initiate a hearing in the community where a proposed geothermal resource development permit is being sought;

(5) Including the criteria for geothermal subzones into the geothermal permitting process;

(6) Allowing decisions to be appealed through a contested case hearing in the Intermediate Court of Appeals;

(7) Changing the effective date to January 28, 2878, to encourage further discussion; and

(8) Making technical, nonsubstantive amendments for clarity, consistency, and style.

As affirmed by the records of votes of the members of your Committees on Energy & Environmental Protection and Water & Land that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 2639, H.D. 1, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 2639, H.D. 2, and be referred to the Committee on Finance.Stand. Com. Rep. No. 536-14, Feb. 14, 2014