Economic and GHG impacts of natural gas for Hawaii

Makena Coffman (), Paul Bernstein, Sherilyn Wee and Clarice Schafer
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Makena Coffman: University of Hawaii Economic Research Organization, University of Hawaii at Manoa
Paul Bernstein: University of Hawaii Economic Research Organization
Sherilyn Wee: University of Hawaii at Manoa
Clarice Schafer: University of Hawaii at Manoa

Environmental Economics and Policy Studies, 2017, vol. 19, issue 3, No 5, 519-536

Abstract: Abstract Hawaii generates the majority of its electricity through oil-fired generation. New production technologies have led to rapidly declining natural gas prices that has renewed Hawaii’s interest in liquefied natural gas (LNG) imports. This study integrates a detailed model of Hawaii’s electric sector with a computable general equilibrium model of Hawaii’s economy to estimate the economic and greenhouse gas (GHG) impacts of importing LNG for use in the electric sector. Incorporating a range of possible price pathways (low, medium and high) out to the year 2040 for LNG imports, we find Hawaii could lower electric sector costs in a range from 6 to 16 % and petroleum refining output declines by over 20 % (in 2040). Gross state product increases in a range of $300 million to $5 billion in net present value. Using natural gas reduces out-of-stack GHG emissions but can also increase GHG emissions in other jurisdictions. Moreover, introducing natural gas could reduce the incentive to pursue renewable energy and energy efficiency. As such, adopting and enforcing policies encouraging renewable energy and efficiency becomes even more important to meet Hawaii’s clean energy and GHG mitigation goals.

Keywords: Natural gas; Electric sector; Computable general equilibrium; Hawaii (search for similar items in EconPapers)
JEL-codes: C68 L94 Q4 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s10018-016-0157-2

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