One of Hawai'i's last two sugar plantations abandoning sugar cane, moving into energy

Gay & Robinson, one of the two remaining sugar companies in Hawai'i, will go out of the sugar business when it finishes grinding the sugar now in the ground.

That should keep the company—which has been in cane for 116 years—making sugar through about August 2010. After that, the only remaining Hawai'i plantation producing sugar will be Maui's HC&S.

But this doesn't mean the Kaua'i community will be cane-free or that jobs will be lost.

Gay & Robinson (G&R) plans to lease much of its sugar acreage as well as its mill site and equipment to Pacific West Energy LLC, which will grow sugar cane to produce energy and ethanol.

The switch from sugar to energy will have a dramatic impact on the island's energy picture.
Pacific West Energy's Will Maloney told Raising Islands that his plant is expected to be able to deliver up to 20 megawatts of energy to the power grid.

Since the maximum demand for Kaua'i Island Utility Cooperative is slightly short of 80 megawatts, that plant could at its peak produce a quarter of the island's maximum electricity demand. That should help the utility move a huge step away from Kaua'i's roughly 90 percent dependence on fossil fuels for electricity.

Additionally, G&R plans to build a new hydroelectric plant to capture the energy in water now flowing through an existing hydroelectric plant that is at the 1200-foot elevation. The water running it will be piped downhill to a new 5 to 10 megawatt power plant to be situated at the 200-foot elevation. It will have variable actual production, depending on rainfall, said G&R President Alan Kennett.

The switch from sugar to energy should have no long-term negative impact on the job market. Maloney said Pacific West Energy will need all the current G&R employees, plus more.

In a press release, G&R said: “The company will continue to honor its contractual obligations to its workers, including current employees as well as retirees.” The firm plans a meeting shortly with the ILWU—the union that represents sugar workers—to discuss the transition.

Maloney said that depending on successfully completing its negotiations with G&R, Pacific West Energy next year should begin planting G&R fields with its own cane as G&R harvests those fields.

The company also expects to expand Kaua'i sugar acreage. G&R has about 7,500 acres in cane. Maloney said his firm will need about 15,000 acres. While he did not identify where that additional acreage would come from, there is extensive former sugar cane land lying fallow around the G&R plantation. Mainly, it is state-owned land previously farmed by two now-defunct plantations: Kekaha Sugar Co. and Olokele Sugar Co.

Kennett said that not all G&R's sugar lands will be leased to Pacific West Energy. Some will be leased to other agricultural ventures.

Maloney said the cane grown for energy will generally be harvested when it is one year old, compared to the two-year cycle currently used by the sugar firm. As a result, it is possible that during late 2010, G&R and Pacific West Energy could be harvesting at the same time—G&R for sugar and Pacific West Energy for ethanol.

Using existing fermentation technologies, Pacific West Energy expects to produce up to 15 million gallons of ethanol annually.

Kennett said the G&R has opted to leave the sugar industry because of significant financial losses.
In a speech this week to an energy conference on Kaua'i, Kennett said the sugar company faces serious increases in all its costs—for fuel, fertilizer, steel and virtually everything else—while sugar prices remain at about 18 cents a point—the same amount the company got two decades ago.

Said Kennett: “Gay & Robinson has been at the forefront of the sugar indusry since its founding in 1892, and is only one of two remaining sugar producing companies in the Hawaiian Islands. We are now moving forward and intend to be at the forefront of a new era as a renewable energy producer helping to reduce Kaua'i's imports of fossil fuels for our energy needs.”

© 2008 Jan W. TenBruggencate