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HomeMy WebLinkAboutCOM 1375.000 1976-1980 II, , - - - Action! Receive & file. Re: C-1375/PC . . . • L HERBERT T.MATAYOSHI,MAYOR SY of h •�� A.DUANE BLACK.DIRECTOR ,,,,70- oo' 4.9/ -• DEPARTMENT OF RESEARCH AND DEVELOPMENT COUNTY Or HAWAII•25 AUPUNI STREET•HILO, HAWAII 96720•TELEPHONE (808) 961 8366 T•. w• ". P October 31 , 1979 Honorable Stephen Yamashiro , Chairman - and Members of the County Council County of Hawaii Hilo, Hawaii 96720 SUBJECT: RESOLUTION 203 This memorandum is in response to Resolution 203 requesting the Department of Research and Development to report on plans for economic development, and on the status of current existing economic development projects . An Overview of the County' s Basic Economic Trends , and A Program to Develop , Broaden and/or Strengthen the Island' s Economy The County of Hawaii is in a period of transition: The population is shifting and changing in character. The profile of businesses , industries and services is changing. Where several years ago the major business emphasis was on sugar exporting, the economy has shifted toward the new export industries of specialized agriculture (anthuriums , tropical plantsand macadamia nuts) , and tourism. Centers for education and scientific research are becoming increas - ingly important, and energy technology promises new opportunities for industrial and economic growth. In the First Hawaiian Bank' s recent Hawaii County In 1979 economic report , Economist Thomas Hitch described the Big Island as having a . . . "well-diversified economy. . . where economic activities have developed to the point where an adverse impact on one is somewhat cushioned by others . " However, the County' s labor force segment of the population has grown over the past several years at approximately the rate of increase in work opportunities , with a resultant net effect of a continued higher than desired rate of unemployment. A key to the continued further development of a diversified economic base is to encourage a set of circumstances and conditions that will create new jobs that can be filled by Big Island residents , searching for satisfying work opportunities . Important to the /375 ' DEC-4-197g- Honorable Stephen Yam ashiro , Chairman and Members of the County Council Page 2 October 31 , 1979 long-range future of the County is that new opportunities are in keeping with the environment and, in addition, are socially desirable. • Hawaii County is made up of a comprehensive collection of diversi- fied businesses and services that are not isolated entities , but are inter-related. Over-seas jets hauling visitors in and out of the Hilo gateway, for example , serve as a primary source of lift for fresh produce , flowers and fish going to mainland markets . Continental Airlines plans to suspend passenger service at Hilo Airport will leave Big Island shippers 12 million pounds of air freight short of current requirements . Recent CAB hearings , re- lating to the suspension of the common fare tariff, revealed that ending that program could result in a reduction in passenger air traffic - - resulting in further reductions in air lift availability. A prime ingredient in the Department' s plans for increasing the number of jobs on the Island is the determination to become energy self-sufficient. Competively priced, locally produced energy will make the Island attractive for new investors and industries , in addition to protecting present enterprises . While some of the solutions to unemployment and energy production are long-range in concept, some are short-range, and others are intermediate in scope . Approximately 37% of the Big Island' s electricity generation comes from biomass - - primarily in the form of bagasse . Biomass energy production is scheduled to in- crease, due to technological improvements and other factors during the coming year, and further reduce the need for imported oil . The HGP-A wellhead generator in Puna is also scheduled to come on line during the next year, adding additional energy for island homes and businesses . The OTEC break through opens up energy opportunities for the future that were only a dream a few months ago. However, while some of these alternative energy efforts are on line now, their importance to employment will mainly occur in the future. Studies and projections indicate that while new jobs will develop as diversified agriculture expands , scientific and educational institutions develop, and a manganese nodule processing plant possibly becomes a reality, the tourist industry has the potential for generating jobs in both the immediate and near future . In fact , the tourist industry has the potential for generating more jobs then all other opportunities , collectively. Since tourism is already established as a growth industry, it follows that this industry must play a leading role in solving the short run employment problem. However, the industry needs strengthening if it is to significantly expand its work force . Honorable Stephen Yamashiro , Chairman and Members of the County Council Page 3 October 31 , 1979 • It is anticipated that the recent travel writers convention (SATW) will provide all facits of the Island' s tourist program with publicity that can be translated into larger volumes of business , and into new dollars being injected into the economy - - with the resultant multiplier effect increasing the importance on the County' s economy. Update Status Report on Recent and/or Current R&D Projects The Department of Research and Development is either directly or indirectly involved with the following projects and programs . While some of these programs have delineated time frames , others are long-range and ongoing in nature . I . Alternative Energy Projects for the Big Island of Hawaii A. Geothermal 1. Hawaii Geothermal Well-head Generator Project. An extension of the Hawaii Geothermal Project, the Well-head Generator Project is currently underway with on-site facility construction. Repair work on the well casing (due to fracturing of the concrete) is being conducted, extending the electricity genera- tion target date to early 1981. 2 . Puna Hui Ohana Papaya Farm Proposal . The Ohana submitted a proposal to HEW for funding of a papaya farm project in the Puna area. Fund- ing request is for three years , starting upon proposal approval. This project is proposed in anticipation of geothermal steam availability for processing. 3 . Commercialization/Resource/Socio-cultural Assessment Project. The State and Puna Hui Ohana will begin a study in October 1979 to assess the aspects of geothermal commercialization, the HGP-A resource , and the socio-cultural impacts of development in Lower Puna. The project is scheduled to run for a one-year period. 4 . AMFAC (Puna Sugar Co . , Ltd. ) Engineering and Economic Analysis for the Utilization of Geothermal Fluids in a Cane Sugar Processing Plant . This analysis has been completed with indications of Honorable Stephen Yamashiro , Chairman and Members of the County Council Page 4 October 31 , 1979 • positive technical feasibility and marginal economic feasibility. 5 . Hawaiian Dredging and Construction Direct Application Study. This study under a DOE grant is scheduled to begin October 15 , 1979 , and will look at the potential markets for geothermal steam. A one- year duration is anticipated. B. Ocean Thermal Energy Conversion (OTEC) 1 . Mini-OTEC Project. This project is in its final stages of operation - completion date is around November 1979 . From the standpoint of net electrical generation, and the demonstration of the OTEC concept the project , has been successful . In fact , after initial test- ing it appears electrical output could exceed original estimates . A second deployment, Mini OTEC II , has been proposed to the DOE; however , a decision has not yet been reached. 2. OTEC I . Deployment date for the DOE/Global Marine Develop- ment Inc. OTEC I test vessel , the Chepachet, is scheduled for April 1980 . On-shore preparation has been already begun. 3. OTEC Seacoast Test Facility. The design plans for the Seacoast Test Facility have been completed and submitted for DOE approval . Additionally, an assessment of the feasibility of cold seawater land injection is being conducted. 4. Fairchild OTEC Market Integration Study. The final phase of this one-year study to determine the barriers and incentives to OTEC commercializa- tion, has been reached and a completion date of about December 1979 is anticipated. C . Biomass 1. C. Brewer Syviculture Project. Eucalyptus tree planting near Akaka Falls and the Honorable Stephen Yamashiro , Chairman and Members of the County Council Page 5 October 31 , 1979 • development of a nursery at Kaiwiki has been initiated. The observation and data acquisition phase is now underway. 2 . State Energy Tree Farms Project. The planting of eucalyptus trees in preparation for the development of energy tree farms has been initiated. The Waimea Tree Nursery is the operating facility and fund release is required for field plantings . 3. Capitol Chip/HCPC Biomass Conversion Contract . Capitol Chip Company has announced plans to sell its field trash and pin chips to HCPC for boiler fuel. Final contract negotiations are currently underway. 4 . Davies Hamakua Sugar Company Bagasse Combustion Project . Contract negotiations are currently underway between Davies Hamakua Sugar Company and HELCO for the sale of electricity which will__be_..g.enerated by the newly. _ installed boiler at Honokaa. D. Solar 1 . HCPC Solar Thermal Project. Contract negotiations are currently underway between HCPC and the DOE for funding of a solar thermal pro- ject. Parabolic concentrating collectors will be employed to produce heat for process steam. E . Wind 1 . DOE/Kahua Ranch Field Evaluation Wind Program. Preparation for the installation of a 45 kw Merkam wind electric generator is currently underway. These include the finalizations of a user agreement and utility interface agreement, special application permit preparation, etc. 2 . HELCO/Kahua Ranch Large WECS Site Selection Proposal . Finalization of a proposal , in response to a DOE PON Honorable Stephen Yamashiro , Chairman and Members of the County Council Page 6 October 31 , 1979 for the selection of candidate sites for the installa- tion of large wind turbines , is currently underway. Kahua Ranch is the site which HELCO will be proposing. II . Agriculture Programs and Projects A. Production Research 1 . Macadamia Nuts - coordinated and funded a joint macadamia nut research project with the Hawaii Macadamia Producers Association and the College of Tropical Agriculture. Scope of project included the use of growth regulators to increase yield and to increase the ease of harvesting; controlling macadamia root rot disease ; drying of macadamia nuts . Project terminated. 2 . Guava - coordinated and funded a joint guava research project with the Hawaii Guava Producers Association and the College of Tropical Agriculture . Project included research or irrigation needs of guava; fertilizer requirements ; and weed control in guava orchards . Project is completed and research data is currently being assembled into a report. 3. Anthuriums - coordinated and funded the College of Tropical Agriculture in developing a tissue culture methods for rapid propagation of anthuriums . Project is terminated and methology derived is currently being utilized by commercial laboratories . 4. Beef Cattle - coordinated and funded the College of Tropical Agriculture for the control and eradication of Hamakua pamakani on our ranges . A biological control method was utilized and the initial report indicated the method to be successful. -- ---- B. Marketing 1 . Promotional Programs a. Papaya - coordinated and funded the papaya industry with this product promotion programs in Japan. b . Ginger - coordinated and funded a ginger promotion program with the Hawaii Ginger Industry Association, and the Department of Planning and Economic Develop- ment. The program is still on-going and our department is receiving thousands of requests Honorable Stephen Yamashiro , Chairman and Members of the County Council Page 7 October 31 , 1979 • for ginger recipes and brochures . c. Anthuriums - funded the Anthurium Council to initiate a product promotion for the anthurium industry. Details for programs are currently being developed. d. All products - coordinated and funded the Tri- County Farm Bureau with their agricultural pro- ducts promotional display at the Annual State Farm Fair. The purpose of this project is to establish a greater awareness of our locally grown products to our people . e . Miscellaneous promotion - participated/assisted in various events such as 1) Miss America Pageant , 2) Society of American Florist Annual meeting , 3) California State Florist Annual meeting , 4) Pacific Horticulture Trade Show, and 5) etc. C. Transportation a. Hypobaric - conducted hypobaric testing of papaya and nursery products to determine feasibility of this means to ship agricultural products . Preliminary results indicated that nursery plants (13 days) and papayas (21 days) arrived at their destinations in excellent condition. Project was concluded because container became unavailable for further test- ing. b . Continental Pull-out - coordinated efforts with the Hawaii Island Chamber of Commerce in develop- ing a program to ease the impact when Continental Airlines terminates their Hilo service and to develop a long-range program for the Big Island. III . Industrial Development A. Industrial Park/Area Development Have been working on the concept of expanding industrial activities in the Hilo , Kawaihae , and Kailua-Kona areas . Conducted survey which pointed to a need of approximately 100 acres for expansion of existing operations (1977) . Have been working with Planning Department staff to determine best approach for more lands to be made available . Status as of October 1979 : Pending several decisions on funding , the responsiveness of DLNR, etc. Honorable Stephen Yamashiro , Chairman and Members of the County Council Page 8 October 31 , 1979 • B. Manganese Nodule Processing Working with DPED on the concept of establishing land- base facilities for deep ocean miners on the Big Island. To date , we have established a valuable communications network with potential miners/processors . Status as of October 1979 : Working on a contract for the first year of a 3-year study on the tailings of manganese nodule processing. DPED coordinating agency. C. Advertising and Promotion Programs Advertising has been placed on the Site Selection Hand- book to entice and encourage the development of industrial type activities on the Island. Also , a promotional brochure has been developed, printed, and circulated to answer inquiries originating from the Site Selection Handbook ad and others . Status as of October , 1979 : There should be two more ads coming out later this year and early in 1980 . D. Foreign Trade Zone The concept of establishing a FTZ on the Big Island has been looked at since 1973 . Our cursory analysis shows that we do not have the necessary amenities required at the present time . Status as of October 1979 : Monitor- ing the development which would affect our participation in this program. IV. Community Programs A. RCED The Department is one of five County departments who are co-sponsors of this project. The other five sponsors are the five Soil and Water Conservation districts on the Big Island. Continuous program. B. Waiakea Soil and Water Conservation District Participates in meetings and functions of this organiza- tion whose purpose is to plan and implement programs relative to soil and water conservation on the Big Island. Continuous planning. Y . Economic Development Projects and Status A. Hawaii Economic Development District Committee - ongoing. B . Overall Economic Development Program for Hawaii County - updating. . . p Honorable Stephen Yamashiro , Chairman and Members of the County Council Page 9 October 31 , 1979 C. Employment Study for North Hawaii - completed and submitted to Council. D. Supercold Freezer - grant accepted; public input . E. South Kohala Water System (Along Kawaihae Road) -. require EIS (Federal) , discussion stage . F. Kaulana Bay, Kau Breakwater, Dredging and Boat Ramp Project - ongoing project with OEO (Hawaii County monitoring. ) G . SATW ' 79 Convention - major thrust to increase aware- ness of Big Island as tourist destination area. Con- ference ended on October 24 , 1979 . Monitoring and follow-up will continue . H. Ongoing Programs - related to promoting the visitor industry. VI . Interdepartmental Activities 1 . Planning Department Provide comments , etc. on Planning Department' s SMA, PDP, Change of Zone , CZM, etc. Also on EIS and other reports . Continuous program. 2 . Other Agencies Provide statistical and other information. Continuous program. VII . Other Activities 1 . Include maintaining the County information data base , publication of the annual Data Book and other reports nd studies required for public and private sector / ecision making, responding to inquiries for information // oncerning areas of R&D concern, and developing and ;'maintaining_an R&D reference system. /A 2 n ,,, - A .I31Te RA '7/ / IRECTOR / APPROVED: ,, c7per/ ,, ,Air HERBERT T. MATAYOSHI , MAYOR