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HC&S agreements with DOE and Navy to produce biofuels under threat as company’s historic water rights curtailed. What will decisions mean for biofuel-water nexus in Hawaii?

The Hawaiian state Commission on Water Resource Management in a series of rulings is circumscribing water rights for Hawaii Commercial & Sugar Company (HC&S), Hawaii’s largest agricultural operation and its last sugar plantation.

The company cultivates more than 35,000 acres of sugarcane in Maui’s central valley, and most recently, signed an agreement with the US government to develop biofuels (see Government and Defense Strike Deal to Make Biofuels from Sugar in Hawaii).

Specifically, HC&S will run two separate programs:

1. $2 million per year from the DOE to research energy crop development and energy conversion technologies
2. $2 million per year from the Navy to support crop and technology assessments and an evaluation of long-term resource requirements for biofuel production

But Chris Hamilton of The Maui News reports that the day after the state Commission on Water Resource Management made another precedent-setting decision to restore millions of gallons of water a day to East Maui streams, Hawaii’s last sugar producer issued a statement of thanks with a plea for mercy in the next rounds of decision-making for disputed access to stream water.

Hawaiian Commercial & Sugar Co. General Manager Chris Benjamin said in a news release Wednesday:

This decision by the Commission on Water Resource Management cannot be looked at in isolation.  Taken in combination with the commission’s 2008 decision . . . and the still-pending Na Wai Eha decision with considerably more at stake, an already challenging business has been made even more difficult.

HC&S was the primary defendant in a petition filed by Native Hawaiian taro farmers seeking the return of stream water diverted for sugar cultivation in Central Maui.  The Hawaiian water panel voted 5-1 to return water to the streams.  It was the second such ruling affecting the plantation’s access to East Maui water.  The taro farmers, who are represented by the Native Hawaiian Legal Corp., promised to push the matter further by returning to the commission for a contested case proceeding, which is a form of binding arbitration.

In a worst-case scenario for HC&S, the company could lose in the span of two years access to 57.08 mgd of stream water of which it has had access for 134 years.

HC&S’ parent company, Alexander & Baldwin Co., gave it a year in January to show marked improvement after producing some of its lowest sugar yields on record and losing $45 million in the past two years due to the ongoing drought.

Benjamin said HC&S needs to remain in business as a sugar plantation while it makes a transition to production of renewable energy with biofuels.

More on the water access decisions affecting biofuels production in Hawaii.

Image: Flickr/thaths