The US state will be “smashed” by banning Russian oil imports.
Hawaii is facing huge economic losses after the state’s only oil refinery stopped buying Russian crude in Ukraine following Moscow’s invasion.
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The island, 2,000 miles from the US mainland, is “an anomaly among US states”. wealth reported. While “the US as a whole consumes very little Russian oil,” Hawaii “imports several million barrels of Russian crude annually, accounting for 10% to 25% of Russia’s crude oil shipments” to the nation as a whole “depending on the year.”
“The conversion of crude oil into refined products” is “the beating heart of the state’s oil-dependent economy,” he said The economist. But with supplies disrupted as a result of Vladimir Putin’s invasion, “Hawaiians are not finding much relief from the energy crisis.”
Russian oil accounts for about 3.5% of total US consumption. But supplies from Russia “constituted up to a third of Hawaii’s crude oil in recent years, much of it going to jet fuel.” Associated Press (AP) reports. Other nations supplying oil to the island nation include Libya and Argentina.
Shortly after Putin gave the order for his troops to invade Ukraine, Par Pacific Holdings, owner of the state’s only oil refinery, made the announcement it suspended all purchases of Russian oil.
According to the Honolulu Star Advertiserthe company insisted that “island consumers should not expect oil supply disruptions or significant price hikes,” with the shortfall set to be made up by oil shipments from North and South America.
The decision to abandon Russian oil was hailed by politicians as a show of support for Ukraine. Democratic MP Patrick Pihana Branco told the AP that “Ukraine is fighting to enjoy the same basic rights that Americans are promised at birth — freedom of expression, security in a democratic society, and equal protection under the law.”
The move was also supported by energy suppliers. In a statement, Hawaiian Electric CEO Shelee Kimura said: “We met with Par Hawaii and expressed our concerns about purchasing oil from Russia, and we have heard from customers who have had similar concerns. Par Hawaii’s decision to suspend oil imports from Russia is the right thing for Hawaii and Ukraine.”
Hawaiian Electric, the island’s largest electric utility, is “one of Par Hawaii’s largest customers,” the AP reported, “using 338 million gallons of heating oil in 2021.”
But while suppliers promised that turning away from Russian oil If the costs were not too high, both the island’s economy and consumers were already “battered,” The Economist said.
Rock and a hard place
“Per Hawaii utility regulations, fuel costs are passed on to customers,” who are already seeing “a significant increase in their energy bills,” Fortune reported.
“One reason Hawaii relies so heavily on Russian crude oil is the Jones Act of 1920,” which mandates that “cargo shipped by sea between U.S. ports must be carried on ships built by Americans.” , owned and occupied,” the site continued.
“These supplies are very expensive, and to save costs, large Hawaiian refiners usually import their oil from abroad.”
Diversification of the island’s energy supply has also proved difficult. “A state law passed in 2015 mandates 100% clean energy in electricity by 2045,” The Economist said, “the first such goal set by an American state, building on 2007 targets.” As a result, “the state now the second highest number of electric vehicles per capita in America”.
But achieving Hawaii’s goal of “weaning itself from oil” is “not easy,” the newspaper added. “Rules written to protect Hawaii’s natural environment impede renewable energy projects lest wind turbines disrupt migratory birds or hydropower crowd out a rare species.”
And “land use struggles pit environmentalists and local communities against one another.”
When Russia’s oil ban was announced, Par Pacific pledged to “work closely with our customers and state government partners to make prudent decisions in support of Hawaii’s energy security.”
But Hawaii now appears caught between a rock and a hard place in a race for oil that “is already hitting consumer wallets in the U.S. hard,” Fortune said.
https://www.theweek.co.uk/news/world-news/us/956539/us-state-battered-by-ban-on-russian-oil The US state will be “smashed” by banning Russian oil imports.