Hawaiʻi’s LNG Business Case Was Overly Optimistic & Built On A Broken Spreadsheet

Why It Matters

If the spreadsheet error is accurate, Hawaii’s flagship LNG bridge could increase ratepayer costs and jeopardize the state’s reliability and decarbonization roadmap, prompting a reassessment of policy and investment decisions.

Key Takeaways

• Spreadsheet omitted $900 million LNG fuel cost
• Net savings flip to net cost
• Scenario 3A relied on optimistic displaced‑fuel mix
• LNG megaprojects average 70% cost overruns
• Hydrogen reuse assumptions lack credible cost data

Pulse Analysis

The discovery of a missing $900 million fuel line in Hawaii’s LNG cost model underscores a broader issue in megaproject planning: optimistic spreadsheets often mask real‑world risks. Reference‑class forecasting, which compares a project to historical analogues, shows that LNG import terminals and floating storage units routinely suffer 60‑70% cost overruns and schedule delays. When Hawaii’s model ignored these industry‑wide trends, it painted an unrealistically rosy picture of net savings, especially in the favored Scenario 3A that assumed a favorable displaced‑fuel mix. By contrast, outside‑view analyses would have adjusted capital estimates upward by 50‑70% and built in longer construction windows, immediately eroding the projected economic upside.

Beyond the immediate accounting error, the study’s long‑term vision hinges on repurposing LNG infrastructure for hydrogen or ammonia by 2045. Independent audits in Europe have repeatedly warned that projected hydrogen costs remain far above those of conventional fuels, with delivered hydrogen prices ranging from $6 to $8 per kilogram and ammonia‑based power exceeding $900 per megawatt‑hour. These figures make the promised low‑cost transition implausible without substantial subsidies. Moreover, the technical challenges of converting offshore pipelines and FSRUs for hydrogen or ammonia add further capital and operational uncertainty, weakening the economic case that the original spreadsheet tried to showcase.

For policymakers, the lesson is clear: rigorous, auditable cost accounting and scenario stress‑testing must precede any large‑scale energy commitment. Hawaii’s reliability and affordability challenges are real, but solutions should be built on transparent models that incorporate industry‑standard overruns, realistic fuel price trajectories, and a sober assessment of future hydrogen economics. Only by aligning the spreadsheet with external benchmarks can the state ensure that its transition strategy delivers genuine value to ratepayers and meets its 2045 clean‑energy goals.