Hawai'i imported 55.4 million gallons of ethanol in the 12 months since the state began requiring most gasoline sold in the Islands to be blended with the alternative fuel.

That's enough ethanol to replace about 43 days worth of statewide gasoline consumption, according to federal and state records. At the same time, Hawai'i's import of foreign crude oil declined about 2 percent to nearly 2 billion gallons. Both figures are signs that Hawai'i's more than year-old forced adoption of ethanol may be reducing the state's dependence on crude oil.

However, the mandate — which oil companies contend makes gasoline more expensive — has not made the Aloha State any more energy independent. Lacking a local ethanol source, oil companies have been importing the grain-based fuel from countries such as El Salvador.

In addition to weaning Hawai'i off foreign oil, the mandate is supposed to expand local sugar cane production, generate more than $100 million of new investment in manufacturing plants, and create nearly 700 direct and indirect jobs, according to state estimates. It's now been more than a year since the mandate took effect on April 1, 2006, and no local ethanol plants have broken ground. And questions also remain over whether Hawai'i can even grow the massive amount of crops needed to satisfy demands for the alternative fuel.

However, the requirement that gasoline be blended with 10 percent ethanol, an alternative fuel that can be produced locally from sugar cane or one of its byproducts, seems to be helping reduce gasoline consumption in the Islands.

"The intent of the law obviously was to have this kind of development," said Maurice Kaya, chief technology officer for the Department of Business, Economic Development and Tourism.

"It's encouraging, if we're seeing these kinds of trends. If it were local (ethanol), that would be even better."

During 2006, Hawai'i gasoline consumption rose 4 percent. The increase was expected in part because ethanol-blended gasoline contains less energy than pure gasoline. Through April of this year, gasoline sales were down 1 percent to about 162 million gallons when compared with the year-ago period, according to the state Department of Taxation. The decline could be a result of ethanol displacing gasoline sales. However, a cooling economy and high fuel prices also may be sapping demand for gasoline.

So far, five companies have announced plans to produce ethanol locally. Among these, a company called Kauai Ethanol is the closest to breaking ground. The company plans to start construction on a $35 million facility in Kaumakani later this summer. Production of up to 12 million gallons of ethanol annually, or 30 percent of what is needed to satisfy state demand, could begin 14 months later.

Plans to produce ethanol locally have been delayed by financing, permitting, engineering and other problems. Ethanol proponents had originally predicted local ethanol production would begin by January 2006.

Although demand for conventional gasoline may be declining, it's not entirely clear that Hawai'i's dependence on crude oil is waning. Data from the federal Energy Information Administration show Hawai'i's foreign oil imports falling 2 percent during the 12 months ended April 2007, when compared with the prior 12-month period. However, foreign crude oil imports into Hawai'i actually rose nearly 9 percent during the 2006 calendar year, versus 2005.

Those crude oil import figures exclude domestic oil shipments, which are not tracked by the EIA.

The ethanol mandate won't necessarily reduce crude imports, according to local oil companies. That's because imports are driven in large part by the need to produce jet fuel and fuel oil that's used to generate electricity.

"Ethanol use hasn't had any impact on the amount of crude oil Tesoro imports because we make a full range of product," Tesoro Corp. spokesman Nathan Hokama said. "The law also was intended to support the local agriculture industry. That hasn't been achieved yet."

Meanwhile, equipment and operating costs associated with storing and distributing ethanol-blended gasoline could put upward pressure on retail prices, according to local oil companies. For example, barging ethanol to the Neighbor Islands and costs for using other companies' facilities cost Tesoro an additional $1.3 million on an annual basis, Hokama said.

Reach Sean Hao at shao@honoluluadvertiser.com.