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Lanai to become eco-lab that runs on solar, billionaire Ellison promises

George Diebold / Getty Images, Blend Images

Polihua Beach is among the draws for tourists on Lanai. Billionaire Larry Ellison says his plans for an eco-lab aim to help locals start small businesses around organic farm exports.

HONOLULU, Hawaii -- Four months after snapping up nearly the entire island of Lanai, billionaire Larry Ellison has presented his vision of paradise: an eco-lab based on solar power, with electric cars replacing gas guzzlers and sea water transformed into fresh water for an organic farm export industry.

Ellison, CEO of the business software firm Oracle, bought 98 percent of the 141-square-mile Lanai from billionaire David Murdock in June, reportedly for around $500 million.

The Lanai holdings include two resorts and golf courses, commercial and residential structures and vast acres of former pineapple fields that now rest undeveloped.

Since the purchase, Lanai's 3,000 residents have been waiting to hear what Ellison, who doesn't currently have a residence on the island, means to do with it. 

During a Tuesday interview with CNBC, Ellison addressed his plans for the first time.

"What we are going to do is turn Lanai into a model for sustainable enterprise," he said.


"I own the water utility, I own the electric utility," he added. "The electric utility is all going to be solar photovoltaic and solar thermal where it can convert sea water into fresh water."

Photovoltaic is the more traditional solar technology of panels that absorb the sun's rays and directly create electricity with semiconductors, while large-scale thermal involves using mirrors to direct heat to run a turbine and thus make electricity.

National Renewable Energy Lab

This solar thermal station is in Spain. Larry Ellison said he plans to bring solar thermal to Lanai.

Electric cars will be brought in, Ellison added, and farming will be transformed.

"We have drip irrigation where we are going to have organic farms all over the island. Hopefully we are going to export produce -- really the best, organic produce to Japan and elsewhere," he said.

"We are going to support the local people and help them start these businesses," Ellison said. "So it is going to be a little, if you will, laboratory for sustainability in businesses of small scale."

KHNL's Jim Mendoza reports on Ellison's purchase soon after it was announced.

Ellison's Lanai representatives did not immediately respond to requests for elaboration on his comments.

Residents of the island who spoke with Reuters largely welcomed the plan.

Alberta de Jetley, owner of Lanai's 18-acre Bennie's Farm, was one of those who voiced support.

"We have been working towards sustainability for years. We know tourism alone can't sustain Lanai. We all understand this has to happen," de Jetley said.

"I think that will go over really well if he can do it," said resident Caron Green.

Ellison, one of the world's richest men with a fortune estimated at $41 billion, has not had any community meetings with residents. De Jetley said this may be a better approach than Murdock's public meetings which left some residents frustrated when plans didn't materialize. 

"Ellison is doing it the right way, not making promises that don't get fulfilled," de Jetley said.

She pointed to the recent refurbishment of the island's public pool and recreation center as well as upgrades to workers' housing around the island as proof of Ellison's positive intentions for the island's future.

As a farm owner, de Jetley hopes Ellison's plans for desalinated water could help water-starved Lanai become the state's "breadbasket" and a major fruit supplier to Japan.

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Not all residents were so optimistic about how their island might fare under the billionaire's tenure, saying they would judge the plans only once they were in place on the ground, although many of those declined to be quoted by name.

With the high cost of land, water and labor in Hawaii, agriculture faces an uphill battle to be competitive and could require Ellison to continuously subsidize it to make it work on Lanai.

"It's going to take a lot of work and there are challenges," said Jennifer Chirico, executive director of Sustainable Living Institute of Maui.

"It's a long-term strategy but it's exciting. Because of the size of Lanai, with just 3,000 people, this is really an opportunity to test sustainability for islands around the world," she said.

Mary Charles, an owner of the island's smallest hotel, Hotel Lanai, points to Ellison's vast personal wealth as proof he can make it happen. "He has the resources, so if anybody can make it successful he and his team can."

Reuters contributed to this report.

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