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92–341PS 2004

REVIEWING THE HYDROGEN FUEL

AND FREEDOMCAR INITIATIVES

HEARING

BEFORE THE

COMMITTEE ON SCIENCE

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

MARCH 3, 2004

Serial No. 108–44

Printed for the use of the Committee on Science

(

Available via the World Wide Web: http://www.house.gov/science

(II)

COMMITTEE ON SCIENCE

HON. SHERWOOD L. BOEHLERT, New York, Chairman

RALPH M. HALL, Texas

LAMAR S. SMITH, Texas

CURT WELDON, Pennsylvania

DANA ROHRABACHER, California

KEN CALVERT, California

NICK SMITH, Michigan

ROSCOE G. BARTLETT, Maryland

VERNON J. EHLERS, Michigan

GIL GUTKNECHT, Minnesota

GEORGE R. NETHERCUTT, JR.,

Washington

FRANK D. LUCAS, Oklahoma

JUDY BIGGERT, Illinois

WAYNE T. GILCHREST, Maryland

W. TODD AKIN, Missouri

TIMOTHY V. JOHNSON, Illinois

MELISSA A. HART, Pennsylvania

J. RANDY FORBES, Virginia

PHIL GINGREY, Georgia

ROB BISHOP, Utah

MICHAEL C. BURGESS, Texas

JO BONNER, Alabama

TOM FEENEY, Florida

RANDY NEUGEBAUER, Texas

VACANCY

BART GORDON, Tennessee

JERRY F. COSTELLO, Illinois

EDDIE BERNICE JOHNSON, Texas

LYNN C. WOOLSEY, California

NICK LAMPSON, Texas

JOHN B. LARSON, Connecticut

MARK UDALL, Colorado

DAVID WU, Oregon

MICHAEL M. HONDA, California

BRAD MILLER, North Carolina

LINCOLN DAVIS, Tennessee

SHEILA JACKSON LEE, Texas

ZOE LOFGREN, California

BRAD SHERMAN, California

BRIAN BAIRD, Washington

DENNIS MOORE, Kansas

ANTHONY D. WEINER, New York

JIM MATHESON, Utah

DENNIS A. CARDOZA, California

VACANCY

VACANCY

VACANCY

(III)

C O N T E N T S

March 3, 2004

Page

Witness List ............................................................................................................. 2

Hearing Charter ...................................................................................................... 3

Opening Statements

Statement by Representative Sherwood L. Boehlert, Chairman, Committee

on Science, U.S. House of Representatives ........................................................ 11

Written Statement ............................................................................................ 12

Statement by Representative Bart Gordon, Ranking Minority Member, Committee on Science, U.S. House of Representatives ............................................ 13

Statement by Representative Judy Biggert, Chairman, Subcommittee on Energy, Committee on Science, U.S. House of Representatives ........................... 14

Written Statement ............................................................................................ 15

Prepared Statement by Representative Michael C. Burgess, Member, Committee on Science, U.S. House of Representatives ............................................ 16

Prepared Statement by Representative Jerry F. Costello, Member, Committee

on Science, U.S. House of Representatives ........................................................ 16

Prepared Statement by Representative Eddie Bernice Johnson, Member, Committee on Science, U.S. House of Representatives ............................................ 17

Prepared Statement by Representative John B. Larson, Member, Committee

on Science, U.S. House of Representatives ........................................................ 17

Prepared Statement by Representative Michael M. Honda, Member, Committee on Science, U.S. House of Representatives ............................................ 18

Witnesses:

Mr. David Garman, Assistant Secretary, Energy Efficiency and Renewable

Energy, Department of Energy

Oral Statement ................................................................................................. 19

Written Statement ............................................................................................ 20

Biography .......................................................................................................... 26

Dr. Michael P. Ramage, Chair, National Academy of Sciences Committee

on Alternatives and Strategies for Future Hydrogen Production and Use

Oral Statement ................................................................................................. 27

Written Statement ............................................................................................ 28

Biography .......................................................................................................... 37

Dr. Peter Eisenberger, Chair, American Physical Society, Panel on Public

Affairs, Energy Subcommittee

Oral Statement ................................................................................................. 39

Written Statement ............................................................................................ 41

Biography .......................................................................................................... 42

Discussion ................................................................................................................. 43

Appendix 1: Answers to Post-Hearing Questions

Mr. David Garman, Assistant Secretary, Energy Efficiency and Renewable

Energy, Department of Energy ........................................................................... 64

Page

IV

Appendix 2: Additional Material for the Record

Hydrogen Posture Plan, An Integrated Research, Development, and Demonstration Plan, U.S. Department of Energy, February 2004 .......................... 90

The Hydrogen Initiative, American Physical Society, Panel on Public Affairs,

March 23004 ......................................................................................................... 143

Statement by Dr. Joseph Romm, Former Acting Assistant Secretary of Energy ........................................................................................................................ 160

(1)

REVIEWING THE HYDROGEN FUEL AND

FREEDOMCAR INITIATIVES

WEDNESDAY, MARCH 3, 2004

HOUSE OF REPRESENTATIVES,

COMMITTEE ON SCIENCE,

Washington, DC.

The Committee met, pursuant to call, at 2:28 p.m., in Room 2318

of the Rayburn House Office Building, Hon. Sherwood L. Boehlert

(Chairman of the Committee) presiding.

2

3

HEARING CHARTER

COMMITTEE ON SCIENCE

U.S. HOUSE OF REPRESENTATIVES

Reviewing the Hydrogen Fuel

and FreedomCAR Initiatives

WEDNESDAY, MARCH 3, 2004

2:00 P.M.–4:00 P.M. 2318 RAYBURN HOUSE OFFICE BUILDING

1. Purpose

On Wednesday, March 3, 2004, the U.S. House of Representatives’ Committee on

Science will hold a hearing to examine the Department of Energy’s (DOE) Hydrogen

Fuel and FreedomCAR initiatives. Specifically, the hearing will focus on two recent

reports from the National Academy of Sciences (NAS) and the American Physical

Society (APS) on DOE’s hydrogen initiatives, and the Administration’s response to

the recommendations from the reports. The hydrogen program is one of the President’s primary energy initiatives, and the two reports recommend changes to the

program.

2. Witnesses

Mr. David Garman is the Assistant Secretary of Energy Efficiency and Renewable

Energy at the Department of Energy. Prior to joining the Department, Mr. Garman

served as Chief of Staff to Alaska Senator Frank Murkowski and has served on the

professional staff of the Senate Energy and Natural Resources Committee and the

Senate Select Committee on Intelligence.

Dr. Michael Ramage is the Chair of the National Academy of Sciences’ (NAS),

Committee on Alternatives and Strategies for Future Hydrogen Production and Use.

Dr. Ramage is a retired executive vice president at ExxonMobil Research and Engineering Company.

Dr. Peter Eisenberger is the Chair of the American Physical Society’s (APS) Panel

on Public Affairs Energy Subcommittee. Dr. Eisenberger is currently a Professor of

Earth and Environmental Sciences at Columbia University, and has extensive academic and corporate research experience at Harvard, Stanford, Princeton, Exxon,

and Bell Laboratories.

3. Overarching Questions

The hearing will address the following overarching questions:

• Are the Hydrogen Fuel and FreedomCAR initiatives on track to provide a viable alternative to petroleum as a transportation fuel?

• Are the goals of the Hydrogen Fuel and FreedomCAR initiatives appropriate

and realistic? Are the initiatives designed to meet their goals?

• What are the most important recommendations from the NAS and APS reports? How is the Department responding to the recommendations?

• Will technology research alone lead to a transition to hydrogen, or will it be

necessary to apply policy tools? How should a research and development effort

take these policy choices into account?

4. Overview

• In his 2003 State of the Union speech, President Bush announced the creation of a new Hydrogen Fuel Initiative, which built on the FreedomCAR initiative announced in 2002. Together, the initiatives aim to provide the technology for a hydrogen-based transportation economy, including production of

hydrogen, transportation and distribution of hydrogen, and the vehicles that

will use the hydrogen. Fuel cell cars running on hydrogen would emit only

water vapor and, if domestic energy sources were used, would not be dependent on foreign fuels.

• The recent reports from the American Physical Society (APS) and the National Academy of Sciences (NAS) both recommend changes to the hydrogen

4

1The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs. NAS pre-publication copy, pp. 2–13.

initiatives, particularly arguing for a greater emphasis on basic, exploratory

research because of the significant, perhaps insurmountable, technical barriers that must be overcome. The APS report strongly cautions DOE against

premature demonstration projects, saying such projects could repeat the government’s unhappy experience with the synthetic fuels programs of the 1970s.

• The NAS study describes DOE’s near-term milestones for fuel cell vehicles as

‘‘unrealistically aggressive.’’ Both reports note that it will require technical

breakthroughs—not just incremental improvements—to meet the goals of the

overall hydrogen initiative. For example, the APS study states, ‘‘No material

exists today that can be used to construct a hydrogen fuel tank that can meet

the consumer benchmarks.’’

• The NAS study finds that in the DOE hydrogen program plan, the ‘‘priorities

are unclear.’’ The NAS study calls for ‘‘increased emphasis’’ on fuel cell vehicle development, distributed hydrogen generation, infrastructure analysis,

carbon sequestration and carbon dioxide-free energy technologies.

• The NAS report notes that DOE needs to think about policy questions as it

develops its research and development (R&D) agenda: ‘‘Significant industry

investments in advance of market forces will not be made unless government

creates a business environment that reflects societal priorities with respect to

greenhouse gas emissions and oil imports.. . .The DOE should estimate what

levels of investment over time are required—and in which program and

project areas—in order to achieve a significant reduction in carbon dioxide

emissions from passenger vehicles by mid-century.’’

• While the President’s fiscal year 2005 (FY05) budget request includes additional funding for hydrogen R&D, it provides the money for hydrogen research by making cuts in other energy efficiency and renewable energy R&D

programs. The APS report specifically argues against such an approach, and

the NAS report notes that research on other aspects of renewable energy may

be necessary for a successful transition to a hydrogen economy.

• The APS report recommends that DOE continue research into bridge technologies—such as gasoline or diesel hybrids and hydrogen-fueled internal

combustion engines—that could provide benefits if the commercialization of

fuel cell vehicles is delayed.

5. Background

Report Recommendations

NAS report recommendations summary

The NAS report raises ‘‘four pivotal questions’’ about the transition to a hydrogen

economy:

• When will vehicular fuel cells achieve the durability, efficiency, cost, and performance needed to gain a meaningful share of the automotive market? The

future demand for hydrogen depends on the answer.

• Can carbon be captured and sequestered in a manner that provides adequate

environmental protection but allows hydrogen to remain cost-competitive?

The entire future of carbonaceous fuels in a hydrogen economy may depend

on the answer.

• Can vehicular hydrogen storage systems be developed that offer cost and safety equivalent to that of fuels in use today? The future of transportation use

depends on the answer.

• Can an economic transition to an entirely new energy infrastructure, both the

supply and the demand side, be achieved in the face of competition from the

accustomed benefits of the current infrastructure? The future of the hydrogen

economy depends on the answer.1

The report examines possible answers to the questions and recommends changes

to the DOE hydrogen R&D program. The study concludes that, even under the most

optimistic scenario, ‘‘[T]he impacts on oil imports and CO2 emissions are likely to

be minor during the next 25 years.’’ The report goes on to add, ‘‘[T]hereafter, if R&D

is successful and large investments are made in hydrogen and fuel cells, the impact

on the U.S. energy system could be great.’’

The report’s recommendations are summarized below.

5

Major NAS Recommendations:

• Systems Analysis—DOE should undertake more systems analysis to better understand the challenges, progress, and potential benefits of making the transition to

a hydrogen economy.

• Fuel Cell Vehicle Technology—DOE should increase funding for fundamental research and development of fuel cells focusing on on-board storage systems, fuel

cell costs, and durability.

• Infrastructure—DOE should provide ‘‘greater emphasis and support’’ to research,

especially exploratory research, related to the creation of a hydrogen infrastructure. DOE should ‘‘create better linkages between its seemingly disconnected programs in large-scale and small-scale hydrogen production.’’

• Infrastructure—DOE should accelerate work on codes and standards, particularly

addressing overlapping regulation at the municipal, State, and federal levels.

• Transition—DOE should strengthen its policy analysis to better understand what

government actions will be needed to bring about a hydrogen economy.

• Transition—DOE should increase investments in research and development related to distributed hydrogen production.

• Safety—DOE should make changes to hydrogen safety programs, including developing safety policy goals with stakeholders.

• Carbon Dioxide-Free Hydrogen—DOE should increase emphasis on electrolyzer development with a target of $125 per kilowatt with 70 percent efficiency. In parallel, DOE should set more aggressive electricity cost targets for unsubsidized nuclear and renewable energy that might be used to produce hydrogen.

• Carbon Capture and Storage—DOE should link its hydrogen programs more closely with its programs on carbon sequestration (which are managed by Fossil Energy).

• RDD Plan—DOE should set clearer priorities for hydrogen R&D and better integrate related programs spread among several DOE offices. Congress should stop

earmarking funds for hydrogen R&D.

• RDD Plan—DOE should shift work away from development and toward exploratory work and should establish interdisciplinary energy research centers at universities.

• Framework—DOE should give greater emphasis to fuel cell vehicle development,

distributed hydrogen generation, infrastructure analysis, carbon sequestration

and FutureGen, and carbon dioxide-free energy technologies.

APS report recommendations summary

The APS recommendations are generally consistent with those of NAS. The primary recommendation of the APS report is that DOE should significantly increase

the funding for basic research in the hydrogen initiative, while reducing the funding

for demonstrations. The report outlines the various technical barriers facing each

stage of hydrogen usage, and the fundamental research breakthroughs that are

needed to make the initiative a success. APS concludes that large-scale demonstrations are generally premature because so many technological hurdles still must be

cleared.

The APS report also recommends that the Administration increase funding for

‘‘bridge’’ technologies—such as hydrogen internal combustion engines and gasoline

and diesel hybrid vehicles—that would provide benefits sooner than hydrogen fuel

cell vehicles, particularly if technical barriers slow the market penetration of the

fuel cell vehicles. The APS report also argues that the hydrogen initiatives should

not displace other efficiency and renewable energy research if the goals of the initiative are to be met. Renewable energy generation, APS argues, is crucial to supplying

clean, domestic energy for hydrogen production.

Challenges

What are the technical challenges?

Major advances are needed across a wide range of technologies if hydrogen is to

be affordable, safe, cleanly produced, and readily distributed. The production, storage and use of hydrogen all present significant challenges.

Hydrogen can be produced from a variety of sources, including coal and natural

gas. But one goal of using hydrogen is to reduce emissions of carbon dioxide. If hydrogen is to be produced without emissions of carbon dioxide, then the technology

to capture and store carbon dioxide (known as carbon sequestration) must improve

significantly. The other main goal of using hydrogen is to reduce the use of imported

6

energy. Today most hydrogen is produced from natural gas, but in order to supply

the entire transportation sector significant imports of natural gas would be required.

Other possible means of producing hydrogen are inherently cleaner than coal, but

are far from affordable with existing technology. For example, the APS estimates

that hydrogen produced through electrolysis is currently four to ten times more expensive than gasoline.

Another major hurdle is finding ways to store hydrogen, particularly on board a

vehicle. APS believes ‘‘a new material must be discovered’’ to develop an affordable

hydrogen fuel tank.

The NAS estimates that fuel cells themselves will need a ten- to twenty-fold improvement before fuel cell vehicles become competitive with conventional technology.

Today’s fuel cells also wear out quickly, and are therefore far short of the durability

that would be required to compete with a gasoline engine. Finally, if hydrogen is

going to be produced on a large-scale, dramatic improvements in pipeline and tanker technology are required to permit the efficient and safe transportation and distribution of hydrogen. Small-scale distributed production also needs improvement,

and the NAS report recommends increased focus in that area because it may be the

first to develop.

What are the non-technical challenges? (policy, regulatory, inertia, public awareness)

Even if the technology advances to a point at which it is competitive, the transition to a hydrogen economy will require an enormous investment to create a new

infrastructure. Changes in regulation, training and public habits and attitudes will

also be necessary. Estimates of the cost of creating a fueling infrastructure (replacing or altering gas stations) alone are in the hundreds of billions of dollars.

The transition also won’t happen quickly. According to the NAS study, significant

sales of hydrogen vehicles are unlikely before 2025 even under the most optimistic

technology assumptions.

Technology

What is a Fuel Cell?

Central to the operation of the hydrogen-based economy is a device known as a

fuel cell that would convert hydrogen fuels to electricity. In cars, these devices

would be connected to electric motors that would provide the power now supplied

by gasoline engines. A fuel cell produces electricity by means of an electrochemical

reaction much like a battery. However, there is an important difference. Rather

than using up the chemicals inside the cells, a fuel cell uses hydrogen fuel, and oxygen extracted from the air, to produce electricity. As long as hydrogen fuel and oxygen are fed into the fuel cell, it will continue to generate electric power.

Different types of fuel cells work with different electrochemical reactions. Currently most automakers are considering Proton Exchange Membrane (PEM) fuel

cells for their vehicles.

7

Benefits of a Hydrogen-based Economy

A hydrogen-based economy could have two important benefits. First, hydrogen can

be manufactured from a variety of sources, including natural gas, biofuels, petroVerDate 11-MAY-2000 19:24 Nov 17, 2004 Jkt 092341 PO 00000 Frm 00011 Fmt 6633 Sfmt 6621 C:\WORKD\FULL04\030304\92341 SCIENCE1 PsN: SCIENCE1
8

leum, coal, and even by passing electricity through water (electrolysis). Depending

on the choice of source, hydrogen could substantially reduce our dependence on foreign oil and natural gas.

Second, the consumption of hydrogen through fuel cells yields water as its only

emission. Other considerations, such as the by-products of the hydrogen production

process, will also be important in choosing the source of the hydrogen. For example,

natural gas is the current feedstock for industrial hydrogen, but its production releases carbon dioxide; production from coal releases more carbon dioxide and other

emissions; and production from water means that pollution may be created by the

generation of electricity used in electrolysis. Production from solar electricity would

mean no pollution in the generation process or in consumption, but is currently

more expensive and less efficient than other methods.

Industry participation

Although exact numbers on industry involvement are proprietary, the major automobile companies have invested billions of dollars in R&D and demonstrations of

fuel cell vehicles. General Motors alone had spent $1 billion as of June 2003, and

estimated that its total investment by 2010 could triple.

Legislation

Language in the portion of the comprehensive Energy Bill (H.R. 6) produced by

the Science Committee would authorize and guide the hydrogen initiative. The conference report on H.R. 6 is still pending in the Senate.

6. Questions to the Witnesses

The witnesses have been asked to address the National Academy of Sciences’

(NAS) and American Physical Society’s (APS) recent reports and recommendations

on the hydrogen initiatives in their testimony, and in addition the following specific

questions.

9

Mr. David Garman:

1. The NAS report describes the goals of the initiatives as ‘‘unrealistically aggressive’’ while the APS report highlights the significant ‘‘performance gaps’’

between current technology and the initiative milestones. Does the Department of Energy (DOE) plan to adjust the goals based on the comments of

these reports? If not, how does DOE plan to respond?

2. Because of the significant technical challenges, both reports criticized the

current mix of funding for hydrogen research, arguing that more emphasis

should be placed on fundamental research as opposed to demonstrations.

Please describe the hydrogen program’s current demonstration and deployment efforts, and how each technology element’s current costs and performance measure against the program goals. Does DOE plan to adjust the balance of funding to match the recommendations? If not, why?

3. The NAS report suggests that the research agenda should be developed with

future policy decisions in mind. How did the Administration consider the impact of future policy decisions in the development of the research agenda for

the hydrogen initiatives? Does DOE plan on increasing its policy analysis capabilities as recommended by the NAS?

4. What are the key criteria for deciding that a technology is ready for demonstration? Are there guidelines or rules of thumb, such as 120 percent of

cost goals, or 85 percent of performance goals that indicate that a technology

is ready for demonstration-scale activities?

5. Using the definitions in OMB Circular A–11, what is the proposed mix of

funding in the FY05 budget request between basic research, applied research, development, demonstration, and deployment activities within the

Hydrogen Fuel Initiative?

Dr. Michael Ramage:

1. Given the current state of hydrogen technology, what do you feel the federal

funding balance should be between demonstration and research?

2. One of the recommendations included in the NAS report calls for an expanded policy analysis program at the Department of Energy. Please describe why the committee felt this was important, and give more detail as

to what such a program might encompass.

3. In the penetration models included in the NAS study, the committee assumes that the technical goals will be met, even though they are deemed

overly optimistic. What would be more realistic goals? How would that affect

the penetration models? What would that imply for the delivery of public

benefits such as environmental improvements and reduced oil dependence?

4. What are the key criteria for deciding that a technology is ready for demonstration? Are there guidelines or rules of thumb, such as reaching 120 percent of cost goals, or 85 percent of performance goals, that indicate that a

technology is ready for demonstration-scale activities?

5. While the NAS report recommends shifting funding away from ‘‘bridge’’ technologies such as gasoline and diesel hybrids and hydrogen internal combustion engines, another recently released report from the American Physical

Society (APS) encourages DOE to increase funding in these areas in light of

their near-term benefits. How would you respond to the APS recommendation? What do you feel is the reason for the different opinions about federal

investment in bridge technologies?

Dr. Peter Eisenberger:

1. One of the major themes of the APS report is the lack of funding for basic

research. The report notes that the Department’s request of $29 million in

the Office of Science for fiscal year 2005 was a dramatic improvement, but

says that the amount of basic research is still inadequate at 13 percent of

the overall hydrogen funding. What do you feel the balance should be? How

should it change over time?

2. What are the key criteria for deciding that a technology is ready for demonstration? Are there guidelines or rules of thumb, such as reaching 120 percent of cost goals, or 85 percent of performance goals, that indicate that a

technology is ready for demonstration-scale activities?

3. While the APS report encourages DOE to increase funding to ‘‘bridge’’ technologies such as gasoline and diesel hybrids and hydrogen internal combusVerDate 11-MAY-2000 19:24 Nov 17, 2004 Jkt 092341 PO 00000 Frm 00013 Fmt 6633 Sfmt 6621 C:\WORKD\FULL04\030304\92341 SCIENCE1 PsN: SCIENCE1
10

tion engines, another recently released report from the National Academy of

Sciences (NAS) recommends shifting funds away from bridge technologies.

How would you respond to the NAS recommendation? What do you feel is

the reason for the different opinions about federal investment in bridge technologies?

11

Chairman BOEHLERT. The Committee will be in order. Now prior

to our hearing, I must ask your patience while I complete one brief

administrative matter. Specifically, I would like to ask the Committee for unanimous consent to discharge House Joint Resolution

57, expressing the sense of Congress that the Congress recognize

the contributions of the seven Columbia astronauts by supporting

the establishment of a Columbia Memorial Science Learning Center in Downey, California. I know that there is strong bipartisan

support for this resolution, and I understand the support of the entire California delegation. Therefore, without objection, so ordered.

I want to welcome everyone here for this important hearing on

one of the President’s key initiatives. This hearing is important because what is at stake over the long-term is the security of our nation, the availability of resources for economic growth here and

around the world, and the health of the environment, nationally

and globally, not exactly minor issues. The President is to be congratulated for his foresight in proposing the Hydrogen Initiative. It

will take at least a decade of focused effort to lay the foundation

for a hydrogen economy.

The question before us today is not whether to have a hydrogen

initiative, but how to make sure we get the most out of what we

are spending on this program. If we think of the Hydrogen Initiative as a car, which I think is an appropriate analogy, then I would

say that the President has bought us the car and the Secretary of

Energy has turned the ignition key, but everyone is still learning

how to drive and no one has mapped out a clear travel plan yet.

So we are at a critical juncture in the development of this initiative, and I am pleased that we will be able to get guidance today

from two prestigious organizations: the National Academy of

Sciences (NAS), and the American Physical Society (APS), represented here by two distinguished researchers. I found the recommendations in their two reports to be compelling, and I hope we

will be able to hear some specifics today about exactly how the Department of Energy (DOE) is going to implement them. Clearly,

this is a valuable program that could be better focused with greater

emphasis on solving fundamental questions.

I am pleased that we have Secretary Garman back with us

today, a good friend, one who has appeared here many, many

times, to tell us how DOE intends to proceed. He is a leading light

in the Department and a true believer in these technologies. And

he has his work cut out for him with this initiative. I also want

to thank Secretary Garman for appearing before us during a week

in which he has already made a number of congressional appearances, but I am sure that as a former Senate staffer he feels he

just can’t spend too much time up here.

Before we hear from our witnesses, I want to highlight two

points made in the reports I referred to earlier that go beyond the

technical recommendations, points I have made in previous hearings on this subject. First, most reports acknowledge that there is

no way to discuss the transition to a hydrogen economy or the research to get us there without dealing forthrightly with policy

questions. No mysterious market force alone is going to produce a

hydrogen economy. I would urge DOE again to make that acknowledgment itself and to plan accordingly. We can’t, for example, have

12

a sensible hydrogen R&D agenda without making some decisions

about essential carbon sequestration, how that is going to be in a

hydrogen economy. Personally, I think it has to be essential, but

we need a decision by DOE. Second, both reports note that other

work on energy efficiency and renewable energy is necessary for a

hydrogen economy to be clean and affordable, and both reports are

right.

So I think it is unfortunate that the Administration proposes to

pay for hydrogen research by cutting the rest of Secretary

Garman’s programs. We have been told in the past that such triage

would not occur, and it shouldn’t.

Finally, let me say that I also agree with these reports when

they point out that hydrogen is no panacea, especially in the shortterm. Work on hydrogen should be not used an excuse—as an excuse to avoid steps we need to take now, steps like stricter CAFE

standards, like promoting hybrid vehicles, like conducting R&D on

interim solutions to our energy dependence and pollution problems.

Our focus at this hearing is on the Hydrogen Initiative itself. I

hope we can reach some consensus today on how the research

agenda can be reshaped to increase the likelihood that hydrogen

can someday become the answer to our energy and environmental

needs.

Mr. Gordon.

[The prepared statement of Chairman Boehlert follows:]

PREPARED STATEMENT OF CHAIRMAN SHERWOOD BOEHLERT

I want to welcome everyone here for this important hearing on one of the President’s key initiatives. This hearing is important because what’s at stake, over the

long term, is the security of our nation, the availability of resources for economic

growth here and around the world, and the health of the environment, nationally

and globally. Not exactly minor issues.

The President is to be congratulated for his foresight in proposing the hydrogen

initiative. It will take at least a decade of focused effort to lay the foundations for

a hydrogen economy.

The question before us today is not whether to have a hydrogen initiative, but

how to make sure we get the most out of what we’re spending on this program. If

we think of the hydrogen initiative as a car—an appropriate analogy—then I would

say that the President has bought us the car and the Secretary of Energy has

turned the ignition key, but everyone is still learning how to drive, and no one has

mapped out a clear travel plan yet.

So, we’re at a critical juncture in the development of this initiative. And I’m

pleased that we’ll be able to get guidance today from two prestigious organizations,

the National Academy of Sciences and the American Physical Society, represented

here by two distinguished researchers.

I found the recommendations in their two reports to be compelling. And I hope

we’ll be able to hear some specifics today about exactly how the Department of Energy (DOE) is going to implement them. Clearly this is a valuable program that

could be better focused, with greater emphasis on solving fundamental questions.

I’m pleased that we have Secretary Garman back with us today to tell us how

DOE intends to proceed. He is a leading light in the Department and a true believer

in these technologies, and he has his work cut out for him with this initiative. I

also want to thank Secretary Garman for appearing before us during a week in

which he already has many Congressional appearances. But I’m sure that as a

former Senate staffer he feels he just can’t spend too much time up here.

Before we hear from our witnesses, I want to highlight two points made in these

reports that go beyond the technical recommendations—points I’ve made in previous

hearings on this subject.

First, both reports acknowledge that there is no way to discuss the transition to

a hydrogen economy—or the research to get us there—without dealing forthrightly

with policy questions. No mysterious market force alone is going to produce a hydrogen economy. I would urge DOE again to make that acknowledgement itself and to

13

plan accordingly. We can’t, for example, have a sensible hydrogen R&D agenda

without making some decisions about how essential carbon sequestration is going

to be in a hydrogen economy. Personally, I think it has to be essential, but we need

a decision by DOE.

Second, both reports note that other work on energy efficiency and renewable energy is necessary for a hydrogen economy to be clean and affordable—and both reports are right. So I think it’s unfortunate that the Administration proposes to pay

for hydrogen research by cutting the rest of Secretary Garman’s programs. We’ve

been told in the past that such triage would not occur. It shouldn’t.

Finally, let me say that I also agree with these reports when they point out that

hydrogen is no panacea, especially in the short-term. Work on hydrogen should not

be used as an excuse to avoid steps we need to take now—steps like stricter CAFE

standards, like promoting hybrid vehicles, like conducting R&D on interim solutions

to our energy dependence and pollution problems.

But our focus at this hearing is on the hydrogen initiative itself. I hope we can

reach some consensus today on how the research agenda can be reshaped to increase the likelihood that hydrogen can some day become the answer to our energy

and environmental needs.

Mr. Gordon.

Mr. GORDON. Thank you, Mr. Chairman. I always enjoy listening

to you, because I just agree with you so much on what you say. It

is such a nice thing to have a sensible chairman. Thank you for

giving me my opportunity also.

In my part of Tennessee, we have a special interest in hydrogen

fuel vehicles in the form of Dr. Cliff Rickets at Middle Tennessee

State University. For many years, Dr. Rickets has been working

with alternative fuels and has built cars that run on everything

from corn to cow manure. Since the late ’80’s, he has been working

with hydrogen fuel engines. In fact, in 1991, he built a car that set

the world land speed record for hydrogen at the Bonneville speed

trials at the Great Salt Flats in Utah. The next year, his team

went back and broke his own record, a record that has now stood

for more than 10 years.

And in Tennessee, we come about our interests in hydrogen honestly and believe that in addition to going fast, we can also transition to a fuel that can be cleaner and reduce our need for imported

oil. But we have to be sensible and smart about how we go about

it, and that is the subject of this hearing. The importance of energy

to society can not be overstated. Since prehistoric—or prehistory,

the survival and the advancement of civilization has depended on

the ability to secure energy resources. From the gathering of wood

to the burning of fossil fuels to the fission of nuclear materials, our

quest for energy has shaped the world, as we know it. The agricultural and industrial revolutions of the last two centuries would not

have been possible had it not been for coal, oil, and natural gas.

However, finding alternatives to fossil fuels is imperative. We

have known this for a generation yet no viable, cost-efficient alternative has emerged. Hydrogen has developed as a potential solution to our energy puzzle, but will it work? And furthermore, will

it work within the timeline and technical goals laid out by the Administration’s Hydrogen Initiative. With over two billion internal

combustion engines in the world, a switch to a hydrogen-based

economy is no easy task, and that is why I am pleased that we

have these very informed officials with us today. And I look forward to hearing from you and taking us further down this path.

Thank you, Mr. Chairman.

Chairman BOEHLERT. Thank you very much, Mr. Gordon.

14

The Chair recognizes the distinguished Chair of the Subcommittee on Energy, Ms. Biggert.

Ms. BIGGERT. Thank you very much, Mr. Chairman. And thank

you for calling this hearing and giving this committee another opportunity to get an update on the work underway at the Department of Energy as part of the President’s Hydrogen Fuel and

FreedomCAR Initiatives. I also want to thank the witnesses for

being so generous with their time and for agreeing to share with

us their insight and expertise on the topic of fuel cells and hydrogen.

I have a keen interest in both the fuel cell and Hydrogen Initiatives that President Bush announced in 2002 and 2003 respectively. As a matter of fact, in June of 2002, I chaired a field hearing

in Naperville, Illinois to examine the potential of hydrogen fuel cell

technology. My District is, of course, home to Argonne National

Laboratory, which has a strong fuel cell R&D program. My District

is also home to small businesses like H2Fuels and various auto

parts suppliers, corporations like BP, and research organizations

like the Gas Technology Institute. In short, I have the privilege to

represent a region that has much to contribute to the continuing

development of fuel cells and the hydrogen needed to fuel them.

As I have said many times before, I do not believe that affordable

energy and a clean and safe environment are mutually exclusive.

America has the ingenuity and the expertise to meet our nation’s

future energy demands and promote energy conservation. And we

can do so in environmentally responsible ways that set a standard

for the world. Most importantly, America now has the motivation,

perhaps like no other time since the oil crisis of the ’70’s, to find

newer and better ways to meet our energy needs.

Let us look at the facts. Our dependence on foreign oil sources

is up almost—to almost 60 percent. Violence in the Middle East

and the War Against Terrorism will continue to cause more volatility in gasoline prices that any of us will find acceptable. The bottom line is that the United States is home to only two percent of

the world’s supply of oil. It doesn’t take a chemical engineer or a

foreign policy expert to understand what that equals: continued dependency on increasingly uncertain sources.

There clearly are some compelling reasons to work toward our

shared vision of a hydrogen economy. Today we will hear testimony

about two recent reports, one prepared by the National Academy

of Sciences, the other one by the American Physical Science Society, that raises questions about our progress in making that vision

a reality.

We are talking about a tremendously challenging endeavor. It

will take us many years to reach our goal. It only makes sense that

we will need to make a few mid-course corrections along the way,

that is why we should be asking are the goals we initially set still

the right goals. If so, we must next ask are we working to meet

our goals in the best way that we can. For instance, many fundamental technical obstacles remain in hydrogen production, transport, and storage, not to mention the technical challenges that we

must address before fuel cell vehicles become a common future of

American life.

15

To overcome these obstacles, the Federal Government must

maintain a strong commitment to basic research. If the road we are

on turns out to be a dead end, we should have an alternative route

already mapped out. That is the reason a diverse portfolio of basic

research is so important to long-term technology initiatives like the

ones we are discussing today. Our job at this hearing is to look at

what we have learned in the first year or two of our efforts and

to gain insight from NAS and APS reports. Both recommend greater emphasis on basic research, which I think is the right course of

action, and both point out that a great deal of work lies ahead.

I am confident that DOE is up to the task, and with the constructive input of groups like NAS and APS, we will move the Nation ever closer to realizing the promise and potential of fuel cells

and hydrogen.

Thank you very much, Mr. Chairman, and I yield back.

[The prepared statement of Mrs. Biggert follows:]

PREPARED STATEMENT OF REPRESENTATIVE JUDY BIGGERT

Thank you, Chairman Boehlert, for calling this hearing and giving this committee

another opportunity to get an update on the work underway at the Department of

Energy as part of the President’s Hydrogen Fuel and FreedomCAR initiatives. I also

want to thank the witnesses for being so generous with their time, and for agreeing

to share with us their insight and expertise on the topics of fuel cells and hydrogen.

I have a keen interest in both the fuel cell and hydrogen initiatives that the President announced in 2002 and 2003 respectively. As a matter of fact, in June 2002,

I chaired a field hearing in Naperville, Illinois to examine the potential of hydrogen

fuel cell technology. My district is, of course, home to Argonne National Laboratory,

which has a strong fuel cell R&D program. My district also is home to small businesses like H2Fuels and various auto parts suppliers, corporations like BP, and research organizations like the Gas Technology Institute. In short, I have the privilege

to represent a region that has much to contribute to the continued development of

fuel cells and the hydrogen needed to fuel them.

As I’ve said many times before, I do not believe that affordable energy and a clean

and safe environment are mutually exclusive. America has the ingenuity and the expertise to meet our future energy demands and promote energy conservation, and

we can do so in environmentally responsible ways that set a standard for the world.

Most importantly, America now has the motivation—perhaps like no other time

since the oil crisis of the 70’s—to find newer and better ways to meet our energy

needs.

Let’s look at the facts. Our dependence on foreign oil sources is up to almost 60

percent. Violence in the Middle East and the war against terrorism will continue

to cause more volatility in gasoline prices than any of us will find acceptable. The

bottom line is that the United States is home to only two percent of the world’s supply of oil. It doesn’t take a chemical engineer or a foreign policy expert to understand what that equals—continued dependence on increasingly uncertain sources.

There clearly are many compelling reasons to work towards our shared vision of

a hydrogen economy. Today, we will hear testimony about two recent reports—one

prepared by the National Academy of Sciences, the other by the American Physical

Society—that raise questions about our progress in making that vision a reality.

We are talking about a tremendously challenging endeavor. It will take us many

years to reach our goal. It only makes sense that we might need to make a few midcourse corrections along the way. That’s why we need to be asking, ‘‘Are the goals

we set initially still the right goals?’’ If so, we need to next ask, ‘‘Are we working

to meet our goals in the best way that we can?’’

For instance, many fundamental technical obstacles remain in hydrogen production, transport, and storage—not to mention the technical challenges that we must

address before fuel cell vehicles become a common feature of American life. To overcome these obstacles, the Federal Government must maintain a strong commitment

to basic research. If the road we’re on turns out to be a dead-end, we should have

an alternate route already mapped out. That’s the reason a diverse portfolio of basic

research is so important to long-term technology initiatives, like the ones we are discussing today.

16

Our job at this hearing is to look at what we’ve learned in the first year or two

of our efforts, and to gain insight from the NAS and APS reports. Both recommend

greater emphasis on basic research, which I think is the right course of action, and

both point out that a great deal of work lies ahead. I am confident that the DOE

is up to the task and, with the constructive input of groups like the NAS and APS,

will move the Nation ever-closer to realizing the promise and potential of fuel cells

and hydrogen.

Thank you.

Chairman BOEHLERT. Thank you very much, Ms. Biggert.

[The prepared statement by Mr. Burgess follows:]

PREPARED STATEMENT OF REPRESENTATIVE MICHAEL C. BURGESS

Thank you Mr. Chairman, and thank you for having this hearing.

I believe that energy independence is a matter of national security. The United

States is especially vulnerable to international price fluctuations since we import

nearly 60 percent of the oil we consume daily from foreign sources, and this number

is expected to increase to 75 percent by 2010. Most of this oil comes from the Middle

East and politically unstable nations such as Algeria, Nigeria and Venezuela. When

we met one year ago, to discuss this very issue, gas prices were soaring as a result

of a two-month strike in Venezuela. This is merely one example of how international

situations can affect the United States.

Our economy depends on access to steady, affordable and reliable domestic energy

supply; it is a matter of national security to have the United States be self-sufficient

when it comes to our energy needs. To ensure America’s energy independence, I believe that we need to implement a long-term, comprehensive energy policy. Furthermore, one component of this national energy policy must be alternative energy research and development.

President Bush, during his 2001 State-of-the-Union Address, proposed a bold

FreedomCAR and Hydrogen Fuel Initiative. The goal of this new FreedomCAR program is to make hydrogen fuel cell technology a viable, affordable and convenient

technology that we can use to power our automobiles. There are many benefits, including a cleaner environment, greater energy independence, and the possibility

that research can spur further technological innovation.

As a member of both the Science and Transportation and Infrastructure Committees, I recognize the unique challenges that we face as we discuss the possibility

of converting into a hydrogen-fueled economy. We must discuss the appropriate role

for the Federal Government in this process and examine our focus on FreedomCAR

and hydrogen-based infrastructure, but we must do so within the context of a comprehensive energy policy. A comprehensive energy policy will help ensure that the

United States can achieve energy independence. In addition, we must also take seriously our responsibility to ensure that taxpayer dollars are spent wisely and must

keep this in mind as we discuss the President’s Hydrogen Initiative.

So, again, Mr. Chairman, I thank you for this hearing in which we can address

some our concerns.

[The prepared statement by Mr. Costello follows:]

PREPARED STATEMENT OF REPRESENTATIVE JERRY F. COSTELLO

Good afternoon. I want to thank the witnesses for appearing before our committee

to discuss the President’s Hydrogen Initiative and two recently released reports

from the National Academy of Sciences (NAS) and the American Physical Society

(APS) on DOE’s Hydrogen Initiative. The hydrogen program is one of the President’s

primary energy initiatives, and the two reports recommend changes to the program.

On February 27, 2003, the President announced the FutureGen project. This

project is a $1 billion government/industry partnership to design, build, and operate

a nearly emission-free, coal-fired electric and hydrogen production plant. The prototype plant will serve as a large-scale engineering laboratory for testing and will expand the options for producing hydrogen from coal and capturing CO2.

I have led the effort to locate FutureGen in Illinois, including leading a bipartisan

effort in the House to secure funding for the project. Further, last July, I hosted

a roundtable discussion regarding FutureGen and what it means for Illinois with

Governor Blagojevich, U.S. Senators Durbin and Fitzgerald, and U.S. Congressman

John Shimkus. Dr. C. Lowell Miller, Director of the Office of Coal Fuels and Industrial Systems at the Department of Energy, made a presentation on the specifics of

the project.

17

I believe that Southern Illinois is the perfect place to locate the new plant. The

region is rich in high-sulfur coal reserves and the Coal Center at Southern Illinois

University Carbondale is located there. In addition, the geology of the region is well

suited to the carbon-trapping technology to be developed. Illinois is home to oil and

gas reserves and deep saline aquifers that can permanently sequester carbon dioxide.

I have been tracking this issue closely since its inception and I am anxious to see

the Department’s program plan. This Administration has touted FutureGen as one

of the most important climate change technologies at our disposal and heightened

its international visibility to extraordinary levels. If it is as important as the Administration has said, and I believe it is, I hope that the Administration will take a

hard look at the program plan, your posture toward industry, and seek to move on

a path forward that is technically, financially, and politically viable. We all want

to make this work, but the program will go nowhere without a sound program plan

upon which everyone agrees.

Finally, I was pleased to see the NAS and the APS both placed the FutureGen

project as a high priority task for advancing development of hydrogen from coal.

I again thank the witnesses for being with us today and providing testimony to

our committee.

[The prepared statement by Ms. Johnson follows:]

PREPARED STATEMENT OF REPRESENTATIVE EDDIE BERNICE JOHNSON

Mr. Chair, I thank you for calling this very important hearing. Our honored witnesses, I thank you for appearing here today to discuss such a vital issue to our

environment and our economy.

I am pleased to speak today about the promising technology that could help protect our environment and safeguard our national security.

During his State of the Union Address a year ago, President Bush’s spelled out

his plans for efficient cars running on clean, hydrogen fuel cells. In fact, the Energy

Department included $318 million for both fuel cells and hydrogen production in its

2005 budget last month. However, according to a report by the National Academy

of Sciences, this plan is decades away from commercial reality. While the Bush administration anticipates mass production of hydrogen cars by 2020, the academy

calls the Energy Department’s goals ‘‘unrealistically aggressive.’’

If we don’t concentrate on viable alternatives to now, the United States is expected to import 68 percent of the oil it consumes by 2025. Should hydrogen-powered fuel cells fulfill their promise, we could drastically reduce that figure and ensure our independence in a way that keeps our environment protected.

Despite the great potential of this technology, there are significant obstacles to

overcome. Usable hydrogen remains expensive to produce and difficult to store effectively. At present fuel cells can cost up to ten times more than conventional engines.

There is important work to do in this field, and I am proud to say that there are

over a dozen organizations in my home state of Texas hard at work on solutions.

Often Texas is thought of as oil country, but our state has the opportunity to play

a vital role in the development of viable alternatives.

As a Ranking Member of the Research Subcommittee, I am very interested in any

technology that could help keep our environment cleaner and our people more secure. I appreciate the opportunity to participate and look forward to ongoing involvement in this promising avenue of research.

[The prepared statement by Mr. Larson follows:]

PREPARED STATEMENT OF REPRESENTATIVE JOHN B. LARSON

I wanted to thank you all for testifying before the Committee today, and I just

would like to take a few moments to offer this opening statement.

I’ve looked through the recent reports from the American Physical Society (APS)

and the National Academy of Sciences (NAS), and both recommend changes to the

hydrogen initiatives that argue for a greater emphasis on basic, exploratory research because of the technical barriers that must still be overcome, including cautions to DOE against premature demonstration projects.

As the Ranking Member of the Energy Subcommittee, this is an issue that I have

looked closely at over the years. During debate on the Energy bill last year, I specifically worked to support a balance between the need for basic R&D with demonstration programs that would put a limited number of vehicles from different

sources with different technologies in real world operating conditions.

18

While you are correct in identifying some of the technical hurdles that still face

extensive real world deployment of fuel cell technology, especially in such areas as

hydrogen storage and fuel cell freeze/cold start capability, these types of demonstrations will provide valuable benchmarking information and allow us to improve the

performance of the power plants and their integration with the vehicle while longerterm efforts on hydrogen infrastructure are being pursued simultaneously.

While in general I agree that deploying large numbers of vehicles, especially using

the same technological approach, is inappropriate at this time, I do support demonstration programs using limited numbers of light and heavy-duty vehicles to

benchmark the actual performance of these vehicles and address system integration

issues. I also believe hydrogen fuel cell buses can represent a bridging strategy that

can help us explore the use of this technology while more wide spread infrastructure

are explored.

For example, DOE’s ‘‘Controlled Hydrogen Fleet and Infrastructure Demonstration and Validation Project’’ would do exactly that: put a limited number of light

duty vehicles from different sources on the road to demonstrate their capabilities.

In addition, I believe that the establishment of some form of a national fuel cell bus

demonstration program would be equally important, since the hydrogen infrastructure requirements are minimal and the vehicles can perform useful work as part

of the demonstration effort while providing valuable real world experience in technology development. While the National Academy suggests that DOE should give

greater emphasis to fuel cell vehicle development, I would respectfully suggest that

should also include the development of heavy-duty vehicles such as transit buses in

cooperation with DOT and DOD.

Finally, I would like to point out that while the reports we are discussing today

look at current federal hydrogen initiatives in the Department of Energy and Department of Transportation, there are additional hydrogen and fuel cell research

and development initiatives being conducted within the Department of Defense that

amounted to roughly $50 million in FY04 alone, and to my knowledge those research and development activities have not been directly considered in the development of this study.

I look forward to hearing your testimony, and to the opportunity for us to discuss

these issues.

[The prepared statement by Mr. Honda follows:]

PREPARED STATEMENT OF REPRESENTATIVE MICHAEL M. HONDA

I thank Chairman Boehlert and Ranking Member Gordon for holding this important hearing today to consider the findings of the National Academy of Sciences and

American Physical Society reports on the hydrogen initiatives and the Administration’s response to the reports.

Both reports recommend that the Department of Energy shift the focus of work

in the hydrogen program away from demonstration and towards more basic R&D

because there are significant technical barriers to overcome. This raises several of

questions that I hope this hearing will address.

Prior demonstration programs have helped to identify some of the very technical

barriers this increased emphasis on research would aim to overcome. I fear that we

might miss more obstacles until after we have made significant investments of time

and resources if we stop working on demonstration projects.

I also wonder what role investments made in demonstration projects by other

agencies can play. While not specifically directed at the light duty vehicles these reports address, I know that the Santa Clara Valley Transportation Authority’s Zero

Emission Bus program is funded by a transit sales tax, the Federal Transit Administration (FTA), the California Energy Commission (CEC), and the Bay Area Air

Quality Management District. It will be useful to know whether DOE can work with

programs like this to gain knowledge about infrastructure needs and identify potential technical obstacles that we will need to overcome.

The recommendations in these reports do not address what will happen to those

demonstration programs already underway. Will a priority shift leave communities

that have begun these implementation plans out in the cold? Many of these communities undertook demonstration programs to conform to environmental regulations,

which seems to tie in naturally with the recommendation in the NAS report that

DOE think about national policy questions that will help bring hydrogen technologies along. I worry that by giving up on early demonstration projects, we will

actually stifle opportunities to develop the necessary policies and shoot ourselves in

the foot.

19

I look forward to this hearing, and hope the witnesses can address some of these

concerns.

Chairman BOEHLERT. Our panel today, our sole panel, as is tradition of this committee, is composed of three very distinguished

witnesses, all of whom serve as valuable resources for this committee. We are here to learn, but we are also here to probe and

question. Our panel consists of: David Garman, Assistant Secretary, Energy Efficiency and Renewable Energy at the Department of Energy; Dr. Michael Ramage, Chair, National Academy of

Science Committee on Alternatives and Strategies for Future Hydrogen Production and Use; and Dr. Peter Eisenberger, Chair,

American Physical Society, Panel on Public Affairs, Energy Subcommittee.

With that, I would ask all of you to try to summarize your opening statement. The Chair will not be arbitrary. And don’t get nervous if you see that red light go on. That just indicates that you

have exceeded five minutes, but if you want to complete a thought,

or as former Secretary Richardson used to say, a paragraph, you

can do so. But we are not going to be arbitrary, because what you

have to say we need to hear.

Mr. Garman.

STATEMENT OF MR. DAVID GARMAN, ASSISTANT SECRETARY,

ENERGY EFFICIENCY AND RENEWABLE ENERGY, DEPARTMENT OF ENERGY

Mr. GARMAN. Thank you, Mr. Chairman and Members of the

Committee.

President Bush announced his Hydrogen Fuel Initiative a little

more than a year ago, and the President challenged us to transform the Nation’s energy future from one dependent on foreign petroleum to one that utilizes hydrogen, a fuel that can be produced

from a variety of abundant domestic resources. We asked the National Academy of Sciences to evaluate our plans to transform the

President’s vision into reality. They did an excellent job, and we

are most grateful for their work. Their report validates the President’s vision with its major conclusion found on page ES–2, and I

quote: ‘‘A transition to hydrogen as a major fuel in the next 50

years could fundamentally transform the U.S. energy system, creating opportunities to increase energy security through the use of

a variety of domestic energy sources for hydrogen production while

reducing environmental impacts, including atmospheric CO2 emissions and criteria pollutants,’’ and that ‘‘there is a potential for replacing, essentially, all gasoline with hydrogen over the next halfcentury using only domestic resources and thus eliminating all CO2

and criteria pollutants from vehicular emissions.’’

Also, I was most gratified to see the Academy’s recognition of the

programmatic progress that we have made. On pages ES–11 and

10–10, the report states, and I quote: ‘‘The Committee is impressed

by how well the hydrogen program has progressed.’’ In all, the

study made 43 key recommendations, and if you will allow me to

dispense with nuance, at least for the oral statement, we fully concur with 35 of those 43 recommendations and are carefully considering the other eight. While we may not agree with every word of

20

every statement and finding, the Committee said absolutely nothing that we dismiss out of hand, and that is truly remarkable.

The only thing that I would quarrel with had been some of the

media reports, which have portrayed the long transition time, technical obstacles, and the sheer difficulty of this effort as if they were

some kind of surprise. This is, of course, something we have been

saying all along. In fact, the reason this is a presidential initiative

announced in the State of the Union Address is because it is a difficult undertaking requiring sustained effort, government leadership, and a bipartisan commitment to get the job done. And success

is, by no means, guaranteed.

There are two other points in the report that I wish to highlight

in my oral testimony. First is the issue of funding. Last year, Congress underfunded the President’s request for hydrogen funding in

the Energy and Water Appropriations Bill by roughly $9 million

and saddled us with $39 million in earmarks. Congress also underfunded the President’s request for fuel cell work in the Interior Appropriations Bill by $19 million. In the Omnibus Appropriations

Bill, Congress added another $5.5 million for hydrogen, all of which

was earmarked. So while the hydrogen and fuel cell programs at

DOE appear well funded, we are about $67 million short of the

amount of unencumbered funding we had hoped to receive in fiscal

year 2004 that could be focused on our program plan. As an unfortunate consequence, we will have to delay some key work in hydrogen production, storage, and technology validation, some of the

very same work the National Academy highlighted in its report. I

think the Academy has recognized this problem and highlighted it

on page ES–12 and elsewhere in the report.

I also want to highlight one other aspect of the report, which has

been largely ignored in the media and that is well known to this

committee. As you know, some of my friends in the renewable energy community have criticized our hydrogen program plans, because, in addition to advancing ways to produce hydrogen using renewable energy, we are also exploring how to make hydrogen using

nuclear and fossil energy resources, including coal. The Committee

noted the importance of the carbon sequestration work in this endeavor, which we think is key. And it is noteworthy that the Committee also agreed with the critical need to explore methods of producing hydrogen from coal and nuclear. And this ought to put to

rest, once and for all, the notion that advancing toward the hydrogen energy economy is only environmentally advantageous if and

only if all of the hydrogen is derived from renewable energy.

So with that, Mr. Chairman, I will stop. I look forward to the

questions and discussions that will follow. Thank you very much.

[The prepared statement of Mr. Garman follows:]

PREPARED STATEMENT OF DAVID GARMAN

Mr. Chairman, Members of the Committee, I appreciate the opportunity to testify

today on the President’s Hydrogen Fuel Initiative and FreedomCAR Partnership.

My testimony will focus on the recent National Academy of Engineering and National Research Council report: The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs. I will also comment on the recent report of the American

Physical Society, The Hydrogen Initiative.

At the outset I want to express the Department’s appreciation for the valuable

work performed by the National Research Council which conducted this very comprehensive study at our request. Its carefully considered recommendations and conVerDate 11-MAY-2000 19:24 Nov 17, 2004 Jkt 092341 PO 00000 Frm 00024 Fmt 6633 Sfmt 6621 C:\WORKD\FULL04\030304\92341 SCIENCE1 PsN: SCIENCE1
21

clusions have already helped strengthen and focus DOE’s hydrogen program and increased the likelihood of its success. The report will also help DOE better focus its

research, priorities and funding, given the broad slate of potential hydrogen activities and technology directions. We are especially pleased to see the Committee’s conclusion that ‘‘transition to hydrogen as a major fuel in the next 50 years could fundamentally transform the U.S. energy system, creating opportunities to increase energy security through the use of a variety of domestic energy sources for hydrogen

production while reducing environmental impacts, including atmospheric CO2 emissions and criteria pollutants.’’

Hydrogen Fuel Initiative

Mr. Chairman, it was a little more than one year ago that the President announced a pioneering plan to transform the Nation’s energy future from one dependent on foreign petroleum to one that utilizes the most abundant element in the universe—hydrogen. This solution holds the potential to provide virtually limitless

clean, safe, secure, affordable, and reliable energy from domestic resources. To

achieve this vision, the President proposed that the Federal Government significantly increase its investment in hydrogen infrastructure research and development

(R&D), including hydrogen production, storage, and delivery technologies, as well as

fuel cells, with the goal of enabling an industry decision by 2015 to commercialize

hydrogen fuel cell vehicles.

This vision is now shared around the world. Last fall, at the urging of Secretary

Abraham, 15 nations, including the United States and the European Union, agreed

to establish the International Partnership for the Hydrogen Economy (IPHE). The

IPHE is providing a mechanism to efficiently organize and coordinate multinational

research, development and deployment programs that advance the transition to a

global hydrogen economy. The IPHE partners represent more than 85 percent of the

world’s gross domestic product and two thirds of the world’s energy consumption

and greenhouse gas emissions.

At a March 5, 2003 hearing before this committee, I described in detail DOE’s

plans to help turn the concept of a hydrogen-based economy into reality. At the time

we described how we would integrate our ongoing and future hydrogen R&D activities into a focused Hydrogen Program, and how we would integrate technology for

hydrogen production (from fossil, nuclear, and renewable resources), infrastructure

development (including delivery and storage), fuel cells, and other technologies. We

also described how we would coordinate hydrogen activities within DOE and among

the federal agencies to achieve the technical milestones on the road to a hydrogen

economy.

We discussed the challenges to be faced and how we believed they could be met.

We said that achieving a hydrogen-based economy would require a combination of

technological breakthroughs, market acceptance, and large investments in a national hydrogen energy infrastructure. We knew that success would not happen

overnight, or even over years, but rather over decades. We knew it would be a longterm process that would phase hydrogen in as the technologies and their markets

are ready, and that success would require that the technologies to utilize hydrogen

fuel and the availability of hydrogen fuel occur simultaneously.

Also at that hearing, I presented the following timeline:

22

As you can see, the timeline shows that we won’t realize the full potential of a

hydrogen economy for several decades. Phase I technology development will lead to

a commercialization decision by industry only if government-sponsored and private

research is successful in meeting customer requirements and in establishing a business case that can convince industry to invest. If industry makes a positive commercialization decision, we will be ready to take the next steps toward realizing the full

potential of the hydrogen economy, a process that will evolve over several decades,

and may include policy options other than research to catalyze infrastructure investment. The impact of hydrogen fuel cell vehicles will depend on how quickly the market introduces the new vehicles, the availability of production and delivery infrastructure, and the time it takes for a new fleet of hydrogen vehicles to replace the

existing inventory of conventional vehicles.

Our focus today is the research and development to overcome the technical barriers associated with hydrogen and fuel cell technologies—including lowering the

cost of hydrogen production and fuel cell technologies, improving hydrogen storage

systems, and developing codes and standards for hydrogen handling and use. The

Department has requested $227 million in its FY 2005 budget request to support

the Hydrogen Fuel Initiative. In addition, the Department of Transportation requested about $1.0 million.

Over the past year our progress has increased confidence that the 2015 goal is

realistic and attainable. For example:

• Significant technical progress has been made in reducing the cost of hydrogen

production. We have verified the ability to produce hydrogen from natural gas

at $3.60 per gallon of gasoline equivalent from an integrated hydrogen refueling station that co-produces electricity from a stationary fuel cell. This meets

our 2003 interim milestone.

• In the very near future, we will announce selections from two major competitive solicitations. The first is our hydrogen storage ‘‘Grand Challenge.’’ Novel

approaches, beyond pressurized tanks, are needed in the long term to provide

the greater than 300 mile range that consumers expect. Our new hydrogen

storage selections have established three ‘‘Centers of Excellence’’ where each

center is composed of a national lab teamed with seven or eight universities

to research novel materials for hydrogen storage.

• The second major solicitation is for our national fuel cell vehicle and hydrogen

infrastructure ‘‘learning’’ demonstration. This ‘‘demonstration’’ is an extension

of our research and will provide us the necessary data to focus our research

on the most difficult technical barriers and safety issues, as well as help us

identify vehicle-infrastructure interface issues that need to be worked out collectively by the government, automotive manufacturers and energy industry.

• In the coming months, we will also be announcing winners to our hydrogen

production and delivery research solicitation.

To track the progress of our research, the Department and its industry partners

jointly develop performance-based technical and cost milestones that reflect cusVerDate 11-MAY-2000 19:24 Nov 17, 2004 Jkt 092341 PO 00000 Frm 00026 Fmt 6633 Sfmt 6621 C:\WORKD\FULL04\030304\92341 SCIENCE1 PsN: SCIENCE1
23

tomer requirements and the business case needed for industry to invest. Our newly

released Hydrogen Posture Plan details the Department’s overall integrated plan,

identifies key technology milestones, and includes timelines that provide clear and

quantifiable measures to track and demonstrate progress. We do not believe that

these milestones are unrealistic. They are, however, intentionally aggressive so that

we ‘‘set the bar high’’ to try to stimulate revolutionary ideas in research. Having

said that, we plan to evaluate all of the milestones based on the National Academies’ report. Indeed, the Hydrogen Posture Plan already takes into account many

of the report’s comments.

Our focus on hydrogen fuel cell vehicles does not come at the expense of support

for conservation and gasoline hybrid vehicles as short-term strategy for reducing oil

use, criteria pollutants and greenhouse gas emissions. Under the FreedomCAR Partnership, in addition to research on fuel cells, the Department requests $91 million

to continue research to develop advanced, affordable hybrid component technologies.

These technologies include energy storage devices, power electronics, lightweight

materials, advanced combustion engines, and other technologies that have application for the gasoline hybrids of today, the fuel cell vehicles of tomorrow, or in many

cases, both. The Department continues to implement robust programs in support of

wind turbines, solar photovoltaic technology, Generation IV nuclear power systems,

and solid state lighting, and many other energy technology program areas.

However, as the National Academies’ report notes, it will take a revolutionary approach like hydrogen fuel cells to provide the fundamental change that will allow

us to be completely independent of oil and free of carbon in the tailpipe. Incremental

changes available in the near term will not overcome the increasing demands for

a limited supply of oil.

This is demonstrated in the chart titled ‘‘Oil Use by Light Duty Vehicles.’’ The

National Academies’ National Research Council report shows a case where gasoline

hybrid electric vehicles (HEV), the ‘‘NRC HEV Case,’’ penetrate the market. As you

can see, under this scenario, petroleum use stays constant at best and we don’t reduce our vulnerabilities associated with importing foreign oil since domestic production stays constant. When you consider the growth of petroleum use around the

world, especially in developing countries, there will be an even greater demand for

limited supplies.

Fuel cell vehicle (FCV) market penetration scenarios developed by DOE and the

National Academies’ National Research Council (NRC) are similar. As shown in the

chart, the petroleum use from the ‘‘DOE FCV’’ case is very similar to the ‘‘NRC HEV

+ FCV’’ case. This analysis also shows that in the long-term, increased fuel economy

alone will not even reduce the amount of oil use compared to today’s level. Simply

put, if we are going to significantly reduce our dependence on foreign oil, we need

to substitute for petroleum.

24

Response to National Academies Report

DOE fully recognized the complexity and uncertainties involved in a transition to

a hydrogen economy, and requested the National Academies to conduct an independent review of our hydrogen production and infrastructure options. We requested

assistance in two major areas: (1) assessing strategies for hydrogen production from

domestic resources in near-, mid-, and long-term; and (2) reviewing the Department’s current research plans and making recommendations on research strategies.

Last April, the committee provided us with four interim recommendations, which

we acted upon immediately. They are:

1. The Department should establish an independent systems engineering and analysis group. In response to this recommendation we conducted

a nationwide recruiting effort and hired a lead systems integrator. The systems integrator has been tasked to develop a model to assess the impact of

various technology pathways, identify key cost drivers and technological

gaps, and assist in prioritization of R&D directions. A portion of the increase

in the FY 2005 budget request will be used to create this capability.

2. The Department should give exploratory and fundamental research

additional budgetary emphasis. As a result of this recommendation, the

DOE Office of Science is now directly involved in supporting the President’s

Hydrogen Fuel Initiative. Last May, the Office of Science hosted a workshop

to identify the basic research needs for a hydrogen economy. The Office of

Science created and filled a position for Senior Advisor for Applied Energy

Programs. This person has a broad knowledge of the Science R&D programs

at the National Laboratories, and helps the applied programs in their search

for technological breakthroughs. The Department’s FY 2005 budget request

includes $29 million for the Office of Science to conduct basic research in hydrogen production, storage and use.

3. DOE should make a significant effort to address safety issues. In response, we developed guidelines for safety plans to be carried out on all

projects and established a safety review panel to evaluate implementation of

these plans. In addition, the Department’s FY 2005 budget request includes

a three-fold increase in funding for safety-related research. We have also

worked closely with the Department of Transportation, the National Institute of Science and Technology, and other organizations to define roles and

responsibilities for the research and development of hydrogen codes and

standards to enable safe use of hydrogen.

4. DOE should integrate hydrogen R&D efforts across the applied energy programs, the Office of Science, and appropriate industry partners. The Department’s Hydrogen Posture Plan integrates the hydrogen activities supporting the President’s Hydrogen Fuel Initiative across the renewable energy, fossil energy, science, and nuclear energy offices. This plan lays

the foundation for a coordinated response to the President’s goal for accelerated research on critical path hydrogen and fuel cell technologies. We have

also expanded our existing FreedomCAR Partnership to include major energy

companies (ExxonMobil, ConocoPhillips, ChevronTexaco, BP and Shell) along

with all three major U.S. auto manufacturers.

The final report of the committee presented us with two main themes:

Theme 1: There should be a shift away from some development areas towards more exploratory work.

The Department has already begun shifting towards more exploratory research.

A good example is in the hydrogen storage area, where we are establishing three

‘‘Centers of Excellence’’ led by national laboratories along with multiple university

and industry partners. This could be a model for ‘‘expert’’ centers focusing on other

priority research areas such as fuel cell costs and durability, distributed hydrogen

production costs and efficiency, systems analysis for hydrogen delivery, and renewable hydrogen production methods such as photobiological, photo-electrochemical (direct solar conversion) and thermochemical (splitting water with heat processes).

The Department’s mix of funding according to OMB circular A–11 for the FY 2005

budget request is as follows:

25

This mix reflects our shift towards more exploratory R&D in the hydrogen storage

area. We are currently evaluating our fuel cell cost and durability research to see

if more exploratory R&D is appropriate. I want to caution everyone that ‘‘exploratory’’ R&D is not synonymous with ‘‘basic’’ R&D. We believe the committee is recommending that we shift away from some development work that industry is capable of doing.

Theme 2: The hydrogen transition may best be accomplished through distributed production at fueling sites, from natural gas reforming or water

electrolysis from wind or solar energy. The committee recommends increased R&D investments on these distributed hydrogen technologies,

which will supply hydrogen for the early transitional period, and suggests

allowing the long-term hydrogen economy to evolve.

Based on this recommendation, the Department will increase its focus on exploratory research to reduce costs and increase efficiency of water electrolysis and distributed natural gas reforming. In this recommendation, we believe the National

Academies’ committee is telling us not to over manage the long term, that the

longer-term hydrogen economy should ‘‘evolve’’ through greater emphasis on breakthroughs in technologies with longer time horizons for commercial application, such

as carbon capture and sequestration to enable coal as a long-term resource,

photoelectrochemical, photobiological, and thermochemical methods.

In keeping with this recommendation, the Office of Science is now established as

a direct participant in the President’s initiative and we are directing our applied research into more exploratory technologies. As mentioned earlier, our hydrogen storage ‘‘Grand Challenge’’ will create three Centers of Excellence involving federal laboratories, universities, and private industry. We agree with the need to support exploratory research and will shift our program activities to a more basic and exploratory nature, as appropriate.

Response to American Physical Society Report

The American Physical Society report on hydrogen calls for more spending on

basic research and contends that demonstrations are premature. On the second part

of this recommendation, DOE along with its industry partners believe there is a

clear need for such ‘‘learning’’ demonstrations. These demonstrations serve as extensions of our research, and are aimed at obtaining performance and durability data

in real world environments. I want to stress that these are not demonstrations

geared toward commercialization. There is no formula that can tell us that we have

achieved a certain percentage of our target and that it is now time to conduct a

demonstration to close the final gap. At this stage in the development, technology

costs are reduced through research breakthroughs in materials, performance, and

manufacturing technology, not ‘‘commercial’’ demonstrations.

Learning demonstrations, however, will provide improved understanding of the

impact of various climatic conditions on fuel cell performance and durability. Such

data are crucial to resolving system barriers such as water and heat management

within the fuel cell. At the conclusion of the five-year demonstration program, the

pre-established targets of 2,000 hours durability, 250 mile range and $3.00 per gallon gasoline equivalent are to be met by industry. This demonstration effort will

give us the statistical evidence that adequate progress is being made to meet the

2015 criteria of 5,000 hours durability, 300 mile range and $1.50–$2.00 per gallon

gasoline equivalent. These demonstrations will provide accelerated data that we will

need to refocus our future R&D, and will provide the hard data needed to make difficult decisions should we experience a lack of research progress.

In a hydrogen economy, we will need multiple and complex interfaces among production, delivery, storage, conversion and end-use. Auto manufacturers, energy companies, and component suppliers will need to work together over the next several

years to resolve such issues as the vehicle-infrastructure refueling interfaces. If we

are going to make the huge transformation to a hydrogen energy system, it will be

private companies, not the government, to make the investment and build the autoVerDate 11-MAY-2000 19:24 Nov 17, 2004 Jkt 092341 PO 00000 Frm 00029 Fmt 6633 Sfmt 6621 C:\WORKD\FULL04\030304\92341 SCIENCE1 PsN: SCIENCE1
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motive manufacturing infrastructure and hydrogen production and delivery infrastructure. This learning demonstration will reveal potential solutions to overcoming

technical and economic hurdles to building infrastructure.

The learning demonstration will also reveal potential safety issues and open a

door to cooperation with local jurisdictions on uniform codes and standards. In summary, we believe that limited learning demonstrations, utilizing less than 15 percent of the overall hydrogen program budget and with industry cost-sharing at a 1:1

ratio, will provide us with the practical experience and critical data to ensure that

our applied and exploratory research efforts are focused on the right problems.

Conclusion

Mr. Chairman, all the panelists here today will agree that achieving the vision

of the hydrogen energy future is a great challenge. It will require careful planning

and coordination, public education, technology development, and substantial public

and private investments. It will require a broad political consensus and a bipartisan

approach. Most of all, it will take leadership and resolve. By being bold and innovative, we can change the way we do business here in America; we can change our

dependence upon foreign sources of energy; we can help with the quality of the air;

and we can make a fundamental difference for the future of our children. This committee in particular has been instrumental in providing that kind of leadership over

the years, and we look forward to continuing this dialogue in the months and years

ahead.

We at the Department of Energy welcome the challenge and opportunity to play

a vital role in this nation’s energy future and to support our national security in

such a fundamental way. This completes my prepared statement. I would be happy

to answer any questions you may have.

BIOGRAPHY FOR DAVID GARMAN

David Garman was nominated by President George W. Bush to serve as Assistant

Secretary on April 30, 2001 and was confirmed unanimously by the United States

Senate on May 25, 2001.

Assistant Secretary Garman leads the Office of Energy Efficiency and Renewable

Energy (EERE) comprised of over 500 federal employees in Washington, DC and six

regional offices, supported by thousands of federal contractors both in and outside

the National Laboratories. EERE’s $1.2 billion technology portfolio is the largest energy research, development, demonstration and deployment portfolio at the Department of Energy.

Assistant Secretary Garman was instrumental in the development of the

FreedomCAR cooperative automotive research partnership and the President’s Hydrogen Fuel Initiative. In recognition of his role, he was awarded the National Hydrogen Association’s 2002 Meritorious Service Award, and the Electric Drive Vehicle

Association’s 2003 ‘‘E–Visionary’’ Award. Concurrent with his duties as Assistant

Secretary, Garman also serves as Chairman of the FreedomCAR Executive Steering

Committee and as Chairman of the Steering Committee for the 15-nation International Partnership for a Hydrogen Economy.

During his tenure at the Department, Mr. Garman has reorganized the Office of

Energy Efficiency and Renewable Energy, replacing an outdated and fragmented organization with what is arguably the most innovative business model ever employed

in the Federal Government. The new EERE organization is comprised of fewer management layers, is more agile, and is focused on results rather than process. The

new organization has been recognized as a success by the White House and the National Association of Public Administration. In fully implementing the new business

model in accordance with the President’s Management Agenda, Assistant Secretary

Garman is continuing his emphasis on increasing program manager accountability,

reducing administrative overhead, and getting more work performed with each taxpayer dollar.

Prior to joining the Department of Energy, Mr. Garman served in a variety of positions on the staff of two U.S. Senators and two Senate Committees during a career

spanning nearly 21 years, including service on the Professional Staff of the Senate

Select Committee on Intelligence and the Senate Committee on Energy and Natural

Resources. Immediately prior to his current position, Mr. Garman was Chief of Staff

to Frank Murkowski then Chairman of the Energy and Natural Resources Committee, now Governor of Alaska. In addition to his normal Senate duties, Mr.

Garman represented the Senate leadership at virtually all of the major negotiations

under the United Nations Framework Convention on Climate Change from 1995–

2000.

27

Assistant Secretary Garman has testified before Congress as an Administration

witness on more than twenty-five occasions; and been featured as a key Administration spokesman on future energy technologies in print, television and radio. He

holds a Bachelor of Arts in Public Policy from Duke University, and a Master of

Science in Environmental Sciences from the Johns Hopkins University.

Chairman BOEHLERT. Thank you very much.

And Dr. Ramage, you are up next. And before you start, just let

me say how much we appreciate the outstanding work of the Academy. And I can’t say that often enough. I do appreciate it. The floor

is yours, sir.

Microphone, please.

STATEMENT OF DR. MICHAEL P. RAMAGE, CHAIR, NATIONAL

ACADEMY OF SCIENCES COMMITTEE ON ALTERNATIVES

AND STRATEGIES FOR FUTURE HYDROGEN PRODUCTION

AND USE

Dr. RAMAGE. I am sorry.

Good afternoon, Mr. Chairman. I serve as Chairman of the National Research Council Committee on Alternatives and Strategies

for Future Hydrogen Production and Use.

In the summer of 2002, the Department of Energy asked the

NRC to examine the technical and policy issues, which must be addressed to attain the benefits of a hydrogen economy. Our committee reviewed the current and potential states of technologies for

hydrogen production, distribution, dispensing, storage, and end

use, and then we estimated cost, carbon dioxide emissions, and energy efficiencies based on that.

We also developed economic models of the technologies and developed a framework of how hydrogen could transform the U.S. energy system, and we focused on light-duty transportation. And

based on the above, we reviewed the DOE program and we made

recommendations on R&D strategies and priorities and directions.

The Committee reached four major conclusions in our February

2004 report. The first is that a transition to hydrogen as a major

fuel could fundamentally transform the U.S. energy system, and

hydrogen has the potential to replace essentially all gasoline and

virtually all CO2 from vehicular emissions.

The second, the Committee’s analysis shows that there are significant hurdles on the path to a hydrogen economy. The hydrogen

system must be economic. It must be safe and appealing, and it

must offer energy security and environmental benefits. For the

transportation sector, that means that it is essential that there is

progress in fuel cell development and also in hydrogen storage, distribution, and production systems. And success is not certain, and

success should not be assumed to be certain in some activity like

this that has such a large benefit and also some major hurdles in

front of it.

The Committee’s third major conclusion addresses the transition

to a hydrogen fuel system, which will probably be lengthy. Since

it will be difficult to stimulate investment in large, centralized hydrogen production and distribution systems without proven demand, the Committee strongly suggests that the transition be progressed with small, on-site hydrogen production systems at the filling station. These distributed production units could be natural gas

reformers. They could be water electrolyzers. And this type of tranVerDate 11-MAY-2000 19:24 Nov 17, 2004 Jkt 092341 PO 00000 Frm 00031 Fmt 6633 Sfmt 6601 C:\WORKD\FULL04\030304\92341 SCIENCE1 PsN: SCIENCE1
28

sition also allows for the development of new technologies and concepts for the eventual widespread use of hydrogen.

The Committee’s fourth major conclusion addresses how hydrogen could transform the energy system in the long-term, significantly reducing the energy imports and CO2. Switching to hydrogen will require four things. First, is that hydrogen fuel cells can penetrate the market and fully penetrate the

market, that hydrogen distribution infrastructure can be developed.

Hydrogen can be economically produced from coal coupled with

CO2 sequestration and the CO2-free hydrogen production technologies can be developed from renewable sources or nuclear heat.

While the impacts will probably be small for the next 25 years,

successful research and development coupled with large hydrogen

and fuel cell investments will result in major impacts in the longerterm.

And based on our analysis of the hydrogen economy and a review

of the DOE program, the Committee recommended that five areas

of the DOE program receive increased emphasis. And the first is

that breakthrough research in fuel cell vehicle development, and I

emphasize breakthrough research. This is the DOE program we are

talking about. The second is development of a low-cost, distributed

hydrogen generation system. The third is increased effort in infrastructure analysis and research. The fourth is an early evaluation

of the viability of CO2 sequestration, particularly with its importance to coal. And the fifth is hydrogen production directly from renewables and nuclear without going through the step of electricity.

[The prepared statement of Dr. Ramage follows:]

PREPARED STATEMENT OF MICHAEL P. RAMAGE

Mr. Chairman and Members of the Committee:

My name is Michael Ramage and I served as Chairman of the National Research

Council Committee on Alternatives and Strategies for Future Hydrogen Production

and Use. The Research Council—known as the NRC—is the operating arm of the

National Academy of Sciences, National Academy of Engineering, and the Institute

of Medicine, chartered by Congress in 1863 to advise the government on matters

of science and technology. The National Research Council appointed the Committee

on Alternatives and Strategies for Future Hydrogen Production and Use in the fall

of 2002 to address the complex subject of the ‘‘hydrogen economy.’’ In particular, the

committee carried out these tasks:

• Assessed the current state of technology for producing hydrogen from a variety of energy sources;

• Made estimates on a consistent basis of current and future projected costs,

carbon dioxide (CO2) emissions, and energy efficiencies for hydrogen technologies;

• Considered scenarios for the potential penetration of hydrogen into the economy and associated impacts on oil imports and CO2 gas emissions;

• Addressed the problem of how hydrogen might be distributed, stored, and dispensed to end uses-together with associated infrastructure issues—with particular emphasis on light-duty vehicles in the transportation sector;

• Reviewed the U.S. Department of Energy’s (DOE’s) research, development,

and demonstration (RD&D) plan for hydrogen; and

• Made recommendations to the DOE on RD&D, including directions, priorities,

and strategies.

The vision of the hydrogen economy is based on two expectations: (1) that hydrogen can be produced from domestic energy sources in a manner that is affordable

and environmentally benign, and (2) that applications using hydrogen—fuel cell vehicles, for example—can gain market share in competition with the alternatives. To

29

1The committee’s final report—The Hydrogen Economy: Opportunities, Costs, Barriers, and

R&D Needs—was released in February, 2004 and is available at www.nap.edu. 2 Criteria pollutants are air pollutants (e.g., lead, sulfur dioxide, and so on) emitted from numerous or diverse stationary or mobile sources for which National Ambient Air Quality Standards have been set to protect human health and public welfare. 3Weekly Compilation of Presidential Documents. Volume 39, Number 5. p. 111. Monday, February 3, 2003. Government Printing Office: Washington, D.C.

the extent that these expectations can be met, the United States, and indeed the

world, would benefit from reduced vulnerability to energy disruptions and improved

environmental quality, especially through lower carbon emissions. However, before

this vision can become a reality, many technical, social, and policy challenges must

be overcome. This report focuses on the steps that should be taken to move toward

the hydrogen vision and to achieve the sought-after benefits. The report focuses exclusively on hydrogen, although it notes that alternative or complementary strategies might also serve these same goals well.

The Executive Summary presents the basic conclusions of the report1 and the

major recommendations of the committee. The report’s chapters present additional

findings and recommendations related to specific technologies and issues that the

committee considered.

BASIC CONCLUSIONS

As described below, the committee’s basic conclusions address four topics: implications for national goals, priorities for research and development (R&D), the challenge of transition, and the impacts of hydrogen-fueled light-duty vehicles on energy

security and CO2 emissions.

Implications for National Goals

A transition to hydrogen as a major fuel in the next 50 years could fundamentally

transform the U.S. energy system, creating opportunities to increase energy security

through the use of a variety of domestic energy sources for hydrogen production

while reducing environmental impacts, including atmospheric CO2 emissions and

criteria pollutants.2 In his State of the Union address of January 28, 2003, President Bush moved energy, and especially hydrogen for vehicles, to the forefront of

the U.S. political and technical debate. The President noted: ‘‘A simple chemical reaction between hydrogen and oxygen generates energy, which can be used to power

a car producing only water, not exhaust fumes. With a new national commitment,

our scientists and engineers will overcome obstacles to taking these cars from laboratory to showroom so that the first car driven by a child born today could be powered by hydrogen, and pollution-free.’’ 3 This committee believes that investigating

and conducting RD&D activities to determine whether a hydrogen economy might

be realized are important to the Nation. There is a potential for replacing essentially all gasoline with hydrogen over the next half century using only domestic resources. And there is a potential for eliminating almost all CO2 and criteria pollutants from vehicular emissions. However, there are currently many barriers to be

overcome before that potential can be realized.

Of course there are other strategies for reducing oil imports and CO2 emissions,

and thus the DOE should keep a balanced portfolio of R&D efforts and continue to

explore supply-and-demand alternatives that do not depend upon hydrogen. If battery technology improved dramatically, for example, all-electric vehicles might become the preferred alternative. Furthermore, hybrid electric vehicle technology is

commercially available today, and benefits from this technology can therefore be realized immediately. Fossil-fuel-based or biomass-based synthetic fuels could also be

used in place of gasoline.

Research and Development Priorities

There are major hurdles on the path to achieving the vision of the hydrogen economy; the path will not be simple or straightforward. Many of the committee’s observations generalize across the entire hydrogen economy: the hydrogen system must

be cost-competitive, it must be safe and appealing to the consumer, and it would

preferably offer advantages from the perspectives of energy security and CO2 emissions. Specifically for the transportation sector, dramatic progress in the development of fuel cells, storage devices, and distribution systems is especially critical.

Widespread success is not certain.

The committee believes that for hydrogen-fueled transportation, the four most

fundamental technological and economic challenges are these:

1. To develop and introduce cost-effective, durable, safe, and environmentally desirable fuel cell systems and hydrogen storage systems. Current fuel cell lifeVerDate 11-MAY-2000 19:24 Nov 17, 2004 Jkt 092341 PO 00000 Frm 00033 Fmt 6633 Sfmt 6621 C:\WORKD\FULL04\030304\92341 SCIENCE1 PsN: SCIENCE1
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times are much too short and fuel cell costs are at least an order of magnitude too high. An on-board vehicular hydrogen storage system that has an

energy density approaching that of gasoline systems has not been developed.

Thus, the resulting range of vehicles with existing hydrogen storage systems

is much too short.

2. To develop the infrastructure to provide hydrogen for the light-duty vehicle

user. Hydrogen is currently produced in large quantities at reasonable costs

for industrial purposes. The committee’s analysis indicates that at a future,

mature stage of development, hydrogen (H2) can be produced and used in

fuel cell vehicles at reasonable cost. The challenge, with today’s industrial

hydrogen as well as tomorrow’s hydrogen is the high cost of distributing H2

to dispersed locations. This challenge is especially severe during the early

years of a transition, when demand is even more dispersed. The costs of a

mature hydrogen pipeline system would be spread over many users, as the

cost of the natural gas system is today. But the transition is difficult to

imagine in detail. It requires many technological innovations related to the

development of small-scale production units. Also nontechnical factors such

as financing, siting, security, environmental impact, and the perceived safety

of hydrogen pipelines and dispensing systems will play a significant role. All

of these hurdles must be overcome before there can be widespread hydrogen

use. An initial stage during which hydrogen is produced at small scale near

the small user seems likely. In this case, production costs for small production units must be sharply reduced, which may be possible with expanded

research.

3. To reduce sharply the costs of hydrogen production from renewable energy

sources, over a time frame of decades. Tremendous progress has been made

in reducing the cost of making electricity from renewable energy sources. But

making hydrogen from renewable energy through the intermediate step of

making electricity, a premium energy source, requires further breakthroughs

in order to be competitive. Basically, these technology pathways for hydrogen

production make electricity, which is converted to hydrogen, which is later

converted by a fuel cell back to electricity. These steps add costs and energy

losses that are particularly significant when the hydrogen competes as a

commodity transportation fuel—leading the committee to believe most current approaches—except possibly that of wind energy—need to be redirected.

The committee believes that the required cost reductions can be achieved

only by targeted fundamental and exploratory research on hydrogen production by photobiological, photochemical, and thin-film solar processes.

4. To capture and store (‘‘sequester’’) the carbon dioxide byproduct of hydrogen

production from coal. Coal is a massive domestic U.S. energy resource that

has the potential for producing cost-competitive hydrogen. However, coal

processing generates large amounts of CO2. In order to reduce CO2 emissions

from coal processing in carbon-constrained future, massive amounts of CO2

would have to be captured and safely and reliably sequestered for hundreds

of years. Key to the commercialization of a large-scale, coal-based hydrogen

production option (and also for natural-gas-based options) is achieving broad

public acceptance, along with additional technical development, for CO2 sequestration.

For a viable hydrogen transportation system to emerge, all four of these challenges must be addressed.

The Challenge of Transition

There will likely be a lengthy transition period during which fuel cell vehicles and

hydrogen are not competitive with internal combustion engine vehicles, including

conventional gasoline and diesel fuel vehicles, and hybrid gasoline electric vehicles.

The committee believes that the transition to a hydrogen fuel system will best be

accomplished initially through distributed production of hydrogen, because distributed generation avoids many of the substantial infrastructure barriers faced by centralized generation. Small hydrogen-production units located at dispensing stations

can produce hydrogen through natural gas reforming or electrolysis. Natural gas

pipelines and electricity transmission and distribution systems already exist; for distributed generation of hydrogen, these systems would need to be expanded only

moderately in the early years of the transition. During this transition period, distributed renewable energy (e.g., wind or solar energy) might provide electricity to

onsite hydrogen production systems, particularly in areas of the country where electricity costs from wind or solar energy are particularly low. A transition emphasizing distributed production allows time for the development of new technologies

31

4The words ‘‘hydrogen program’’ refer collectively to the programs concerned with hydrogen

production, distribution, and use within DOE’s Office of Energy Efficiency and Renewable Energy, Office of Fossil Energy, Office of Science, and Office of Nuclear Energy, Science and Technology. There is no single program with this title.

and concepts capable of potentially overcoming the challenges facing the widespread

use of hydrogen. The distributed transition approach allows time for the market to

develop before too much fixed investment is set in place. While this approach allows

time for the ultimate hydrogen infrastructure to emerge, the committee believes

that it cannot yet be fully identified and defined.

Impacts of Hydrogen-Fueled Light-Duty Vehicles

Several findings from the committee’s analysis (see Chapter 6) show the impact

on the U.S. energy system if successful market penetration of hydrogen fuel cell vehicles is achieved. In order to analyze these impacts, the committee posited that fuel

cell vehicle technology would be developed successfully and that hydrogen would be

available to fuel light-duty vehicles (cars and light trucks). These findings are as

follows:

• The committee’s upper-bound market penetration case for fuel cell vehicles,

premised on hybrid vehicle experience, assumes that fuel cell vehicles enter

the U.S. light-duty vehicle market in 2015 in competition with conventional

and hybrid electric vehicles, reaching 25 percent of light-duty vehicle sales

around 2027. The demand for hydrogen in about 2027 would be about equal

to the current production of nine million short tons (tons) per year, which

would be only a small fraction of the 110 million tons required for full replacement of gasoline light-duty vehicles with hydrogen vehicles, posited to

take place in 2050.

• If coal, renewable energy, or nuclear energy is used to produce hydrogen, a

transition to a light-duty fleet of vehicles fueled entirely by hydrogen would

reduce total energy imports by the amount of oil consumption displaced. However, if natural gas is used to produce hydrogen, and if, on the margin, natural gas is imported, there would be little if any reduction in total energy imports, because natural gas for hydrogen would displace petroleum for gasoline.

• CO2 emissions from vehicles can be cut significantly if the hydrogen is produced entirely from renewables or nuclear energy, or from fossil fuels with

sequestration of CO2. The use of a combination of natural gas without sequestration and renewable energy can also significantly reduce CO2 emissions.

However, emissions of CO2 associated with light-duty vehicles contribute only

a portion of projected CO2 emissions; thus, sharply reducing overall CO2 re- leases will require carbon reductions in other parts of the economy, particularly in electricity production.

• Overall, although a transition to hydrogen could greatly transform the U.S.

energy system in the long run, the impacts on oil imports and CO2 emissions

are likely to be minor during the next 25 years. However, thereafter, if R&D

is successful and large investments are made in hydrogen and fuel cells, the

impact on the U.S. energy system could be great.

MAJOR RECOMMENDATIONS

Systems Analysis of U.S. Energy Options

The U.S. energy system will change in many ways over the next 50 years. Some

of the drivers for such change are already recognized, including at present the geology and geopolitics of fossil fuels and, perhaps eventually, the rising CO2 concentration in the atmosphere. Other drivers will emerge from options made available by

new technologies. The U.S. energy system can be expected to continue to have substantial diversity; one should expect the emergence of neither a single primary energy source nor a single energy carrier. Moreover, more-energy-efficient technologies

for the household, office, factory, and vehicle will continue to be developed and introduced into the energy system. The role of the DOE hydrogen program4 in the restructuring of the overall national energy system will evolve with time.

To help shape the DOE hydrogen program, the committee sees a critical role for

systems analysis. Systems analysis will be needed both to coordinate the multiple

parallel efforts within the hydrogen program and to integrate the program within

a balanced, overall DOE national energy R&D effort. Internal coordination must address the many primary sources from which hydrogen can be produced, the various

scales of production, the options for hydrogen distribution, the crosscutting challenges of storage and safety, and the hydrogen-using devices. Integration within the

32

5 Cost includes fuel cell module, precious metals, fuel processor, compressed hydrogen storage,

balance of plant, and assembly, labor and depreciation.

overall DOE effort must address the place of hydrogen relative to other secondary

energy sources—helping, in particular, to clarify the competition between electricity,

liquid-fuel-based (e.g., cellulosic ethanol), and hydrogen-based transportation. This

is particularly important as clean alternative fuel internal combustion engines, fuel

cells and batteries evolve. Integration within the overall DOE effort must also address interactions with end-use energy efficiency, as represented, for example, by

high-fuel-economy options such as hybrid vehicles. Implications of safety, security,

and environmental concerns will need to be better understood. So will issues of timing and sequencing: depending on the details of system design, a hydrogen transportation system initially based on distributed hydrogen production, for example, might

or might not easily evolve into a centralized system as density of use increases.

Recommendation ES–1. The Department of Energy should continue to develop its

hydrogen initiative as a potential long-term contributor to improving U.S. energy security and environmental protection. The program plan should be reviewed and updated regularly to reflect progress, potential synergisms within the program, and

interactions with other energy programs and partnerships (e.g., the California Fuel

Cell Partnership). In order to achieve this objective, the committee recommends that

the DOE develop and employ a systems analysis approach to understanding full

costs, defining options, evaluating research results, and helping balance its hydrogen program for the short, medium, and long term. Such an approach should be implemented for all U.S. energy options, not only for hydrogen.

As part of its systems analysis, the DOE should map out and evaluate a transition plan consistent with developing the infrastructure and hydrogen resources necessary to support the committee’s hydrogen vehicle penetration scenario or another

similar demand scenario. The DOE should estimate what levels of investment over

time are required—and in which program and project areas—in order to achieve a

significant reduction in carbon dioxide emissions from passenger vehicles by midcentury.

Fuel Cell Vehicle Technology

The committee observes that the Federal Government has been active in fuel cell

research for roughly 40 years, while proton exchange membrane (PEM) fuel cells applied to hydrogen vehicle systems are a relatively recent development (as of the late

1980s). In spite of substantial R&D spending by the DOE and industry, costs are

still a factor of 10 to 20 times too expensive, are short of required durability, and

energy efficiency is still too low for light-duty-vehicle applications. Accordingly, the

challenges of developing PEM fuel cells for automotive applications are large, and

the solutions to overcoming these challenges are uncertain.

The committee estimates that the fuel cell system, including on-board storage of

hydrogen, will have to decrease in cost to less than $100 per kilowatt (kW)5 before

fuel cell vehicles (FCVs) become a plausible commercial option, and it will take at

least a decade for this to happen. In particular, if the cost of the fuel cell system

for light-duty vehicles does not eventually decrease to the $50/kW range, fuel cells

will not propel the hydrogen economy without some regulatory mandate or incentive.

Automakers have demonstrated FCVs in which hydrogen is stored on board in different ways, primarily as high-pressure compressed gas or as a cryogenic liquid. At

the current state of development, both of these options have serious shortcomings

that are likely to preclude their long-term commercial viability. New solutions are

needed in order to lead to vehicles that have at least a 300 mile driving range; are

compact, lightweight, and inexpensive; and that meet future safety standards.

Given the current state of knowledge with respect to fuel cell durability, on-board

storage systems, and existing component costs, the committee believes that the

near-term DOE milestones for FCVs are unrealistically aggressive.

Recommendation ES–2. Given that large improvements are still needed in fuel

cell technology and given that industry is investing considerable funding in technology development, increased government funding on research and development

should be dedicated to the research on breakthroughs in on-board storage systems,

in fuel cell costs, and in materials for durability in order to attack known inhibitors

to the high volume production of fuel cell vehicles.

Infrastructure

A nationwide, high-quality, safe, and efficient hydrogen infrastructure will be required in order for hydrogen to be used widely in the consumer sector. While it will

33

be many years before hydrogen use is significant enough to justify an integrated national infrastructure—as much as two decades in the scenario posited by the committee—regional infrastructures could evolve sooner. The relationship between hydrogen production, delivery, and dispensing is very complex, even for regional infrastructures, as it depends on many variables associated with logistics systems and

on many public and private entities. Codes and standards for infrastructure development could be a significant deterrent to hydrogen advancement if not established

well ahead of the hydrogen market. Similarly, since resilience to terrorist attack has

become a major performance criterion for any infrastructure system, the design of

future hydrogen infrastructure systems may need to consider protection against

such risks.

In the area of infrastructure and delivery there seem to be significant opportunities for making major improvements. The DOE does not yet have a strong program

on hydrogen infrastructures. DOE leadership is critical, because the current incentives for companies to make early investments in hydrogen infrastructure are relatively weak.

Recommendation ES–3a. The Department of Energy program in infrastructure

requires greater emphasis and support. The Department of Energy should strive to

create better linkages between its seemingly disconnected programs in large-scale

and small-scale hydrogen production. The hydrogen infrastructure program should

address issues such as storage requirements, hydrogen purity, pipeline materials,

compressors, leak detection, and permitting, with the objective of clarifying the conditions under which large-scale and small-scale hydrogen production will become

competitive, complementary, or independent. The logistics of interconnecting hydrogen production and end use are daunting, and all current methods of hydrogen delivery have poor energy-efficiency characteristics and difficult logistics. Accordingly,

the committee believes exploratory research focused on new concepts for hydrogen

delivery requires additional funding. The committee recognizes that there is little

understanding of future logistics systems and new concepts for hydrogen delivery—

thus making a systems approach very important.

Recommendation ES–3b. The DOE should accelerate work on codes and standards and on permitting, addressing head-on the difficulties of working across existing and emerging hydrogen standards in cities, counties, states, and the Nation.

Transition

The transition to a hydrogen economy involves challenges that cannot be overcome by research and development and demonstrations alone. Unresolved issues of

policy development, infrastructure development, and safety will slow the penetration

of hydrogen into the market even if the technical hurdles of production cost and energy efficiency are overcome. Significant industry investments in advance of market

forces will not be made unless government creates a business environment that reflects societal priorities with respect to greenhouse gas emissions and oil imports.

Recommendation ES–4. The policy analysis capability of the Department of Energy with respect to the hydrogen economy should be strengthened, and the role of

government in supporting and facilitating industry investments to help bring about

a transition to a hydrogen economy needs to be better understood.

The committee believes that a hydrogen economy will not result from a straightforward replacement of the present fossil-fuel-based economy. There are great uncertainties surrounding a transition period, because many innovations and technological breakthroughs will be required to address the costs, and energy-efficiency,

distribution and nontechnical issues. The hydrogen fuel for the very early transitional period, before distributed generation takes hold, would probably be supplied

in the form of pressurized or liquefied molecular hydrogen, trucked from existing,

centralized production facilities. But, as volume grows, such an approach may be

judged too expensive and/or too hazardous. It seems likely that, in the next 10 to

30 years, hydrogen produced in distributed rather than centralized facilities will

dominate. Distributed production of hydrogen seems most likely to be done with

small-scale natural gas reformers or by electrolysis of water; however, new concepts

in distributed production could be developed over this time period.

Recommendation ES–5. Distributed hydrogen production systems deserve increased research and development (R&D) investments by the Department of Energy.

Increased R&D efforts and accelerated program timing could decrease the cost and

increase the energy efficiency of small-scale natural gas reformers and water electrolysis systems. In addition, a program should be initiated to develop new concepts

in distributed hydrogen production systems that have the potential to compete—in

cost, energy efficiency, and safety—with centralized systems. As this program develVerDate 11-MAY-2000 19:24 Nov 17, 2004 Jkt 092341 PO 00000 Frm 00037 Fmt 6633 Sfmt 6621 C:\WORKD\FULL04\030304\92341 SCIENCE1 PsN: SCIENCE1
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ops new concepts bearing on the safety of local hydrogen storage and delivery systems, it may be possible to apply these concepts in large-scale hydrogen generation

systems as well.

Safety

Safety will be a major issue from the standpoint of commercialization of hydrogenpowered vehicles. Much evidence suggests that hydrogen can be manufactured and

used in professionally managed systems with acceptable safety, but experts differ

markedly in their views of the safety of hydrogen in a consumer-centered transportation system. A particularly salient and under-explored issue is that of leakage in

enclosed structures, such as garages in homes and commercial establishments. Hydrogen safety, from both a technological and a societal perspective, will be one of

the major hurdles that must be overcome in order to achieve the hydrogen economy.

Recommendation ES–6. The committee believes that the Department of Energy

program in safety is well planned and should be a priority. However, the committee

emphasizes the following:

• Safety policy goals should be proposed and discussed by Department of Energy with stakeholder groups early in the hydrogen technology development

process.

• The Department of Energy should continue its work with standards development organizations and ensure increased emphasis on distributed production

of hydrogen.

• The Department of Energy systems analysis should specifically include safety,

and it should be understood to be an overriding criterion.

• The goal of the physical testing program should be to resolve safety issues

in advance of commercial use.

• The Department of Energy’s public education program should continue to

focus on hydrogen safety, particularly the safe use of hydrogen in distributed

production and in consumer environments.

Carbon Dioxide-Free Hydrogen

The long timescale associated with the development of viable hydrogen fuel cells

and hydrogen storage provides a time window for a more intensive DOE program

to develop hydrogen from electrolysis, which, if economic, has the potential to lead

to major reductions in CO2 emissions and enhanced energy security. The committee

believes that if the cost of fuel cells can be reduced to $50 per kilowatt (kW), with

focused research a corresponding dramatic drop in the cost of electrolytic cells to

electrolyze water can be expected (to ∼$125/kW). If such a low electrolyzer cost is

achieved, the cost of hydrogen produced by electrolysis will be dominated by the cost

of the electricity, not by the cost of the electrolyzer. Thus, in conjunction with research to lower the cost of electrolyzers, research focused on reducing electricity

costs from renewable energy and nuclear energy has the potential to reduce overall

hydrogen production costs substantially.

Recommendation ES–7. The Department of Energy should increase emphasis on

electrolyzer development, with a target of $125 per kilowatt and a significant increase in efficiency toward a goal of over 70 percent (lower heating value basis). In

such a program, care must be taken to properly account for the inherent

intermittency of wind and solar energy, which can be a major limitation to their

wide-scale use. In parallel, more aggressive electricity cost targets should be set for

unsubsidized nuclear and renewable energy that might be used directly to generate

electricity. Success in these areas would greatly increase the potential for carbon dioxide-free hydrogen production.

Carbon Capture and Storage

The DOE’s various efforts with respect to hydrogen and fuel cell technology will

benefit from close integration with carbon capture and storage (sequestration) activities and programs in the Office of Fossil Energy. If there is an expanded role

for hydrogen produced from fossil fuels in providing energy services, the probability

of achieving substantial reductions in net CO2 emissions through sequestration will

be greatly enhanced through close program integration. Integration will enable the

DOE to identify critical technologies and research areas that can enable hydrogen

production from fossil fuels with CO2 capture and storage. Close integration will

promote the analysis of overlapping issues such as the co-capture and co-storage

with CO2 of pollutants such as sulfur produced during hydrogen production.

Many early carbon capture and storage projects will not involve hydrogen, but

rather will involve the capture of the CO2 impurity in natural gas, the capture of

35

CO2 produced at electric plants, or the capture of CO2 at ammonia and synfuels

plants. All of these routes to capture, however, share carbon storage as a common

component, and carbon storage is the area in which the most difficult institutional

issues and the challenges related to public acceptance arise.

Recommendation ES–8. The Department of Energy should tighten the coupling

of its efforts on hydrogen and fuel cell technology with the DOE Office of Fossil Energy’s programs on carbon capture and storage (sequestration). Because of the hydrogen program’s large stake in the successful launching of carbon capture and storage activity, the hydrogen program should participate in all of the early carbon capture and storage projects, even those that do not directly involve carbon capture

during hydrogen production. These projects will address the most difficult institutional issues and the challenges related to issues of public acceptance, which have

the potential of delaying the introduction of hydrogen in the marketplace.

The Department of Energy’s Hydrogen Research, Development and Demonstration

Plan

As part of its effort, the committee reviewed the DOE’s draft ‘‘Hydrogen, Fuel

Cells & Infrastructure Technologies Program: Multi-Year Research, Development

and Demonstration Plan,’’ (DOE, 2003b) dated June 3, 2003. The committee’s deliberations focused only on the hydrogen production and demand portion of the overall

DOE plan. For example, while the committee makes recommendations on the use

of renewable energy for hydrogen production, it did not review the entire DOE renewables program in depth. The committee is impressed by how well the hydrogen

program has progressed. From its analysis, the committee makes two overall observations about the program:

• First, the plan is focused primarily on the activities in the Office of Hydrogen,

Fuel Cells and Infrastructure Technologies Program within the Office of Energy Efficiency & Renewable Energy, and on some activities in the Office of

Fossil Energy. The activities related to hydrogen in the Office of Nuclear Energy, Science and Technology, and in the Office of Science, as well as activities related to carbon capture and storage in the Office of Fossil Energy, are

important, but they are mentioned only casually in the plan. The development

of an overall DOE program will require better integration across all DOE programs.

• Second, the plan’s priorities are unclear, as they are lost within the myriad

of activities that are proposed. A general budget is contained in the Appendix

for the plan, but the plan provides no dollar numbers at the project level,

even for existing projects/programs. The committee found it difficult to judge

the priorities and the go/no-go decision points for each of the R&D areas.

Recommendation ES–9. The Department of Energy should continue to develop its

hydrogen Research, Development, and Demonstration (RD&D) Plan to improve the

integration and balance of activities within the Office of Energy Efficiency and Renewable Energy; the Office of Fossil Energy (including programs related to carbon

sequestration); the Office of Nuclear Energy, Science, and Technology; and the Office of Science. The committee believes that, overall, the production, distribution,

and dispensing portion of the program is probably underfunded, particularly because a significant fraction of appropriated funds is already earmarked. The committee understands that of the $78 million appropriated for hydrogen technology for

FY 2004 in the Energy and Water appropriations bill (Pub. Law 108–137), $37 million is earmarked for activities that will not particularly advance the hydrogen initiative. The committee also believes that the hydrogen program, in an attempt to

meet the extreme challenges set by senior government and DOE leaders, has tried

to establish RD&D activities in too many areas, creating a very diverse, somewhat

unfocused program. Thus, prioritizing the efforts both within and across program

areas, establishing milestones and go/no-go decisions, and adjusting the program on

the basis of results are all extremely important in a program with so many challenges. This approach will also help determine when it is appropriate to take a program to the demonstration stage. And finally, the committee believes that the probability of success in bringing the United States to a hydrogen economy will be greatly increased by partnering with a broader range of academic and industrial organiVerDate 11-MAY-2000 19:24 Nov 17, 2004 Jkt 092341 PO 00000 Frm 00039 Fmt 6633 Sfmt 6621 C:\WORKD\FULL04\030304\92341 SCIENCE1 PsN: SCIENCE1
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6Secretary Abraham, joined by Ministers representing 14 nations and the European Commission, signed an agreement on November 20, 2003 to formally establish the International Partnership for the Hydrogen Economy. 7 NAE = member, National Academy of Engineering.

zations—possibly including an international focus6—and by establishing an independent program review process and board.

Recommendation ES–10. There should be a shift in the hydrogen program away

from some development areas and toward exploratory work—as has been done in

the area of hydrogen storage. A hydrogen economy will require a number of technological and conceptual breakthroughs. The Department of Energy program calls for

increased funding in some important exploratory research areas such as hydrogen

storage and photoelectrochemical hydrogen production. However, the committee believes that much more exploratory research is needed. Other areas likely to benefit

from an increased emphasis on exploratory research include delivery systems, pipeline materials, electrolysis, and materials science for many applications. The execution of such changes in emphasis would be facilitated by the establishment of DOEsponsored academic energy research centers. These centers should focus on interdisciplinary areas of new science and engineering—such as materials research into

nanostructures, and modeling for materials design—in which there are opportunities for breakthrough solutions to energy issues.

Recommendation ES–11. As a framework for recommending and prioritizing the

Department of Energy program, the committee considered the following:

• Technologies that could significantly impact U.S. energy security and carbon dioxide emissions,

• The timescale for the evolution of the hydrogen economy,

• Technology developments needed for both the transition period and steady state,

• Externalities that would decelerate technology implementation, and

• The comparative advantage of the DOE in research and development of technologies at the pre-competitive stage.

The committee recommends that the following areas receive increased emphasis:

• Fuel cell vehicle development. Increase research and development (R&D) to facilitate breakthroughs in fuel cell costs and in durability of fuel cell materials,

as well as breakthroughs in on-board hydrogen storage systems;

• Distributed hydrogen generation. Increase R&D in small-scale natural gas reforming, electrolysis, and new concepts for distributed hydrogen production

systems;

• Infrastructure analysis. Accelerate and increase efforts in systems modeling

and analysis for hydrogen delivery, with the objective of developing options

and helping guide R&D in large-scale infrastructure development;

• Carbon sequestration and FutureGen. Accelerate development and early evaluation of the viability of carbon capture and storage (sequestration) on a large

scale because of its implications for the long-term use of coal for hydrogen

production. Continue the FutureGen Project as a high-priority task;

• Carbon dioxide free-energy technologies. Increase emphasis on the development of wind-energy-to-hydrogen as an important technology for the hydrogen

transition period and potentially for the longer-term. Increase exploratory and

fundamental research on hydrogen production by photobiological,

photoelectrochemical, thin-film solar, and nuclear heat processes.

COMMITTEE ON ALTERNATIVES AND STRATEGIES FOR FUTURE HYDROGEN PRODUCTION AND USE

MICHAEL P. RAMAGE, NAE,7 Chair, ExxonMobil Research and Engineering Company (retired), Moorestown, New Jersey

RAKESH AGRAWAL, NAE, Air Products and Chemicals, Inc., Allentown, Pennsylvania

DAVID L. BODDE, University of Missouri, Kansas City

ROBERT EPPERLY, Consultant, Mountain View, California

ANTONIA V. HERZOG, Natural Resources Defense Council, Washington, D.C.

ROBERT L. HIRSCH, Scientific Applications International Corporation, Alexandria,

Virginia

37

MUJID S. KAZIMI, Massachusetts Institute of Technology, Cambridge

ALEXANDER MacLACHLAN, NAE, E.I. du Pont de Nemours & Company (retired),

Wilmington, Delaware

GENE NEMANICH, Independent Consultant, Sugar Land, Texas

WILLIAM F. POWERS, NAE, Ford Motor Company (retired), Ann Arbor, Michigan

MAXINE L. SAVITZ, NAE, Consultant (retired, Honeywell), Los Angeles, California

WALTER W. (CHIP) SCHROEDER, Proton Energy Systems, Inc., Wallingford, Connecticut

ROBERT H. SOCOLOW, Princeton University, Princeton, New Jersey

DANIEL SPERLING, University of California, Davis

ALFRED M. SPORMANN, Stanford University, Stanford, California

JAMES L. SWEENEY, Stanford University, Stanford, California

Project Staff

Board on Energy and Environmental Systems (BEES)

MARTIN OFFUTT, Study Director

ALAN CRANE, Senior Program Officer

JAMES J. ZUCCHETTO, Director, BEES

PANOLA GOLSON, Senior Project Assistant

NAE Program Office

JACK FRITZ, Senior Program Officer

Consultants

Dale Simbeck, SFA Pacific Corporation

Elaine Chang, SFA Pacific Corporation

BIOGRAPHY FOR MICHAEL P. RAMAGE

Michael Ramage was born on July 29, 1943, in Washington, Indiana. He received

a B.S. degree in 1966, a M.S. degree in 1969, and a Ph.D. in 1971, all in Chemical

Engineering from Purdue University. He retired as Executive Vice President of

ExxonMobil Research and Engineering Company in 2001. Mr. Ramage was formerly

Chief Technology Officer of Mobil Oil Corporation and President, Mobil Technology

Company. He was also member of the Board of Directors and Executive Committee

of Mobil Oil Corporation.

Ramage joined the Mobil Research and Development Corporation in 1971, working at the Paulsboro Research Laboratory, where he held various technical and

managerial positions until becoming Manager of Process Development for Mobil

Chemical Company in 1980. He was named Manager of Planning Coordination for

Mobil Chemical Company’s domestic and international operations in 1981. He returned to the Paulsboro Research Laboratory in 1982 as Manager of the Process Research, Development, and Technical Service Division. He was named Vice President

of Planning for Mobil Research and Development Corporation in 1987. From 1989–

1992 he managed Mobil’s Dallas Research Laboratory, which was responsible for

Mobil’s geoscience and petroleum engineering research efforts. In 1992, he led a

team that created Mobil Exploration and Producing Technical Center, and was appointed General Manager. In this capacity, he was responsible for research, development, and technical support for Mobil’s worldwide exploration and producing activities. In 1994, he was appointed Vice President of Engineering for Mobil and was

responsible for leading the Corporation’s worldwide Engineering Organization. In

1995, Mr. Ramage again led a major corporate reorganization effort. The result was

the creation of Mobil Technology Company, a worldwide organization of over 2000

people responsible for research, engineering, technical service, and capital project

management for all Mobil business units. In September 1995, he was appointed

Chief Technology Office and President, Mobil Technology Company. In 1998, he was

appointed to the Board of Directors and Executive Committee of Mobil Oil Corporation. In 1999, he was a member of the Exxon Mobil merger transition team and was

later appointed Executive Vice President, ExxonMobil Research and Engineering

Company. Mr. Ramage retired from ExxonMobil in 2002 and continues to serve as

a liaison between the company and outside research, academic, and professional organizations.

Ramage did extensive research in reaction engineering and catalysis in his early

career at Mobil and was awarded six U.S. patents, one New Zealand patent, and

has thirteen publications for work related to those areas.

38

Mr. Ramage is a member of the Board of Directors for the American Institute of

Chemical Engineers, the International Symposium on Chemical Reaction Engineering, and Junior Achievement of Philadelphia. He serves on the Chemical Engineering Visiting Committee at Purdue University. In the past, he served on Advisory

Boards at Stanford, University of California, Berkeley, University of Texas at Austin, and The Construction Industry Institute. Mr. Ramage is also a member of the

National Academy of Engineering, the NAE Council, and The Government University Industry Research Roundtable. He received an Honorary Doctor of Engineering

degree from Purdue in 1996.

Dr. RAMAGE. Mr. Chairman, would you like me to answer the

questions now?

Chairman BOEHLERT. Yes.

Dr. RAMAGE. Okay. With regard to the five questions, the first

question regarded the appropriate balance of federal funds between

demonstration and research. This issue was not directly addressed

in our study, but our report does recommend a shift away from development in some areas, such as biomass gasification, or more exploratory research in areas such as direct hydrogen production

using photo, biological, and solar methods.

With regards to your second question on policy analysis, the DOE

must have the capability not only to manage the technical programs, but also engage in policy discussions required to move the

technology into the market. Policies such as incentives and government industry actions can impact the goals and directions of the

technical program.

With regard to your third question on market penetration and

our model, the Committee’s vision for how light-duty fuel cell vehicles will enter the U.S. market is plausible, but it is optimistic. And

it is optimistic because it assumes two things. It assumes first that

if—the technical barriers are overcome and second that the infrastructure barriers are overcome. If those two things happen, then

it becomes plausible in our mind. Those are the two big areas. And

this is the reason why. One of the major—our report was on the

transition period and the transition period using small scale, at-site

production systems so we can take the infrastructure issue out of

the equation and let that develop over time.

With regard to your fourth question regarding demonstration

programs, this issue also was not addressed in our Committee, but

let me give you some personal perspective. I believe that the need

and timing for demonstrations varies with the type of technology.

And I believe that there are three important criteria that must be

met before technology is ready for demonstration. And here, I am

really talking about large-scale demonstrations like building coal

plants or natural gas plants to produce hydrogen. There are three

areas. The first is the individual system components of the technology needs to meet commercial performance, not necessarily cost,

but commercial performance. The second is that the scale of the

components, to a large scale, should be performed one at a time in

existing production facilities, if possible. And I would call these

learning demonstrations. And the third is that a systems modeling

approach must be used to be able, with a mathematical process,

which must be completed, which you can predict commercial performance, risk, and synergies, those three areas.

With respect to your fifth question, the non-hydrogen bridge

technologies to a hydrogen economy, there are a number of strateVerDate 11-MAY-2000 19:24 Nov 17, 2004 Jkt 092341 PO 00000 Frm 00042 Fmt 6633 Sfmt 6601 C:\WORKD\FULL04\030304\92341 SCIENCE1 PsN: SCIENCE1
39

gies for reducing oil imports and carbon dioxide emissions in the

short-, medium-, and long-term. The Committee recommends that

the DOE keep a balanced program and that the systems approach

be developed and employed to understand the trade-offs of all U.S.

energy, including hydrogen. And this also could include, and should

include, the analysis of bridge technologies to get us from one point

to the next point.

Mr. Chairman, this concludes my testimony, and I will be glad

to answer any questions that you may have.

Chairman BOEHLERT. Thank you very much, Dr. Ramage.

Dr. Eisenberger.

STATEMENT OF DR. PETER EISENBERGER, CHAIR, AMERICAN

PHYSICAL SOCIETY, PANEL ON PUBLIC AFFAIRS, ENERGY

SUBCOMMITTEE

Dr. EISENBERGER. Mr. Chairman, Mr. Gordon, Members of the

Committee, thank you for the invitation to testify today.

I chair the Committee of the American Physical Society composed of scientists, industrial R&D managers, and energy economists. We analyzed the Hydrogen Initiative and released our report

on Monday. I request that our report be entered into the record.

[The information referred to appears in Appendix 2: Additional Material for the Record.]

The bottom line is that major scientific breakthroughs are required for the Hydrogen Initiative to succeed. We made several

management and funding recommendations that, in our opinion,

will increase the chances for long-term success.

As a starting point, let me say that currently there is only a very

nascent technology base upon which to build a hydrogen economy.

Currently, the U.S. industry provides hydrogen to meet the needs

of a non-transportation sector that is only about three percent of

what is needed for that transportation sector. Several hydrogen

fueling stations are scheduled to open this year, and several models

of hydrogen-fueled cars have been demonstrated, but none of the

current technologies are competitive options for the consumer.

The most promising hydrogen engine technologies require 10 to

100 times improvements in cost or performance in order to be competitive. As the Secretary of Energy has stated, current hydrogen

production methods are four times more expensive than gasoline

and significant challenges remain to satisfy both energy security

and environmental objectives of converting to a hydrogen-based

transportation sector. Finally, no material exists to construct a hydrogen fuel tank that meets the consumer benchmarks. A new material must be developed.

These are very large performance gaps, and our committee concluded that incremental improvements to existing technologies are

not sufficient to close all of the gaps. In particular, hydrogen storage is a potential showstopper.

Simply put, for the Hydrogen Initiative to succeed, major scientific breakthroughs are needed. This will not be easy. We can not

simply engineer our way to a hydrogen economy, but we can take

several steps now to make success more likely.

Without question, relevant basic science must have greater emphasis in both the planning and research program of the Hydrogen

40

Initiative. This is not a controversial conclusion. The Bush Administration has already taken steps in this direction, but more must

be done. We recommend that: one, the Hydrogen Technical Advisory Committee include members with strong research backgrounds who are familiar with key basic science problems; two,

Principal-Investigator basic research should be increased, and this

PI research should be complemented with competitively-bid, peerreviewed multidisciplinary research centers that carry out basic research in key research areas of production, storage, and use. These

university-based centers should have active industry and national

laboratory participation.

The issue of funding is, of course, a delicate one. Resources are

not unlimited, and members of our Committee face—members of

your committee face difficult decisions. Several members of our

APS Committee have managed large-scale industrial technology

programs. For what it is worth, I and the members of my committee feel your pain. We have faced difficult funding decisions in

our own careers.

Perhaps the most useful thing I can share with you is the manner in which industry approaches the difficult funding decisions

you face. The main factors involve technological competitiveness

and readiness, market acceptance, and rate of penetration. In the

case of Congress, one needs to add the criteria of meeting national

security objectives. Our evaluation is that for hydrogen there are

very significant technology gaps, a lack of an existing infrastructure, and the inevitable slow rate of penetration for a new energy

technology. This means that one would invest more resources in research and less, if at all, in development projects. Pilot projects to

demonstrate specific components, like sequestrations, are more appropriate at this state of the Hydrogen Initiative. And a very important point is that premature investments in large demonstration projects have a history of not only failing but also damaging

the overall objectives.

However, national security objectives may argue for a more aggressive development plan than industry would follow, though still

premature large-scale demonstration projects are unlikely to be

helpful. In this regard, I will mention one additional point of view

that the industrial managers on our APS Committee all shared: the

need to hedge.

In the event that the timeline for significant hydrogen vehicle

market penetration slips beyond 2020, there could be, for energy

security reasons, a greater need for technologies that serve as a

bridge between the current fossil fuel economy and any future hydrogen economy. Also the likelihood is increased that continued investment in research will produce new discoveries that will identify

a far superior way to meet our needs in the long-term. Increasing

the focus on basic science and engineering that advances such technologies would serve as a sensible hedge and, at the same time,

maintain the development of technologies that show clear, shortterm promise.

Similarly, the Hydrogen Initiative must not displace research

into promising energy efficiency, renewable energy areas, and carbon sequestrations. These investments both complement and contribute to the goals of a hydrogen economy. And they become an

41

increasingly important means for reducing CO2 and enhancing our

energy security in the event that the significant technology hurdles

for the Initiative are not met within the proposed timeline.

I hope that our perspective has—our perspective and our recommendations help you in your oversight, and I am prepared to

answer any questions you might have.

Thank you very much.

[The prepared statement of Dr. Eisenberger follows:]

PREPARED STATEMENT OF PETER EISENBERGER

Mr. Chairman, Mr. Gordon, Members of the Committee, thank you for the invitation to testify today.

In January 2003, President Bush announced an Initiative to reduce the Nation’s

dependence on foreign oil through the production of hydrogen fuel and a hydrogenfueled car. The Initiative envisions the competitive use of hydrogen in commercial

transportation by the year 2020.

I chaired a committee of the American Physical Society that analyzed this Initiative—we released our report on Monday. The bottom line is that major scientific

breakthroughs are required for the Hydrogen Initiative to succeed. We made several

management and funding recommendations that, in our opinion, will increase the

chances for long-term success.

Before I get into the specifics, let me say a very brief word about our authors and

methodology. Together, the authors and reviewers have considerable experience in

bench science, the management of industrial technology programs from the laboratory to systems level, management of government R&D programs, and the economics of energy-commercialization programs. We did not carry out a new analysis of

the scientific elements of the Hydrogen Initiative. Instead, we distilled the considerable work that is already available. Our sources included the DOE ‘‘Report of the

Basic Energy Sciences Workshop on Hydrogen Production, Storage and Use’’, the

Hydrogen Energy Roadmap, and numerous presentations by government officials

managing the Hydrogen Initiative, including those for the just released NRC report.

As a starting point, let me say that currently there is only a very nascent technology base upon which to build a hydrogen economy. Currently, the U.S. industry

provides hydrogen to meet the needs of the non-transportation sector that is only

about three percent of what is needed for the transportation sector. Several hydrogen-fueling stations are scheduled to open this year. And several models of hydrogen-fueled cars have been demonstrated. But, none of the current technologies are

competitive options for the consumer.

The most promising hydrogen-engine technologies require 10 to 100 times improvements in cost or performance in order to be competitive. As the Secretary of

Energy has stated, current hydrogen production methods are four times more expensive than gasoline, and significant challenges remain to satisfy both energy security

and environmental objectives of converting to a hydrogen-based transportation sector. Finally, no material exists to construct a hydrogen fuel tank that meets the consumer benchmarks. A new material must be developed.

These are very large performance gaps. And our committee concluded that incremental improvements to existing technologies are not sufficient to close all the gaps.

In particular, hydrogen storage is the potential show-stopper.

Simply put, for the Hydrogen Initiative to succeed, major scientific breakthroughs

are needed. This will not be easy. We cannot simply engineer our way to a hydrogen

economy. But, we can take several steps now to make success more likely.

Without question, relevant basic science must have greater emphasis in both the

planning and the research program of the Hydrogen Initiative. This is not a controversial conclusion. The Bush Administration has already taken steps in this direction, but, more must be done. We recommend that:

1. The Hydrogen Technical Advisory Committee include members with strong

research backgrounds who are familiar with the key basic science problems.

2. Principal-Investigator basic research should be increased. And this PI research should be complemented with competitively-bid, peer-reviewed multidisciplinary research centers that carry out basic research in the key research areas of production, storage and use. These university-based centers

should have active industry and national laboratory participation.

The issue of funding is, of course, a delicate one. Resources are not unlimited and

Members of your committee face difficult decisions. Several members of our APS

42

committee have managed large-scale industrial technology programs. As for myself,

in an earlier life, I was Senior Director of the Corporate Research Laboratory for

Exxon. For what it’s worth, I and the members of my committee, feel your pain. We

have faced difficult funding decisions in our careers.

Perhaps the most useful thing I can share with you is the manner in which industries approaches these difficult funding decisions. The main factors involve technological competitiveness and readiness, market acceptance, and rate of penetration.

In the case of Congress, one needs to add the criteria of meeting national security

objectives. Our evaluation is that for hydrogen there are very significant technology

gaps, a lack of an existing infrastructure and the inevitable slow rate of penetration

for a new energy technology. This means that one would invest more resources in

research and less, if at all, in development projects. Pilot projects to demonstrate

specific components like sequestration are more appropriate at this stage of the Hydrogen Initiative. Premature investments in a large demonstration projects have a

history of not only failing but also damaging the overall objectives.

However, national security objectives may argue for a more aggressive development plan than industry would follow, though premature large-scale demonstration

projects are unlikely to be helpful. In this regard, I will mention one additional

point of view that the industrial managers on our APS committee all shared—hedging.

In the event that the timeline for significant hydrogen vehicles market penetration slips beyond 2020, there could be, for energy security reasons, a greater need

for technologies that serve as a ‘‘bridge’’ between the current fossil-fuel economy and

any future hydrogen economy. Also the likelihood is increased that continued investment in research will produce new discoveries that will identify a far superior way

to meet our needs in the long term. Increasing the focus on basic science and engineering that advances such technologies would serve as a sensible hedge and at the

same time maintain the development of technologies that show clear short-term

promise.

Similarly, the Hydrogen Initiative must not displace research into promising energy efficiency and renewable energy areas, and carbon sequestration. These investments both complement and contribute to the goals of a hydrogen economy. And,

they become increasingly important means for reducing CO2 and enhancing our energy security in the event that the significant technology hurdles for the Initiative

are not met within the proposed timeline.

I hope that our perspective and our recommendations help in your oversight of

the Hydrogen Initiative.

BIOGRAPHY FOR PETER EISENBERGER

Peter Eisenberger attended Princeton University from 1959 until 1963 where he

received a B.A. in Physics. He graduated in 1967 from Harvard with a Ph.D. in Applied Physics and remained at Harvard for one year as a Post-Doctoral Fellow. In

1968, Dr. Eisenberger joined the staff at Bell Laboratories. From 1974 to 1981, he

was a department head at Bell Laboratories. He was a consulting professor at Stanford University’s Applied Physics Department from 1981 to 1987. He became actively involved in the growth of National User facilities, including Chairship of the

Advanced Photon Steering Committee and participation in National Academy of

Science (NAS) and Department of Energy (DOE) studies. In 1981, he joined Exxon

Research and Engineering Company as Director of their Physical Sciences Laboratory. In 1984, he was appointed Senior Director of their Corporate Research Laboratory. In 1989, he was appointed Professor of Physics and Director of the Princeton

Materials Institute at Princeton University. He is currently a Professor of Earth and

Environmental Sciences at Columbia University, where form 1996 to 1999 he held

the posts of Vice Provost of the Earth Institute of Columbia University and Director

of Lamont-Doherty Earth Observatory of Columbia University. Dr. Eisenberger is

a fellow of both the American Physical Society and the American Association for the

Advancement of Science. Dr. Eisenberger was one of the authors of the National Action Plan for Materials Science and Engineering, and was a member of the Commission on the Future of the National Science Foundation (NSF). He was chair of the

Advisory Committee in the Mathematical and Physical Sciences Division of the

NSF. His recent activities include Chairman of the Board of the Invention Factory

Science Center, Member of the Board of Trustees for New Jersey’s Inventors Hall

of Fame, Director of Associated Institutions for Materials Science, and organizer of

NSF/DOE Conferences, ‘‘Basic Research Needs for Vehicles of the Future,’’ ‘‘Basic

Research Needs for Environmentally Responsive Technologies of the Future,’’ ‘‘Organizing for Research and Development in the 21st Century,’’ and ‘‘Basic Research

Needs to Achieve Sustainability: The Carbon Problem.’’ More recently, he has been

43

appointed by Governor Whitman to the New Jersey Commission on Science and

Technology and Co-chair of Flandrau Science Center Senior Advisory Board at the

University of Arizona.

DISCUSSION

Chairman BOEHLERT. Thank you very much, Mr. Eisenberger.

Mr. Garman, I appreciate the additional money that DOE has requested for exploratory hydrogen research in the Office of Science.

That is definitely a positive step that demonstrates, I think, your

responsiveness to outside guidance. You say in your testimony that

you are evaluating some additional programs to see if more money

should be shifted to exploratory R&D. On what basis will you make

that decision and are there specific criteria?

Mr. GARMAN. This is a very iterative process, Mr. Chairman. And

one of the things that we did early on is share with the Committee

our draft, hydrogen fuel cell infrastructure technologies program,

program plan. This enabled the Committee to interact with us in

some of these areas and was the reason, I will tell you, that in the

President’s 2005 budget submission we did ask for $29 million in

the Office of Science to do some of this more fundamental work.

We—there are—and so this is going to be an iterative process. I

don’t think there are any hard and fast rules of thumb about precisely when and how we will shift funding.

But there is something very important that I think we need to

get out on the table and understand, and it may be the basis of the

Committee’s misunderstanding in some of these areas. Nobody is

talking about doing premature technology demonstrations. And in

fact, we find this very report very useful in helping us to fend that

off from those of us—or from those who are saying, some members

in the other body, I might add, that we are not being aggressive

enough and that we need to go more quickly to larger scale technology demonstrations, get certain numbers of cars on the road by

certain target dates irrespective of whether the technology, the underlying technology, is ready. The commercial success has to be

clear. The business case has to be clear.

So I think it is very important to make that point that our demonstrations, when we say demonstrations or technology validation

activities, we are talking about putting a very limited number of

vehicles on the road that will produce data that goes right back

into the R&D process, including the exploratory R&D process. We

are not talking about building large facilities. We are not talking

about doing large vehicle demonstrations that are designed to drive

unit costs down. We are talking about learning, very small, limited

learning demonstrations that produce data that go right back into

the R&D process. So there is a lot of agreement on this panel on

that subject, and I think that it is very important to make that

point early on.

Chairman BOEHLERT. The development of technology should set

the pace then, that is what you are saying?

Mr. GARMAN. Absolutely. You should—we should not be in a rush

to deploy vehicles either in the context of a large demonstration or

actually trying to force market adoption of a technology that is not

ready.

44

Chairman BOEHLERT. Well, do you agree with these experts,

then, that we need to shift some more money to exploratory research?

Mr. GARMAN. Exploratory, yes. And this is where we may have

a nomenclature problem, and I want to be very careful. This program is on a razor’s edge. Some would say we need to do more fundamental and basic science, and of course, we have some coming

at us from the other side saying no, we need to rush to deploy the

technologies we have got today, which would be a horrible mistake,

because it would lock in those technologies at their current state

of development. It would be premature before codes and standards

and the other work that needs to be done are completed.

So we are on a razor’s edge here. We don’t want this to become

a basic research program of the kind that government can work on

for 20 or 30 years before it produces results, but we don’t want this

also to become an effort where we start to deploy and push before

we are ready. So we are on a razor’s edge.

Chairman BOEHLERT. Yeah. Yeah. And you always are very careful. I noticed that. Thank you, and I really appreciate it.

Dr. Ramage and Dr. Eisenberger, let me ask you each in order, do you think that $29 million for the Office of Science is enough

for the type of program you envision? Dr. Ramage.

Dr. RAMAGE. Well, may I first tell you exactly what I think we

recommended on this issue, and I think that will help me answer

the question?

We recommended that there were certain areas where there

needs to be increased exploratory research. Hydrogen storage is

one of them, particularly in direct hydrogen production and other

ones, storage is a big issue. And you know, the $29 million and the

fact that that has been made, I think, is a very positive move. I

can’t tell you if that is the right amount of money, but I certainly

think that is in the right direction.

May I make another comment, though——

Chairman BOEHLERT. Sure.

Dr. RAMAGE [continuing]. On this issue? You know, I have managed research all of my life, and the worst thing you can do in a

program is have a program that has too much basic research and

you don’t have the right balance, which is really what my first

question was. And you really need programs where you have basic

research, development, and learning demonstrations so you can

constantly move your technologies through the programs. And you

can be testing them and learning them at the same time. And you

have to make sure that in your research program you are actually

working on areas where you have major gaps in knowledge, and

storage is one of those areas. But there are other areas, and we

argue for a transition using distributed production. That is really

a development effort. And it is not—and that effort, we think, is

very important, but developing a small scale, at-site reformers is

effort that is in the development and there are learning activities

that are required to do that.

So the answer to your question is we are very happy, and the

Committee was very happy to see $29 million. But this is not an

issue of basic research versus something else. There is a continuum

of activities that have to take place to keep this economy moving

45

toward a hydrogen economy. And in the end, a lot of things that

we think will happen, we don’t know what they are today.

Chairman BOEHLERT. Dr. Eisenberger.

Dr. EISENBERGER. In answering the question, let me try to put

this in a frame, which I think is contributing to part of the confusion. Let us say when President Kennedy committed us to go to the

moon, he had just the need to accomplish the task. He didn’t have

to worry about—our country didn’t have to worry about the cost or

consumer acceptance of the particular way we went. And what we

have here is a concatenation of both a national security need and

a market need. And we are mixing up, in some cases, the drivers

that would make one want to regard this as a national security objective with the way you would prudently address something that

ultimately the consumer has to accept. And as much as the national security wants it, if the consumer doesn’t accept it, it ain’t

going to happen. And I think it is in trying to understand which

track we are on and keeping for sure that we know in the bottom

line we have to be on the consumer track that would help us all

stay on the same path.

So I agree with the philosophy stated here in terms of the need

to have this continuum, but my concern is viewing it as something

that ultimately has to make the—meet the market. It is something

that we would normally—I—my instincts, my judgment, I can’t

give you a number, because I would have to spend a lot more time

to look into it, but I feel that we are putting too much of the resources downstream, right in that continuum that Dr. Ramage

talked about, and not enough upstream, and that since the amount

of money that goes into demonstration projects, in industry you

know once you course the demonstration projects, they are the ones

that cost you a lot of money. All right. They are very expensive. A

$1 billion research program is unimaginable, right? We are talking

about millions, but the demonstration projects are much more costly. So I would say notionally, I—there is a need to shift more. I

couldn’t give you a number. All right. But I can say that I think

there is this confusion between whether we are doing this ultimately that it has to meet the marketplace or we are doing it because of national security.

Chairman BOEHLERT. Secretary Garman wants to——

Mr. GARMAN. And there is just—again, there is—I think there is

a miscommunication going on here, so I want to try to correct it

before it goes on too far. The $29 million in the science budget, that

is what we are calling basic. That does—we are doing much more

exploratory research and plan to do more exploratory research. And

I think I was negligent in failing to—partly for reasons of time, to

answer the five Committee questions. But one of those five Committee questions is on point when you say, you know, using the

definitions in OMB circular A–11, what is your split in the current

funding profile between these different types of research? In basic

research, we are around 13 percent; applied research, which includes a component of exploratory R&D, about 42.5 percent; development, 29.2 percent; demonstration, 13.4 percent, and that constitutes what we have. And the only deployment work we are doing

is a tiny two percent, mainly related to education for the very longterm.

46

Chairman BOEHLERT. Thank you for that clarification.

Mr. Larson.

Mr. LARSON. Thank you. Thank you, Mr. Chairman. And I thank

the panelists for being here for your—and for your fine testimony.

And I thank the Chairman again for this hearing that is important

to each and every one of us. It is rarely an opportunity in my years

in government that you get to talk about a subject matter that embraces energy, the economy, the environment, and foreign policy all

in one breath. And so I think the dynamic here is extraordinarily

important, but never has there been such a great need, and in my

estimation, so little funding toward that effort. And I think the

hard truth is that if we are going to aggressively pursue a hydrogen economy, then we have got to aggressively put forward the

funding that we are going to need. And I say that lauding the Administration in terms of the efforts it has made to date, but recognizing that even though these efforts are well intended, it is not

nearly the amount of money that I believe is going to be necessitated if we are serious, in fact, about a number of the issues that

you have raised and a number of the goals that the Committee has

stressed to date.

A couple of questions that I have, and I am wondering with respect to—Mr. Garman, with respect to this study and the work of—

and your work whether or not there has been any coordination

with the Department of Defense which already has put forward

close to $50 million in studies and in actual projects.

Mr. GARMAN. Yes, sir. We have worked with the Department of

Defense both in the context of the stationary fuel cell work that

they do, and we also interfaced with the Department of Defense in

a program that we call Future Truck, which is looking at larger,

heavier transportation. We have done some fuel cell work with

them in that context and will continue to do so. It is very, very important. Their needs are sometimes a little different than ours, but

we think there are a lot of avenues for collaboration, and we want

to do even more.

Mr. LARSON. One of those collaborations I believe, and I would

be interested in the panelists’ views on this, is when you are talking about pilots, it seems to me that as a mode of transportation

that, and you have all pointed out some of the problematic concerns

raised in looking at individual vehicles, but when you talk about

heavyweight vehicles, you mentioned trucks, I would focus on

buses, primarily because of the mode of transportation, the fact

that they are usually barned that even, the fact that they usually

can accommodate some of the storage issues that were—that have

been raised. And also, in terms of pure pilots and testing, seeing

that this ought to be a clear focus of Department of Energy and

Transportation. Would you respond, all of the panelists?

Dr. EISENBERGER. I think it makes—I would also like to echo in

that regard to what Dr. Ramage said. You can’t go from nothing

to something. You have got to find ways to ease yourself into the

market to get on the learning curve, to get things—some value out

of it so that provides an economic motivation for your infrastructure to develop. And I have thought about it recently——

Mr. LARSON. That is a good point. And all of you have mentioned

this with respect to the market, but isn’t it also true that if we look

47

out at our municipalities, as we look out at our states, as we look

at our various schools that every single one of those schools has to

transport kids back and forth to school via bus. Those plants and

facilities all have to be heated and cooled. They are part of the

marketplace, to be sure, but they are also part of a larger laboratory of government where, I believe, that we ought to spend a lot

of our focus and emphasis, understanding that it is not the same

as the commercial market. And in fact, as all of you have pointed

out, we don’t want to prematurely rush in areas that will be

failings while we have the opportunity governmentally and in controlled pilots to take a look at these areas.

Dr. EISENBERGER. I just want to say one more thing, and then—

as the Academy report said, and we also agree, that, for example,

in addition to buses, distributed power gives you another way to

get into this market. It gives you a way of dealing with fuel cells,

providing an incentive to grow your production facilities.

Mr. LARSON. How much money is needed in bridge technology?

Dr. EISENBERGER. Well, to make a quantitative statement, one

would really have to go into the details.

Mr. LARSON. Hypothetically, nothing that I would hold your feet

to the fire about, but——

Dr. EISENBERGER. No.

Mr. LARSON [continuing]. Just give us some parameters. Is it bigger than a breadbasket?

Dr. EISENBERGER. Well——

Mr. LARSON. And this is the frustration on the part of Members,

I think——

Dr. EISENBERGER. Right.

Mr. LARSON [continuing]. Is that in earnest, Members and this

Chairman has been exceptional, want to help, but want to get realistic figures, because I think, both from a substantive and academic

standpoint, the—in this case, I think the ends does justify the

means.

Dr. EISENBERGER. Well, let me put—let me say it this way. I

really agree very much with your comments that energy is so critical to what we do that to underfund it, to not give more resources,

in general, to develop our options for our future and be able to pursue the bus idea that you made, distributed power, all right, is

really, I think, penny-wise and pound-foolish in the long-term. And

because it is a major issue, this—the whole future of success of, as

you pointed out, all of these things coming together here, requires,

really, a very significant investment. And to some extent, we are

underwhelming the problem. And I—my sympathy goes to Mr.

Garman who has to manage a project where he has these great objectives and he is given not all of the resources to accomplish them.

Mr. LARSON. Believe me, our sympathies go to him, too. And it

may not sound that, but I know—we know the difficult task that

he is operating on.

Dr. EISENBERGER. Right.

Mr. LARSON. And Dr. Ramage.

Dr. RAMAGE. Yes. Just specifically on the buses, I—our Committee felt very strong that in the early part of the transition to

a hydrogen economy that the—you would actually use fleets, buses

and other things, and you could use existing production capacity,

48

so you don’t have to worry about the infrastructure, and there is

hydrogen out there, and you basically would do it. And that would

allow you to enter the market with fleets, and buses would be a

big part of that. And that allows you to move forward while you

are doing your R&D program. It allows you to get commercial use.

It allows consumers to get use. You get learning demonstrations.

So, in our vision, that literally is the first part of this transition.

Later on, you would have distributed production at sites when vehicles come in the market. But the buses and mass transportation

would be the first part of this.

Mr. LARSON. What about the transmission? And I noticed in your

comments, and I really do appreciate the talk about making the

transition with coal and other entities, you didn’t mention natural

gas, which I would think, from a distribution standpoint and pipeline standpoint and transmission standpoint, might be critical to

the future, although we note that that is a limited source as well.

Dr. RAMAGE. Well, the—our issues on natural gas are we believe

that during the transition, natural gas should be a primary source

of hydrogen, but in the steady state, unless we have some major

natural gas findings in this country. If you look at EIA and the

amount of natural gas that we are importing, it becomes the same

national energy security issue as oil. And so we separated and basically recommended that the DOE make—decrease the size of their

program in large-scale natural gas, focus on using natural gas during the transition for small-scale reformers.

Mr. LARSON. How far away are we with coal and making that—

in being able to capture the hydrogen from that process?

Dr. RAMAGE. I think you are probably—I mean in a coal plant,

like the parameters in our future, are 15 or 20 years away. So it

is a—coal is a long-term part of the steady state solution.

Chairman BOEHLERT. The gentleman’s time has expired. The

Chair recognizes the Chairman of the Subcommittee on Environment, Technology, and Standards, a distinguished fellow of the

American Physical Society, Dr. Ehlers.

Mr. EHLERS. Thank you, Mr. Chairman. And I am very pleased

to have another physicist at the table. And thank both of you for

your work in this extremely difficult project. You have done a good

job of identifying the problems, and I am—in my analysis of it,

which incidentally is far less extensive than yours, but agrees with

yours, there are so many different things that have to happen simultaneously. And it has to be an incredible governmental/industry

cooperation to achieve the results that we want. Such simple matters as deciding how is—well, you mentioned fuel storage in your

study. It is not just storing it underground somewhere, but how are

you going to store it in the car, because that influences the service

stations of the future? Are you going to get in—go in and get a

tank full of liquid hydrogen? Are you going to go in and exchange

high-pressure cylinders? Tremendous decisions have to be made

with major impacts upon industry, and it is going to take intense

cooperation to get this done in any reasonable sort of time.

In terms of the production of hydrogen, I will simply tell my colleague from Massachusetts, I personally think natural gas is too

good to burn or to use for hydrogen. It is too precious as a petrochemical feed stock, and we should reserve it for that. I hope that

49

nuclear power is an efficient way to produce hydrogen, but I

haven’t seen the evidence yet.

So what I really appreciate is your pointing out the complexity.

It can be done, perhaps more rapidly than you say, but it is going

to have to be a national crash program. And I don’t—and that

leads to a question for Mr. Garman on the budget. I am very concerned about DOE’s budget. Last year, when you testified, you said

that this program is not going to gore anyone’s ox. I think this

year’s budget shows that maybe you aren’t goring them, but you

are certainly bloodying them. But also, I am very concerned that

you don’t seem to have much money in the budget to deal with this

in terms of the problems that have to be dealt with. And I wonder

if you would give us some comment on those two issues.

Mr. GARMAN. Thank you. And I——

Mr. EHLERS. It appears that other alternative energy sources are

suffering, and also, you are not getting enough.

Mr. GARMAN. Thank you. And I appreciate that. And it goes also

back to the Chairman’s opening statement with respect to his observation or belief that it is unfortunate the Administration proposes to pay for hydrogen research by cutting the rest of Secretary

Garman’s programs. That hasn’t happened, Mr. Chairman.

Chairman BOEHLERT. That is good news. Tell me the rest of the

story.

Mr. GARMAN. I will tell you the rest of the story. Overall funding

for the Office of Energy Efficiency and Renewable Energy is up.

Our renewable energy program funding is up 4.8 percent. Yes,

there was a reduction of 2/10 of one percent in energy efficiency

funding, and there were also some shifts in that funding, but our

overall budget is up, particularly when you look at the impact of

congressional earmarks that are funding that is not on our R&D

planning. Our wind power is up. Hydropower is up. Geothermal is

up. Solar power, if you remove the earmarks of about $1.5 million,

solar power is up. Biomass, if you remove the $51 million worth of

earmarks in biomass that do not contribute to our program planning, the program planning that we have come together with industry, with the Department of Agriculture to devise, our biomass

is up some $30 million.

Mr. EHLERS. You are beginning to sound like some radio announcer giving the stock quotes for the day.

Mr. GARMAN. So, you know, I feel, actually, quite the opposite.

I don’t feel encumbered or savaged; I feel blessed that in a constrained budget environment, we have been given as much as we

have been given. And that puts and awesome responsibility, I

think, on us to perform in that context.

Chairman BOEHLERT. That you attribute to the exceptional confidence people have in you.

Mr. GARMAN. I hope so, Mr. Chairman. I hope it is something.

Mr. EHLERS. But you would not object if the Congress gives you

more.

Mr. GARMAN. I think the President has submitted a very good

budget, and let me say this, this is an important—and as I said before, and I know it is impolitic of me to say it in this forum, but

we were saddled with $67 million worth of earmarks. I even have

50

an earmark for hydrogen, Mr. Chairman, that doesn’t have anything to do with hydrogen.

Mr. EHLERS. Okay. We will try and take care of that this year.

A quick question, Dr. Eisenberger. On the APS report, you talked

about the storage problems. Could you give a quick rundown what

you see those to be and what you think the most likely choice is

going to be?

Dr. EISENBERGER. Well, you know, it is no accident we are running on gasoline, because it is a very unique fuel in terms of its

capability in terms of energy density and ability to store in the

automobile the amount of energy you need to travel what the consumer has learned to understand they can expect. I just turns out

that currently hydrogen, given its basic properties, you can squeeze

it, you can do various things to it, it is extremely difficult to, currently, have a material where you can imagine getting enough energy density in the automobile in a way that is safe so that you

can give the sort of performance that the consumer has learned

to—or that the transportation sector needs. And so right now, there

is not a known answer to this. And so that is a gap that is a really

serious problem. Now what I would say is, and it gets back to your

comment and it is a thing that concerns us as well, to make this

thing work, it is no better than the weakest link in the chain,

right. You can’t get there if—because it is a consumer-oriented

thing, if something doesn’t work. And it is that—the magnitude

and the complexity that suggests to us that this idea of piloting,

and I don’t want to—and I agree that there is verbiage here that

we could clean up, but piloting things that are ready to be piloted

and then focusing very clearly on those gaps which really are serious in terms of not having, as Dr. Ramage said, even a commercial

performance demonstration yet, that one has to make sure that one

really focuses on those things, because one knows one can’t go to

market until one gets those things addressed.

Mr. EHLERS. Right.

Chairman BOEHLERT. The gentleman’s time has expired.

Mr. Costello.

Mr. COSTELLO. Mr. Chairman, thank you.

Mr. Garman, I want to ask you a few questions about the

FutureGen program. The Administration has made it very clear

that it is the important program for this Administration. And when

George Ruddins testified before our Committee, I think it was in

November of 2003, he provided a tentative timeline for the

FutureGen project. And you know, in the fiscal year 2004 appropriations bill, DOE was directed to produce a program plan for the

FutureGen project by December 31 of 2003, and I am wondering

what the status of the plan is.

Mr. GARMAN. I made sure we spoke to George right before I came

up, and the program plan, which was promised to you, is in the

final review process within the Administration. And I am told it

will be transmitted to Congress shortly. And we hope to have that

up to you as quickly as possible. That brings to mind the fact that

I have promised this committee a hydrogen posture plan, which I

produce right now. [The information referred to appears in Appendix 2: Additional Material for the Record.] I have done that. And

I will have George follow up with your staff, but it is out of the

51

building. It is out of DOE and undergoing interagency concurrence

at the White House, I am told.

Mr. COSTELLO. When you indicate that it will be delivered to the

Congress shortly, could you get a time frame on there, 30, 60, or

90 days?

Mr. GARMAN. I would hope it would be within a week or two.

Mr. COSTELLO. Let me ask another question about FutureGen

and about funding for the project. The coal R&D budget provides

$237 million of previously appropriated funding specifically for

FutureGen. There are $233 million of new funding available for

other coal R&D programs, which is almost a 50 percent cut in programs like fuel cell research, coal gasification, advanced research

centers, and other important programs compared to last year. And

as, I think, we all realize that FutureGen is not a replacement for

these programs. And in fact, if anything, the program, FutureGen,

can not succeed without them as a foundation. So I am wondering

if you will address that issue. How do we expect FutureGen to be

successful if, in fact, we are cutting the R&D funds for the other

items that I have just mentioned?

Mr. GARMAN. I would hope that the program plan would elucidate that for you. I am told that the project timeline for FutureGen

remains on track for a fiscal year 2004 start and that there have

been some changes in some of the out-year milestones consistent

with assuring, and this may seem ironic in this context, but that

some of the underlying science matches up well with the

deliverables in the project. So that, since I am the energy efficiency

and renewable energy guy and not the fossil guy, you have delved

to about the limits of my knowledge on that specific point, but we

will try to answer better than that for the record.

[The information follows:]

INSERT FOR THE RECORD

FutureGen Funding and Funding for Other Coal R&D Programs

The funding profile for FutureGen is complementary to and consistent with the

Department’s Coal R&D roadmap in key areas, as reported in the March 04, 2004

FutureGen Report to Congress. The schedule for the FutureGen project will allow

the FutureGen industrial consortium sufficient time to assess the technical readiness of candidate technologies for inclusion in the FutureGen research project. The

pace of the research being pursued should provide the opportunity to choose the

technology best suited to meet the FutureGen project goals. Progress in the ongoing

coal research, development, and demonstration program will provide the necessary

technical foundation to help make FutureGen a success.

Mr. COSTELLO. The last question about FutureGen, and I realize

you may not be the person to answer this, is where does the Administration with finding a partner in the private sector as anticipated and directed in this legislation?

Mr. GARMAN. My notion is that we are finding many partners

and a great deal of interest, not only in the domestic private sector,

but also internationally through the Carbon Sequestration Leadership Forum. There has been a tremendous amount of interest from

other nations, including Germany and Poland, in partnering with

us and making FutureGen the first demonstration, hydrogen-producing, zero-emission coal plant in the world to enable that technology transfer to be universally adopted around the world and

that the interest is there.

52

Mr. COSTELLO. They—have they mentioned that they will bring

their checkbooks with them to participate?

Mr. GARMAN. That is—it is well understood that that is part of

the deal.

Mr. COSTELLO. Mr. Chairman, thank you.

Chairman BOEHLERT. Thank you very much, Mr. Costello. I love

the international cooperation where we do all of the work and they

get all of the benefit without any of the burden of helping to finance it, so that is something—that is a question we are all interested in hearing the right answer to, and you gave the right one.

Mr. Gutknecht.

Mr. GUTKNECHT. Thank you, Mr. Chairman.

I have a keen interest in this, because I also am the chair of a

Subcommittee in the Agriculture Committee that deals with renewable fuels. And so we appreciate the opportunity to have you here

today, and we are going to continue to look at this.

First, and this you don’t have to answer right now, but I would

like to get a list of those earmarks from last year. That is problematic, I think. You know, historically, this committee has done a

pretty good job of not recommending earmarks within NSF or other

science research projects, and it seems to me we ought to try to

apply that as well to the Department of Energy.

Second, though, and I think this is a—also a very important

issue, I want to raise the issue of collaboration with our universities. You know, we have a lot of pretty smart people and curious

students and very good graduate students who could be extremely

helpful in doing some of this research. And I guess the question is

what portion of the Department of Energy’s awards are directed toward university research to help develop some of these new technologies?

Mr. GARMAN. Let me answer—I will give you a precise number

for the record, but let me answer it this way, because it bears on

a question asked earlier about the challenge of hydrogen storage on

board the vehicle. And we fully appreciate, understand, and agree

with that challenge. And in fact, this is one of the areas where the

Academy, in its report, actually commended our hydrogen storage

initiative as ‘‘a strong program with the right balance of basic research’’. And the reason I mention that is because it is our plan,

in fact, we will, in a matter of days, be announcing winners of a

hydrogen storage solicitation, which we have had on the street,

composed of teams of universities and national labs. We thought it

was so important that we make sure that the university component

is included in this for a variety of reasons. First of all, it helps us

make sure that there is the basic research component. Second, it

avails you of that opportunity to take advantage of research at universities that can often be produced at a much lower cost than research at national labs because of the availability of graduate students and all of the other good things you have in universities.

So——

Mr. GUTKNECHT. Cheap labor.

Mr. GARMAN [continuing]. We are very much looking forward to

the opportunity to make that solicitation, get more universities involved in this fundamental research on one of the most, we agree,

vexing problems that we have in making this initiative a reality.

53

Not to beat this dead horse, we will probably have to delay the actual funding a little bit, because of the impact of the earmarks, but

we are going to go ahead and make the selections, let the people

know they have—they will be awarded these things just as soon as

we can scrape up the funding and get it out to them.

Mr. GUTKNECHT. The next question, and perhaps either Dr.

Ramage or Dr. Eisenberger can jump in on this, and I think this

is something I am keenly interested in, and that is using renewable

energy sources, such as biomass or wind or other sources like that,

to actually produce hydrogen. To what extent should our hydrogenrelated efforts focus on deriving that hydrogen from some of these

renewable sources? And let me give you an example. I mean, we

have—there has been just an explosion of the latest and most efficient windmills in my District. I am amazed, with the modest

amount of incentive from the Federal Government, we have seen

just an explosion. Now in some respects, there is at least discussion

out there about using those, when we don’t need the power on the

grid, to produce some other energy source, which could be storable.

And hydrogen might make some sense. I would like to get your

particular—particularly Dr. Ramage or Dr. Eisenberger, your particular point of view on that.

Dr. RAMAGE. I think it is a very good question. And we strongly

recommend in our report that wind energy play a major role in the

transition and maybe in the steady state, and it is because wind

energy today, in a lot of areas, has almost—is almost cost-competitive with grid electricity. And also, there has been a lot of—there

is a lot of activity going on in industry to look at ways to improve

it more.

The second piece of this, and that is that we believe that

electrolyzers, which are now a big component in generating hydrogen, will end up coming down greatly in cost. And so marrying

wind energy with advances in electrolyzers will play a major role,

probably, you know, in the early parts of the transition to generate

hydrogen.

With respect to the question about—you know, we recommend

that biomass not be used directly for gasification as a source of hydrogen. It doesn’t mean we don’t think that biological processes are

important. That is more of a fundamental research. But just looking at hydrogen, there is a lot of land required. In our report, we

identify that, in fact, to use biomass to generate the hydrogen

would take about half of the cropland in the United States. And it

is just not a very efficient process. While it might be important if

there are limited funds in the DOE, we believe that effort should

be focused more on exploratory ways to look at—directly at biological means. We do fully support solar energy as a method to produce

hydrogen, particularly direct—but wind is a very important key

component, we think, in the transition. And the technology is

ready. It is close.

Dr. EISENBERGER. My comments are along a similar line, but

maybe I will try to take a slightly different cut at it. Part of the

message I have tried to communicate is that in the understandable

pressure in the short-term to try to come up with solutions to mitigate our dependence on foreign sources of energy and to deal with

issues—environmental issues, we should recognize that the—in the

54

long-term, there is no alternative but to find a solution that has

some renewable energy source, some way of converting it into a

storable fuel that can be used in various ways to meet our energy

needs. That is the end game. There is no getting away from that.

It is a matter of time. And some at some level, our concern has

been that we need to balance that understanding of where you are

going in the long-term, and then each step of the way make sure

you don’t over-commit your resources in things that are not going

to get you there, and in the process of doing that, I mean I agree

with everybody, like Dr. Ramage said, you can’t ensure success.

There are going to be failures, but we know in America what America does to failures: you leave it and then you don’t talk about it

for another 10 or 15 years. And so part of our concern is that if

we focus too much on the short-term and try to commit to things

that won’t give what we expect from them and don’t really solve

the long-term problems that we have to face, we could set back the

overall initiative. So being prudent is not because we don’t believe

hydrogen has a place to—a role to play, but our prudence is actually concerned that if we move—get too far ahead of ourselves, we

will hurt where we all know where we have to go.

Chairman BOEHLERT. Thank you very much. The gentleman’s

time has expired.

Mr. Akin.

Mr. AKIN. Thank you, Mr. Chairman.

And Mr. Garman, I just wanted to appreciate just publicly that

you came to our District, and there is a lot of interest and enthusiasm as a result of your stopping out and chatting.

My question is a pretty fundamental one, and I guess it might

be appropriate for Dr. Eisenberger. I guess the concern I have sitting here, the more I have listened the more I feel like I am about

like a bottle of champagne, it seems like what we are doing is we

are putting some sort of emphasis on hydrogen. It seems to be almost dictating the solution. We haven’t defined what the problem

is. It would be a little bit like if we are trying to get across a river,

and I would commission you guys to work on suspension bridges.

You know, well, maybe there is another way to build a bridge than

a suspension bridge. It seems like here that is what precisely are

we trying to do. And the big thing that I ask myself in hydrogen

is as people talk about it, it is not like you can grab yourself by

the bootstraps and fly around the room. There is some source of energy. It is either going to be—I mean, you can do it on the margin.

You can do something with some solar and some wind and stuff,

but when you look at the volume of energy that there is going to

be, and that demand is only going to go up as nations become more

industrial. You know, you have got basically nuclear, you have got

coal, and you have got oil. Those are your big ones. And hydrogen

doesn’t change that equation. So I guess my question is aren’t we

putting the cart way before the horse? And shouldn’t we be really

addressing specifically what are the problems? Is it foreign oil?

Okay. How do we deal with that? Is it emissions in cars today?

Then how big a problem is that, and how do we deal with that?

It seems like we are going completely backwards. What we should

be doing is just specifically saying this is the problem, this is the

55

goal, and now what technologies are available? Am I off the track?

Or will you just please respond.

Dr. EISENBERGER. I will—you know, it is unusual to hear a politician describing an idealistic approach to a problem, right, but I

agree with you that conceptually that is the way one should go

about this problem. And that—but on the other hand, I would also

say, as a pragmatist, that energy is so critical to our society that

there is not one single answer. All right. And we have an interest

in moving in hydrogen. You know. Forces have come together, as

was mentioned in the introduction, where there is support from

many sectors to advance this technology. It has a role to play. It

is not the only answer, as I tried to say. We need other things as

well. And we should not—we should be investing more in alternatives, and if we would do that, then we could take your approach. If we had a real commitment to say, look, we are going to

solve, as you pointed out, the security aspects of it, the environmental aspects of it, then we could sit down and have a program

that would be a lot more expensive than the program we are now

committed to. It would require more options and more different directions than we are now pursuing.

Mr. AKIN. I—just one other—I promised I would try and get one

of these. These are the, you know, questions distributed ahead of

time that, you know, you have to—but this is a good question. And

this is the first page of the NAS executive summary states: ‘‘DOE

should keep a balanced portfolio of R&D efforts and continue to explore energy supply and demand alternatives that do not depend

on hydrogen. If battery technology improved dramatically, for example, all electric vehicles might become the preferred alternative,

however, EERE funding for battery and electric vehicle technology

has been drastically reduced over the last few years.’’ Based on the

NAS statement, might you increase funding for battery or non-fuel

cell vehicle technology research?

Dr. EISENBERGER. That is along same lines as what I was saying

before. You have got a problem, whoever wants to—and Dr.

Garman—I mean, Mr. Garman, if you wanted to respond, that——

Mr. GARMAN. I thank you for that question, because once again,

it gives me the opportunity to correct. Our hybrid and electric propulsion vehicle program budget funding line is not down. It is up.

We are not investing all of our eggs in the hydrogen basket. We

are spending more on hybrid technology and energy storage technology. That is batteries. We think there is great promise in lithium ion batteries, and we think that is a very important technology. And the reason that it is such a good bet for us to be investing in those technologies is not only will those be used in fuel

cell vehicles when they come to pass, but they could also be used

in the interim. And so this is a no-brainer. We——

Mr. AKIN. You are disagreeing with the premise.

Mr. GARMAN. I am disagreeing with the premise——

Mr. AKIN. You are saying—okay.

Mr. GARMAN [continuing]. Of the question. Yes, sir.

Mr. AKIN. All right. Thank you very much. Anybody else? I have

got another two seconds left.

[No response.]

Mr. AKIN. No? Thank you. Thank you, Mr. Chairman.

56

Chairman BOEHLERT. Thank you very much.

Ms. Biggert.

Ms. BIGGERT. Thank you, Mr. Chairman.

Mr. Garman, a central theme of both reports is that there are

hard technical problems that require basic research to solve. And

I think both reports are clear in recommending that funding be

shifted away from product development in large-scale demonstrations toward exploratory, fundamental research. And I was pleased

to see that the Office of Science was included in the Initiative with

$29 million in new and reallocated funding. Do you agree with the

reports that more basic and fundamental research is needed to

meet the goals of the Initiative? And while the funds of—for science

is a good first step, is the Department planning any future increases in basic research?

Mr. GARMAN. I think the key, and I will leave it to the—to Dr.

Ramage to correct me if I am wrong, but first of all, on the issue

of demonstrations, we are not proposing to do large-scale demonstrations at this time. We don’t think it is ready. We have not

proposed that. We have proposed to do very small-scale, learning

demonstrations where we have vehicles, not in the millions, not in

the hundreds of thousands, but in the tens, tens of vehicles to

produce data and information that feeds back into the R&D process.

Secondly, yes, we do agree with the proposition that there needs

to be more basic and exploratory research. And as you noted in our

fiscal year 2005 budget submission, we have involved the Office of

Science in this work, and we are also—you will be seeing us doing

more exploratory research in our research that we are doing as

well above and beyond that $29 million. So we concur with the recommendations in the report.

Ms. BIGGERT. Thank you.

Then, Mr. Garman, again, we know that it is possible to produce

a car that gets 50 miles or more to the gallon. And in fact, there

are a few on the market today, such as the Toyota Prius. Rumor

has it that you drive one?

Mr. GARMAN. I bought two, in fact.

Ms. BIGGERT. Okay. Well, thinking of one in the APS report

shows in energy information Administration projection of the U.S.

demand for imported oil increasing steadily while U.S. production

is flat, producing a need for 16 million barrels per day of imports.

And the same graph shows that a fuel economy of 39 miles per gallon, only about d as efficient as the Prius, would save about five

million barrels per day. But the fiscal year budget request for the

hydrogen program has a goal of only 1/10 of one million barrels per

day in 2020. And why are we cutting programs? I think you just

said we were not cutting programs, if that is true.

Mr. GARMAN. We are not. And in fact, we are enthusiastic supporters of hybrid vehicles. The President has requested the passage

of a tax credit for purchases of hybrid vehicles, which is in the energy bill, awaiting passage. He proposed that in May of 2001 with

the issuance of his National Energy Plan. So we believe very

strongly that hybrids are a wonderful bridge technology and even

more so because some of those same hybrid technologies, the power

electronics, the energy storage, the electric drive, will also be incorVerDate 11-MAY-2000 19:24 Nov 17, 2004 Jkt 092341 PO 00000 Frm 00060 Fmt 6633 Sfmt 6601 C:\WORKD\FULL04\030304\92341 SCIENCE1 PsN: SCIENCE1
57

porated in the fuel cell vehicles of the future. So we are—on this

graph, which you point out in the APS report, I think it is important to point out that that graph came from our office. And I think

that even—the thing that is interesting to me is even if you have

an immediate 60 percent increase in corporate average fuel economy standards and a much smaller increase was resoundingly defeated in the other body by a wide bipartisan margin, I have to

point out, that curve still starts going up after a certain point in

time. Yes, it does save oil, but it does not get us on that pathway

of eventually delinking light-duty transportation and oil use. And

Representative Akin really asked the million-dollar question: What

are we doing this for? And the answer is quite simple: we are doing

this to eliminate and delink light-duty transportation from petroleum use. The great thing about hydrogen is it is not an energy

source; it is an energy carrier. And we can produce it from coal and

nuclear and renewable energy and a lot of other things we have

here. Because as this committee has pointed out, we don’t have a

lot of oil. We have two percent of the world’s proven reserves, and

the Persian Gulf nations have 64 percent. So we are doing this to

get off of imported petroleum. We are also doing this to eliminate

emissions of all kinds at the tailpipe and delink light-duty transportation from oil use. It is that simple.

Chairman BOEHLERT. Thank you very much. The gentlelady’s

time has expired.

Ms. BIGGERT. Mr. Chairman, I have one more question. Could I

submit it and ask that I get a response?

Chairman BOEHLERT. By all means, all Members will have the

opportunity to submit questions in writing to our witnesses, and we

would appreciate timely responses.

The Chair is now pleased to recognize the distinguished Chairman of the Subcommittee on Space and Aeronautics, who is fresh

from an overwhelming victory at the polls in California just yesterday, Mr. Rohrabacher.

Mr. ROHRABACHER. Yes, that is why I am the distinguished instead of the extinguished chairman.

I would be happy to yield to Ms. Biggert for—to let her ask her

question. Go right ahead. You only have two minutes.

Ms. BIGGERT. Thank you very much, Mr. Chairman.

This is for Dr. Ramage. One of the recommendations from your

report is a greater emphasis on fundamental research on photosynthetic microbial systems. And my understanding is that the Office

of Science Environmental Genome program is getting promising results as it examines hydrogen-producing microbes. Would you—

could you expand a little bit on your recommendation and tell us

more about the potential of the environmental genomics?

Dr. RAMAGE. I am not sure. Let me—could I make a comment

about why we recommended focusing directly on hydrogen production? If you think about most renewables make electricity, and

when you make electricity with a premium fuel and you have to

convert it to hydrogen, which is a commodity fuel, you are losing

energy, and you spend money. And that led us, by looking at costs,

the recommendation to look for ways directly in order to make hydrogen from biological and solar methods. There has obviously been

a lot of progress made in genomics and metabolic type of activities

58

in general and the ability to design organisms that can actually

produce hydrogen has been increasing a lot. There is still a long

way to go, but our Committee strongly felt that that is where a lot

of the exploratory money should go and go away from, you know,

traditional biomass, because there has been a lot of progress made.

Ms. BIGGERT. Thank you. Thank you.

Mr. ROHRABACHER. All right. Well, let us see here. Just one note

before I ask my question. I have been a Member of this committee

long enough to remember the Partnership for a New Generation of

Vehicles program, the PNGV. Do we all remember that? We spent

about $1 billion in that, and then we just sort of walked away. And

there was $1 billion that evaporated. I just hope that this isn’t one

of those types of things where there are a lot of press conferences

and a lot of verbiage and then just nothing to show for the money

that has been spent.

And speaking of spending the money, I would—from the testimony, I understand that we don’t even have a tank designed now

for the automobile that could actually have hydrogen and use it as

a hydrogen storage supply system that would then power the car.

How much money is going into finding and designing one of those

in the budget that you are asking for right now?

Mr. GARMAN. We actually do have a tank, and the hydrogen fuel

cell vehicles that are on the road in California and other place do

carry hydrogen on board the vehicle, unfortunately, not enough,

about the range of 150 to 175 miles.

Mr. ROHRABACHER. Right.

Mr. GARMAN. And we need a 300-mile range or better.

Mr. ROHRABACHER. Okay. So how much are we spending on trying to develop that tank out of the money that is being—you are

asking for this year?

Mr. GARMAN. Our overall storage initiative is earmarked at about $150 million over five years.

Mr. ROHRABACHER. $150 million over five years?

Mr. GARMAN. Yes, sir, around $30 million a year.

Mr. ROHRABACHER. Boy, that is a lot of money to design a storage tank.

Mr. GARMAN. Well——

Mr. ROHRABACHER. $150 million——

Mr. GARMAN [continuing]. If I can explain why, it is—what we

are doing is looking at completely new materials——

Mr. ROHRABACHER. All right.

Mr. GARMAN [continuing]. Including chemical hydrides, metal hydrides, allenates, carbon nanotubes, other more esoteric storage

materials that can be used to store that hydrogen at near ambient

temperatures and pressures. Today, the kind of hydrogen tank on

board the vehicle is a 5,000 or 10,000 p.s.i. tank of compressed hydrogen. We think—and of course, cylindrical tanks are very bulky;

they take up a lot of space on the vehicle. They cost a lot of money.

So we are trying to come up with new designs in partnership with

the private sector that can create a tank that will meet those performance standards——

Mr. ROHRABACHER. So there is no material that exists today that

could be used to construct a hydrogen fuel tank that can meet the

consumer benchmark?

59

Mr. GARMAN. That is correct, that meets——

Mr. ROHRABACHER. As of right now?

Mr. GARMAN [continuing]. Our cost targets. That is correct.

Mr. ROHRABACHER. So you are having to go straight to, you

know, really fundamental science on this, and you are going to

spend $150 million on that, and this is a—could I say it is a shot

in the dark, because you don’t really know if you are going to find

it or not?

Mr. GARMAN. I would say that it is—this is the one area, the primary area where we think we do need a technological breakthrough in order to meet that consumer demand.

Mr. ROHRABACHER. Okay. There is no technological breakthrough

needed to make this fiscally responsible in terms of what type of

fuel you will be using in order to create the hydrogen for fuel in

the first place? That is not a—you don’t—that is already decided

in a——

Mr. GARMAN. No, sir. I think the—again, the beauty of hydrogen

is that you have a variety of different primary energy sources that

you can use to make the hydrogen fuel. I think the early years, as

it has been pointed out, that is most likely to be natural gas distributed at the station. And we believe we can meet that target

with, you know, $1.50 per gallon of gas equivalent hydrogen, or

$1.50 per kilogram by 2010.

Mr. ROHRABACHER. That is a pretty good——

Chairman BOEHLERT. The gentleman’s time has expired.

That is a pretty good goal. Come up to the State of New York

where the gasoline price is considerably higher.

The Chairman now recognizes Dr. Burgess.

Dr. BURGESS. Thank you, Mr. Chairman.

And actually, I am very relieved to hear that there is not being

any diversion of funds from the hybrid system, because, like you,

Mr. Garman, I believe very much in that technology. And in fact,

I went out in January to buy a Prius, and in my part of the world,

you can’t buy one, and I guess that is because you bought two, so

I wanted to make a note of that.

The—and you have answered this question already, but I will go

ahead and ask it, because it hasn’t specifically been answered, but

the idea of getting our hydrogen from natural gas, our—and I do

recognize that there are other sources, and I am very glad to hear

you talk about solar and wind sources for generating hydrogen in

the future, but in the short-term, are we trading our dependence

on foreign oil for our dependence on foreign natural gas?

Mr. GARMAN. We—you have given me an opportunity—a very interesting point that I think has been lost. And we are, today, producing nine million metric tons of hydrogen each and every year

from natural gas. We make a lot of hydrogen in this country, mainly for use at refineries and other locations for desulfurization of

gasoline and diesel products. We would—if we wanted to fund

our—or fuel our entire fleet using natural gas, we would need

around 53 million metric tons, which is, you know, not a huge factor above that that we are already producing today. Now I—but I

agree with the fundamental premise. We want to be careful. We do

not want to trade a dependence on oil for a dependence on natural

gas that has to be imported, which is why I think the point of the

60

Academy is right on when they say plan for the transition period

when you expect to be using natural gas, but do the fundamental

work that provides the breakthrough in the other sources of hydrogen so that they can come on line soon after that point.

Dr. BURGESS. Mr. Chairman—I thank you very much.

Mr. Chairman, I would just add that the work that this committee did on the nanotechnology bill last year, perhaps, can give

rise to the technological breakthrough that they were asking for

with the carbon nanotubes and the reinforced carbon concept that

now is the leading edge of the wing of the Space Shuttle, which

may someday come to the point where you could use it as your

tank.

Until we get to the point where we are making hydrogen from

some other source, I look forward to seeing some hydrogen wells

drilled in West Denton County. I would like that.

Chairman BOEHLERT. Dr. Burgess, I just—thanks for bringing

the National Nanotechnology Initiative up.

And I would like to thank our witnesses. Let the record show

that as Dr. Burgess was making his commentary, all of the witnesses nodded in the affirmative. So they are in agreement with

him and talking about the good work of this committee.

And I thank you very much. Do you have anything more?

[No response.]

Chairman BOEHLERT. Just one final question as we wrap this up.

I think we have reached a consensus. And how do you—how will

you evaluate, Dr. Ramage and Dr. Eisenberger, if they at—Secretary Garman and his people have taken your recommendations

to heart? Dr. Ramage.

Dr. RAMAGE. Well, I think that I am encouraged by what Dave

has said. And I very, very—I think it was an interactive process,

and I am encouraged by what he said about what the issues are,

and I am also encouraged by what he said about the balance of the

program and also the fact that funding hasn’t been decreased in

other areas.

I also know that they are moving toward developing a systems

approach to managing their overall program, which is a very important part of our recommendation. So we have been very encouraged, and so I am pleased with what I have heard today.

Chairman BOEHLERT. Dr. Eisenberger.

Dr. EISENBERGER. Again, I will answer in two ways. I think that

within the constraints that Dr. Garman—I mean that Mr. Garman

is working under, I think he is responding. But I think the constraints should be looked at. I think that some of the questions

that were asked in this hearing require that we take a look at the

project in a larger context of our needs and make sure that the program is not dictated by externalities that really have very little to

do with any specific objective. And there is some indication that

those distortions are part of the problem that we are trying to deal

with.

Chairman BOEHLERT. Thank you very much. And you have both

confirmed by what you said in response to a number of questions

something that the Chair has long felt, and I know Members of the

Committee, who are familiar with Secretary Garman, feel that he

has an extensive outreach program. He talks to people like you, but

61

more importantly, he occasionally listens to people like you. And

once in a while, he even listens to those of us in the Congress. So

I want to commend you, Mr. Secretary, for the outstanding work

you do. And I want to thank you for being resources for this committee, Dr. Eisenberger and Dr. Ramage. We go forward with a

program that is important for America for a whole lot of the right

reasons. And I feel it is in good hands. And I—but the good hands

should know that we are watching.

Thank you very much. This hearing is adjourned.

[Whereupon, at 4:10 p.m., the Committee was adjourned.]

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Appendix 1:

ANSWERS TO POST-HEARING QUESTIONS

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ANSWERS TO POST-HEARING QUESTIONS

Responses by David Garman, Assistant Secretary, Energy Efficiency and Renewable

Energy, Department of Energy

Q1. Has funding for battery and electric vehicle technology declined over the last

four years? Please provide a table for historical funding level (see example below)

for hybrid vehicles, for electric vehicles powered completely by batteries, and for

fuel cell vehicles, indicating any overlaps of funding between vehicle types, from

fiscal year 1999 to the current request. Please exclude work that applies to all

vehicles such as lightweight structural materials. Please provide a total for each

vehicle type as well as documenting the amount from each budget line.

A1. Request levels for battery research and for electric-drive vehicle technology

have risen over the past several years, but the research emphasis has shifted over

the period, resulting in relatively more funding for hybrid and fuel cell vehicles and

less for purely-electric vehicles. The following table provides summary budget data

from FY 1999 through FY 2005 for work on Hybrid, Battery Electric, and Fuel Cell

Vehicles.

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Q2. Since both hydrogen fuel cells and batteries require scientific breakthroughs,

what is the technical basis for the Department’s strong preference for investment

in fuel cells, versus high energy density batteries, for electric vehicle propulsion?

A2. Electric vehicle (EV) propulsion battery R&D has been curtailed due to two severely limiting attributes for which no clear research solution has emerged: energy

density and recharging time. The low energy density of battery technology typically

limits EVs to a range of approximately 100 miles, versus the range of a conventional

vehicle of 350–400 miles. The recharge time of an EV battery is up to six hours,

versus the refueling time of a conventional vehicle of less than five minutes. The

combination of these two negative attributes led to rejection of electric vehicles by

the marketplace and by major automotive manufacturers.

The Department continues a small effort in EV batteries to address these barriers, but has shifted the majority of vehicle battery R&D to focus on the high power

application required by hybrid electric vehicles, including fuel cell vehicles. Hybrid

vehicles do not suffer from range limitations and recharging is conducted continually during vehicle operation. The major focus areas of this activity are use tolerance, battery life, and cost reduction.

Fuel cell technology is not inherently limited by range and refueling time in the

manner batteries are. Current refueling takes less than five minutes (high pressure

tank storage). Like a battery, fuel cells require two reactants, typically hydrogen

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and oxygen. But since fuel cells obtain oxygen from the air (essentially an infinite

storage tank) the refueling and capacity of oxygen is not an issue. Therefore, the

limiting factor in fuel cell vehicle range is hydrogen storage. Although our current

ability to store hydrogen limits vehicle range to approximately 200 miles, this is

mainly volume limited. On a weight basis, the entire fuel cell system, including hydrogen storage, has a specific energy (Wh/kg) approximately double that of today’s

advanced batteries.

In the spring of 2003, DOE convened a ‘‘think tank’’ meeting of distinguished scientists, which determined that significant promise exists in improving on the current storage capability of hydrogen: ‘‘The group believes that while the problem is

challenging. . .there are materials and structures that offer promise for hydrogen

storage at higher capacities.’’ While significant improvements are required to attain

a vehicle range commensurate with conventional vehicles, projects are now in place

to address this issue. We recently announced approximately $150 million in hydrogen storage awards, including the initiation of three Centers of Excellence.

Q3. Please estimate the BTU’s saved per federal dollar spent for Weatherization and

for the Industries of the Future program.

A3. The Department understands the Committee’s desire for clear cost-benefit calculations across the EERE portfolio in order to make wise funding recommendations. It is problematic, however, to compare EERE programs using a straight Btusaved-per-dollar-invested metric. The EERE program portfolio is designed to meet

a variety of National needs and provide multiple benefits not fully captured on a

Btu-saved-per-dollar-invested basis. These include reducing energy bills of low-income Americans, the primary focus of the Weatherization program.

Comparisons are also complicated by differences in the composition of EERE costs

across programs and in the time horizons of the expected benefits. For instance,

Weatherization dollars pay for the cost of the technologies purchased, and the benefits begin to accrue immediately after installation. The Industrial Technologies Program (ITP) dollars pay mostly for research with potential benefits realized in the

future.

The cost and benefit estimates discussed below are based on detailed, individual

program evaluations available to date. As part of its recent restructuring, EERE

continues to improve the consistency of cost/benefit measures across its program

portfolio; at this point, however, EERE cannot fully compare costs or benefits of the

efficiency improvements enabled by these two programs. Specifically, EERE is developing ways of estimating private sector costs, as well as more thoroughly ‘‘backing

out’’ energy savings that would have occurred without federal assistance.

The Weatherization Assistance Program (WAP) funds energy efficiency improvements to low-income homes for Americans who lack the means of financing such

capital investments. Energy price spikes can force these Americans to make painful

tradeoffs between adequate heating, medical care, nutrition, and housing. Based on

our most recent comprehensive analysis (conducted by Oak Ridge National Laboratory and published in 2002), Americans’ energy bills are reduced by $1.30 for every

dollar spent on weatherization; these savings are even greater when energy prices

rise. This program also provides associated benefits that are more difficult to quantify, such as providing local building expertise, decreasing homelessness, and reducing the risk of home fires.

WAP has requested $291.2 million in the FY 2005 budget request. EERE has estimated that these dollars, in combination with leveraged funds provided by State

and local utility partners will allow the program to weatherize over 200,000 homes

(118,900 homes with DOE funds, and approximately 100,000 additional homes with

leveraged funds). While federal dollars are projected to result in approximately 5.0

trillion Btu of source energy savings in 2005, federally-leveraged additional funding

is projected to save a further 3.3 trillion Btu in source energy, for an annual total

energy savings of 8.3 trillion Btu. Including leveraged energy savings, each federal

WAP program dollar yields roughly 430,000 Btus in energy savings over the assumed 15-year life of these improvements.

The Industrial Technologies Program (ITP) develops, manages, and implements a

balanced portfolio that addresses industry requirements throughout the technology

development cycle. As opposed to the WAP, ITP’s primary strategy is to invest in

high-risk, high-return R&D. Investments focus on technologies and practices that

will provide clear public benefit but have market barriers preventing adequate private-sector investment.

From 1977 to 2002, ITP invested approximately $2.65 billion (constant 2002 dollars) supporting research, development, and demonstration (RD&D) projects that

have produced over 160 technologies. EERE estimates that the cumulative benefits

of the private sector investments made in these technologies are estimated at roughVerDate 11-MAY-2000 19:24 Nov 17, 2004 Jkt 092341 PO 00000 Frm 00073 Fmt 6601 Sfmt 6621 C:\WORKD\FULL04\030304\92341 SCIENCE1 PsN: SCIENCE1
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ly 3,700 trillion Btu, or roughly 1,400,000 Btu saved per federal dollar invested. Significant economic and environmental benefits are also achieved.

Q4. In your testimony you stated that ‘‘[W]e fully concur with 35 of those 43 recommendations. . .’’ from the NAS report. Which were the 35 recommendations

DOE concurred with and what is DOE specifically doing to address each of

them? What objections does DOE have to the other eight? Has DOE decided to

reject them entirely?

A4. DOE has not explicitly rejected any of the NAS recommendations. Please refer

to the attachment to this document that details the DOE response to each NAS recommendation, including the eight outstanding recommendations. The following two

recommendations are examples of recommendations where DOE has not fully concurred, as further consideration is required:

• Recommendation 3–2 to discontinue PEM applied R&D for stationary systems: DOE concurs with the concept of focusing R&D to address fundamental

barriers that face all fuel cell applications. However, this recommendation

would have significant negative impact if not transitioned appropriately (potentially eliminating important R&D of value to both stationary and transportation applications), would send a strong negative signal to the fuel cell community and investors, would result in the loss of substantial industry costshare, and would not allow DOE to fulfill its current obligations under several

cooperative agreements. DOE feels significant discussions with its stakeholders and development of a transition plan is required before this recommendation can be implemented.

• Recommendation 3-lb to end on-board fuel processing: DOE is currently conducting a scheduled fuel processing ‘‘go/no-go’’ decision process, which includes input from an expert panel on the feasibility of on-board reforming.

This process to examine on-board fuel processing was in place well before release of the NAS report, and DOE feels that a final decision on the NAS recommendation should not replace the formal ‘‘go/no-go’’ process. A public announcement on this ‘‘go/no-go’’ process is scheduled to be released in July

2004.

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Q5. In your testimony, your response to the American Physical Society’s (APS’s) recommendation against funding large-scale demonstrations was that your demonstrations were ‘‘learning demonstrations.’’ What are the specific characteristics

that distinguish a learning demonstration? How does it compare in terms of expense to a commercial-scale demonstration? Does this classification-learning

demonstration-only apply to the EERE hydrogen demonstrations? How does

DOE respond to the APS recommendation against funding large demonstration

projects in the context of other programs?

A5. The Department’s vehicle and infrastructure learning demonstrations are an

extension of our research and critical to meeting the goals of the President’s Hydrogen Fuel Initiative, including the program’s technical targets that support the 2015

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industry commercialization decision. As pointed out during the discussion at the

Science hearing by Michael Ramage, Chair of the National Research Council’s Hydrogen Committee, ‘‘a continuum of basic science, applied research, development,

and learning demonstrations is necessary for the successful transition to a hydrogen

economy.’’

The key characteristics of the hydrogen learning demonstrations are:

• Generation of important data that will be used to guide and refocus future

research and development efforts

• Identification of operating issues not previously considered, e.g., technology

performance in different climates

• Examination of system integration issues

• Evaluation of performance and durability under real-world operating conditions

• Teaming of auto companies and energy companies, which is critical to the

success of the initiative

• Leveraging by industry of 50 percent of the funding

Learning demonstrations are not unique to the EERE hydrogen program. Any

demonstration that has the characteristics described above would be classified as a

learning demonstration. However, the approach of bringing together the automotive

and energy industries, which are crucial to the development of a hydrogen infrastructure, is unique. This approach will allow the Department and the Congress to

track the progress made and the future potential of this important technology. If

the Department does not follow through with the hydrogen learning demonstrations,

these essential partnerships will probably dissolve and we will lose valuable financial and technical leverage from industry.

The characteristics of commercial-scale demonstrations are quite different. They

involve mature technologies that are ready for market. Commercial demonstrations

put the technologies in the hands of the public or fleet operators to encourage or

incentivize consumer acceptance and to stimulate market development and expansion. Commercial demonstrations can also be used to subsidize production so that

the necessary volumes can be achieved to lower cost. Without a specific program in

mind and understanding of relevant policies approved by Congress, the cost of commercial demonstrations cannot be estimated.

We believe that the American Physical Society’s overemphasis on basic research

is too limiting. Conducting stand-alone basic research is insufficient to achieve our

2015 goals; applied research and technology demonstrations are critical to meeting

the technology milestones leading to the 2015 industry commercialization decision

and to begin the transition to a hydrogen economy. Basic research is critical to understanding the underlying science that will lead to hydrogen and fuel cell technology improvements in the near-term and potentially ‘‘breakthroughs’’ in the longterm.

Almost 85 percent of the hydrogen budget is for research and development efforts.

The Department’s mix of hydrogen funding according to OMB circular A-11 for the

FY 2005 budget request is as follows:

Basic Research: 12.9 percent

Applied Research: 42.5 percent

Development: 29.2 percent

• Demonstration: 13.4 percent

• Deployment: 2.0 percent (Education)

Q6. What projects related to hydrogen might have been funded if additional funds

were available?

A6. Additional funding would be used to address two major challenges facing the

hydrogen economy—hydrogen storage capacity and hydrogen production cost. The

most critical challenge facing the hydrogen economy is the development of a viable

on-board hydrogen storage technology. No technology available today meets consumer requirements in terms of vehicle driving range, weight, volume, and cost. To

address this challenge, an elite group of university scientists recommended the establishment of Hydrogen Storage Centers of Excellence to be led by DOE National

Laboratories and to include university and industry partners.

Funding for the Centers was requested in the FY 2004 budget. However, due to

Congressionally-directed projects in the FY 2004 hydrogen appropriation, no funds

were available to start the competitively-selected Centers of Excellence and other

university projects. In addition, funds requested in FY 2004 to start critical renewVerDate 11-MAY-2000 19:24 Nov 17, 2004 Jkt 092341 PO 00000 Frm 00090 Fmt 6601 Sfmt 6621 C:\WORKD\FULL04\030304\92341 SCIENCE1 PsN: SCIENCE1
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able hydrogen production and delivery R&D projects were not available due to the

earmarks. The Department plans to start these storage and production projects with

FY 2005 funds, subject to Congressional appropriation.

Q7. In the Vehicle Technologies budget, the largest decrease is due to a completion

of the light truck engine program. Given the increase in the size of the U.S. light

truck fleet, this type of work would seem extremely relevant to reducing our foreign oil use. What programs or projects were selected as having greater benefits?

How has technology improved over the course of the program? Are manufacturers incorporating the improved technology into their vehicles?

A7. The Light Truck Engine (LTE) program was initiated in 1997 to address the

increasing fuel consumption in this growing vehicle segment. The primary focus was

the development of advanced clean diesel engines that could increase the fuel economy of light trucks and SUVs by 50 percent over a comparable gasoline powered

vehicle. Two state-of-the-art diesel engines have been developed that have demonstrated the fuel economy goal and additional technologies have been developed to

reduce emissions to Tier 2 levels in short-term testing. These significant advances

have paved the way for introduction of advanced clean diesel engines into the light

truck market.

There are no other projects that will have a greater near-term impact on reducing

oil consumption than the successful implementation of this technology in the light

truck market. However, it is felt that federal R&D funding is no longer needed for

these engines as final product development will be carried out by industry. One

major LTE industry partner is reported to be negotiating the potential production

and use of their advanced clean diesel engines with a major vehicle manufacturer

(see Ward’s Auto World, February 1, 2004). The focus of our efforts is shifting to

longer-term higher risk research on advanced combustion regimes that have the potential for even higher efficiencies and lower emissions.

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Appendix 2:

ADDITIONAL MATERIAL FOR THE RECORD

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PREPARED STATEMENT OF DR. JOSEPH ROMM

Author, The Hype about Hydrogen (Island Press, March 2004); Former Acting Assistant Secretary of Energy

Mr. Chairman and esteemed Members of the Science Committee, I thank you for

the opportunity to submit this testimony. I wish to express my appreciation for the

strong support this committee has shown for clean energy technology R&D over the

course of several decades.

Hydrogen and fuel cell cars are being hyped today as few technologies have ever

been. In his January 2003 State of the Union address, President Bush announced

a $1.2 billion research initiative, ‘‘so that the first car driven by a child born today

could be powered by hydrogen, and pollution-free.’’ The April 2003 issue of Wired

magazine proclaimed, ‘‘How Hydrogen can save America.’’ In August 2003, General

Motors said that the promise of hydrogen cars justified delaying fuel-efficiency regulations.

Yet, for all the hype, a number of recent studies raise serious doubts about the

prospects for hydrogen cars. In February 2004, a prestigious National Academy of

Sciences panel concluded, ‘‘In the best case scenario, the transition to a hydrogen

economy would take many decades, and any reductions in oil imports and carbon

dioxide emissions are likely to be minor during the next 25 years.’’ And that’s the

best case. Realistically, as I discuss in my new book ‘‘The Hype about Hydrogen:

Fact and Fiction in the Race to Save the Climate,’’ a major effort to introduce hydrogen cars before 2030 would undermine efforts to reduce emissions of heat-trapping

greenhouse gases like carbon dioxide—the main culprit in last century’s planet-wide

warming of one degree Fahrenheit.

As someone who helped oversee the Department of Energy’s program for clean energy, including hydrogen, for much of the 1990s—during which time we increased

hydrogen funding by a factor of ten with the support of the Committee—I believe

that continued research into hydrogen remains important because of its potential

to provide a pollution-free substitute for oil in the second half of this century. But

if we fail to limit greenhouse gas emissions over the next decade—and especially

if we fail to do so because we have bought into the hype about hydrogen’s near-term

prospects—we will be making an unforgivable national blunder that may lock in

global warming for the U.S. of one degree Fahrenheit per decade by mid-century.

HYDROGEN AND FUEL CELLS

Hydrogen is not a readily accessible energy source like coal or wind. It is bound

up tightly in molecules like water and natural gas, so it is expensive and energyintensive to extract and purify. A hydrogen economy—which describes a time when

the economy’s primary energy carrier is hydrogen made from sources of energy that

have no net emissions of greenhouse gases—rests on two pillars: a pollution-free

source for the hydrogen itself and a fuel cell for efficiently converting it into useful

energy without generating pollution.

Fuel cells are small, modular, electrochemical devices, similar to batteries, but

which can be continuously fueled. For most purposes, you can think of a fuel cell

as a ‘‘black box’’ that takes in hydrogen and oxygen and puts out only water plus

electricity and heat.

The most promising fuel cell for transportation is the Proton Exchange Membrane

(PEM) fuel cell, first developed in the early 1960s by General Electric for the Gemini

space program. The price goal for transportation fuel cells is to come close to that

of an internal combustion engine, roughly $30 per kilowatt. Current PEM costs are

about 100 times greater. It has taken wind power and solar power each about twenty years to see a tenfold decline in prices, after major government and private-sector

investments in R&D, and they still each comprise well under one percent of U.S.

electricity generation. A major technology breakthrough is needed in transportation

fuel cells before they will be practical.

THE STORAGE SHOW-STOPPER?

Running a fuel cell car on pure hydrogen, the option now being pursued most

automakers and fuel cell companies, means the car must be able to safely,

compactly, and cost-effectively store hydrogen onboard. This is a major technical

challenge. At room temperature and pressure, hydrogen takes up some 3,000 times

more space than gasoline containing an equivalent amount of energy. The Department of Energy’s 2003 Fuel Cell Report to Congress notes:

Hydrogen storage systems need to enable a vehicle to travel 300 to 400 miles

and fit in an envelope that does not compromise either passenger space or storVerDate 11-MAY-2000 19:24 Nov 17, 2004 Jkt 092341 PO 00000 Frm 00164 Fmt 6601 Sfmt 6621 C:\WORKD\FULL04\030304\92341 SCIENCE1 PsN: SCIENCE1
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age space. Current energy storage technologies are insufficient to gain market

acceptance because they do not meet these criteria.

The most mature storage options are liquefied hydrogen and compressed hydrogen

gas.

Liquid hydrogen is widely used today for storing and transporting hydrogen. Liquids enjoy considerable advantages over gases from a storage and fueling perspective: They have high energy density, are easier to transport, and are typically easier

to handle. Hydrogen, however, is not typical. It becomes a liquid only at ¥423°F,

just a few degrees above absolute zero. It can be stored only in a super-insulated

cryogenic tank.

Liquid hydrogen is exceedingly unlikely to be a major part of a hydrogen economy

because of the cost and logistical problems in handling liquid hydrogen and because

liquefaction is so energy intensive. Some 40 percent of the energy of the hydrogen

is required to liquefy it for storage. Liquefying one kg of hydrogen using electricity

from the U.S. grid would by itself release some 18 to 21 pounds of carbon dioxide

into the atmosphere, roughly equal to the carbon dioxide emitted by burning one

gallon of gasoline.

Compressed hydrogen storage is used by nearly all prototype hydrogen vehicles

today. Hydrogen is compressed up to pressures of 5,000 pounds per square inch (psi)

or even 10,000 psi in a multistage process that requires energy input equal to 10

percent to 15 percent of the hydrogen’s usable energy content. For comparison, atmospheric pressure is about 15 psi.

Working at such high pressures creates overall system complexity and requires

materials and components that are sophisticated and costly. And even a 10,000-psi

tank would take up seven to eight times the volume of an equivalent-energy gasoline tank or perhaps four times the volume for a comparable range (since the fuel

cell vehicle will be more fuel efficient than current cars).

The National Academy study concluded that both liquid and compressed storage

have ‘‘little promise of long-term practicality for light-duty vehicles’’ and recommended that DOE halt research in both areas. Practical hydrogen storage requires a major technology breakthrough, most likely in solid-state hydrogen storage.

AN UNUSUALLY DANGEROUS FUEL

Hydrogen has some safety advantages over liquid fuels like gasoline. When a gasoline tank leaks or bursts, the gasoline can pool, creating a risk that any spark

would start a fire, or it can splatter, posing a great risk of spreading an existing

fire. Hydrogen, however, will escape quickly into the atmosphere as a very diffuse

gas. Also, hydrogen gas is non-toxic.

Yet, hydrogen has its own major safety issues. It is highly flammable with an ignition energy 20 times smaller than that of natural gas or gasoline. It can be ignited

by cell phones and electrical storms located miles away. Hence, leaks pose a significant fire hazard. At the same time, it is one of the most leak-prone of gases.

Odorants like sulfur are impractical, in part because they poison fuel cells. Hydrogen burns nearly invisibly, and people have unwittingly stepped into hydrogen

flames. Hydrogen can cause many metals, including the carbon steel widely used

in gas pipelines, to become brittle. In addition, any high-pressure storage tank presents a risk of rupture. For these reasons, hydrogen is subject to strict and cumbersome codes and standards, especially when used in an enclosed space where a

leak might create a growing gas bubble.

Some 22 percent or more of hydrogen accidents are caused by undetected hydrogen leaks. This ‘‘despite the special training, standard operating procedures, protective clothing, electronic flame gas detectors provided to the limited number of hydrogen workers,’’ as Russell Moy, former group leader for energy storage programs at

Ford Motors has wrote in the November 2003 Energy Law Journal. Moy concludes

‘‘with this track record, it is difficult to imagine how hydrogen risks can be managed

acceptably by the general public when wide-scale deployment of the safety precautions would be costly and public compliance impossible to ensure.’’ Thus, major

innovations in safety will be required before a hydrogen economy is practical.

AN EXPENSIVE FUEL

A key problem with the hydrogen economy is that pollution-free sources of hydrogen are unlikely to be practical and affordable for decades. Indeed, even the pollution-generating means of making hydrogen are currently too expensive and too inefficient to substitute for oil.

Natural gas (methane or CH4) is the source of 95 percent of U.S. hydrogen. The

overall energy efficiency of the steam methane reforming process (the ratio of the

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energy in the hydrogen output to the energy in the natural gas fuel input) is about

70 percent.

According to a comprehensive 2002 analysis for the National Renewable Energy

Laboratory by Dale Simbeck and Elaine Chang, the cost of producing and delivering

hydrogen from natural gas, or producing hydrogen on-site at a local filling station,

is $4 to $5 per kilogram (without adding in any fuel taxes), comparable to a price

of gasoline of $4–$5 a gallon (since a kilogram of hydrogen contains about the same

usable energy as a gallon of gasoline). This is over three times the current untaxed

price of gasoline. Considerable R&D is being focused on efforts to reduce the cost

of producing hydrogen from natural gas, but fueling a significant fraction of U.S.

cars with hydrogen made from natural gas makes little sense, either economically

or environmentally, as discussed below.

Water can be electrolyzed into hydrogen and oxygen. This process is extremely energy-intensive. Typical commercial electrolysis units require about 50 kiloWatthours (kWh) per kilogram, an energy efficiency of 70 percent. The cost today of producing and delivering hydrogen from a central electrolysis plant is estimated at $7

to $9 per kilogram. The cost of on-site production at a local filling station is estimated at $12 per kg. Replacing one half of U.S. ground transportation fuels in 2025

(mostly gasoline) with hydrogen from electrolysis would require about as much electricity as is sold in the U.S. today.

From the perspective of global warming, electrolysis makes little sense for the

foreseeable future. Burning a gallon of gasoline releases about 20 pounds of carbon

dioxide. Producing one kg of hydrogen by electrolysis would generate, on average,

70 pounds of carbon dioxide. Hydrogen could be generated from renewable electricity, but that would be even more expensive and, as we will see, renewable electricity has better uses for the next few decades.

Other greenhouse-gas-free means of producing hydrogen are being pursued.

The Department of Energy’s FutureGen project is aimed at designing, building, and

constructing a 270-megawatt prototype coal plant that would co-generate electricity

and hydrogen while removing 90 percent of the carbon dioxide. The goal is to validate the viability of the system by 2020. If a permanent storage location can be

found for the carbon dioxide, such as an underground reservoir, this would mean

that coal could be a virtually carbon-free source of hydrogen. The Department is also

pursuing thermochemical hydrogen production systems using nuclear power with

the goal of demonstrating commercial scale production by 2015. Biomass (plant matter) can be gasified and converted into hydrogen in a process similar to coal gasification. The cost of delivered hydrogen from gasification of biomass has been estimated at $5 to $6.30 per kg. It is unlikely that any of these approaches could provide large-scale sources of hydrogen at competitive prices until after 2030.

Stranded investment is one of the greatest risks faced by near-term hydrogen production technologies. For instance, if over the next two decades we built a hydrogen

infrastructure around small methane reformers in local fueling stations, and then

decided that U.S. greenhouse gas emissions must be dramatically reduced, we would

have to replace that infrastructure almost entirely. John Heywood, director of the

Sloan Automotive Lab at the Massachusetts Institute of Technology, argues, ‘‘If the

hydrogen does not come from renewable sources, then it is simply not worth doing,

environmentally or economically.’’ A major technology breakthrough will be needed

to deliver low-cost, zero-carbon hydrogen.

THE CHICKEN-AND-EGG PROBLEM

Bernard Bulkin, Chief Scientist for British Petroleum, discussed BP’s experience

with its customers at the National Hydrogen Association annual conference in

March 2003. He said, ‘‘if hydrogen is going to make it in the mass market as a

transport fuel, it has to be available in 30 to 50 percent of the retail network from

the day the first mass manufactured cars hit the showrooms.’’ Yet, a 2002 analysis

by Argonne National Laboratory found that even with improved technology, ‘‘the hydrogen delivery infrastructure to serve 40 percent of the light duty fleet is likely

to cost over $500 billion.’’ Major breakthroughs in both hydrogen production and delivery will be required to reduce that figure significantly.

Another key issue is the chicken-and-egg problem: Who will spend the hundreds

of billions of dollars on a wholly new nationwide infrastructure to provide ready access to hydrogen for consumers with fuel-cell vehicles until millions of hydrogen vehicles are on the road? Yet who will manufacture and market such vehicles until

the infrastructure is in place to fuel those vehicles? And will car companies and fuel

providers be willing to take this chance before knowing whether the public will embrace these cars? I fervently hope to see an economically, environmentally, and poVerDate 11-MAY-2000 19:24 Nov 17, 2004 Jkt 092341 PO 00000 Frm 00166 Fmt 6601 Sfmt 6621 C:\WORKD\FULL04\030304\92341 SCIENCE1 PsN: SCIENCE1
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litically plausible scenario for how this classic Catch-22 chasm can be bridged; it

does not yet exist.

Centralized production of hydrogen is the ultimate goal. A pure hydrogen economy requires that hydrogen be generated from carbon-dioxide-free sources, which

would almost certainly require centralized hydrogen production closer to giant windfarms or at coal/biomass gasification power plants where carbon dioxide is extracted

for permanent underground storage. That will require some way of delivering massive quantities of hydrogen to tens of thousands of local fueling stations.

Tanker trucks carrying liquefied hydrogen are commonly used to deliver hydrogen

today, but make little sense in a hydrogen economy because of liquefaction’s high

energy cost. Also, few automakers are pursuing onboard storage with liquid hydrogen. So after delivery, the fueling station would still have to use an energy-intensive

pressurization system. This might mean that storage and transport alone would require some 50 percent of the energy in the hydrogen delivered, negating any potential energy and environmental benefits from hydrogen.

Pipelines are also used for delivering hydrogen today. Interstate pipelines are esti- mated to cost $1 million per mile or more. Yet, we have very little idea today what

hydrogen-generation processes will win in the marketplace over the next few decades—or whether hydrogen will be able to successfully compete with future highefficiency vehicles, perhaps running on other pollution-free fuels. This uncertainty

makes it unlikely anyone would commit to spending tens of billions of dollars on

hydrogen pipelines before there are very high hydrogen flow rates transported by

other means, and before the winners and losers in both the production end and the

vehicle end of the marketplace have been determined. In short, pipelines are unlikely to be the main hydrogen transport means until the post-2030 period.

Trailers carrying compressed hydrogen canisters are a flexible means of delivery,

but are relatively expensive because hydrogen has such a low energy density. Even

with technology advances, a 40-metric-ton truck might deliver only about 400 kg of

hydrogen into onsite high-pressure storage. A 2003 study by ABB researchers found

that for a delivery distance of 300 miles, the delivery energy approaches 40 percent

of the usable energy in the hydrogen delivered. Without dramatic improvement in

high-pressure storage systems, this approach seems impractical for large-scale hydrogen delivery.

Producing hydrogen on-site at local fueling stations is the strategy advocated

by those who want to deploy hydrogen vehicles in the next two decades. On-site

electrolysis is impractical for large-scale use because it would be highly expensive

and inefficient, while generating large amounts of greenhouse gases and other pollutants. The hydrogen would need to be generated from small methane reformers.

Although onsite methane reforming seems viable for limited demonstrations and pilots, it is also both impractical and unwise for large-scale application, for a number

of reasons.

First, the upfront cost is very high—more than $600 billion just to provide hydrogen fuel for 40 percent of the cars on the road, according to Argonne. A reasonable

cost estimate for the initial hydrogen infrastructure, derived from Royal Dutch/Shell

figures, is $5000 per car.

Second, the cost of the delivered hydrogen itself in this option is also higher than

for centralized production. Not only are the small reformers and compressors typically more expensive and less efficient than larger units, but they will likely pay

a much higher price for the electricity and gas to run them. A 2002 analysis put

the cost at $4.40 per kg (that is, equal to $4.40 per gallon of gasoline).

Third, ‘‘the risk of stranded investment is significant, since much of an initial

compressed hydrogen station infrastructure could not be converted later if either a

non-compression hydrogen storage method or liquid fuels such as a gasoline-ethanol

combination proved superior’’ for fuel-cell vehicles.’’ This was the conclusion of a

major 2001 study for the California Fuel-Cell Partnership, a Sacramento-based public-private partnership to help commercialize fuel cells. Most of a methane-based investment would also likely be stranded once the ultimate transition to a pure hydrogen economy was made, since that would almost certainly rely on centralized production and not make use of small methane reformers. Moreover, it’s possible the

entire investment would be stranded in the scenario where hydrogen cars simply

never achieve the combination of popularity, cost, and performance to triumph in

the marketplace.

In the California analysis, it takes 10 years for investment in infrastructure to

achieve a positive cash flow, and to achieve this result requires a variety of technology advances in both components and manufacturing. Also, even a small tax on

hydrogen (to make up the revenue lost from gasoline taxes) appears to delay positive cash flow indefinitely. The high-risk and long-payback nature of this investment

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would seem far too great for the vast majority of investors, especially given alternative fuel vehicles history.

The U.S. has a great deal of relevant experience in the area of alternative fuel

vehicles that is often ignored in discussions about hydrogen. The 1992 Energy Policy

Act established the goal of having alternative fuels replace at least 10 percent of

petroleum fuels in 2000, and at least 30 percent in 2010. By 1999, some one million

alternative fuel vehicles were on the road, only about 0.4 percent of all vehicles. A

2000 General Accounting Office report explained the reasons for the lack of success:

Fundamental economic impediments—such as the relatively low price of gasoline, the lack of refueling stations for alternative fuels, and the additional cost

to purchase these vehicles—explain much of why both mandated fleets and the

general public are disinclined to acquire alternative fuel vehicles and use alternative fuels.

It seems likely that all three of these problems will hinder hydrogen cars. Compared to other alternative fuels (such as ethanol and natural gas), the best analysis

today suggests hydrogen will have a much higher price for the fuel, the fueling stations, and the vehicles.

The fourth reason that producing hydrogen on-site from natural gas at local fueling stations is impractical is that natural gas is simply the wrong fuel on which to

build a hydrogen-based transportation system:

• The U.S. consumes nearly 23 trillion cubic feet (tcf) of natural gas today and

is projected to consume more than 30 tcf in 2025. Replacing 40 percent of

ground transportation fuels with hydrogen in 2025 would probably require an

additional 10 tcf of gas (plus 300 billion kwh of electricity—10 percent of current power usage). Politically, given the firestorm over recent natural gas

supply constraints and price spikes, it seems very unlikely the U.S. government and industry would commit to natural gas as a substitute for even a

modest fraction of U.S. transportation energy.

• Much if not most incremental U.S. natural gas consumption for transportation would likely come from imported liquefied natural gas (LNG). LNG is

dangerous to handle and LNG infrastructure is widely viewed as a likely terrorist target. Yet one of the major arguments in favor of alternative fuels has

been their ability to address concerns over security and import dependence.

• Finally, natural gas has too much economic and environmental value to the

electric utility, industrial, and buildings sectors to justify diverting significant

quantities to the transportation sector, thereby increasing the price for all

users. In fact, using natural gas to generate significant quantities of hydrogen

for transportation would, for the foreseeable future, undermine efforts to combat global warming (as discussed below).

Thus, beyond limited pilot stations, it would be unwise to build thousands of local

refueling stations based on steam methane reforming (or, for that matter, based on

any technology not easily adaptable to delivery of greenhouse-gas-free hydrogen).

THE GLOBAL WARMING CENTURY

Perhaps the ultimate reason hydrogen cars are a post-2030 technology is the

growing threat of global warming. Our energy choices are now inextricably tied to

the fate of our global climate. The burning of fossil fuels—oil, gas and coal—emits

carbon dioxide (CO2) into the atmosphere where it builds up, blankets the earth and

traps heat, accelerating global warming. We now have greater concentrations of CO2

in the atmosphere than at any time in the past 420,000 years, and probably anytime

in the past three million years—leading to rising global temperatures, more extreme

weather events (including floods and droughts), sea level rise, the spread of tropical

diseases, and the destruction of crucial habitats, such as coral reefs.

Carbon-emitting products and facilities have a very long lifetime: Cars last 13 to

15 years or more, coal plants can last 50 years. Also, carbon dioxide lingers in the

atmosphere trapping heat for more than a century. These two facts together create

an urgency to avoid constructing another massive and long-lived generation of energy infrastructure that will cause us to miss the window of opportunity for carbonfree energy until the next century.

Between 2000 and 2030, the International Energy Agency (IEA) projects that coal

generation will double. The projected new plants would commit the planet to total

carbon dioxide emissions of some 500 billion metric tons over their lifetime, which

is roughly half the total emissions from all fossil fuel consumed worldwide during

the past 250 years.

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Building these coal plants would dramatically increase the chances of catastrophic

climate change. What we need to build is carbon-free power. A March 2003 analysis

in Science magazine by Ken Caldeira et al. concluded that if our climate’s sensitivity

to greenhouse gas emissions is in the mid-range of current estimates, ‘‘stabilization

at 4°C warming would require installation of 410 megawatts of carbon emissionsfree energy capacity each day’’ for 50 years. Yet current projections for the next 30

years are that we will build just 80 megawatts per day.

Since planetary warming accelerates over time, and since temperatures over the

continental U.S. land mass are projected to rise faster than the average temperature

of the planet, a warming of 4°C (over 7°F) means that by mid-century, the U.S. temperature could well be rising as much per decade as it rose all last century: one degree Fahrenheit. This scenario, which I am labeling ‘‘The Global Warming Century,’’

would be a climate catastrophe—one that the American public is wholly unprepared

for.

In February 2003, British Prime Minister endorsed the conclusion of Britain’s

Royal Commission on Environmental Pollution: ‘‘to stop further damage to the climate. . .a 60 percent reduction [in global emissions] by 2050 was essential.’’

Unfortunately, the path set by the current energy policy of the U.S. and developing world will dramatically increase emissions over the next few decades, which

will force sharper and more painful reductions in the future when we finally do act.

Global CO2 emissions are projected to rise more than 50 percent by 2030. From

2001 to 2025, the U.S. Energy Information Administration (EIA) projects a 40 percent increase in U.S. coal consumption for electricity generation. And the U.S. transportation sector is projected to generate nearly half of the 40 percent rise in U.S.

CO2 emissions forecast for 2025, which again is long before hydrogen-powered cars

could have a positive impact on greenhouse gas emissions.

Two points are clear. First, we cannot wait for hydrogen cars to address global

warming. Second, we should not pursue a strategy to reduce greenhouse gas emissions in the transportation sector that would undermine efforts to reduce greenhouse gas emissions in the electric generation sector. Yet that is precisely what a

hydrogen-car strategy would do for the next few decades.

HYDROGEN CARS AND GLOBAL WARMING

For near-term deployment, hydrogen would almost certainly be produced from fossil fuels. Yet running a fuel-cell car on such hydrogen in 2020 would offer no significant life-cycle greenhouse gas advantage over the 2004 Prius running on gasoline.

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Further, fuel cell vehicles are likely to be much more expensive than other vehicles, and their fuel is likely to be more expensive (and the infrastructure will probably cost hundreds of billions of dollars). While hybrids and clean diesels may cost

more than current vehicles, at least when first introduced, their greater efficiency

means that, unlike fuel cell vehicles, they will pay for most if not all of that extra

upfront cost over the lifetime of the vehicle. A June 2003 analysis in Science magazine by David Keith and Alex Farrell put the cost of CO2 avoided by fuel cells run- ning on zero-carbon hydrogen at more than $250 per ton even with a very optimistic

fuel cell cost. An advanced internal combustion engine could reduce CO2 for far less

and possibly for a net savings because of the reduced fuel bill.

Probably the biggest analytical mistake made in most hydrogen studies-including

the recent National Academy report—is failing to consider whether the fuels that

might be used to make hydrogen (such as natural gas or renewables) could be better

used simply to make electricity. For example, the life-cycle or ‘‘well-to-wheels’’ efficiency of a hydrogen car running on gas-derived hydrogen is likely to be under 30

percent for the next two decades. The efficiency of gas-fired power plants is already

55 percent (and likely to be 60 percent or higher in 2020). Co-generation of electricity and heat using natural gas is over 80 percent efficient. And by displacing

coal, the natural gas would be displacing a fuel that has much higher carbon emissions per unit energy than gasoline. For these reasons, natural gas is far more costeffectively used to reduce CO2 emissions in electric generation than it is in transportation.

The same is true for renewable energy. A megawatt-hour of electricity from renewables like wind power, if used to manufacture hydrogen for use in a future fuelcell vehicle, would save slightly under 500 pounds of carbon dioxide compared to the

best current hybrids. That is less than the savings from using the same amount of

renewable electricity to displace a future natural gas plant (800 pounds), and far

less than the savings from displacing coal power (2200 pounds).

As the June 2003 Science analysis concluded: ‘‘Until CO2 emissions from electricity generation are virtually eliminated, it will be far more cost-effective to use

new CO2-neutral electricity (such as wind) to reduce emissions by substituting for

fossil-electric generation than to use the new electricity to make hydrogen.’’ Barring

a drastic change in U.S. energy policy, our electric grid will not be close to CO2-

free until well past 2030.

A 2004 analysis by Jae Edmonds et al. of Pacific Northwest National Laboratory

concluded in that even ‘‘in the advanced technology case with a carbon constraint. . .hydrogen doesn’t penetrate the transportation sector in a major way until

after 2035.’’

CONCLUSION

Hydrogen and fuel-cell vehicles should be viewed as post-2030 technologies. In

September 2003, a DOE panel on Basic Research Needs for the Hydrogen Economy

concluded the gaps between current hydrogen technologies and what is required by

the marketplace ‘‘cannot be bridged by incremental advances of the present state

of the art,’’ but instead require ‘‘revolutionary conceptual breakthroughs.’’ In sum,

‘‘the only hope of narrowing the gap significantly is a comprehensive, long-range

program of innovative, high risk/high payoff basic research.’’ The National Academy

came to a similar conclusion.

The DOE should focus its hydrogen R&D budget on exploratory, breakthrough research. Given that there are few potential zero-carbon replacements for oil, the DOE

is not spending too much on hydrogen R&D. But given our urgent need for reducing

greenhouse gas emissions with clean energy, DOE is spending far too little on energy efficiency and renewable energy. If DOE’s overall clean energy budget is not

increased, however, then it would be bad policy to continue shifting money away

from efficiency and renewables toward hydrogen. Any incremental money given to

DOE should probably be focused on deploying the cost-effective technologies we have

today, to buy us more time for some of the breakthrough research to succeed.

The National Academy panel wrote that ‘‘it seems likely that, in the next 10 to

30 years, hydrogen produced in distributed rather than centralized facilities will

dominate,’’ and so they recommended increased funding for improving small-scale

natural gas reformers and water electrolysis systems. Yet any significant shift toward cars running on distributed hydrogen from natural gas or grid electrolysis

would undermine efforts to fight global warming. DOE should not devote any R&D

to these technologies. In hydrogen production, DOE should be focused solely on finding a low-cost, zero-carbon source, which will almost certainly be centralized. That

probably means we won’t begin the hydrogen transition until after 2030 because of

the logistical and cost problems associated with a massive hydrogen delivery infrastructure.

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But we shouldn’t be rushing to deploy hydrogen cars in the next two decades anyway, since not only are several R&D breakthroughs required, we also need a revolution in clean energy that dramatically accelerates the penetration rates of new CO2-

neutral electricity. Hydrogen cars might find limited value replacing diesel engines

(for example in buses) in very polluted cities before 2030, but they are unlikely to

achieve mass-market commercialization by then. That is why I conclude neither government policy nor business investment should be based on the belief that hydrogen

cars will have meaningful commercial success in the near- or medium-term.

The longer we wait to deploy existing clean energy technologies, and the more inefficient, carbon-emitting infrastructure that we lock into place, the more expensive

and the more onerous will be the burden on all segments of society when we finally

do act. If we fail to act now to reduce greenhouse gas emissions—especially if fail

to act because we have bought into the hype about hydrogen’s near-term prospects—

future generations will condemn us because we did not act when we had the facts

to guide us, and they will most likely be living in a world with a much hotter and

harsher climate than ours, one that has undergone an irreversible change for the

worse.