Hydrogen Economy Offers Major Opportunities But Faces Considerable Hurdles

WASHINGTON -- February 2, 2004 -- A transition to hydrogen as a major fuel in the next 50 years could significantly change the U.S. energy economy, reducing air emissions and expanding domestic energy resources, but technical, economic, and infrastructure barriers need to be overcome, says a new report from the National Academies' National Academy of Engineering and National Research Council. 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, said the committee that wrote the report.

"Our study suggests that while hydrogen is a potential long-term energy approach for the nation, the government should keep a balanced portfolio of research and development efforts to enhance U.S. energy efficiency and develop alternative energy sources," said committee chair Michael Ramage, retired executive vice president at ExxonMobil Research and Engineering, Moorestown, N.J.

In last year's State of the Union address, President Bush announced a $1.2 billion hydrogen fuel initiative which, combined with the existing FreedomCAR (Cooperative Automotive Research) initiative at the U.S. Department of Energy, aims to make it practical and cost-effective to use clean, hydrogen-powered vehicles by 2020. But the new initiative has technological and economic challenges to overcome, and concerns about cost, environmental impact, and safety need to be addressed, the committee said.

Hydrogen can be produced using fossil fuels such as natural gas and coal; renewable energy sources such as wind, organic matter, and sun; or nuclear energy. Currently hydrogen is produced in large quantities at reasonable cost for industrial purposes by breaking down natural gas into hydrogen and carbon dioxide. But to achieve widespread use of hydrogen, especially as a fuel for automobiles, it must be produced cost-effectively either in large plants or in smaller facilities at or near vehicle fueling stations. If the hydrogen is produced in large plants, infrastructure must be put in place to distribute it to fueling stations. And hydrogen storage technologies must be developed for vehicles that will give consumers the range between refuelings that they expect, the committee said.

The report points out that 10 percent of the natural gas used in the U.S. today is imported and that significantly more will be in the future. Thus, while the most cost-effective source of hydrogen for the long run is probably natural gas, its long-term use as a source of hydrogen would not increase U.S. energy independence, the report says.

Fuel cells, which are devices that combine hydrogen and oxygen to produce electricity, are one of the most promising power sources for clean, hydrogen-fueled transportation, but their cost must be significantly reduced and their reliability should be increased, the report says.

Because hydrogen is flammable and explosive, safer systems for transporting, storing, and handling it also must be developed, the report says. Although hydrogen is professionally managed and used safely in industrial settings, the widespread use of hydrogen in a consumer setting will require the creation of new systems to ensure safety.

Most current ways of producing hydrogen are expensive, but if many technical problems are solved and technologies reach a mature stage of development, hydrogen could be produced and used in fuel cell vehicles at reasonable cost, the committee said. The most significant challenge will be the high cost and logistical complexity of hydrogen distribution to fueling stations, the committee added.

"We are facing a 'chicken and egg' problem that will be difficult to overcome," Ramage said. "Who will invest in the manufacture of fuel cell vehicles if there is no widespread hydrogen supply? At the same time, who will invest in facilities to produce hydrogen if there are not enough fuel cell vehicles to create sufficient income for the hydrogen producers?"

An initial stage where hydrogen is produced on a small scale using natural gas or electricity seems likely, the report adds. For this to happen, production costs for small units must be sharply reduced, which may be possible with expanded research. And during this transition, other technologies for producing hydrogen on a larger scale can be developed.

The committee reviewed DOE's research, development, and demonstration plan for hydrogen, and was impressed by its thoroughness and the agency's progress over time. However, DOE should better coordinate and integrate the efforts of all offices involved in its hydrogen program, the committee said.

"DOE leadership is critical to setting up a hydrogen program for the future, but its current program has tried to establish activities in too many areas," Ramage said. "Prioritizing efforts, establishing milestones, and adjusting the program based on results are extremely important. Also, the program's odds of success in bringing the United States to a hydrogen economy will be greatly increased if DOE partners with a broader range of academic and industrial organizations."

Also, to address the hurdles facing hydrogen production, distribution, and use, DOE should shift its resources and attention from some development activities to more exploratory work, the report says. For example, research should be increased in the areas of distributed hydrogen production systems, hydrogen storage, and solar energy for hydrogen production.

Currently, producing hydrogen from coal -- a large domestic resource -- results in emissions of carbon dioxide into the atmosphere. To reduce these emissions, large-scale production of hydrogen from coal would need to incorporate captured and stored carbon, the report says. The DOE program should accelerate development and early evaluation of carbon capture and storage technologies and further investigate production methods that do not result in emissions, such as wind, the sun, and nuclear heat processes, the committee added.

The study was sponsored by the U.S. Department of Energy. The National Research Council is the principal operating arm of the National Academy of Sciences and the National Academy of Engineering. It is a private, nonprofit institution that provides science and technology advice under a congressional charter. A committee roster follows.

Copies of The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs [ http://books.nap.edu/catalog/10922.html?onpi_newsdoc02042004 ] will be available this spring from the National Academies Press; tel. 202-334-3313 or 1-800-624-6242 or order on the Internet at http://www.nap.edu. Reporters may obtain a pre-publication copy from the Office of News and Public Information (contacts listed above).

[ This news release and report are available at http://national-academies.org ]

NATIONAL ACADEMY OF ENGINEERING
and
NATIONAL RESEARCH COUNCIL
Division on Engineering and Physical Sciences
Board on Energy and Environmental Systems

Committee on Alternatives and Strategies for Future Hydrogen Production and Use

Michael P. Ramage* (chair)
Executive Vice President
ExxonMobil Research and Engineering Co. (retired)
Moorestown, N.J.

Rakesh Agrawal*
Air Products Fellow
Air Products and Chemicals Inc.
Allentown, Pa.

David L. Bodde
Charles N. Kimball Chair in Technology and Innovation
Henry W. Bloch School of Business and Public Administration
University of Missouri
Kansas City

W. Robert Epperly
Independent Consultant
Mountain View, Calif.

Antonia V. Herzog
Staff Scientist
Climate Center
Natural Resources Defense Council
Washington, D.C.

Robert L. Hirsch
Senior Energy Program Advisor
Scientific Applications International Corporation
Alexandria, Va.

Mujid S. Kazimi
Director
Center for Advanced Nuclear Energy Systems, and
Professor of Nuclear Engineering
Massachusetts Institute of Technology
Cambridge

Alexander MacLachlan*
Senior Vice President
Research and Development
DuPont (retired)
Wilmington, Del.

Gene Nemanich
Independent Consultant
Sugar Land, Texas

William F. Powers*
Vice President, Research
Ford Motor Co. (retired)
Boca Raton, Fla.

Maxine Savitz*
Independent Consultant, and
General Manager
Honeywell Inc. (retired)
Los Angeles, Calif.

Walter W. Schroeder
President and Chief Executive Officer
Proton Energy Systems Inc.
Wallingford, Conn.

Robert H. Socolow
Professor of Mechanical and Aerospace Engineering
Princeton Environmental Institute
Princeton University
Princeton, N.J.

Daniel Sperling
Director
Institute of Transportation Studies
University of California
Davis

Alfred N. Spormann
Microbial Physiologist and Biochemist
Department of Civil and Environmental Engineering
Stanford University
Stanford, Calif.

James L. Sweeney
Professor
Department of Management Science and Engineering
Stanford University
Stanford, Calif.

STAFF

Martin Offutt
Study Director

* Member, National Academy of Engineering