Issues: Oil & Energy

To address the rapidly accelerating threats posed by global warming and increased dependence on imported oil, the United States and other countries must act to reduce the consumption of petroleum-based fuels in the transportation sector. To manage these threats effectively, we must take near-term actions to significantly increase the efficiency of vehicles that will be sold during the next 25 years. In addition, we must begin now to develop non-petroleum alternatives to fuel the transportation fleets of the future. It will take decades before such new fuels and vehicles will achieve significant market penetration due to the large changes required in vehicle technology and fuel production and distribution systems. We must invest today in two broad areas: incorporating state-of-the-art technology into the vehicles coming on the market in this decade and the next; and developing a new state-of-the-art for vehicles and fuels for the decades that follow.

Among the options for future fuels and fleets, hydrogen and hydrogen fuel cells vehicles have received the most attention and funding to date. The potential of this "hydrogen economy" is drawing increasing attention from Americans concerned about our nation's oil dependence and the threats to our health and well-being from air pollution and global warming. Hydrogen fuel could play a promising long-term role in solving these problems if it is used in high efficiency, non-polluting fuel cells and if it is made from non-polluting energy sources. Hydrogen fuel cells and fuel sources, however, face significant technology, cost, and deployment barriers. A practical assessment of these barriers reveals that it will take at least two decades before hydrogen and fuel cells can begin to make a significant contribution to our energy security, cleaner air, and a safer climate.

The National Academy of Sciences, in a February 2004 report concluded that even the most optimistic predictions for commercializing hydrogen fuel cell vehicles have the first such vehicles reaching commercial showrooms around 2015. It would then take at least another decade or more before hydrogen fuel cell vehicles reach sufficient numbers to begin to have a major impact on the vehicle market, on petroleum imports, and on global warming emissions.¹

The Academy report concluded: "[H]ydrogen -- although it could transform the energy system in the long run -- does not represent a short-term solution to any of the nation's energy problems."² For this reason, the U.S. Department of Energy "should keep a balanced portfolio of R&D efforts and continue to explore supply-and-demand alternatives that do not depend on hydrogen." The Academy report also stated: "[H]ybrid electric vehicle technology is commercially available today, and benefits from this technology can therefore be utilized immediately."³ High mileage hybrid electric vehicles, including the Toyota Prius, the Honda Civic Hybrid and hybrid models coming from other automakers, are already competing successfully in the marketplace.

America cannot afford to wait 20 years before we begin to curb our oil dependence and global warming pollution. President Bush touts hydrogen R&D programs with attractive names -- "Freedom Car" and "Freedom Fuel" -- but these have only long-term pay-off. At the same time, his administration opposes meaningful efforts to reduce oil dependence, air pollution, and global warming now with strong federal performance standards to raise the fuel economy and reduce the global warming pollution of the 17 million conventional cars and trucks that will be sold each year for the next 20 years. In fact, the administration just recently extended alternative fuel mileage credits that actually have the affect of increasing petroleum consumption and more then offsetting the modest 1.5 mpg increase in light truck fuel economy that the administration recently adopted.⁴

Strong federal standards would motivate automakers to commercialize the cleaner, more efficient technologies that are already available today -- more fuel-efficient engines, transmissions, and other components for conventional gasoline-powered cars, as well as more hybrid gas-electric vehicles. Strong standards can also help accelerate a transition to a clean and sustainable fuel supply.

For more than 30 years, California has played a special role in national efforts to clean up our cars and trucks. Each generation of the pollution control technology that is now found on every vehicle nationwide was pioneered in California under the state's own clean air standards. Now California is playing a similar role in developing the hydrogen economy. California's Zero Emission Vehicle (ZEV) program is spurring the early introduction of critical technologies, such as electric drives and fuel cells, into our smoggiest cities. But what is lacking are meaningful federal standards that go beyond long-term R&D to make cleaner vehicles a reality nationwide.

Other countries, notably various EU countries, are successfully pursuing a portfolio of near- and long-term options for improving energy security and reducing environmental impacts from the transportation sector. In addition, China is investing heavily in research and development of fuel cell vehicles and hydrogen production and storage options while also developing new fuel economy standards for conventional vehicles that are tougher on gas-guzzling SUVs than those in the United States.

America must immediately begin kicking the petroleum habit and substantially reducing our global warming pollution. Hydrogen is one promising long-term successor to the petroleum fuels that currently power 97 percent of our vehicles.

It really matters, however, where the hydrogen comes from. It can be produced from a wide variety of sources: fossil fuels, biomass, or electrolysis of water, where the electricity used for electrolysis can also be generated from a range of sources. One of hydrogen's primary advantages is that it can be produced from a diverse number of entirely domestic and renewable sources. Hydrogen can increase our energy security if it is made from the former. It can improve our environment if it is made from the latter (e.g., biofuels or electrolysis powered by wind or solar electricity) or if the carbon pollution from fossil fuel sources is successfully pumped back underground for permanent storage.

It also matters how hydrogen is used, whether in fuel cells or conventional internal combustion engines. Fuel cells are inherently more efficient then gasoline engines. They convert hydrogen to electricity efficiently and without high temperature combustion, through a chemical reaction, much as a standard battery does. In this reaction, the hydrogen fuel reacts with oxygen from air to produce electricity, and the only emission from the vehicle is water vapor. There is no smog-forming or global warming pollution from the vehicle.

Tremendous progress has been made over the last decade in developing fuel cell vehicle prototypes, spurred in large part by the California Zero Emission Vehicle program. Every major automobile manufacturer has a fuel cell vehicle (FCV) prototype and a small number of FCVs are on the roads in California, Washington, D.C., Japan, and Europe.

While these investments have spurred many technological improvements, they have also revealed the many difficulties of designing cost-effective and safe fuel cells and hydrogen storage and dispensing systems. Before FCVs will be ready for mass production, significant technical and cost challenges must be resolved. These include the high current cost of fuel cells, their lack of durability, limited driving range due to limitations in on-board fuel storage technology, issues of safety and lack of infrastructure to produce and distribute the hydrogen to large numbers of consumers.

These considerations only underline the importance of taking concrete steps now with technology that is already available in the near-term, and the danger of putting all our eggs in the hydrogen basket even for the long term. Building a sustainable transportation energy system must include strong clean air and fuel economy standards in the near-term and ultimately, a more balanced portfolio of R&D focusing on other clean fuel technologies as well as hydrogen in the long-term. This combined approach will begin immediately reducing our oil imports and global warming pollution with technologies available today, while exploring and preserving a range of potential future technology options.

Other vehicle and fuel options appear to have at least as much potential as hydrogen to substantially reduce oil consumption and global warming pollution from vehicles. Ethanol used in high efficiency vehicles, such as hybrids, is one such option if the ethanol is made from agricultural waste or energy crops (cellulosic ethanol) instead of today's corn-based ethanol. Furthermore, a breakthrough in the efficiency of chemical batteries or other technologies for storing electricity could allow rechargeable electric vehicles to penetrate the mass market.

Currently, there are 180 million passenger vehicles in the U.S., virtually all of which run on gasoline or diesel. Even after hydrogen fuel cell vehicles make it to the showroom, it will take many decades before the majority of vehicles on the road are fuel cell-powered.

Steady improvement to today's gasoline vehicles would have a much bigger near-term and mid-term impact than even the most aggressive deployment of a FCVs. Today's fuel-saving gasoline technologies can be deployed now and can run off the current fueling infrastructure. FCVs will require an entirely new infrastructure that faces significant technical and economic barriers.

As shown in NRDC's recent Dangerous Addiction report,⁵ increased fuel economy could save almost 25 times more oil between now and 2020 than FCVs. By 2030, when fuel cells could be more prevalent, oil savings from conventional and hybrid vehicle fuel-economy improvements are still five times as great as those from fuel cell vehicles.

To illustrate this point, we compared the oil savings for a fuel-economy proposal of 40 miles per gallon by 2012 and 55 miles per gallon by 2020 with projected savings from a fuel-cell target of 100,000 fuel-cell vehicles per year by 2010 and 2.5 million per year in 2020 without any improvement in the fuel economy of conventional vehicles. Figure 1 shows that oil savings up to 2030 from fuel-cell technology -- even on an optimistic timeline -- are dwarfed by the gains that can be achieved by raising the gas mileage of conventional American cars and trucks.

Hydrogen can be extracted from a variety of sources, including natural gas, water, biomass, and even oil or coal. Currently, most hydrogen is extracted from natural gas, oil, and coal, while releasing carbon dioxide from those fuels into the atmosphere. Small amounts of hydrogen are produced by electrolysis (splitting water into hydrogen and oxygen with electricity) using conventional (mainly fossil-fueled) sources of electricity, which also results in carbon dioxide emissions. Hydrogen can also be made from renewable sources, and from fossil fueled plants that pump carbon dioxide underground. These sources have very different environmental and energy security implications.⁶

Natural Gas Steam Methane Reforming. At present, natural gas is the leading "feedstock" under consideration for near-term hydrogen production in the U.S. Natural gas is a non-renewable resource, and hydrogen production from reforming natural gas would result in substantial carbon dioxide emissions. The greatest supplies of natural gas are found in ecologically sensitive locations and in politically unstable parts of the world, as is petroleum. To power 40% of the fleet with hydrogen from natural gas in 2025, even using higher efficiency fuel cells, would require a 33% increase in natural gas supply from projected 2025 levels.⁷ Since natural gas is already in heavy demand as the cleanest fossil fuel for power plants, alternative sources of hydrogen production are needed. Also, unless global warming emissions are removed and stored underground, the natural gas process will continue to contribute to global warming. In other words, while natural gas might work as a transition fuel, a hydrogen economy based on natural gas would be neither sustainable nor secure in the long term.

Electrolysis and Renewables. Electrolysis using renewably generated electricity, such as wind or photovoltaics, would produce a domestic, non-polluting hydrogen transportation fuel. Unfortunately, hydrogen produced today by this method can be more than 3 times the cost of an equivalent gallon of gasoline. On the other hand, if the electricity is supplied from the present-day electrical grid, currently more than 50 percent coal-fired, while somewhat less expensive then hydrogen production from renewable-based electrolysis it would generate even larger amounts of carbon emissions than the natural gas process. In order for hydrogen fuel cell vehicles to reduce global warming pollution, the electrolysis process will have to become more efficient, and the electricity driving it will need to be produced from a high percentage of low- to zero-carbon sources (e.g., renewables or coal with carbon capture and storage). Under current projections, electrolytic hydrogen from grid electricity in the U.S. would likely create a net increase in global warming emissions for at least the next couple of decades.⁸,⁹

Biomass and Biofuels. Dedicated sustainable energy crops could also serve as a crucial part of a hydrogen economy since they can serve directly as a carbon-free source of hydrogen through biomass gasification, or converted to cellulosic-based ethanol as an intermediate step and then to hydrogen. This later option is attractive since ethanol as a room temperature liquid fuel is substantially easier to transport. Energy crops could also diversify agricultural markets, help stabilize the agricultural economy, contribute to rural economic development, and reduce the adverse impacts of agricultural subsidies on developing countries. More research and development of the production processes of biomass to hydrogen and ethanol-to-hydrogen is needed to make this source of energy a cost-effective and viable option.

Eventually, hydrogen could also be produced directly from renewable sources through photoelectrochemical or photobiological processes, but these are still at an early stage of research and development and could take decades to come to fruition.

Coal Gasification. The Bush administration's hydrogen fuel initiative has strongly emphasized producing hydrogen from coal. While coal has the advantage of being a domestic resource, it drawbacks include high emissions of carbon dioxide and other pollutants and land and water impacts from current mining practices. If these environmental problems are addressed through the use of technologies such as coal gasification with carbon capture and storage¹⁰ and low environmental impact mining, then hydrogen from coal could potentially become a sustainable source of hydrogen over the long term, both in the U.S. and other coal-rich countries. But for these technologies to come to market, the U.S. must establish enforceable limits on carbon dioxide emissions and demonstrate the viability of large-scale carbon storage projects as soon as possible. The Department of Energy is exploring initiatives that gasify coal producing both hydrogen and electricity while storing the waste carbon dioxide in a geologic formation.

Carbon storage needs further research and development. But it is not the "silver bullet" solution for producing clean hydrogen as portrayed by the Bush Administration. Carbon storage, if proven to be safe, permanent, and environmentally benign, should be only one component of a portfolio of options for producing hydrogen. The emphasis should be on producing hydrogen from intrinsically clean sources, such as wind, solar, and sustainable biomass crops. Yet to date the Administration has failed to place a high enough priority on these clean options. The administration also supports nuclear power, which could produce hydrogen with no global warming emissions. But expanding nuclear power presents significant safety, waste disposal, security, and land use risks. A portfolio of truly clean, renewable, and domestic sources of hydrogen must ultimately form the basis for any future hydrogen economy.

Hydrogen is not necessarily going to be a magic solution to America's global warming pollution and our country's petroleum dependence. Nevertheless, placed in perspective hydrogen has the potential to play a major role and therefore must be explored aggressively. However, these efforts must be accompanied by near-term actions. First and foremost, we need policies that mobilize the technologies we already have. That means raising fuel economy standards, accelerating hybrid vehicle production, and actively developing options such as cellulosic ethanol. To complement these actions we need a realistic, diverse and aggressive R&D effort to develop the longer-term technologies, such as hydrogen, that hold significant promise.

Numerous analyses demonstrate that if we do nothing to curb global warming or cut our foreign oil dependence until a hydrogen economy is ready, these problems will be too big to solve. A responsible, economically sensible energy policy that effectively addresses both global warming and energy security must include:

• Aggressive near-term performance standards requiring automakers to cut the oil consumption and global warming pollution of their fleets by deploying technologies that reduce carbon emissions, save fuel, or do both.
  
  
• Accelerated deployment of off-the-shelf and near-term vehicle technologies and fuels that can reduce oil dependence and global warming pollution while providing a potential transition to hydrogen fuel cells.
  
  
• Strategic deployment of fuel cells. In the coming decade, we need to conduct fleet testing of FCVs in our smoggiest cities, in order to get real world experience with the commercialization challenges while cleaning up the air.
  
  
• Continued research and development into fuel cell vehicle technology and advanced hydrogen system technologies, complemented with research, development, and deployment of the capacity to make hydrogen from wind, solar power, and biofuels, and from fossil-fuel sources without carbon emissions. These are the most sustainable energy sources for potential future hydrogen production.
  
  
• Long-term research and development efforts that continue to explore alternative clean energy options to hydrogen such as biofuels or battery electric vehicles.
  

Notes

1. National Research Council of the National Academy of Sciences, "The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs," February 2004.

2. Ibid, p. 6-14.

3. Ibid, p. ES-2.

4. Extending the alternative fuel credits is estimated to increase the nation's petroleum consumption by around 3 billion gallons from 2005 through 2008 (see Dept. of Transportation, Environmental Protection Agency, Dept. of Energy, Report to Congress: Effects of the Alternative Motor Fuels Act CAFE Incentives Policy (Mar. 2002)), while the 1.5 mpg increase in light truck standards is projected to save just 0.9 billion gallons over the same period (see Dept. of Transportation, National Highway Traffic Safety Administration, Light Truck Average Fuel Economy Standards Model Years 2005-2007, Notice of Final Rule, 68 Fed. Reg. 16868, 16898 (April 7, 2003)).

5. Daniel Lashof and Roland Hwang, Dangerous Addiction 2003 -- Breaking the Chain of Oil Dependence, March 2003.

6. Wang, et al. "Well-to-Wheels Energy and Emission Impacts of Vehicle/Fuel Systems Development and Applications of the GREET Model", 2003; National Research Council of the National Academy of Sciences, "The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs," February 2004.

7. Joseph Romm, Hydrogen and Fuel Cells: A Technology and Policy Overview, prepared for the National Commission on Energy Policy by The Center for Energy and Climate Solutions, October, 2003.

8. C. E. (Sandy) Thomas, John P. Reardon, Franklin D. Lomax, Jr., Jennifer Pinyan & Ira F. Kuhn, Jr., Proceedings of the 2001 DOE Hydrogen Program Review, "Distributes Hydrogen Fueling Systems Analysis."

9. Today, the U.S. generates about 71 percent of its electricity from fossil fuels. The Department of Energy projects that this share will increase to 77 percent by 2025 while the percentage of renewable generated electricity will stay constant at about 7-8 percent, US DOE Annual Energy Outlook 2004.

10. Carbon storage is the process of permanently storing carbon dioxide into geologic or ocean reservoirs, and if successful could be used to reduce these emissions from burning coal and other fossil fuels, making them more acceptable sources of hydrogen, or electricity production.

last revised 4.16.04