Ken Silverstein EnergyBiz Insider Editor-in-Chief

The federal government wants to do its part to facilitate the hydrogen economy, a development that could affect the way electricity is generated as well as how cars are driven. It has allocated $1.7 billion over five years toward the effort. The key question, of course, is whether the costs are worth the benefits. While the answer is not yet known, advocates of greater research say that fuel cell cars and fuel cell electric generation would create zero emissions.

"People understand the appeal," says Susan Hock, director of electric and hydrogen technology systems for the National Renewable Energy Laboratory in a conversation at her Golden, Co. office. "We could wean ourselves from fossil fuels and become more energy independent to power cars and homes -- and the only emission would be distilled water. But, you have to produce, distribute and store it."

Hock goes on to say that she believes the hydrogen economy will have its first commercial uses for transportation. That's because the major automobile manufacturers along with the oil companies are working jointly to bring about forward momentum.

Hydrogen does not stand alone in nature and must therefore be separated from oxygen -- but to break it out requires energy produced by other fuels. If fossil fuels are used, the process then consumes more energy than it creates and the end result is likely more pollution. If renewable sources are used, the procedure is far more benign. But then questions arise about whether it is more efficient to make hydrogen or just produce electric energy directly. Nuclear proponents say that their processes are both efficient and non-polluting.

The Skepticism

It is also difficult to store hydrogen -- something the U.S. Department off Energy has said is the number one priority when it comes to commercializing fuel-cell vehicles. This issue is now the focus of countless universities and federal laboratories along with industrial partners that include car makers and oil companies. The goal is to travel 300 miles before a car would have to refill.

Right now, though, filling cars and sport utility vehicles with the equivalent of one gallon of gasoline takes about 14,500 gallons of uncompressed hydrogen, says Sandia National Laboratories. Meantime, the production of hydrogen is inefficient. But Hock says that hydrogen has nearly three times the energy content of gasoline, which more than compensates for the efficiency losses.

Critics also say that because hydrogen is hazardous, any leakage could be highly explosive and might possibly accumulate in the atmosphere and harm parts of the ozone layer. Moreover, the transportation of the hydrogen is problematic. According to Hock, more than 1,000 kilometers of steel pipeline in the United States is now being used to transport it. Natural gas companies and pipeline experts estimate that new hydrogen pipelines would be 30 percent more expensive than traditional gas pipelines.

Progress is being made now. In the 1970s, for instance, fuel cell parts were custom-made. Now more and more of them are pressed and molded. That has lowered the cost of manufacturing, although the materials that go into their making -- platinum and membranes -- are expensive. Indeed, the cost of fuel cells has already been cut significantly in the last 15 years and it will continue to fall, says Hock.

"The cost of a fuel cell prototype remains high at $3,000 a kilowatt, but the high production volume of 500,000 units per year" is projected to reduce that price tag to $200 a kilowatt, she says. Eventually, she says the cost could decline to $30 a kilowatt. At the same time, Hock is hopeful that the cost to produce hydrogen could drop from today's $3.60 a gallon of gasoline equivalent to as little as $2 for the same unit by 2015.

Why place so much emphasis on fuel-cell vehicles when hybrid cars exist today? Such cars use an internal combustion engine that run on petroleum. But, unlike conventional cars, they convert energy during braking or coasting and store that in a battery used by the electric motor. That conversion process is using energy that is normally wasted by all gas cars. That's why hybrids get better gas mileage in the city.

Ali Emadi, director of Advanced Automotive Systems at Illinois Institute of Technology in Chicago, says that hybrids are a reality now: "Clearly, fuel cell vehicles are not currently economically feasible. In addition, their overall efficiency is less than hybrids. Therefore, hybrids are going to be more and more popular every year. In fact, I believe that this is the trend not only for the short term, but also for the long term."

The Transition

Hock disagrees, saying that hybrids will serve as a bridge to the hydrogen economy. Hybrid vehicles will decrease oil consumption, she says. But, because the demand for oil is expected to increase, any long-term solution must rely more on petroleum substitutes. And companies are working toward this. Electric Fuel, for example, is developing a prototype that will power cars and buses with fuel cells for a whole shift without having to refuel. Already, the New York City-based company proved that it can run a bus for 101 miles without having to stop and juice up.

"Now is the time for the U.S. government and U.S. industry to create a partnership that can lead the world in the charge to achieve this vision ...," says Byron McCormick of General Motors Corp., in a release. "We were given one mandate by our management: Take the automobile out of the environmental debate."

By any measure, the transition to a hydrogen economy will take lots of time. Many well qualified entities are working on technologies that would overcome the current obstacles. President Bush along with hydrogen innovators say that fuel cell vehicles could make their commercial break-through by 2020. And if such a vision comes to be, even the biggest optimists agree it may be another 20 years to make a complete transformation to the hydrogen economy. The prospects and the subsequent benefits are forcing government and private industry to put the pedal to the metal.

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