[Senate Hearing 108-817]
[From the U.S. Government Publishing Office]
S. Hrg. 108-817
FUTURE OF THE HYDROGEN FUEL CELL
=======================================================================
HEARING
before the
SUBCOMMITTEE ON SCIENCE, TECHNOLOGY, AND SPACE
OF THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
MAY 7, 2003
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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8SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana DANIEL K. INOUYE, Hawaii
TRENT LOTT, Mississippi JOHN D. ROCKEFELLER IV, West
KAY BAILEY HUTCHISON, Texas Virginia
OLYMPIA J. SNOWE, Maine JOHN F. KERRY, Massachusetts
SAM BROWNBACK, Kansas JOHN B. BREAUX, Louisiana
GORDON SMITH, Oregon BYRON L. DORGAN, North Dakota
PETER G. FITZGERALD, Illinois RON WYDEN, Oregon
JOHN ENSIGN, Nevada BARBARA BOXER, California
GEORGE ALLEN, Virginia BILL NELSON, Florida
JOHN E. SUNUNU, New Hampshire MARIA CANTWELL, Washington
FRANK LAUTENBERG, New Jersey
Jeanne Bumpus, Republican Staff Director and General Counsel
Robert W. Chamberlin, Republican Chief Counsel
Kevin D. Kayes, Democratic Staff Director and Chief Counsel
Gregg Elias, Democratic General Counsel
------
Subcommittee on Science, Technology, and Space
SAM BROWNBACK, Kansas, Chairman
TED STEVENS, Alaska JOHN B. BREAUX, Louisiana
CONRAD BURNS, Montana JOHN D. ROCKEFELLER IV, West
TRENT LOTT, Mississippi Virginia
KAY BAILEY HUTCHISON, Texas JOHN F. KERRY, Massachusetts
JOHN ENSIGN, Nevada BYRON L. DORGAN, North Dakota
GEORGE ALLEN, Virginia RON WYDEN, Oregon
JOHN E. SUNUNU, New Hampshire BILL NELSON, Florida
FRANK LAUTENBERG, New Jersey
C O N T E N T S
----------
Page
Hearing held on May 7, 2003...................................... 1
Statement of Senator Brownback................................... 1
Statement of Senator Dorgan...................................... 3
Statement of Senator Lautenberg.................................. 4
Witnesses
Friedman, David J., Senior Engineer, Clean Vehicles Program,
Union of Concerned Scientists.................................. 25
Prepared statement........................................... 27
Garman, Hon. David K., Assistant Secretary, Energy Efficiency and
Renewable Energy, Department of Energy......................... 10
Prepared statement........................................... 12
Marburger III, Hon. John H., Director, Office of Science and
Technology Policy.............................................. 6
Prepared statement........................................... 8
McCormick, J. Byron, Executive Director, Fuel Cell Activities,
General Motors Corporation..................................... 36
Prepared statement........................................... 41
Preli, Jr., Francis R., Vice President-Engineering, United
Technologies Corporation Fuel Cells............................ 44
Prepared statement........................................... 46
Appendix
Response to written questions submitted by Hon. Bill Nelson to
Francis R. Preli, Jr........................................... 57
FUTURE OF THE HYDROGEN FUEL CELL
----------
WEDNESDAY, MAY 7, 2003
U.S. Senate,
Subcommittee on Science, Technology, and Space,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 2:36 p.m. in room
SR-253, Russell Senate Office Building, Hon. Sam Brownback,
Chairman of the Subcommittee, presiding.
OPENING STATEMENT OF HON. SAM BROWNBACK,
U.S. SENATOR FROM KANSAS
Senator Brownback. The hearing will come to order. We're
going to have a fun hearing today on a great topic, hydrogen-
fueled automobiles and other uses of hydrogen fuel.
I'd like to begin the hearing of the Science, Technology,
and Space Subcommittee by thanking each of our witnesses. I
appreciate you coming today. I want to thank you on behalf of
the Committee for joining us here today and sharing your
testimony. Secondly, I want to thank you on behalf of my kids
for your leadership in advancing the practical applications of
hydrogen fuel cell research. This is an incredibly important
issue for the future, and it certainly has a lot of excitement
and interest for now and for the next generation.
Perhaps a critical duty for any leader, whether you're a
CEO, Secretary of State, a principal of a high school, is to
advance a vision of what we want our country and the world to
look like. As did countless generations before we were born, we
are charged to leave our children's life better than that which
we inherited. I'd also argue that this notion of the world we
would like to leave our children is a vision that unites us.
While we often disagree about how to get there, we just as
often agree about where we would like to be heading.
It is almost universally held we would like to be energy
independent. This country is best when it is a forceful
advocate for democracy and freedom. Unfortunately, far too
often, our Nation's interests in advancing these principles
stumble over our interest in affordable and reliable sources of
energy. It is a generally held belief that the more affordable
and reliable energy sources we can develop at home, the more
freely we will be able to advance American ideals abroad.
Generally, I think we can all agree that we would like to
leave our children a cleaner, better environment. My dad is a
farmer in Parker, Kansas, and he farms the land that his dad
farmed. My brother farms the same land. Growing up on a farm,
you can't help but learn the values of good stewardship. I have
no doubt that Dad is going to leave to my brother, Jim, the
land better than he found it.
I've been very blessed to see a great deal of this country,
and I have a great faith that we are living on a gift from God.
As stewards of this country, such is our responsibility to pass
on the gift to the next generation in better condition than it
was received.
But we can't ignore that we are also stewards of the
economy. If we listen to the debate around here, it's very
clear that we agree that a robust economy makes this country
strong. Again, we don't all agree on how to get there, but I
suspect that that's a whole different hearing. We have a
tremendous burden to keep the economy growing and to continue
creating new jobs.
If the duty of a leader is to advance a vision of the
future, perhaps the greatest trick of leadership is not having
to sacrifice one goal for the sake of another. And therein lies
the importance of the hydrogen fuel cell.
Hydrogen is the most plentiful element on the planet. Two-
thirds of the planet is water. Two-thirds of water is hydrogen.
Now, I'm trained neither as a scientist, nor an engineer, but
as near as I can figure, we have all the hydrogen that we need
right here within our borders.
As for the environment, at worst the emissions of a
hydrogen fuel cell is minimal, and the efficiency of fuel cells
is unmatched by conventional technologies. Likely, the initial
generations of fuel cells will rely on some form of
petrochemicals, most likely natural gas, to produce the
hydrogen. However, the modest amounts of CO2 emitted from these
power sources are dwarfed by the emissions of today's cleanest
internal combustion engines.
In addition, today's internal combustion engine captures
only 15 to 20 percent of the energy in gasoline. Fuel cells, on
the other hand, convert 40 to 65 percent of hydrogen energy
into electricity. The potential of this 160-year-old technology
to help us achieve cleaner air by the time my kids are driving
their kids to school is staggering.
Not only can our economy be sustained in a transition to a
greater reliance on hydrogen, but our economy can grow as we
move toward hydrogen. As we have seen in the past several
years, our economy is extremely sensitive to fluctuations in
energy cost. Moving away from the more limited and unstable
commodities of fossil fuels towards the more abundant hydrogen
has a tremendous potential to insulate the economy from
fluctuations in energy prices.
In addition, where there is innovation, there is growth. As
American companies, like those represented here today, develop
the innovative technologies that carry us into hydrogen-based
transportation and possibly a hydrogen-based economy, our
country will see growth follow.
However, for all the potential of hydrogen fuel cells, to
paraphrase Robert Frost, there are many miles before we sleep.
The time frame we've laid out for the transition to hydrogen-
based transportation is almost unmatched in human history. To
meet the time frame, our commitment must be unwavering.
We thank those of you who are here to testify today, in
advance, for all the hard work and the dedication and the
leadership you will invest and have already invested in this
mission. And that's why we look forward to your testimony and
presentation and answering questions today.
We've been joined by another advocate of hydrogen
technology that's approached me and talked with me on the floor
about this issue and has aggressively supported it, Senator
Dorgan, from North Dakota.
STATEMENT OF HON. BYRON L. DORGAN,
U.S. SENATOR FROM NORTH DAKOTA
Senator Dorgan. Senator Brownback, thank you very much.
Let me just make a couple of comments before we begin the
hearing. I will not be able to stay for the entire hearing, but
I'm especially pleased that you're holding it, because I think
this is the issue. We have the energy bill on the floor. It
includes an initiative dealing with hydrogen and fuel cells.
The President has indicated his interest and his
administration's support for this. I have indicated previously
that it is enormously welcome, because putting the
administration's support behind this direction is not only a
breath of fresh air, but is an enormous source of strength to
move something like this through the Congress.
I've indicated also, without meaning to be highly critical,
that the President's specific proposal was more timid than I
would like. I had offered legislation here in the Congress
prior to the President making his proposal, a more robust
proposal that I think we ought to embrace. It is a $6.5 billion
proposal over 10 years that sets targets and timetables of
having 100,000 fuel cell vehicles on the road by 2010 and 2.5
million vehicles on the road by 2020.
This is not a project that will be achieved just because we
wish it to be so. The issue of finding a new supply of energy,
particularly hydrogen, means that we have issues dealing with
the production, the transportation, the storage of hydrogen,
and the continued development of increasingly sophisticated
fuel cells.
But, as you indicated, Mr. Chairman, running gasoline
through the carburetors of our vehicle fleet forever makes no
sense to me. Fuel cells are twice as efficient as running
gasoline through carburetors, in terms of putting power to the
wheel, and it just makes sense to me, especially given what
we've seen in Iraq and the Middle East recently, that our
economy should not be so overly dependent on foreign sources of
energy. The fastest growing part of our energy usage is in
transportation, by far. We import 55 percent of our oil. Which
is expected to increase to 68 percent by the year 2020. That's
an unsustainable path, and it's a path that jeopardizes this
country's economy. It holds our country hostage to conditions
that we do not, cannot, and will not control.
We will continue to dig and drill, and we will continue to
increase production of oil, coal, and natural gas. I support
all that. But if digging and drilling is our only energy
strategy, then we are confined to a ``yesterday-forever''
strategy.
Mr. Chairman, my first car was a 1924 Model-T Ford. I
restored it as a young teenager. I put gasoline in the 1924
Ford the same way you put gasoline in a 2003 Ford. Not a thing
has changed in a century. The new dream and vision of a
hydrogen economy with fuel cells, particularly for our
transportation fleet, but also stationary fuel cells, is
something that can cause fundamental change in this country
that is positive--positive for our economy, and positive to
help us become less dependent on things that we can't control.
I just think that this requires a robust, aggressive push from
all of us in public policy.
I'm really pleased with the people you have testifying.
I've worked with many of them. Mr. Garman has been to North
Dakota. We've talked about other energy, wind energy. But Mr.
Garman, I know that you are representing the administration's
view of how much we can do, and you and I have a slight
disagreement about how aggressive we can or should move. But we
have no disagreement on the direction, and that is refreshing
to me. This administration has put itself in the position of
saying, ``Let's move in this direction.'' I say, ``You bet.
Let's do it, and let's be very bold about it as we do it.''
My hope, Mr. Chairman, is that when the energy bill leaves
the Senate, even though we nearly tripled the amount of effort
in the Energy Committee on the hydrogen piece--we're up to a
little over $3 billion at this point--my hope is that we can
increase it even more so that my grandchildren and your
grandchildren, when they turn the key in their vehicle, will be
turning their key in a fuel cell vehicle that uses hydrogen.
And if I can make one final point. Secretary Garman came to
North Dakota to talk about wind energy. There is a wind energy
component in this, as well, because wind blows intermittently.
But you put up the new efficient wind turbines to produce
electricity and use electricity through the process of
electrolysis to separate hydrogen and oxygen for water, store
the hydrogen, and use it for our vehicle fleet. It all fits
together in a wonderful, wonderful way, and because of that, I
sleep better. It was therapeutic to say all of this.
[Laughter.]
Senator Dorgan. Thank you.
Senator Brownback. Thank you very much, Senator Dorgan,
whose passionate support of hydrogen is obvious.
Senator Lautenberg, do you have an opening statement?
STATEMENT OF HON. FRANK LAUTENBERG,
U.S. SENATOR FROM NEW JERSEY
Senator Lautenberg. Thanks, Mr. Chairman. I listened with
interest to Senator Dorgan's statement, and he talked about
fixing up his 1924 vehicle. I had a energy-less vehicle in
1924. It was my mother pushing me in a baby carriage, and----
[Laughter.]
Senator Lautenberg.--you can't find that kind of energy
around anymore, but I didn't realize that you were old enough
to understand that. I'm pleased to be here, also, to join in
this discussion, this review of where we go beside fossil fuels
and how we get where we want to go. And I'm not talking about
the mileage alone. The alternatives have to be found to the way
we do business today.
It's so rare that we hear things like ``conserve'' or
``sacrifice'' or things of that nature, and I think the best
way to get where we'd like to be is to really devote our energy
and our resource to this opportunity with the hydrogen fuel
cells. And I just passed a car that's parked outside downstairs
that General Motors is showing, a hydrogen fuel cell car. But
it's still prototype. It's not ready at all for production. But
they are going into hybrid production, I was told, next year.
And that will add something like a 10 percent efficiency
factor. If that translates immediately to the use of oil, to
the importation of oil--I mean, the numbers are staggering.
Well, in the State of the Union Address, President Bush
announced a new $1.2 billion dollar research and development
initiative for hydrogen-fueled vehicles. Now, as those in this
room know now, the hydrogen fuel cells hold enormous promise as
an efficient low-emission source of power. And theoretically,
it's possible to create a hydrogen fuel cell that only emits
water, and the water can be used again as a source for more
hydrogen.
The President's initiative is meant to complement the
Department of Energy's Freedom CAR Program, a 2-year-old
cooperative research program between the Federal Government and
universities and private industry. But as important as hydrogen
will be down the road, I can't help but think that the
initiative merely scratches the surface. It's designed to, I
think, hide the relatively poor record that we've had with
regard to cutting auto emissions and our dependence on OPEC oil
now at a time when we know how precarious that supply is and
the availability.
The fastest, cheapest way to cut our dependence on foreign
oil now is to make our cars and trucks go further on each
gallon of gas that they burn. And the fact is, the automakers
are keenly aware of hydrogen promises and are investing $2- to
$3 billion of their own money each year to develop the
technology. And the Federal Government's money, $1.2 billion,
would be better spent promoting near-term fuel economy
improvements in our cars and trucks. And this near-term
component is what's missing from the President's approach.
According to the National Academy of Sciences, existing
technologies could be used to raise fuel efficiency to 40 miles
per gallon without compromising safety. The NRDC estimates that
we could cut the amount of oil our cars and trucks use by a
half by the year 2020, and by three-quarters over the next
three decades, compared with business-as-usual projections. And
total consumer savings from these improvements would equal
nearly $13 billion per year in 2012, and almost $30 billion by
2020.
By lifting the fuel economy standards for the national
fleet to 40 miles per gallon by 2012 and 55 miles per gallon in
2020, we'd save nearly 4 billion barrels of oil over the next
dozen years. And by the year 2012, we could save nearly, it's
believed with credibility, 2 million barrels each day. That's
more oil than we imported from Saudi Arabia last year, and
three times our imports from Iraq. By 2020, savings would grow
to nearly 5 million barrels a day, which is almost twice the
amount that we currently import from the Persian Gulf.
When it comes to hydrogen, I'm anxious to learn more from
the witnesses today about this exciting technology, how long
it'll take before hydrogen-fueled cars and trucks are
commercially feasible. But I would suggest that we should also
hold a hearing, Mr. Chairman, on why President Bush hasn't
announced any initiatives to cut auto emissions and our
dependence on OPEC oil now.
And I look forward to hearing from our witnesses, and I
thank you, Mr. Chairman, for holding this meeting.
Senator Brownback. Yes, thank you, Senator Lautenberg.
We have two panels today. Our first panel is the Honorable
John Marburger III. He's director of Office of Science and
Technology Policy. And the Honorable David Garman, Assistant
Secretary for Energy Efficiency and Renewable Energy of the
U.S. Department of Energy.
Gentlemen, we're delighted to have you here today,
delighted to hear your testimony, and look forward to that and
answering questions.
And, Mr. Marburger, if you'd be willing to go first, if
that would be all right. We will put your full statement into
the record as if presented, so you're free to summarize if
you'd like.
STATEMENT OF HON. JOHN H. MARBURGER III, DIRECTOR, OFFICE OF
SCIENCE AND TECHNOLOGY POLICY
Mr. Marburger. Thank you Mr. Chairman, Senator Dorgan, and
Senator Lautenberg. It's a pleasure to be here. I appreciate
the opportunity to appear before you today to discuss the
President's hydrogen fuel initiative. I will keep my oral
presentation short so there's time for questions, and I
appreciate that my written testimony will be included in the
record.
The President's National Energy Policy Report that was
released 2 years ago this month set forth a vision for a clean,
secure, and affordable energy future. That vision includes a
key role for hydrogen as an energy medium across the entire
spectrum of energy applications.
President Bush, as you noted, emphasized in his State of
the Union Address this year that one of his chief domestic
goals is to promote energy independence for our country while
dramatically improving the environment.
Senator Brownback. Mr. Marburger, could you pull that
microphone closer to you? I don't know if it's picking up very
well.
Mr. Marburger. Okay.
Senator Brownback. There you go.
Mr. Marburger. The President subsequently announced the
Hydrogen Fuel Initiative to develop the technology to enable
mass production of clean hydrogen-powered automobiles and the
infrastructure to support them by 2020. The Hydrogen Fuel
Initiative complements the previously announced Freedom CAR
Partnership, which includes fuel cell, hybrid electric, and
other advanced automotive technology research.
Other new initiatives have followed, including the Carbon
Sequestration International Leadership Forum, the FutureGEN
Zero Emission Coal-Fired Electricity and Hydrogen Power Plant
Initiative, and an international partnership for the hydrogen
economy. In a related but much longer-term initiative, the
President announced U.S. participation in the international
collaboration on fusion energy research.
Hydrogen is important, because it can serve as a primary
energy carrier. Like electricity, it can be produced from many
different domestically available energy sources using
technologies that do not emit pollutants or carbon dioxide.
Furthermore, hydrogen-based transportation, power, and heating
systems promise dramatic efficiency gains with greatly reduced
noxious air pollutants and greenhouse gas emissions. These
technologies, together with the other elements of the
President's energy plan, have the long-term potential to
substantially reduce or eliminate our Nation's dependence on
foreign oil while improving the environment.
Our transportation sector, for example, runs almost
exclusively on oil and we are importing more than half of our
oil needs every day. Hydrogen can be produced from diverse
domestic energy sources, including natural gas, coal, or
nuclear energy, or biomass, wind, and solar power, anything
that produces electricity. Although we will continue to strive
for efficiency improvements in conventional vehicles, hydrogen-
fueled vehicles can potentially remove petroleum from the
equation altogether.
Hydrogen fuel cell vehicles are potentially more than twice
as efficient as conventional cars and trucks. And if you
consider the entire well-to-wheel energy cycle, including the
efficiency of hydrogen production from natural gas, fuel cells
still are more efficient and produce significantly less CO2
than conventional, diesel, or hybrid electric vehicles.
Widespread use of fuel-cell-powered cars and trucks would also
yield significant air quality improvements, particularly in
urban areas.
As hydrogen production shifts toward newer energy source
technologies, such as coal power with carbon sequestration or
nuclear power, our transportation sector could reduce emissions
of air pollutants and greenhouse gases to near zero.
So what do we have to do to achieve this hydrogen vision?
There are significant technical challenges. First, we need a
hydrogen infrastructure for convenient and affordable refueling
of the vehicles and devices. The private sector builds
infrastructure only when the business case is attractive. And
considering that our current infrastructure delivers gasoline
for less than the price of bottled water, this is a significant
challenge.
When produced from natural gas, hydrogen is currently four
times more expensive than gasoline. The President's Hydrogen
Fuel Initiative proposes a large increase in R&D funding for
technologies that will drive down the cost of production,
storage, distribution, and delivery of hydrogen.
As the infrastructure develops, hydrogen will likely come
from a number of different energy sources and production
methods, as determined by the marketplace. The mix will depend
on regional factors like the cost and availability of feed
stocks or environmental constraints or state regulations. The
hydrogen distribution and delivery systems will involve a
combination of centralized production facilities, pipelines,
local production of neighborhood fueling stations, and truck
delivery to rural areas.
After the infrastructure challenge is the need for the fuel
cell vehicles themselves to be cost competitive with the
conventional vehicles that they will replace. Even in mass
production, fuel cells today would be 10 times more expensive
than comparable gasoline engines. Currently available high-
performance fuel cells require relatively large amounts of
precious metals, such as platinum, and highly engineered
materials. Agency R&D efforts focus on reducing these costs and
very promising new technologies are emerging.
A third challenge is the need for hydrogen storage systems
with sufficient energy density to provide a 300-mile vehicle
driving range without excessive size, weight, or cost. The
President's initiative proposes funding increases for each of
these vital research areas, along with the development of codes
and standards that will foster safe handling and operation of
hydrogen-fueled systems.
The hydrogen fission includes many other applications
besides fuel cell vehicles. Stationary fuel cells can provide
heating and power for buildings and reliable distributed power
generation. As a hydrogen infrastructure is developed, local
hydrogen production will support distributed power generation,
and pipeline networks could serve residential applications.
This future-oriented initiative does not obviate the need
for interim strategies to address our Nation's energy
environmental challenges. The administration proposes to
continue R&D in non-hydrogen transportation technologies--
hybrid electric systems, for example--energy storage, and
materials.
Our ultimate goal is a petroleum-free, emission-free energy
future. The President's Hydrogen Fuel Initiative led by the
Department of Energy proposes $1.2 billion for research over 5
years to overcome the key technology hurdles to enable a
hydrogen-based economy. There are many other agencies involved
in this initiative, including the Departments of
Transportation, Defense, Commerce, Agriculture, NSF, NASA, and
EPA, and my office will continue to work with all agencies, as
usual, to assist coordination. The agencies, by the way, are
working well together and have already begun to establish
collaborative activities.
So I thank you very much for allowing me to present the
President's initiative here today, and I'll be glad to answer
questions.
[The prepared statement of Mr. Marburger follows:]
Prepared Statement of Hon. John H. Marburger III, Director, Office of
Science and Technology Policy
Mr. Chairman, Mr. Breaux, and Members of the Subcommittee, I
appreciate the opportunity to appear before you today to discuss the
President's Hydrogen Fuel Initiative.
America's energy challenges must be met with revolutionary new
technologies and dedicated leadership to improve the production,
distribution, and use of energy. The President's National Energy Policy
Report, released in May 2001, establishes a clear path for our Nation
to achieve a clean, secure, and affordable energy future. That vision
includes hydrogen as an energy carrier in our automobiles, trucks,
homes, and businesses.
In the State of the Union address in January 2003, President Bush
stated that one of his key domestic goals is ``to promote energy
independence for our country, while dramatically improving the
environment.'' The President then announced the Hydrogen Fuel
Initiative to develop the technology to enable mass production of
clean, hydrogen-powered automobiles, and the infrastructure to support
them, by 2020. The Hydrogen Fuel Initiative complements the FreedomCAR
partnership, which includes fuel-cell, hybrid-electric, and other
advanced automotive technology research. Other new initiatives have
followed from the President's leadership. In February, the Secretary of
Energy announced the Carbon Sequestration International Leadership
Forum, along with the ``FutureGEN'' initiative to build a zero-
emission, coal-fired electricity and hydrogen power plant.
Additionally, on February 3 the President announced that the U.S. will
join Canada, the European Union, Japan, Russia, and the United Kingdom
in the creation of an international collaboration on fusion energy
research. Most recently, the Administration announced that it will lead
an International Partnership for the Hydrogen Economy.
Through these initiatives, we will lead the effort, in concert with
the private sector and other nations, to develop clean and secure
energy supplies and energy systems. We envision a future in which
hydrogen serves, along with electricity, as a primary energy carrier
for the U.S. economy. Like electricity, hydrogen can be produced from a
diversity of domestically available energy sources using technologies
that do not emit pollutants or carbon dioxide. Furthermore, hydrogen-
based transportation, power, and heating systems offer the promise of
dramatic efficiency gains with greatly reduced noxious air pollutants
and greenhouse gas emissions. These technologies, together with the
other elements of the President's energy plan, have the long-term
potential to substantially reduce or eliminate our Nation's dependence
on foreign oil while improving the environment.
While we have made significant progress in reducing pollutant
emissions from our cars, trucks, and power plants, and we will continue
to make progress in the near term through ongoing regulatory actions,
our objective is to move beyond the command-and-control mechanisms of
environmental policy. We can do this by developing and deploying
transportation systems and power systems that are emission-free by
design.
For example, a hydrogen-based transportation sector would
dramatically improve our Nation's energy security. Our transportation
sector runs almost exclusively on oil, and we are importing more than
half of our oil needs every day. Although we will continue to strive
for efficiency improvements in conventional vehicles, hydrogen-fueled
vehicles can potentially remove petroleum from the equation altogether.
Hydrogen can be produced from diverse domestic energy sources,
including natural gas, coal, nuclear energy, biomass, wind, and solar
power. Upon successful market penetration, hydrogen fuel cell vehicles
would dramatically reduce our dependence on imported oil, with ultra-
clean hydrogen internal combustion engines as a possible interim step.
Hydrogen fuel cell vehicles offer the potential to achieve more
than twice the efficiency of conventional cars and trucks. When
considering the full energy cycle, including the efficiency of hydrogen
production from natural gas, fuel cells are still more efficient--and
produce less carbon dioxide--than conventional, diesel-powered, or
hybrid-electric vehicles. Hydrogen fuel cell vehicles produce no
emissions other than water. Widespread use of fuel-cell powered cars
and trucks would thus yield significant air quality improvements,
particularly in urban areas. As hydrogen production shifts more to
renewable sources, nuclear power, and coal power with carbon
sequestration, our transportation sector could reduce emissions of air
pollutants and greenhouse gases to near zero.
In the State of the Union address, the President said:
``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.''
In order to achieve this hydrogen vision, we must overcome some
significant technical challenges.
First, a hydrogen infrastructure must be built that will enable
convenient and affordable refueling. The private sector will build the
infrastructure only when the business case is attractive. Considering
that our current gasoline infrastructure can deliver refined petroleum
products to local stations for less than the price of bottled water,
this represents a significant challenge. When produced from natural
gas, hydrogen is currently four times as expensive to produce as
gasoline. The President's Hydrogen Fuel Initiative, therefore, proposes
a large increase in the research and development funding for
technologies that will enable cost-competitive production, storage,
distribution, and delivery of hydrogen. This includes funding for
renewable- and nuclear-based hydrogen production.
As the infrastructure develops, hydrogen will likely be produced
from a portfolio of energy sources and production methods, as
determined by the marketplace. The optimal combination of energy
sources will likely depend on regional factors such as the cost and
availability of the feedstocks, environmental constraints, and state
regulations. Similarly, hydrogen distribution and delivery systems will
most likely involve a combination of centralized production facilities
with pipelines, local production at neighborhood fueling stations, and
truck delivery to rural areas.
Second, fuel cell vehicles must be safe, reliable, and cost-
competitive with the conventional vehicles that they replace. Even in
mass production, fuel cells today would be ten times more expensive
than comparable gasoline engines. High-performance fuel cells require
relatively large amounts of precious metals (platinum) and highly
engineered materials. Agency research and development efforts are
focused on reducing these costs.
Third, we must develop hydrogen storage systems with sufficient
energy density to provide a 300-mile vehicle driving range without
excessive size, weight, or cost.
The President's Initiative proposes funding increases for each of
these vital research areas, along with the development of codes and
standards that will help ensure the safe handling and operation of
hydrogen-fueled systems.
The hydrogen vision includes many other applications besides fuel
cell vehicles. Stationary fuel cells can provide heating and power for
buildings and reliable, distributed power generation. Portable power
units, laptops, and cell phones can also be powered by hydrogen. Some
of these applications could achieve commercial viability before fuel
cell vehicles do. As the hydrogen infrastructure is developed, local
hydrogen production will support distributed power generation, and
pipeline networks could serve residential applications.
In addition, as we work to achieve the hydrogen vision, we need
interim strategies to address our Nation's energy and environmental
challenges. Therefore, the Administration has proposed a continuing
research and development effort in non-hydrogen transportation
technologies such as hybrid-electric systems, energy storage, and
materials. These technologies are expected to provide fuel savings both
in the near term, by application to conventional gasoline-fueled
vehicles, and in the long term by enabling commercially viable fuel-
cell vehicles, which will need lightweight materials, high-density
power electronics, and cost-effective energy storage devices.
Our ultimate goal is a petroleum-free, emission-free energy future.
The President's Hydrogen Fuel Initiative, led by the Department of
Energy (DOE), proposes $1.2 billion for research over five years
(including $181.7 million in the FY2004 budget request) to overcome the
key technology hurdles to enable a hydrogen-based economy.
Other agencies besides DOE, including the Department of
Transportation (DOT), Environmental Protection Agency, Department of
Defense, Department of Commerce, National Science Foundation,
Department of Agriculture, National Aeronautics and Space
Administration, and others, also conduct or plan to conduct significant
research related to hydrogen and fuel cell technologies. For example,
DOT will develop many of the codes and standards related to hydrogen
technologies. In order to foster coordination across the federal
government, and to improve the effectiveness of hydrogen research and
development, my office is leading an interagency hydrogen R&D task
force. The agencies have strongly supported this effort and have begun
to establish collaborative activities. The task force will also provide
an opportunity to reach out to the private sector and to expand
coordination of research, where appropriate, to other nations through
the International Partnership for the Hydrogen Economy.
The hydrogen vision is ambitious, but through the President's
Hydrogen Fuel Initiative, together with related activities across the
federal government, we can make substantial progress towards the vital,
national goals of energy security and environmental stewardship.
I would be happy to answer any questions you may have.
Senator Brownback. Thank you, Mr. Marburger, for the
presentation, and I look forward to the questions back and
forth.
Mr. Garman, welcome to the Committee, and I look forward to
your presentation.
STATEMENT OF HON. DAVID K. GARMAN, ASSISTANT
SECRETARY, ENERGY EFFICIENCY AND RENEWABLE
ENERGY, DEPARTMENT OF ENERGY
Mr. Garman. Thank you, Mr. Chairman. I, too, will summarize
my testimony.
As the chart behind me shows, there is an imbalance between
domestic oil production and transportation's demand for
petroleum. This imbalance, which is now around 11 million
barrels a day, is projected to keep growing. And we're not
going to close this imbalance with regulation, with new
domestic production, or even both. Although promoting
efficiency in the use of oil and finding new domestic sources
of oil are important short-term undertakings, over the long-
term, a petroleum-free option is eventually required. We
ultimately want a transportation system that is free of
dependence on foreign energy supplies and free of all harmful
emissions.
We also want to preserve the freedom of consumers to
purchase the kind of vehicles they want to drive, and that's
the concept behind the Freedom CAR Partnership and the
President's Hydrogen Fuel Initiative, which are designed to
help develop the technologies necessary for hydrogen fuel cell
vehicles and the infrastructure to support them.
A transportation system based on hydrogen provides several
advantages. Hydrogen can be produced from diverse domestic
sources, freeing us from a reliance on foreign imports. And
when hydrogen is used to power a fuel cell, the combination
results in more than twice the efficiency of today's gasoline
engines and none of the harmful air emissions. In fact, the
only byproducts of fuel cell operation are pure water and waste
heat.
But to bring about the mass market penetration of hydrogen
vehicles, government needs to partner with the private sector
to conduct the research and development needed to advance
investment in a hydrogen fuel infrastructure that performs as
well as the petroleum-based infrastructure we already have, and
that's going to be difficult.
Our gasoline infrastructure that we currently enjoy has
been forged over the last century in a competitive market. It's
remarkably efficient. It can deliver refined petroleum products
that began as crude oil a half a world away to your
neighborhood for less than the cost of milk, drinking water, or
many other liquid products you can buy in the supermarket.
We're currently bound to that petroleum infrastructure. And
before drivers will purchase a fuel cell vehicle, they have to
have confidence in a new hydrogen infrastructure. And that's
why the President, in his State of the Union Address, made a
new national commitment backed over the next 5 years by $1.2
billion for the Hydrogen Fuel Initiative, in addition to
another $1/2 billion for associated vehicle technologies.
And government's not going to build this hydrogen
infrastructure. The private sector will do that as the business
case becomes clearer. But as we develop the technologies needed
by the vehicles, we'll also develop the technologies required
by the infrastructure. Some of the technology challenges are
daunting. For example, we have to lower, by a factor of four,
the cost of producing and delivering hydrogen. We have to
develop more compact, lightweight, lower-cost hydrogen storage
systems. We have to lower by a factor of at least 10 the cost
of materials for fuel cells.
And, fortunately, we're not starting from scratch.
Beginning back in November 2001, the Department of Energy began
working with industry, academia, and other stakeholders on a
comprehensive technology roadmap. We've achieved a remarkable
level of consensus on what needs to be done.
And as important as hydrogen is for the long term, we've
maintained a robust research and development program in non-
hydrogen transportation technologies. Under the Freedom CAR
Partnership, we've proposed a funding increase in fiscal year
2004 for our hybrid technology, as well as increases in
materials technology. Many of these technologies will deliver
fuel savings both prior to and after the introduction of fuel
cell vehicles, since lightweight materials and hybrid
technologies will most likely be incorporated into the fuel
cell vehicle designs as well as the conventional and hybrid
models that precede them.
Automakers are introducing technologies that have resulted
in part from DOE's work in this area. At the recent Detroit
auto show, the major U.S. automakers announced that they'll
have a variety of new hybrid electric models entering the
market in the 2004-2008 time frame. Of course, hybrid vehicles
are more expensive compared to conventional vehicles, which is
why the President proposed a tax credit for hybrid vehicles in
his national energy plan and in subsequent budget submissions.
And we urge Congress adopt these important incentives for more
efficient vehicles.
So, with that, Mr. Chairman, I'd be pleased to answer any
questions the Committee has, either now or in the future.
Thank you.
[The prepared statement of Mr. Garman follows:]
Prepared Statement of Hon. David K. Garman, Assistant Secretary, Energy
Efficiency and Renewable Energy, Department of Energy
Mr. Chairman and Members of the Subcommittee, I appreciate this
opportunity to testify today.
The President's National Energy Plan, entitled ``Reliable,
Affordable and Environmentally Sound Energy for America's Future,'' is
the blueprint for the energy future we seek, and it makes several
recommendations with regard to hydrogen.
Specifically, it directs the Secretary to develop next generation
energy technology, including hydrogen; it recommends that our research
and development (R&D) programs related to hydrogen and fuel cells be
integrated; and it recommends that legislation reauthorizing the
Hydrogen Energy Act enjoy the support of the Administration.
Since the release of the President's energy plan in May 2001, the
President and Secretary Abraham have unveiled several exciting new
initiatives related to hydrogen. Most notable are the FreedomCAR
partnership announced in January 2002; the President's Hydrogen Fuel
Initiative announced during the State of the Union address in January
2003; and the ``FutureGEN'' zero-emission coal-fired electricity and
hydrogen power plant initiative announced in February. Each of these
initiatives plays a particularly important role in a hydrogen energy
future. Each will help make possible a future in which the principal
``energy carriers'' are hydrogen and electricity, eventually generated
using technologies that do not emit any pollutants or carbon dioxide.
Today, we are highly dependent on coal, natural gas and nuclear
energy for the majority of our electricity. We depend on oil, a growing
percentage of which is imported, to power our transportation needs. In
my testimony today I will focus on transportation, and the role that
FreedomCAR could have in eventually building a light duty
transportation system that requires no petroleum, and is comprised of
vehicles that emit nothing other than water vapor. As illustrated in my
first chart (Figure One) the ``gap'' between domestic production and
transportation demand is growing--and is projected to keep growing. The
current gap between total U.S. consumption and net production of oil is
roughly 11 million barrels per day. Promoting efficiency in the use of
oil, and finding new domestic sources of oil, are both important short-
term undertakings. But over the long-term, a petroleum-free option is
eventually required.
Our energy challenge is further complicated by another important
factor--the pollutants and carbon dioxide emissions resulting from our
use of energy. We have made tremendous progress in reducing pollutant
emissions from our cars and trucks as well as our stationary power
sources, and we will continue to make incremental gains through
regulatory approaches such as the Tier II standards. But for true
efficiency gains, we must reach to develop a wholly new approach to
energy.
In his recent State of the Union address, President Bush announced
a groundbreaking plan to transform our Nation's energy future from one
dependent on foreign petroleum, to one that utilizes the most abundant
element in the universe--hydrogen.
Hydrogen can be produced from diverse domestic sources, freeing us
from a reliance on foreign imports for the energy we use at home.
Hydrogen can fuel ultra-clean internal combustion engines, which would
reduce auto emissions by more than 99 percent. And when hydrogen is
used to power fuel cell vehicles, it will do so with more than twice
the efficiency of today's gasoline engines--and with none of the
harmful air emissions. In fact, fuel cells' only byproducts are pure
water and some waste heat.
But ultimate success in the mass-market penetration of hydrogen
fuel cell vehicles requires a hydrogen-based infrastructure that
performs as well as the petroleum-based infrastructure we now have.
Our current gasoline/hydrocarbon infrastructure has been forged in
a competitive market. It is ubiquitous and remarkably efficient. It can
deliver refined petroleum products that began as crude oil half a world
away to your neighborhood for less than the cost of milk, drinking
water, or many other liquid products you can buy at the supermarket. We
are currently bound to that infrastructure. We have no alternative.
Eventually replacing it with something different will be extremely
difficult. But that is what we must do if we expect to achieve success
with the FreedomCAR partnership. Drivers must be able to go anywhere in
America and to refuel their hydrogen-powered vehicle before they will
be comfortable purchasing one.
That is why the President, in his State of the Union address,
proposed that we in the federal government significantly increase our
spending on hydrogen infrastructure R&D, including hydrogen production,
storage, and delivery technologies, as well as fuel cells. Over the
next five years, we plan to spend an estimated $1.7 billion on the
FreedomCAR partnership and Hydrogen Fuel Initiative, $1.2 billion of
which is for the Hydrogen Fuel Initiative, which includes resources for
work on hydrogen and fuel cells. Of the $1.2 billion figure, $720
million is ``new money.''
We will not build the infrastructure. The private sector will do
that as the business case becomes clear. But as we develop the
technologies needed by the vehicles, we will also develop the
technologies required by the infrastructure. In cooperation with DOT,
we will convene the parties needed for technology partnerships, we will
collaborate on the needed codes and standards, and we will promote
international cooperation in this effort. Just last week, during a
presentation to the International Energy Agency, Secretary Abraham
called for an ``International Partnership for the Hydrogen Economy'' to
collaborate on research and deployment of hydrogen technologies.
I will now elaborate further on some of these technology challenges
we face and the timing of the transition toward a hydrogen economy.
Technology Challenges
Achieving our vision will require a combination of technological
breakthroughs, market acceptance, and large investments in a national
hydrogen energy infrastructure. Success will not happen overnight, or
even over years, but rather over decades; it will require an
evolutionary process that phases hydrogen in as the technologies and
their markets are ready. Success will also require that the
technologies to utilize hydrogen fuel and the availability of hydrogen
occur simultaneously.
Some of the significant hurdles to be cleared include:
Lower by a factor of four the cost of producing and
delivering hydrogen;
Develop more compact, light weight, lower cost, safe, and
efficient hydrogen storage systems that will enable a greater
than 300 mile vehicle range;
Lower by a factor of ten the cost of materials for advanced
conversion technologies, especially fuel cells;
More effective and lower cost (by a factor of at least ten)
carbon-capture and sequestration processes (a separate program
critical to fossil-based production of hydrogen);
Designs and materials that maximize the safety of hydrogen
use; and,
Finally, we must solve the overarching infrastructure
challenges to develop a hydrogen-based delivery and refueling
infrastructure comparable to the petroleum-based one we have
today. The development of needed codes and standards as well as
the education of consumers relative to the use of hydrogen can
help safely establish this hydrogen infrastructure.
The Department has drafted a work breakdown structure associated
with each of the critical areas (production, delivery, storage,
conversion, and end-use) identified in the National Hydrogen Energy
Roadmap unveiled by the Secretary last November. We have developed
critical milestones and decision points that will help us gauge
technology progress. Examples of key program milestones that support
FreedomCAR and achievement of a hydrogen economy include the following:
On-board hydrogen storage systems with a six percent
capacity by weight by 2010; more aggressive goals are being
established for 2015;
Hydrogen production at an untaxed price equivalent to $1.50
per gallon of gasoline at the pump by 2010;
Polymer electrolyte-membrane automotive fuel cells that cost
$45 per kilowatt by 2010 and $30 per kilowatt by 2015 and meet
100,000 miles of service life; and,
Zero emission coal plants that produce hydrogen and power,
with carbon capture and sequestration, at $0.79 per kilogram at
the plant gate.
In the near future, we plan on partnering with energy companies to
establish more specific goals related to technology and components
needed to produce and distribute hydrogen using various fossil, nuclear
and renewable pathways. In this exercise, we will be looking at the
full range of hydrogen technology areas covered in the Roadmap.
Advances in other technologies will also be necessary for the
ability of a hydrogen-fueled vehicle to realize its full potential.
These include:
Improved energy storage, (e.g., batteries that are more
durable, cheaper, and better performing);
More efficient and cost effective electric motors;
Inexpensive and more effective power electronics; and,
Better materials for lighter, but strong, structural
members.
These technologies will enable hydrogen-fueled vehicles to be more
efficient, and to help lower the vehicle cost to the consumer.
In the near- to mid-term, most hydrogen will likely be produced by
technologies that do not require a complete hydrogen distribution
infrastructure (i.e., using existing distributed natural gas
infrastructure). As RD&D progresses along renewable, nuclear, and clean
coal and natural gas production pathways (including techniques for
carbon sequestration) a suite of technologies will become available in
the mid- and long-term to produce hydrogen from a diverse array of
domestic resources. The economic viability of these different
production pathways will be strongly affected by regional factors, such
as feedstock availability and cost, delivery approaches, and regulatory
environment.
Detailed analysis of life-cycle costs and benefits for alternative
hydrogen production pathways, carbon sequestration, and other elements
will continue. ``Well-to-Wheels'' analyses conclude that the energy and
environmental benefits depend greatly on how hydrogen is manufactured,
delivered and stored, and on the economic feasibility of sequestration
for fossil feed stocks. The results of these studies will help in
making down-select decisions and to ensure that the relative merits of
specific hydrogen pathways are evaluated properly and in comparison
with other energy alternatives. In fact, we are now following up on a
National Academy of Sciences recommendation to establish a more robust
systems analyses effort so that we can optimally prioritize areas for
R&D, as well as understand the ramifications of future R&D successes
and disappointments. Out-year planning will identify needs for RD&D on
production and storage technologies, delivery infrastructure, and
education and safety/codes and standards. Public education of consumers
and local code officials must also be pursued concurrently with the
RD&D.
Finally, industry must develop and construct the infrastructure to
deliver hydrogen where it is needed. We will work with the DOT to help
industry develop a safe, efficient, nation-wide hydrogen
infrastructure. The hydrogen distribution infrastructure can evolve
along with the conversion and production technologies, since much of
the infrastructure that is developed for fossil-based hydrogen will
also be applicable to renewable- and nuclear-based hydrogen. We will
partner with industry to develop infrastructure in pilot projects, and
industry will expand locally, regionally, and ultimately nationally.
Interim Strategies
As important as we believe hydrogen is for the long term, we are
still working, in cooperation with other federal agencies, to maintain
a robust, and in some areas growing, research and development program
in non-hydrogen transportation technologies.
Under the FreedomCAR partnership we have proposed a funding
increase in fiscal year 2004 for our hybrid technology, as well as
increases in materials technology. We believe many of these
technologies will deliver fuel savings both prior to and after the
introduction of fuel cell vehicles, since lightweight materials and
hybrid technologies are expected to be incorporated into fuel cell
vehicle designs. Therefore, these investments are expected to pay off
in the interim, as well as over the long term.
In addition, we had a number of interim strategies in mind as we
established specific, measurable performance goals for our program. And
our FY 2004 budget is aligned with these goals. For example:
We are working to develop technologies for heavy vehicles by
2006 that will enable reduction of parasitic energy losses,
including losses from aerodynamic drag, from 39 percent of
total engine output in 1998 to 24 percent;
The 2006 goal for Transportation Materials Technologies R&D
activities is to reduce the production cost of carbon fiber
from $12 per pound in 1998, to $3 per pound; and,
The 2010 goal for Hybrid and Electric Propulsion R&D
activities is to reduce the production cost of a high power
25kW battery for use in light vehicles from $3,000 in 1998 to
$500, with an intermediate goal of $750 in 2006, enabling more
cost competitive market penetration of hybrid vehicles.
Automakers are introducing technologies that have resulted in part
from DOE's work in this area. At the recent North American
International Auto Show in Detroit, the major U.S. automakers announced
that they will have a variety of new hybrid gasoline-electric models
entering the market in the 2004-2008 timeframe.
Of course, hybrid vehicles are more expensive compared to
conventional vehicles, which is why the President proposed a tax credit
for hybrid vehicles in his National Energy Plan, and subsequent to that
in his 2004 budget submission. We urge that Congress adopt this
important incentive for more efficient vehicles.
And we will continue support for our Clean Cities program, a
unique, voluntary approach supporting more than eighty local coalitions
that deploy alternative fuel vehicles (AFVs) and promote supporting
infrastructure.
The Administration strongly supports a renewable fuels standard
(RFS) that will increase the use of clean, domestically produced
renewable fuels, especially ethanol, which will improve the Nation's
energy security, farm economy, and environment.
As important as the RFS and the Clean Cities program are, their
goals illustrate the daunting challenges we face. Taken together, the
RFS and Clean Cities are expected to offset about four billion gallons
of petroleum use per year by 2010. That sounds impressive until it is
compared to the demand for petroleum for transportation uses. In the
year 2000, we used approximately 130 billion gallons of gasoline and
over 33 billion gallons of diesel (highway use only). With that
realization, the critical importance of the FreedomCAR partnership and
Hydrogen Fuel Initiative as a long-term strategy becomes clear.
And, if we are to achieve real progress in the near term and our
ultimate vision in the long term, we must continue to nurture
productive partnerships with the private sector. It is the private
sector that will make the major investments necessary for the
transition to a radically different transportation future. Those
investments will not be made in the absence of a clear-cut business
case.
Transition to a Hydrogen Economy
We consider the transition to the hydrogen economy as occurring in
four phases, each of which requires and builds on the success of its
predecessor, as depicted in Chart 2. The transition to a hydrogen-based
energy system is expected to take several decades, and to require
strong public and private partnership. In Phase 1, government and
private organizations will research, develop, and demonstrate
``critical path'' technologies and safety assurance prior to investing
heavily in infrastructure. This Phase is now underway and will enable
industry to make a decision on commercialization in 2015.
The FY04 Budget currently before Congress is consistent with
completion of the technology RD&D phase by 2015.
Phase II, Transition to the Marketplace, could begin as early as
2010 for applications such as portable power and some stationary
applications, and as hydrogen-related technologies meet or exceed
customer requirements. If an industry decision to commercialize
hydrogen fuel cell vehicles is made in 2015, mass-market penetration
can begin to occur around 2020. Consumers need compelling reasons to
purchase new products; public benefits such as high fuel use efficiency
and low emissions are not enough to overcome the market advantages of
the incumbent technology and infrastructure. The all-electronic car
powered by hydrogen fuel cells is one example of an approach to greater
value delivery; it could offer the consumer greater amenities, improved
performance through elimination of mechanical parts and greater design
flexibility.
As these markets become established, government can foster their
further growth by playing the role of ``early adopter,'' and by
creating policies that stimulate the market. As markets are established
this leads to Phase III, Expansion of Markets and Infrastructure. The
start of Phase III is consistent with a positive commercial decision
for vehicles in 2015. A positive decision will attract investment in
infrastructure for fuel cell manufacturing, and for hydrogen production
and delivery. Government policies still may be required to nurture this
infrastructure expansion phase.
Phase IV, which should begin about 2025, is Realization of the
Hydrogen Vision, when consumer requirements will be met or exceeded;
national benefits in terms of energy security and improved
environmental quality are being achieved; and industry can receive
adequate return on investment and compete globally. Phase IV provides
the transition to a full hydrogen economy by 2040.
Conclusion
Mr. Chairman, it will take a great deal to achieve this vision of a
hydrogen energy future we are all talking about this afternoon. 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.
The President has demonstrated his leadership and resolve. ``With a
new national commitment,'' said the President during his State of the
Union address, ``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.''
A few days later at an event on energy independence featuring new
uses for fuel cells including automobiles, the President reiterated his
commitment to his new Hydrogen Fuel Initiative stating, ``The
technology we have just seen is going to be seen on the roads of
America. And it's important for our country to understand that 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.''
We believe that the benefits the President envisions are attainable
within our lifetimes and will accrue to posterity, but they will
require sustained work and investment of public and private financial
resources. 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, either now or in the future.
Senator Brownback. Thank you very much, Mr. Garman.
There's a number of questions that I have. And let's run
the clock here about 7 minutes, if we could, for questions back
and forth. Both of you put forward the promise of this for the
future, and we can see the beauty of that. Both of you put
forward a series of technical and cost hurdles to overcome in
both the fuel and in the vehicle. Is this doable, to be able to
meet these costs and technical hurdles? And in what time frame
are we talking about being able to do that, if it is
achievable?
Mr. Marburger. Dave, you're closer to the technical
details. I'll do the high-level content-free questions, and you
can do the technical questions.
Mr. Garman. The President's words in the State of the Union
were really chosen very carefully when he said a child born
today should be able to purchase a hydrogen fuel cell vehicle
when he's ready to drive. We think that the components can be
in place for commercialization on the merits of the business
case for the automakers to make a decision to proceed with
mass-market introduction of the vehicles. That decision can
happen around 2015, with real mass-market introduction by 2020.
Some of the automakers are saying perhaps that can come sooner
if the refueling infrastructure is in place.
Our general findings with respect to alternative fuel
infrastructure is that fueling stations, about 20 percent in
urban markets and 50 percent in rural markets need to have the
alternative fuel available or customers won't have confidence
in purchasing the vehicles. So we have to attack this chicken-
and-the-egg problem, not only the vehicles, but also the
infrastructure, and that is going to take some time. So I think
2015/2020 is the correct time frame.
Mr. Marburger. Let me add to that by pointing out that
there are current applications of stationary fuel cells for
backup power, and they are developing a market. They're
developing the industry and, together with that, the
infrastructure that will be necessary as the applications move
on into the transportation sector.
Senator Brownback. Mr. Garman, what do you base that
projection of 2015--you're 12 years out from that--that you
could get to a commercialization phase, and you're talking
about a factor of 4 on the price of the fuel, a factor of 10 on
the actual fuel cell vehicle itself--where do you see those
great advances coming in such, really, a pretty short period of
time?
Mr. Garman. We're heartened, in part, by some great
advances that have happened in the recent past. For example,
the cost of fuel cells themselves have been brought down by an
order of magnitude in the last 5 or 6 years as a consequence of
some of the work done at the national labs and in the private
sector on reducing the amount of platinum and other precious
metals needed for the fuel cell membrane. We have, through this
road-mapping process that I referred to and bringing all of the
parties together to understand what the technology hurdles
were, have really developed a pretty tight set of R&D goals,
beginning in the 2010 time frame.
If we are successful in meeting all of our 2010 goals--and
I'll provide them for the Committee; it's sort of engineering-
type-based goals--but if we're successful, we believe we'll
have the basic technology components necessary for the vehicle
in place--the technology, the capability, at least--somewhere
after the 2010 time frame. So we've given a great deal of
thought to these possibilities.
You know, the price of, for instance, hydrogen from natural
gas, yes, today it is four times higher than it needs to be,
but we are already opening some demonstration stations,
hydrogen refueling stations, and learning a great deal about
how to improve the efficiency of the hydrogen production, how
to optimize compression, storage, and some of the other
elements that need to be in place to make sure we can meet our
cost targets.
And the reason we are doing these cost targets kind of
consistent with the President's management agenda and linking
the budget that we're asking Congress for with the achievement
of performance goals that we've articulated, we hope to be
transparent to the Congress so that you will know and we will
know how we're progressing against those goals going ahead.
Senator Brownback. Mr. Garman or Mr. Marburger, either one
of you. Senator Dorgan and I have one similar feature that we
have between our States--there are a number of them, but we do
have plenty of wind energy. And we've had windmills and wind
electricity generation be recently constructed. Of course, it's
been a power source since people have been farming in it, but
the big problem is the sporadic nature of wind energy and then
being able to put that into the grid in a timely or usable
fashion. But if you did convert that wind energy into hydrogen
and store and receive it, it does seem to answer significant
questions for wind energy and possibly for hydrogen. Is that
correct, or is that too simplistic of a view of putting
together these resources?
Mr. Garman. No, that's absolutely correct. We have to--
because we're using electrolysis as the mode of hydrogen
production there, which is the conversion of one energy carrier
to another. And there's a certain loss of efficiency whenever
you do that. We want to make sure that the underlying wind
technology, we continue to bring down the cost of generating
electricity from wind. That's very important.
And also, we're going to have to do a little bit of work on
how we get the hydrogen from its point of production, at the
wind turbine or close to it, to where it needs to go. We do
have, today, hydrogen pipelines, about 700 miles worth in this
country. We operate them at pretty low pressures. If we were to
want to operate large hydrogen pipelines at much higher
pressures, we're going to have some materials issues and some
other things that we have to confront. We think we can do this.
We don't see any showstoppers. The issue is, as always, cost--
competing with that tremendously low cost that energy companies
are able to deliver gasoline to your neighborhood for. That's
what we have to compete with, and that's a tough competitor.
Senator Brownback. Mr. Marburger?
Mr. Marburger. Yes, I'd like to add to that, in that
hydrogen is not only a great way to store energy, it's a great
way to deliver it. Because unlike electricity, which has to be
brought from the production source to the user by a wire which
loses a lot on the way, hydrogen doesn't lose any of its
electricity en route. So if you can have pipeline distribution,
it could be much more efficient than electrical energy
distribution over wires. And this is potentially another
attractive feature.
Senator Brownback. As you mention, though, Mr. Garman, that
we've got to get more efficient production of electricity, then
in the present scenario are we likely to produce hydrogen via
coal because of the expense, and are we having another set of
environmental issues, then, that are forward with producing
hydrogen via coal?
Mr. Garman. We wouldn't want to do that unless we were
successful at sequestration technology. And, of course, there
are--you know, if I wanted to produce hydrogen from coal, what
I would do is gasify the coal, split off the hydrogen from that
gas created, and then take the carbon dioxide, the sulfur, and
the other elements in that gas and sequester that in, say, deep
unminable coal seams or saline aquifers so that that's not
released to the environment. That is a way, theoretically, that
we could cleanly use coal.
In the near term, we believe that most of the hydrogen will
be produced from natural gas, the way hydrogen is produced
today. We produce some 9 million metric tons of hydrogen each
and every year using natural gas. We would need 40 million
metric tons to drive a fleet of 100 million vehicles. So we're
really not that far apart, in terms of what we produce today
and what we would need to drive a fleet of vehicles.
So in the near term, we think natural gas would probably be
the feed stock. But, again, the great thing about hydrogen is
that we can, on the farm, gasify agricultural residues that are
currently left in the field. That can be turned into hydrogen.
There's just a variety of methods and processes that we can
use. One day we hope to be able to use microbes, bacteria,
algae, some other things that, even through genetic
modification or other means, we can use to actually create
hydrogen, or to synthesize hydrogen, if you will. So this gives
us lots of options as a nation.
Senator Brownback. Senator Lautenberg?
Senator Lautenberg. Yes, thank you, Mr. Chairman.
Mr. Garman, accompanying your statement is a graph that
says the oil used in transportation plotted against domestic
production. And that's a grim prospect, obviously. When we got
to the 2000 line, the difference between available oil from
domestic sources and that which is presently used began to
widen substantially. And so here we are with an expectation
that we're going to have to use far more than twice that which
we are able to produce domestically, and we're looking at a
program that has a lot of potential, but also a lot of
practical problems associated with it. Namely, cost, as I
looked at Mr. Marburger's statement.
So if those are the projections, why wouldn't we be wise to
step up the funding that is offered from the Government,
considering that the automobile manufacturers are spending
between $2- and $3 billion each year on hydrogen fuel vehicle
research, and we're proposing $1.2 billion. We're going to be
throwing away a lot of money long-term in this process, and
wouldn't you think that the situation is more emergent than
$1.2 billion and that we ought to try to see what we can do
about expanding that, match the private sector, and really show
that the commitment's a serious one?
Because I think that if people look at a $1.2 billion spent
here, that energy is probably the second or third highest
priority, in terms of our need as a society. I mean, we're
drowning in pollution, and the dependency on others for our
product, our needs, and I think that we have to declare an
emergency alarm and get on with the investment.
I take it, from each of you, that the practicality is
there. But the question of how you get this into production is
a fairly good-sized task. But money can cure a large part of
that. We're going to be spending the money. It's a question of
where we spend it and when we spend it.
Mr. Garman. I would respond and agree that there's both a
short-term challenge and a long-term challenge and would argue
that the most appropriate use of Federal R&D dollars is in
long-term technology.
Automakers have technology to produce high-mileage cars
today. You can buy high-mileage cars today. I drive a car that
gets over 50 miles per gallon. It's available. The problem is
the consumers, for one reason or another, are not choosing to
purchase high-mileage cars, because it doesn't give them the
features that they want in a vehicle.
And what's, sort of, different and remarkable about fuel
cell vehicles is that a fuel cell vehicle, like the one you
saw, the General Motors car, outside today and others being
planned by the other automakers, actually provide advantages
that consumers will want to buy. It actually gives them
advantages, it does things that their vehicles today can't do.
And it also confers certain public benefits, like reducing our
dependence on foreign oil and making our air cleaner to
breathe.
So I think that our approach is a good one to make the
investments in the long term R&D. We have other tools at our
disposal, and, in fact, the administration used corporate
average fuel economy standards. When you look at that graph,
you see that the largest increase in petroleum use is in the
light truck category. And just a couple of weeks ago, the
administration increased CAFE standards on light trucks for the
first time since the 1996 model year, and it was the largest
increase in standards in 20 years, I believe. So there are
various mechanisms that are available to us.
I think the right role for R&D is to solve these truly
difficult technical challenges that we have to this alternative
that will make these debates about corporate average fuel
economy standards absolutely moot, totally remove the
automobile from the environmental equation, and totally remove
the geopolitics of oil from our transportation problems.
Senator Lautenberg. Well, do you think, therefore, then,
the pace is an acceptable one at this juncture? Can we
accelerate the pace of development by spending more money, or
are the automobile companies being foolish in the amount that
they're investing?
Mr. Garman. We're guided, in part, by the roadmap work that
we developed in partnership with private sector,
nongovernmental organizations, and others. The truth is, yes,
more money can accelerate some things, but you also need time.
You need learning cycles where you actually put the technology
on the road, discover where the improvements need to be made,
redirect your R&D to solve the problems, and then, again, go
through another learning cycle to put the next-generation
technology on the road.
So, yes, money is useful, and we're glad the President has
entrusted us with these resources, but we also need some time.
Senator Lautenberg. I think we also need some
encouragement, when you say that the consumers haven't turned
to these things with a rush certainly. But I've never heard a
word--and, by the way, it's not unique to this administration,
but over the last years--I haven't heard the word ``conserve,''
``sacrifice,'' ``do your part,'' ``help us reduce our
dependence,'' and ``if you need a second vehicle, look at the
gasoline, the mileage consumption there per gallon''--and
encourage the industry rather than I think what we're doing.
There is a delicate balance between jobs and investment and--
but the industry, generally, has been permitted to set its own
timetable. There were several times in my previous term here
when we tried to raise the CAFE standard, and it just couldn't
go anywhere.
I think in view of what is an emergency character to where
we're going, I would think that a more aggressive campaign
coming out of the administration talking about, you know, ``You
want to do your part. If you need another something, then look
at the mileage standards and see what that looks like.'' And,
really, because we know that the vehicles--there are vehicles
available that get more mileage. I looked at that car, and I'm
trying to figure out what it is that you saw in that car that
you can't get in other cars. But perhaps we can talk about that
privately.
I thank you, Mr. Chairman.
Senator Brownback. Thank you very much.
If I could ask one follow-up of Secretary Garman. Based on
your experience and your knowledge, what are the greatest
challenges--and I'd like for you to put these in priority
order--to the deployment of hydrogen fuel cell cars? What are
the specific set of questions that we have to answer in list of
importance as you look at this issue?
Mr. Garman. Number one, I would say, is storage. Storage of
hydrogen onboard the vehicle. Consumers are only going to buy a
vehicle that gives them a range of 300 or 350 miles between
refuelings. And the nature, the physical nature, of hydrogen is
such that it's difficult to store in a manner that--without
using a lot of weight and bulk. And weight and bulk is, in
essence, the enemy of an automaker trying to design a car that
consumers will want to buy.
So, you know, the method of storing hydrogen today is by
compressing it in a 5,000- or 10,000-pounds-per-square-inch
vessel, pressure vessel. We're looking at a variety of
technologies, like chemical hydrides, metal hydrides, carbon
nanotubes, other types of materials that can store hydrogen at
close to ambient temperatures and pressures. That, I would say,
is number one.
Number two, I would say, is probably the cost of the
hydrogen itself. It needs to be competitive with the cost of
gasoline if we're going to get in the ballpark. Maybe down the
road, Congress can deal with some policy incentives, in terms
of how hydrogen is taxed or other things, but we've got to make
sure that we can produce hydrogen close to the cost of its
competitor before consumers will feel comfortable purchasing
the car.
And, third, you might think about making hydrogen out of
ethanol. Biomass is a tremendous opportunity for hydrogen.
Senator Brownback. Good.
Mr. Garman. Absolutely.
Senator Brownback. Nice statement.
[Laughter.]
Mr. Garman. And, third, the cost and durability of the fuel
call itself. They're about an order of magnitude too high
today. And also the durability of the fuel cell of--you know,
when you buy a car, you want to make sure it's going to go
120,000 or 150,000 miles, and that's going to require about a
5,000-hour life on the fuel cell. Today, the fuel cells are
lasting, you know, 1,000 hours or 2,000 hours. We need to
improve the durability and lower the cost of the fuel cell.
Those items, I would think, are the big three.
Senator Brownback. And you don't see any of them as
insurmountable within this 12-year time frame that you're
talking about?
Mr. Garman. I probably worry a little bit more about
storage than the others. And, we've pulled together Nobel
Laureates and other prize-winning scientists to help us tackle
this problem.
Senator Brownback. And they feel it is accomplishable?
Mr. Garman. Yes. I mean, we're going to need a technology
breakthrough on that one. All the others, I think we can do
without a major technology breakthrough, but on the storage, I
think we're going to need a technology breakthrough.
Senator Brownback. Like what? What sort of technology
breakthrough are you----
Mr. Garman. A composition of a metal hydride, for instance,
we've got metal hydrides that come close, just not quite there
yet--that can actually hold the hydrogen molecules in its
matrix without having to use high pressure for storage. And
this is kind of a materials challenge, and this is--I yield to
the expert, who's an actual scientist. He doesn't just play one
on TV.
Mr. Marburger. Let me just comment on the relevance of
other national priorities for basic research to this problem.
These new materials are designed and improved through the
processes of nanotechnology. The National Nanotechnology
Initiative is likely to produce new materials and new materials
preparation processes that will be very relevant, both to the
storage and to the fuel cell membranes and electrodes,
themselves, and that the figures of merit on these materials
have been improving gradually.
But I agree with Dave, a technology breakthrough will be
necessary. But in view of the many opportunities that exist--
for example, Dave mentioned carbon nanotubes; if we can find a
way to manufacture carbon nanotubes in much larger quantities--
--
Senator Brownback. Slow me up here a little bit. Carbon
nanotubes. I realize I chair this Subcommittee, but I don't--
what are you talking about?
[Laughter.]
Mr. Marburger. These are nanoscale structures made out of
carbon atoms that have unusual geometrical properties, and they
have strength properties and electrical-conductivity
properties, but they also have properties that may make them
suitable for storing hydrogen. And the problem with them now is
that they're difficult to manufacture in the quantities and
specifications that you need.
So lots of people are working on this, because there are
other applications of carbon nanotubes, as well. And we hope
for a crossover kind of result that can stimulate developments
in the fuel cell business, the hydrogen business.
Senator Brownback. You know, we've doubled funding at NIH
over a 5-year time period, widely supported amongst the
Congress, a strong feeling that we were just very close to some
major breakthroughs in health research and medical information
technology, drugs, treatment. Would we have the same sort of
promises if we did something similar with NSF, National Science
Foundation, as some people have kicked that idea around? Are we
on some of the breakthroughs that we need in this and a number
of other areas if we significantly increase that investment?
Mr. Marburger. NSF is currently the largest shareholder in
the National Nanotechnology Initiative, and there are certainly
very, very important benefits to come from funding those
initiatives, that initiative in the Department of Energy and
other big physical science agencies, as well. Our preference is
to focus on the priorities and on the areas of science that are
likely to create breakthroughs like this. The physical sciences
have been identified as an area that's in need of additional
support. And in the President's fiscal year 2004 budget
request, a number of physical sciences programs and projects
are singled out for increased funding, including five new
nanotechnology materials centers in Department of Energy
laboratories, all of which, I can assure you, will be recruited
for basic research on a hydrogen economy.
Senator Brownback. Sounds like a topic we'll need to cover
at a future hearing.
Gentlemen, thank you very much. I would like the one
document you talked about, Mr. Garman, to be submitted into the
record, that would be appreciated. *
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* The document is included in Mr. Garman's prepared statement.
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Senator Brownback. Very good testimony.
Call for the second panel. The second panel is Dr. David
Friedman. He's the senior engineer of Clean Vehicles Program
for the Union of Concerned Scientists. Mr. Byron McCormick, the
Executive Director of fuel cell activities for General Motors
Corporation. And Mr. Francis Preli, Jr., vice president of
engineering, United Technologies Corporate Fuel Cells.
Gentlemen, we're delighted to have you here this afternoon.
Your written statements will be put into the record as
presented, so you're free to summarize if you would choose to
do so.
Dr. Friedman, we will start with you. And the microphones,
pull them up close, if you will. They're not the best
technology.
STATEMENT OF DAVID J. FRIEDMAN, SENIOR ENGINEER, CLEAN VEHICLES
PROGRAM, UNION OF CONCERNED
SCIENTISTS
Dr. Friedman. Thank you, Mr. Chairman, and thank you for
the opportunity to testify before you today.
My name is David Friedman, and I'm a senior engineer with
the Union of Concerned Scientists. UCS is a nonprofit
organization of more than 60,000 scientists and citizens
working for practical environmental solutions.
Now, as I start, I just want to note that in the 5 minutes
it will take me to speak today, we will spend over $1 million
overseas to buy oil. That is $200,000 that leaves the U.S.
economy every minute. This economic burden will continue to
grow as long as the U.S. is tied to oil. We will be susceptible
to OPEC's market power and Persian Gulf instability. We will
also be contributing to many significant environment problems
that impact our health and our economy.
While there is no single silver bullet to address this
problem, there is a set of technologies that offer short-,
medium-, and long-term solutions to our transportation oil
problem. Given the size of this problem, we must put each of
these tools to work. Today I would like to talk about these
technologies and where hydrogen fuel cells fit in.
If you would turn your attention to this chart, the top
edge, very similar to the chart that Secretary Garman showed,
shows the projected oil use for U.S. cars and trucks only,
today starting at about 8 million barrels per day and reaching
over 14 million barrels per day by 2020. In the short term, as
seen in the blue-shaded area, cost-effective conventional
technologies are available and can be put on the road to
quickly and dramatically slow the growth of oil use from cars
and trucks while also saving consumers money. These
technologies include efficient gasoline engines, like General
Motors' displacement-on-demand technology. They also include
more efficient transmissions, improved aerodynamics, high-
strength steel, and lower rolling-resistance tires. Diesel is
another conventional technology option, but it will not be as
cost effective as other existing technologies, and it will make
it harder to address air quality concerns.
Because these conventional technologies exist and are cost
effective, we do not need a major research program to get them
on the road. Instead, we need automakers to put them in the
showrooms, providing consumers with choices they currently do
not have, things like a 35-mile-per-gallon Ford Explorer or a
33-mile-per-gallon Chevy Silverado pickup.
The administration recently set an extremely modest 4-year
goal for increasing light truck fuel economy standards by 1.5
miles per gallon. This will have a negligible impact on our oil
use, barely affecting the top line. It will save less than one
day's worth of oil each year between 2005 and 2008.
Significantly more can be done with the use of conventional
technologies, as the blue-shaded area in this chart shows.
In the medium term, as shown in the red-shaded area, hybrid
technology can stabilize our passenger-vehicle oil use through
2020 building on the gains made by near-term conventional
technology. Our analysis indicates that hybrid technology can
lead to a fleet of 55- to 65-mile-per-gallon cars and 40- to
50-mile-per-gallon trucks in the 2015 to 2020 time frame.
Dedicated alternative fuel vehicles also offer near- and
medium-term air quality and oil savings benefits. And fuels
such as natural gas and possibly methanol will provide a major
source of hydrogen in the transition to renewable hydrogen feed
stocks.
These technologies also do not require major public funding
for research, but they will be more expensive than other
options, especially in the near-term. For this reason,
temporary performance-based market incentives will be important
to get a sufficient number of vehicles and fuel on the road to
bring down their costs.
Finally, hydrogen fuel cell vehicles, as shown in the
green-shaded area, build on gains from conventional and hybrid
technology, and together they can dramatically reduce projected
oil use. By 2030 and beyond, hydrogen fuel cell vehicles can
put us on a path to effectively eliminate our passenger vehicle
oil use. But, again, that's 20 to 30 years away, and there are
many technologies that can do a lot in the interim.
There is a need for government-funded research and
demonstration on fuel cells and fuel cell vehicles to ensure
that clean hydrogen fuel and vehicles can be made available.
Temporary performance-based market incentives for fuel cell
vehicles, hydrogen, and, importantly, renewable energy
resources will also be important to bring down costs.
These research programs and incentives must also recognize
that hydrogen is not inherently clean. Instead, it is an energy
carrier that is only as clean as the source. Accelerating the
movement to a clean hydrogen future will not be a small or
inexpensive task, but the benefits far outweigh the costs. To
be successful, such a program will need a clear timetable,
along with concrete vehicle production and supply goals, and
that's something that is missing from the administration's
current plans.
In closing, I just want to say that as an engineer, I see
this broad array of technology that is available as an
opportunity. It's an opportunity to roll up our sleeves and get
to work making vehicles that are safer, cleaner, and less
dependent on oil.
Because the available conventional and advanced
technologies complement each other, this is not an either/or
proposition. We don't have to choose between conventional
improvements, hybrids, and fuel cell vehicles. We can do them
all and dramatically reduce our oil dependence. We must
continue to focus on policies that will put conventional
technology to work while we also invest in these longer-term
options.
Thank you for the opportunity to testify today.
[The prepared statement of Dr. Friedman follows:]
Prepared Statement of David J. Friedman, Senior Engineer, Clean
Vehicles Program, Union of Concerned Scientists
Thank you Mr. Chairman and Members of the Committee for the
opportunity to testify before you today. My name is David Friedman and
I am a Senior Engineer in the Clean Vehicles Program at the Union of
Concerned Scientists (UCS). UCS is a nonprofit organization of more
than 60,000 scientists and citizens working for practical environmental
solutions.
Today, I would like to begin by briefly describing the numerous
challenges--ranging from growing dependence on foreign oil to public
health concerns--posed by our transportation sector. I will then focus
on both the technologies available today as well as the technologies of
the future that will help us meet these challenges. UCS firmly believes
that technology is available today that can increase our efficiency,
help protect public health and provide consumers with safe
transportation. There is no single silver bullet, but there is a set of
technology that offer short, medium and long-term solutions to our
transportation oil problem. Given the size of this problem, we must put
each of these tools to work. We must continue to focus on policies that
will put that technology to work for us now even while we invest in the
technologies of the future.
Energy, Oil, and the Transportation Sector
The United States currently uses about 20 million barrels of oil
each day. Two thirds of that oil is used in the transportation sector.
So, the economic, political, environmental and health risks associated
with our oil dependence are inherently linked to the amount of fuel our
transportation system requires every day.
Oil Markets
As the world's largest oil consumer, the United States is
particularly exposed to the risks posed by an oil market beyond our
control. Reliance on the economically powerful OPEC cartel \1\ and the
politically unstable Persian Gulf nations will only grow over time as
oil supplies dwindle. OPEC owns four-fifths of the world's remaining
proven oil reserves and nations in the Persian Gulf own two-thirds
(Figure 1). Only a small proportion--about 2 percent--of the proven
reserves lies within the United States.
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\1\ OPEC, the Organization of Petroleum Exporting Countries,
consists of Algeria, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya,
Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela.
Economic Impacts
Importing large amounts of oil carries significant economic costs:
we send more than $200,000 overseas each minute to buy foreign oil. \2\
But even if we imported no oil at all, the U.S. economy would still be
vulnerable. The world oil market determines the price we pay for oil,
so global price hikes affect the cost of U.S. oil because all oil
retailers (domestic and foreign) charge more. As long as the U.S.
economy is tied to oil--and oil is traded globally--we will be
susceptible to OPEC's market power and Persian Gulf instability. To
date, the economic costs of oil dependence have been tremendous,
totaling $7 trillion over the past 30 years by one estimate (Greene
&Tishchishyna, 2000).
---------------------------------------------------------------------------
\2\ UCS estimate based on the Energy Information Administration `s
import cost figure of $119 billion in 2000 (EIA, 2001c).
---------------------------------------------------------------------------
The political instability of the Persian Gulf has caused three
major price shocks over the past 30 years. The Iraqi invasion of Kuwait
in 1990 took an estimated 4.6 million barrels per day out of the global
oil supply for three months. The Iranian revolution reduced global oil
supplies by 3.5 million barrels per day for six months in 1979, and the
Arab oil embargo eliminated 2.6 million barrels per day for six months
in 1973 (EIA, 2001b). In each of these cases, the world oil supply
dropped only about 5 percent (Davis, 2001), but world oil prices
doubled or tripled (Greene et al., 1998). In the wake of these oil
price hikes, U.S. inflation increased markedly, accompanied by
downturns in our gross domestic product (BLS, 2001;BEA, 2001;EIA,
2001a). In each case, recession followed.
Petroleum imports also exact a toll on our international balance of
trade: The $119 billion we spent on foreign oil in 2000 accounted for a
fourth of that year's U.S. trade deficit (EIA, 2001c). The situation is
likely to worsen as imports increase. Today, the United States imports
over half the petroleum products we use; this portion can only rise as
our oil appetite grows (Figure 2).
Finally, consumers themselves feel a significant bite from our oil
dependence. Forty percent of our daily oil consumption in 2000 (about 8
million barrels per day) went to fuel our cars and trucks, at a cost to
consumers of $186 billion. By 2020, oil consumption is expected to grow
by nearly 40 percent and consumers will be spending around $260 billion
dollars per year to fuel up their cars and trucks.
Environmental Impacts
The cars and trucks we drive every day were responsible for over 20
percent of the global warming emissions produced by the United States
during 2000: 1.5 billion tons (358 million metric tons, carbon
equivalent) of the heat-trapping gases linked to global warming. \3\
Most of these gases will stay in the atmosphere for more than 100
years, contributing to an increase in the earth's average surface
temperature. This is projected to rise 2.5 to 10.4 +F (1.4 to 5.8 +C)
between 1990 and 2100, if no major efforts are undertaken to reduce
emissions of global warming gases. As the earth continues to warm, we
face a great risk that the climate will change in ways that threaten
our health, our economy, our farms and forests, beaches and wetlands,
and other natural habitats.
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\3\ This UCS estimate is based on EIA 2000a. Each gallon of
gasoline burned emits nearly 19 pounds of carbon dioxide, the primary
pollutant responsible for global warming. The production and delivery
of gasoline are responsible for another 5 pounds per gallon of global
warming pollutants (Wang 1999).
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Cars and trucks are also major contributors to air pollution.
Regulations have helped clean up passenger vehicles over the past three
decades. However, rising demand for travel and increased vehicle
ownership will outpace even the standards on the books through this
decade. Cars and trucks will need to clean up their act even more if we
are to eliminate the threat air pollution poses to public health--
especially to our children and the elderly.
Finally, producing and distributing the gasoline that went to fuel
our cars and trucks in the year 2000 resulted in the emission of
848,000 tons of smog-forming pollutants and 392,000 tons of benzene-
equivalent toxic chemicals, in addition to the pollutants emitted from
the tailpipes of vehicles. \4\ Altogether, cars and trucks are the
largest single source of air pollution in most urban areas. As with
U.S. oil use and global warming emissions, upstream air pollution is
expected to continue to rise significantly over the next two decades,
posing the greatest health threat to children, the elderly, and other
vulnerable members of our population. Gasoline and oil distribution
also leads to water and ground pollution and catastrophic oil spills
such as the Exxon Valdez that harm the entire ecosystem.
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\4\ The production, refining, and delivery of each gallon of
gasoline in the United States emit an estimated 6.4 grams (0.014
pounds) of smog-forming pollutants (Wang 1999). Upstream activities
also release harmful toxic pollution into the air. This poses a major
health hazard near refineries, along distribution routes, and at
gasoline stations. For every gallon of gasoline delivered, 2.9 grams
(0.0065 pounds) of benzene-equivalent toxic emissions are produced
(Winebrake et al. 2000; Wang 1999).
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A Comprehensive, Technology Based, Plan to Kick our Oil Habit
While the problems of our oil dependence loom large, there is a
suite of technology options that can be used to turn things around. We
can take advantage of the technical and engineering prowess of U.S.
industries to put these technologies to work in a comprehensive
approach that can ultimately move the transportation sector away from
oil. No single silver bullet can solve the problems posed by our use of
cars and trucks--but if we, as a society, choose now to invest in a
variety of solutions, ranging from near to long term, together they can
effectively eliminate the use of oil for transportation and at the same
time address many of the other problems associated with our
transportation system.
Because it will likely take most of the first half of this century
to finally move ourselves off oil in the transportation sector, we must
take advantage of every option that is afforded to us in that time.
Conventional technologies can be put on the road over the next 10 years
to dramatically reduce oil use from cars and trucks. Hybrid technology
can then begin to actually stabilize that amount of oil below today's
levels. Together, as shown in Figure 3, conventional and hybrid
technology can fill the gap while the long-term hope offered by
hydrogen fuel cells and alternative fuels begins to materialize.
At the same time these technologies are being put into play to
address oil dependence and energy security, they offer the opportunity
to address the air quality and safety problems associated with cars and
trucks. The aggressive use of conventional and advanced technology can
mark a return to ``the age of the engineer,'' \5\ as Ford's then Vice
President of Car Product Development, Robert B. Alexander characterized
the period in the late 1970's when automakers were challenged to
provide consumers with more socially responsible vehicles by
simultaneously improving safety, fuel economy, and emissions. The
current and future levels of technology available in automobile
development provide the exact same opportunity to both transform the
internal combustion engine vehicles we have been driving for the past
100 years and to work on new technologies such as fuel cells and
alternative fuels that offer the promise of addressing transportation
problems in the longer run.
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\5\ Robert B. Alexander, speech before the Management Briefing
Seminars sponsored by the Michigan Chamber of Commerce and the
University of Michigan (Traverse City, MI) August 4, 1977.
---------------------------------------------------------------------------
The technologies available today and those being developed for the
future provide the opportunity to integrate air quality, safety, and
reduced oil dependence into the regular redesign process that takes
place for each car and truck model every 3-5 years. These three goals
then become a complementary part of a refocused redesign process that
can diminish and then ultimately kick our oil habit while also
protecting public health through improved air quality, and making our
highways safer. These technologies and this shift in focus are well
within the abilities of our automobile and fuels industries, but will
require a change in their priorities--a change that will need to be
driven by clear signals from the government.
Like other investments in technology, using automotive technology
to build a fleet of cleaner, safer, cars and trucks while reducing our
oil dependence will be an engine for economic and job growth. For
example, our analysis indicates that a reaching a fleet average of 40
mpg over the next ten years will provide consumers a net savings of
more than $29 billion per year by 2015 because savings at the pump far
outweigh the added vehicle costs. The money saved would be spent
throughout the economy, yielding a net increase of 182,700 new jobs in
areas such as the service industry, agriculture, construction,
manufacturing and even 41,100 additional jobs for the U.S. auto
industry and their suppliers.
The federal government can play a key role in addressing oil
dependence while simultaneously helping to make our highways safer and
improving air quality. Providing a clear vision that guides technology
development to meet these goals can fulfill part of this role. This
vision must capture the urgency of the problems while providing
realistic goals, timelines, and performance metrics. Finally, the
vision needs to include rolling up our sleeves and getting this
technology on the road and be backed up by the necessary policies and
resources to truly address the problems that exist today.
Conventional Technology
The most effective near term approach to addressing the many
problems associated with our cars and trucks is to put existing and
emerging convention technology to work. These technologies can reverse
the 15 year trend of declining fuel economy and dramatically improve
fuel economy over the next ten years--filling a stop-gap role by
keeping keep passenger vehicle oil use near today's 8 million barrels
per day, rather than letting it continue to grow at unprecedented
rates.
Many of the technologies that could have been used improve fuel
economy while making safer and cleaner vehicles have been left on the
automakers' shelves. These technologies include efficient engines that
incorporate lower friction components, variable valve technology,
displacement on demand, gasoline direct injection, and turbo or super-
charging. Improved transmission technologies have also been developed:
e.g. 6-speed automatic transmissions with aggressive lock-up control,
continuously variable transmissions, and efficient ``manual''
transmissions that are shifted by a computer instead of by the driver.
Integrated starter/generator technology that can turn off the engine
instead of letting it idle have seen use in Japan and Europe and are
available to U.S. automakers. More mundane technologies can also be put
to work: e.g. improved aerodynamics, lower rolling resistance tires,
and electronic power steering.
Putting these technologies to work--according to our analysis and
that of the National Academy of Sciences, researchers at MIT, and
others--means that it is possible to make SUVs like the Ford Explorer
that reach 34-35 miles to the gallon, family cars like the Ford Taurus
that get up to 41-45 mpg, and full-size pickups like the Dodge Ram that
can reach 30-33 mpg--all of which will have the same size, comfort,
performance as consumers expect today along with the same or even
improved safety (DeCicco 2001, Friedman 2001, NRC 2002, Weiss 2000).
The added technologies will increase vehicle cost, but will more than
pay for themselves in gasoline savings.
Another conventional engine technology that could be used to
address oil dependence is diesel technology, sometimes referred to as
``advanced lean burn'' technology. Diesel engines offer improved
efficiency and, like gasoline vehicles, rely on fuel derived from oil.
In many ways, diesel is no different from the other conventional
technologies that can be used to improve fuel economy and should be
treated within the policy arena in the same way as the other
conventional technologies listed above.
Several cautions are in order, however, on diesel:
1. Diesel technology is expensive and will not be as cost
effective as other conventional technologies. The added costs
needed to reduce the production of harmful emissions will
further reduce the cost effectiveness of diesel technology.
2. Unlike the conventional technologies above, diesel makes it
harder to address public health concerns regarding air quality.
Current diesel technology in Europe is cleaner than past
vehicles, but still produces toxic emissions and smog forming
emissions that several times dirtier than the average gasoline
cars and trucks under Federal Tier 2 emission requirements.
3. With added emission controls being developed by the auto
industry, we expect that diesel vehicles will fall within the
allowance of future U.S. emission standards, but are unlikely
to catch up with the cleanest gasoline cars. Conventional
gasoline vehicles can already meet standards well below those
required by current law, while diesel vehicles are expected to
qualify within the dirtier emission categories under Tier 2,
making it harder to address air quality concerns.
4. Questions remain about whether future standards on the
books are sufficient to protect public health, but even with a
clean bill of health, diesel may not be as cost effective a
fuel economy strategy as employing existing and emerging
conventional gasoline technology.
With those cautions noted, and as long as diesel is held to the
same standards as gasoline vehicles and provided with the same
incentives as other conventional technology, it can still be part of
the mix of conventional technologies being considered.
The main historical approach to getting conventional technologies
on the road has been through fuel economy standards; which have proven
quite effective--saving 43 billion gallons of gasoline in the year
2000, or a reduction of over 25 percent, according to recent work by
the National Academy of Sciences (NRC 2002). The current effort on fuel
economy is a proposal by the National Highway Traffic Safety Authority
(NHTSA) to increase the fuel economy standard for light trucks by 1.5
mpg as of model year 2007, raising it from 20.7 mpg to 22.2 mpg.
While NHTSA's proposed rule would be the first increase in fuel
economy standards in a decade, it is an extremely modest goal given the
suite of technologies available in that timeframe and will not pose a
challenge to automakers. It will also have a negligible impact on our
oil use, saving less than one day's worth of oil each year between 2005
and 2008. Over that timeframe our cumulative oil use will be more than
30 billion barrels of oil compared to cumulative savings from the NHTSA
proposal that amount to 0.02 to 0.06 billion barrels of oil from 2005
to 2008. Significantly more can be done with the use of conventional
technology and we hope that NHTSA will take greater advantage of this
in their final rule. We also hope that NHTSA or Congress will address
many of the regulatory loopholes within existing fuel economy
regulations that are adding to our increased oil dependence.
Additional approaches can be taken by the government to support of
near term technology. Although choice is severely limited in today's
car and truck market, the government can commit to purchasing the
highest fuel economy car or truck that meets their needs and increasing
the overall fuel economy of federal fleets. In this way the government
can both provide the auto industry with a guaranteed market for
vehicles that use conventional technology to improve fuel economy while
also providing leadership by example. Government can also provide
incentives for the purchase of cars and trucks with above average fuel
economy.
Advanced Technology
More recent developments have led to a new suite of technologies
that can follow on the heels of the conventional technology
improvements discussed above. These include the development of hybrid
electric vehicles, hydrogen fuel cell vehicles, and dedicated
alternative fuel vehicles.
Hybrid Electric Vehicle Technology provides fuel economy
improvements primarily during city driving, with the ability to more
than double city fuel economy while providing incremental benefits on
the highway. Creating a hybrid entails the use of an electric motor and
battery along with a conventional internal combustion engine. The
electric motor provides regenerative braking that recovers energy in
stop and go traffic, idle off capability that turns the engine off when
you would otherwise be wasting fuel at a stop light, and electric motor
assist that provides the necessary boost for driving around town and
accelerating onto the highway. Analysis in our recent report on hybrids
indicates that a fleet of hybrid cars and trucks could reach 50 to 60
miles per gallon (Friedman, 2003). Hybrids will also provide added
features that will appeal to consumers: such as improved low-end
torque, smoother acceleration when using the electric motor, reduced
engine and brake maintenance and added electrical capacity.
Honda and Toyota have both offered first-generation hybrid cars in
the marketplace for the past few years and Toyota recently announced
its second generation Prius that achieves better fuel economy while
also providing more space and better acceleration. Ford and GM are
planning to join the hybrid market with SUVs in 2004 and 2005, while
Toyota is expected to offer a luxury hybrid SUV that will outperform
the conventional model. Fully developed gasoline hybrid electric
technology, technology that builds on the benefits of improved
conventional vehicles, offers the potential to begin reducing passenger
vehicle oil use below today's 8 million barrel per day level during the
next decade while meeting the strictest existing Federal tailpipe
emission levels, Bin 2.
Hybrids will cost more than conventional vehicles, especially in
the early years when production volumes are low and automakers are
unable to take advantage of economies of scale. Once sufficient
production volumes are reached, automakers will be able to sell hybrids
for a profit while consumers save more on gasoline than they spent for
the added technology--a win/win situation. The challenge with hybrids
is how to reach those economies of scale as soon as possible. Hybrids
can benefit from tax credits and other financial incentives to
encourage consumers to purchase the early hybrid offerings. These tax
credits must incorporate emissions and fuel economy performance metrics
to ensure that taxpayer dollars are spent on the most promising
technology--hybrids that can provide consumers with the greatest
gasoline savings and cleanest air. Without the assurance that hybrid
tax credits are going to vehicles that perform better than the average
vehicle on the road, such a program would run the risk of following in
the footsteps of the Arizona budget crisis that was created by offering
tax breaks to alternative fuel vehicles without requiring environmental
performance metrics.
The goal of hybrid tax credits would be to get the technology on
the road and help familiarize consumers with a new vehicle option.
Getting hybrids on the road in significant numbers also has the benefit
of supporting fuel cell vehicles as they both share many of the same
electric technologies. Hybrid tax credits will not guarantee oil
savings or improvements in energy security, but they will help to pave
the road for those benefits to be realized in the future.
As with some of the conventional technology mentioned, a note of
caution is also required regarding some vehicles that may end up being
labeled by some as hybrids:
1. Of specific concern are vehicles that use the 42 volt
integrated starter/generator, or idle-off, technology mentioned
in the conventional technology section. This is a wonderful
conventional technology that can provide fuel economy
improvements of more than 10 percent, but as noted above,
hybrids provide more than just idle-off capability and the two
technologies should not be confused when establishing policies
and providing incentives for hybrid technology. If treated like
hybrids instead of conventional technology, these idle-off
systems have the potential to repeat the problems of the
Arizona budget crisis on a national scale.
2. Of additional concern are vehicles that use hybrid
technology to increase the weight and power of a vehicle
without providing fuel economy benefits. These ``muscle
hybrids'' represent a squandering of hybrid technology and are
reminiscent of past technology trends where conventional fuel
``efficiency'' technology was used to make vehicles heavier
instead of helping them to get better fuel economy. Policies
must also recognize that the label ``hybrid'' does not
inherently imply improved fuel economy performance.
Hydrogen Fuel Cell Vehicle Technology offers the ultimate potential
of complete energy independence, dramatic reductions in greenhouse gas
emissions and zero tailpipe emissions. Fuel cells combine hydrogen with
oxygen in the air to produce electricity, water, and some heat. If the
hydrogen is stored on-board the vehicle, no smog forming emissions,
carbon dioxide or toxic pollutions are emitted from the tailpipe.
Hydrogen fuel cell vehicles can also provide a smooth, quite and
comfortable ride possible with electric drive technology. Fuel cells
can also be used for many other things, from powering laptop computers
to providing the electricity for a hospital, home or office building.
To be successful, fuel cell vehicles will rely on many of the
conventional and hybrid technologies reaching the consumer market
before fuel cells--therefore efforts made by automakers on conventional
and hybrid vehicles will also pay off in the scope of their longer term
fuel cell vehicle development. Many of the same conventional
technologies that would help today's cars and trucks reach 40 miles per
gallon, e.g. improve aerodynamics and reduce rolling resistance, along
with the high strength materials that can make vehicles both lighter
and safer, will help to fuel cell vehicles efficient and cost
effective. The technology for the electric motors, batteries and
electric auxiliary systems in hybrid vehicles will be used in the same
roles to make fuel cell vehicles work.
Fuel cell vehicles, however, will not be ready in the same
timeframe as existing conventional technologies or even hybrid
vehicles. Without sufficient government support, it will probably take
more than 20 years for millions of fuel cell vehicles and the necessary
hydrogen fuel to be offered to consumers. It will take even longer,
with business as usual, for the majority of the hydrogen to be supplied
by renewable energy sources. If hydrogen fuel cell vehicles are going
to be widely available in the marketplace within the next 10 to 15
years, a government program on the scale of the Apollo project will be
necessary. And even with such an aggressive program, fuel cells must
still be considered a long-term investment, needing to be supported by
the shorter-term investments of getting conventional, hybrid and
alternative fuel technology on the road.
As with the Apollo project, a similar program to support hydrogen
fuel cell vehicles must have a clear development target. The engineers
knew what they were shooting for: putting a man on the moon and getting
them back safely by the end of the decade. That meant they needed to
develop the technology to build a rocket that could put a human on the
moon and then make it happen within a certain amount of time. For
today's automotive engineers to know what is being asked of them on
hydrogen fuel cell vehicles the parallel set of goals would be as
follows: develop the technology to build a fleet of a safe, clean,
efficient and cost effective hydrogen fuel cell vehicles; develop the
technology to provide a clean, cost effective source of hydrogen; and
then make it happen within the next 15 years. Developing the technology
is not enough; a fuel cell vehicle ``Apollo-like'' project must also
include clear vehicle production and fuel supply goals, performance
targets and timelines along with the resources to make the program
successful. \6\
---------------------------------------------------------------------------
\6\ For reference, President Kennedy asked for $531 million in
fiscal year 1962 alone to support the Apollo program, today that would
be equivalent to more than 3 billion dollars in the FY 2004 budget.
---------------------------------------------------------------------------
A final note of caution regarding fuel cell and hydrogen
technology: just because a fuel cell vehicle runs on hydrogen, it
should not be assumed that it is clean. Hydrogen can be made from many
feedstocks and is actually considered an energy carrier and not an
energy source, or fuel, in and of itself. In that way, it is much like
electricity; its overall energy and environmental benefits are linked
to the fuel or energy source used to make the hydrogen in the first
place. For that reason it is important that funding for hydrogen and
funding for renewable energy go hand in hand. Renewable resources such
as wind, solar and biomass energy will be vital in making the clean
hydrogen future a reality. Cuts in renewable funding jeopardize
investments in hydrogen and fuel cells.
Alternative Fuels offer the promise of 100 percent oil
displacement, often along with significant air quality benefits. In the
long term, alternative fuels based on renewable, home grown
agricultural waste and dedicated crops can be one of the backbones of
clean, domestic energy production--even supplying some of the hydrogen
that can be used in fuel cell vehicles. In the nearer term, alternative
fuels such as natural gas can serve both as an alternative to diesel in
heavy duty vehicles and as a bridge to hydrogen fuel cells (both by
helping to develop technology to support the use of gaseous fuels and
by providing a key early feedstock for hydrogen). Alternative fuel
support can also help domestic industries that provide fuel options
that can move us off of oil.
Much like hybrids, one of the hurdles alternative fuels face is
their high cost in low volume production along with the initial costs
of building the necessary infrastructure. And again, much like hybrids,
tax credits for alternative fuel vehicles, fuel, and infrastructure can
help to build the necessary economies of scale. Many other incentive
programs are also possible, though clear enforcement mechanisms are
vital to their success.
It is important, also, to recognize some of the technical
limitations associated with some alternative fuel approaches. Vehicles
that could run on an alternative fuel are not providing energy security
or environmental benefits if they are actually being run on gasoline or
diesel, both of which are clearly derived from oil and are not
alternative fuels. Thus targeting any incentives to directly encourage
and reward alternative fuel use can both help to ensure growing markets
for the alternative fuels and provide the associated benefits.
Conclusion
The United States has a history putting technology to work in
solving many of the problems around us. We developed mass-production,
computers, the Internet, and we put several people on the moon. We now
have the technology to put people into cars and trucks that don't
guzzle so much gas and can further develop the technology to put them
in cars and trucks that don't use gasoline at all.
As an engineer, I see the broad array of available technology as an
opportunity to roll up our sleeves and get to work making vehicles
safer, cleaner and less dependent on oil while saving consumers money
and creating new jobs. We can rely on existing conventional technology
over the next ten years to take advantage of this opportunity. At the
same time, we can make investments in hybrid vehicles, alternative
fuels, and hydrogen fuel and fuel cell vehicles to take advantage of
the longer-term opportunities. Because these conventional and advanced
technologies compliment each other, it is not an either/or proposition.
And because our need for safe vehicles, clean air and increased energy
security is so important and immediate we cannot afford to these
technologies and the opportunities they represent slip through our
fingers. The Federal Government has a key role to play in developing
sound policies to ensure that we take advantage of these opportunities.
Thank you for the opportunity to testify before the Committee
today. I would be happy to answer any questions you may have.
References
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series tables. Available on the BEA website at www.bea.doc.gov/
bea/dn/st-tabs.htm.
Bureau of Labor Statistics (BLS). 2001. Consumer Price Index. Available
on the BLS website at ftp://ftp.bls.gov/pub/special.requests/
cpi.cpiai.txt.
Davis, S. 2001. Transportation Energy Data Book: Edition 21. Oak Ridge,
Tenn.: Oak Ridge National Laboratory.
DeCicco, J., F. An, M. Ross. 2001. Technical Options for Improving the
Fuel Economy of U.S. Cars and Light Trucks by 2010-2015.
Washington, DC: American Council for an Energy-Efficient
Economy. April.
Energy Information Administration (EIA). 2000. Annual Energy Outlook
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Energy.
Energy Information Administration (EIA). 2001a. Annual Energy Review
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Energy Information Administration (EIA). 2001b. International Energy
Annual, 1999. DOE/EIA-0219(99). Washington, DC: U.S. Department
of Energy.
Energy Information Administration (EIA). 2001c. Petroleum Supply Annual
2000. DOE/EIA-0340(00)/1. Washington, DC: U.S. Department of
Energy.
Friedman, D., et al. 2001. Drilling in Detroit. Cambridge, Mass.: Union
of Concerned Scientists.
Friedman, D. 2003. A New Road : The Technology and Potential of Hybrid
Vehicles. Cambridge, Mass.: Union of Concerned Scientists.
Greene, D.L., and N.I. Tishchishyna. 2000. Costs of Oil Dependence: A
2000 Update. ORNL/TM-2000/152. Oak Ridge, Tenn.: Oak Ridge
National Laboratory.
Greene, D.L., et al. 1998. The outlook for U.S. oil dependence, Energy
Policy 26(1):55-69.
National Research Council/National Academy of Sciences. 2001.
Effectiveness and Impact of Corporate Fuel Economy (CAFE)
Standards. Advance Copy. July 31. Washington, DC: National
Academy Press.
Wang, M. Q. 1999. GREET 1.5-Transportation Fuel-Cycle Model, Volume 1:
Methodologies, Development, and Use. Argonne, Ill.: Argonne
National Laboratory. ANL/ESD-39. [GREET 1.5a on the Argonne
website at www.anl.gov]
Weiss, M. A., J. B. Heywood, E. M. Drake, A. Schafer, and F.F. AuYeung.
2000. On the Road in 2020: A Life-Cycle Analysis of New
Automobile Technologies. Energy Laboratory Report #MIT EL 00-
003. Cambridge Mass.: Massachusetts Institute of Technology.
October.
Winebrake, J., D. He, M. Wang. 2000. Fuel-Cycle Emissions for
Conventional and Alternative Fuel Vehicles: An Assessment of
Air Toxics. Argonne, Ill.: Argonne National Laboratory. ANL/
ESD-44. August.
Senator Brownback. Thank you, Dr. Friedman.
Mr. McCormick, thank you for joining us.
STATEMENT OF J. BYRON McCORMICK, EXECUTIVE
DIRECTOR, FUEL CELL ACTIVITIES, GENERAL MOTORS
CORPORATION
Mr. McCormick. Thank you, Senator. I appreciate the
opportunity to be here today to testify on behalf of General
Motors.
As you noted, I'm Byron McCormick, the Executive Director
of General Motors' Global Fuel Cell Activities, and I head the
team that is developing hydrogen fuel cell vehicles that people
want to drive and, most importantly, want to buy.
Senator Brownback. Mr. McCormick, pull that microphone a
little----
Mr. McCormick. Oh, I'm sorry.
Senator Brownback. --closer to you, if you would.
Mr. McCormick. Before I go into my prepared text, I'd like
to make a couple of additions.
First of all, you may have noticed today that we made an
announcement, a business announcement, with Dow Chemical. We
think it's a milestone in moving towards the hydrogen economy,
and it's somewhat different than many of the things that people
talk about.
Dow and General Motors today entered into an agreement with
a plan to use byproduct hydrogen generated in their chemical
production facilities in Texas and other places in the world
with General Motors using its automotive fuel cells to create
electricity from that byproduct hydrogen to, in fact, then help
power the facilities themselves. It's a pure business
proposition and one that we think makes a great deal of sense
but, for us, allows us to move the technology out of the
laboratory into low-volume production where we'd begin to
develop our supply base, et cetera.
The second thing I'd like to mention before I go into my
larger discussion is that we'd like to invite the members and
their staff this afternoon. We have, at the exit of the
building, hybrid and fuel cell vehicles which will be available
for ride and drive. And over the next 2 years, we will have
hydrogen fuel cell vehicles here in Washington, DC, available
for you to drive and your staffs to drive, and you can contact
our Washington office so you can get some hands-on experience
with the technology.
Now, as I comment, this is a really exciting time for the
automotive industry and for General Motors, in particular.
Technology is changing the way we live our lives for the
better, and there's much more to come. This year we announced a
three-phased advanced technology plan focused on reducing
consumption in vehicle emissions. This plan includes internal
combustion engine initiatives such as displacement on demand,
cylinder deactivation, and many other activities, as well as a
suite of high-volume hybrid offerings for the mid-term. And
these hybrids are really designed to match the driving patterns
of U.S. consumers and, in fact, are on most of our best-selling
vehicles, and then, early next decade, to be ready to introduce
hydrogen fuel cell vehicles.
The subject today is hydrogen in fuel cells. And these
technologies, when they're fully developed and deployed will
not only deliver revolutionary vehicles, like the Hy-Wire
vehicle, which we will be showing at RFK Stadium, if you have a
chance to see it this week, but also will change the way we
think about the automobile and our environment.
We are on the threshold of a historic opportunity. Instead
of the historical evolution of automotive technology by
incremental improvements, we now see our way to bold technology
advances that will fundamentally change personal transportation
in this century. These advances have the potential to lead to
the creation of commercially viable, zero-emission, fuel cell
vehicles with the functionality that Americans expect. This
vision is based on hydrogen as fuel, which can be made from
many nonpetroleum sources.
Not only will fuel cells essentially remove the auto from
the environmental debate by reducing tail pipe emissions to
only water vapor and potentially shifting vehicles to renewable
fuels, they will also offer the performance for every type of
vehicle--heavy-duty commercial, sport utilities, truck, mass
transit, or cars.
Fuel cells running on hydrogen fuel are the ultimate
environmentally friendly vehicles, because their emission is
only water. The fuel cell supplies the electricity to electric
motors, which power the wheels. The fuel cell produces
electricity by stripping electrons from the hydrogen that
travels through a membrane and combines with oxygen to form
water. Fuel cell vehicles are substantially more efficient than
internal combustion engine vehicles, have no pollution, and are
quiet.
Beyond the advantages for the vehicles, fuel cells promise
two additional benefits. First, once integrated into our daily
lives, fuel cell vehicles will be supported by broadly
available cost-effective hydrogen refueling infrastructure. And
I'm sure we'll want to talk more about that as we go forward.
Such an infrastructure, by its very nature, would provide an
evolutionary shift of personal transportation from petroleum
to, very importantly, a mix of sources, including renewables.
Secondly, the development of this technology will create
new, more environmentally compatible distributed electric power
generation capabilities, like the type we announced with Dow
this morning. The automobile will have the potential to provide
electric power for homes and work sites, as well.
The power on today's electrical grid could be supplemented
by generating capacities of cars in every driveway. For
example, if only one out of 25 cars in California today was a
fuel cell vehicle, their generating capacity would exceed the
entire utility grid. A typical mid-sized fuel cell vehicle
produces 50 to 100 kilowatts, and typical household power is on
the 7 to 10 kilowatts load. So you can see that one vehicle can
really power a neighborhood.
Like any advancement that has promise to completely change
the dominant technology, fuel cell development is a major
costly technical endeavor which, if aggressively undertaken and
sustained, should allow significant implementation in the 10-
to 20-year time frame. Our rate of progress today is rapid.
With an uninterrupted focus, our technology momentum should
make this vision possible.
It is clear that we are in intense global competition for
leadership in this race to establishing commercialized fuel
cell technologies. In Japan, the kyogikai, which are companies
operating under government auspices, are developing a program
for the implementation of fuel cell technology. Now is the time
for U.S. Government and U.S. industry to create a partnership
that can lead to the changed world that we see in this vision.
Recognizing this potential, approximately 6 years ago
General Motors consolidated and accelerated its fuel cell
program. We were given one mandate by our management: Take the
automobile out of the environmental debate regardless of
whether the environmental debate is focused on air quality,
climate, or overall sustainability. GM leadership recognizes
that the global conditions inspire bold and thoughtful action.
Number one, there are over 6 billion people in the world,
with 10 billion expected later this century. Most of these
people are young, globally aware, Web-connected, and, most
importantly, residing in emerging economies with escalating
demands for personal transportation. Only 12 percent of the
world's population have automobiles today. That's a staggering
number, 88 percent nonpenetration of automobiles in the world
today. Therefore, a breakthrough in energy efficiency and
emissions will absolutely be required to meet the demands of a
future sustainable high-quality environment.
Our vision is as follows. We see fuel cells as the long-
term power source. The GM Global Fuel Cell Program seeks to
create affordable, full-performance fuel cell vehicles that
meet customer preferences and demands and emit only water from
their tailpipes. We see hydrogen as the long-term fuel. And the
creation of a robust, readily available, hydrogen refueling
network for those vehicles must be accessible through refueling
stations as gasoline is dispensed today.
The hydrogen in the infrastructure could be certainly
derived from a mix of hydrocarbons and any source of
electricity. In the first case, hydrogen is extracted from
petroleum, natural gas, a renewable hydrocarbon, such as
ethanol, via reformers or fuel processors, which catalytically
decompose the hydrocarbons into hydrogen carbon dioxide.
Hydrogen can also be extracted from water using electrolysis,
which uses electricity to dissociate water. Electricity could
come from conventional power plants, renewable power such as
hydro, solar, wind, or geothermal sources. And in this way, the
hydrogen economy allows a graceful transition for
transportation from a reliance on petroleum to a robust
diversity of energy sources, including renewable.
The blending of these energy sources is seamless to the
driver of the vehicle. The driver of the vehicle really only
sees the hydrogen in fuel and not whether it came from
petroleum, natural gas, nuclear, or renewable. And we should
point out that hydrogen can be created directly from nuclear
energy, as well.
There are major challenges we need to overcome to make this
hydrogen economy a reality. First, we need continued
development of onboard hydrogen storage. Using hydrogen in a
vehicle requires a completely new type of tank. The challenge
is to find a lightweight, compact tank that stores enough
hydrogen at modest pressures for a lengthy drive.
Liquid hydrogen stored cryogenically or compressed hydrogen
stored at high pressures will suffice for early market
introductions. But, over the long term, we should seek solid,
in quotes, storage techniques such as chemical hydrides, which
will more efficiently and cost-effectively store significant
amounts of hydrogen onboard the vehicle.
We need the Government to partner with us on fundamental
long-term research and development of hydrogen storage, as well
as a full portfolio of technologies.
And that includes our second major challenge to a hydrogen
economy, developing and commercializing clean and efficient
methods of producing hydrogen. Eventually, we want to use
methods that are renewable and have no adverse environmental
impact.
We're working closely with energy suppliers to investigate
the best solutions. A few weeks ago, we announced that we are
partnering with Shell to demonstrate our fuel cell vehicles
here in Washington, DC, and Shell will be putting a hydrogen
fueling station in the District to be operational in the
October time frame so that people can begin to experience
hydrogen as a real fuel.
The third challenge we have to overcome is developing
business models for the deployment of the hydrogen
infrastructure and piloting technologies to support it.
As for the reality of the vision, we, at General Motors,
have invested aggressively in what we call enabling
technologies--fuel cells, reformers, electrolyzers, and
automotive electric propulsion. Our commitment is clear in the
significance of our investment--hundreds of millions of dollars
annually for several years to date, and growing. The
acceleration has spurred some very rapid technical progress.
To give you an idea of that rate of progress, in the last 4
years the size and weight of our fuel cell stack for a given
power has decreased by a factor of 10. And we have also
achieved significant cost reduction with each new generation of
stack technology. In fact, we generate new generations a couple
to three times a year.
Like today's gasoline cars, fuel cell vehicles must be able
to handle a tremendous range of environmental conditions. We
are now able to start fuel cells in freezing, down to minus 40,
and do it in substantially less than a minute. Also, at the
vehicle level, we have developed and demonstrated full-
performance vehicles, like our HydroGen3 vehicles that you will
be able to drive later today.
We have developed revolutionary auto designs such as our
AUTOnomy concept, Hy-Wire concept, which combine fuel cells,
and by-wire electronics, and other advanced technologies in new
and unique ways. These designs could make fuel cell vehicles
both more affordable and, most importantly, more compelling to
our customers.
Additionally, we have demonstrated numerous stationary,
distributed electrical-generation systems based on our fuel
cell technologies.
These milestones represent remarkable progress, and our
rate of progress encourages us. But no one should overlook that
there remain major technical obstacles that must be conquered
before vehicles can be brought to market and become
commercially successful.
Let me be clear about the progress represented by our
demonstration vehicles. The progress is rapid and encouraging,
but we are not there yet. Although we are well on our way to
achieving automotive performance levels required for
reliability, durability, and safety, and full capability in
harsh weather extremes, including the ability to withstand
environment and in-use abuse that trucks and automobiles are
subject to worldwide every day. We must achieve these goals
and, most importantly, do it in a way that is affordable to our
customers.
Achieving full automotive performance and affordability
targets is the key to customer acceptance and enthusiasm. These
targets require a huge investment and can only reasonably be
made if we believe the infrastructure will be there to allow us
to introduce fuel cell vehicles to the public.
And I want to emphasize the next sentence. Consistent and
sustained government policy today must drive the development of
the hydrogen economy by accelerated R&D in hydrogen storage,
pilot-scale distribution networks, fuel cell stations, and,
most importantly, incentives for proliferation.
Selective demonstration vehicles or captive fleets will not
suffice to encourage major timely investment by energy
producers or automotive companies, nor will potential creators
of the hydrogen infrastructure invest until they see a rapid
expansion in fuel cell hybrid vehicles. Even then, there is an
economic burden of supporting the infrastructure during the
long transition period from today's gasoline-powered fleet.
Stewardship of this transition requires a careful and
thoughtful, well-thought-out plan which allows automotive
manufacturers, our materials and component suppliers, hydrogen
fuel suppliers, and government regulatory bodies to progress
hand in hand. This careful coordination must also take into
account technical, financial, and environmental realities that
a successful transition requires. This is the basis on which a
government-industry partnership must be based.
Within General Motors, the magnitude of our fuel cell
investment creates an intensive business dilemma. The choice
between using our resources to meet expanding funding needs to
achieve the revolutionary vision at the expense of short-term
initiatives, or to fund an aggressive pursuit of more
incrementally based technologies. To a large degree, the
outcome of that internal debate in General Motors will depend
on the development of a long-term, stable set of governmental
policies and initiatives upon which we can properly balance the
investment of our finite financial and technical resources.
As a closing thought, I believe that fuel cells and
hydrogen-based transportation are absolutely the future. The
pace of technical progress is accelerating. We cannot be left
behind or sitting on the sidelines. Now is the time for the
U.S. Government and U.S. industry to create a partnership that
can lead to the world which we have envisioned.
General Motors and our partners are driving to bring the
first-generation fuel cell technology to market as rapidly as
possible. To a large degree, this initiative was made possible
by the pioneering research and development sponsored by NASA
and later extended by the Department of Energy. We now look
forward to not only realizing the full benefits of that
pioneering work in automobiles, but additionally in working
together with the Government to create new generations of
breakthrough technologies in hydrogen storage and fuel cell
materials.
Thank you, and I look forward to your questions.
[The prepared statement of Mr. McCormick follows:]
Prepared Statement of J. Byron McCormick, Executive Director, Fuel Cell
Activities, General Motors Corporation
I appreciate the opportunity to be here today to testify on behalf
of General Motors. I am Byron McCormick, Executive Director of GM's
Global Fuel Cell Activities. I head the team that is developing
hydrogen-powered fuel cell vehicles that people will want to drive and
buy.
This is an exciting time in the automotive industry and for General
Motors. Technology is clearly changing the way we live our lives for
the better, and there's more to come. This year, we announced a three-
phase advanced technology plan focused on reducing fuel consumption and
vehicle emissions. This plan includes advanced internal combustion
engine initiatives--such as Displacement on Demand cylinder
deactivation--for the near term; a suite of high-volume hybrid
offerings for the mid-term, and the introduction of hydrogen fuel cell
vehicles early next decade.
The subjects today are hydrogen fuel and fuel cells. These
technologies, when fully developed and deployed, will not only deliver
revolutionary vehicles, but will change the way we think about the
automobile and our environment.
We are on the threshold of an historic opportunity. Instead of the
historical evolution of automotive technology by incremental
improvements, we now see our way to bold technology advances that will
fundamentally change personal transportation for the new century. These
advances have the potential to lead to the creation of commercially
viable zero-emission, fuel-efficient fuel cell vehicles with the
functionality that Americans expect. This vision is based on hydrogen
fuel, which can be made from many non-petroleum energy sources. Not
only will fuel cells essentially remove the auto from the environmental
equation by reducing tailpipe emissions to only water vapor and
potentially shifting vehicles to renewable fuels--they will also offer
the performance required for every type of vehicle: heavy duty
commercial, sport utilities, trucks, mass transit or cars.
Fuel cell vehicles running on hydrogen fuel are the ultimate
environmentally friendly vehicles because the only emission is water.
The fuel cell supplies electricity to an electric motor that powers the
wheels. The fuel cell produces electricity by stripping electrons from
hydrogen that travels through a membrane to combine with oxygen to form
water. Fuel cell vehicles are more than twice as energy efficient as
the internal combustion engine, have no pollutant emissions, and are
quiet.
Beyond the advantages for vehicles, fuel cells in vehicles promise
two additional benefits. First, once fully integrated into our daily
lives, fuel cell vehicles will be supported by a broadly available,
cost-effective hydrogen-refueling infrastructure. Such an
infrastructure by its very nature would provide an evolutionary shift
of personal transportation from petroleum to a mix of energy sources
including renewables.
Secondly, the development of this technology will create new, more
environmentally compatible distributed electric power generation
possibilities. The automobile will have the potential to provide
electrical power to homes and worksites. Power on today's electrical
grid could be supplemented by the generating capacity of cars in every
driveway. For example, if only one out of every 25 cars in California
today was a fuel cell vehicle, their generating capacity would exceed
that of the utility grid. A typical midsize fuel cell vehicle would
produce 50 to 75 kilowatts of electrical power, where a typical
household may use 7 to 10 kilowatts at peak load.
Like any advancement that has the promise to completely change the
dominant technology, fuel cell development is a major, costly,
technical endeavor, which--if aggressively undertaken and sustained--
should allow significant implementation in the 10-20 year timeframe.
Our rate of progress today is very rapid. With an uninterrupted focus,
our technological momentum should make this fuel cell vision possible.
It is clear that we are in an intense global competition for
leadership in this race to establish and commercialize fuel cell
technologies. Toyota, Honda, Daimler, Ford, Volkswagen, Nissan, PSA,
Hyundai, GM and others all have large programs. In Japan, the kyogikai,
which are companies operating under government auspices, are developing
a program for the implementation of fuel cell technology. 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.
Recognizing this potential, approximately six years ago at General
Motors fuel cell activities were consolidated and accelerated. We were
given one mandate by our management: Take the automobile out of the
environmental debate. Regardless of whether the environmental debate is
focused on air quality, climate, or overall sustainability, GM
leadership recognizes that global conditions inspire bold, thoughtful
action.
1. There are over 6 billion people in the world today with
over 10 billion expected later this century. Most of these
people are young, globally aware, web-connected, and residing
in emerging economies with escalating demand for personal
transportation.
2. Only 12 percent of the world's population have automobiles
today. Therefore, a breakthrough in energy efficiency and
emissions will be required to meet the demands of the future in
a sustainable high-quality environment.
Our vision is as follows:
1. We see fuel cells as the long-term power source. The GM
global fuel cell program seeks to create affordable, full-
performance, fuel cell-powered vehicles that meet customer
preferences and demands and emit only water vapor from their
tailpipes.
2. We see hydrogen as the long-term fuel. The creation of a
robust, readily available hydrogen-refueling network for those
vehicles will be accessible through refueling stations, as
gasoline is dispensed today. Hydrogen in the infrastructure
could be derived from a mix of sources including: 1)
hydrocarbons, and 2) from any source of electricity.
In the first case, hydrogen is extracted from petroleum, natural
gas and renewable hydrocarbons, such as ethanol, via ``reformers'' or
fuel processors, which catalytically decompose the hydrocarbons into
hydrogen and carbon dioxide.
Hydrogen can also be extracted from water using electrolysis, which
uses electricity to dissociate water. Electricity would come from
conventional power plants or renewable power such as hydro, solar,
wind, and geothermal sources. In this way, hydrogen fuel allows a
transition of transportation from reliance on petroleum to a robust
diversity of energy sources including renewable energy. The blending of
these energy sources is seamless to the driver of a vehicle; he sees
only hydrogen fuel, not whether it came from petroleum, natural gas,
nuclear or renewable energy. Hydrogen created directly from nuclear
energy is also a future option.
There are three major challenges that we need to overcome to make
this hydrogen economy a reality:
First, we need continued development of on-board hydrogen storage.
Using hydrogen in a vehicle requires a completely new type of fuel
tank. The challenge is to find a lightweight, compact tank that stores
enough hydrogen at modest pressure for a lengthy drive.
Liquid hydrogen stored cryogenically or compressed hydrogen stored
at high pressures will suffice for early market introduction, but, over
the long term, we should seek ``solid'' storage techniques such as
chemical hydrides, which will more efficiently and cost-effectively
store significant amounts of hydrogen on board the vehicle.
We need the government to partner with us on fundamental, long-term
research and development on hydrogen storage as well as a full
portfolio of technologies.
And that includes our second major challenge to a hydrogen
economy--developing and commercializing clean and efficient methods of
producing hydrogen. Eventually, we want to use methods that are
renewable and have no adverse environmental impact. We're working
closely with energy suppliers to investigate the best solutions. A few
weeks ago, we announced that we are partnering with Shell to
demonstrate our fuel cell vehicles and an operational hydrogen fueling
station here in Washington, DC. The demonstration vehicles went into
service today and the fueling station will be operational in late fall.
The third challenge we have to overcome is developing business
models for the deployment of a hydrogen infrastructure and piloting
technologies to support it.
As for the reality of this vision, we at General Motors have
invested aggressively in what are called ``enabling'' technologies:
fuel cells, reformers, electrolyzers and automotive electric
propulsion. Our commitment is clear in the significance of our
investment--over $100 million annually for several years to date, and
growing. The acceleration has been spurred on by rapid technical
progress.
To give you an idea of that rate of progress, in the last four
years the size and weight of our fuel cell stack for a given power has
decreased by a factor of 10. And we have also achieved a cost reduction
with each new generation of stack technology.
Like today's gasoline cars, fuel cell vehicles must be able to
handle a tremendous range of environmental conditions. We are now able
to start fuel cells from freezing--minus 40 +C--in substantially less
than a minute. Also at the vehicle level, we have developed and
demonstrated full-performance vehicles like our HydroGen3 demonstration
vehicles that you will be able to drive here in Washington. And we have
developed revolutionary designs, such as our AUTOnomy concept and Hy-
wire prototype vehicles, which combine a fuel cell, by-wire
electronics, and other advanced technologies in new and unique ways.
These designs could make fuel cell vehicles both more affordable and
more compelling for our customers.
Additionally, we have demonstrated numerous stationary, distributed
electrical-generation systems based on our fuel cell technologies.
These milestones represent remarkable progress. Our rate of
progress encourages us, but it is crucial to recognize that the race
for fuel cell development is a marathon, not a sprint. No one should
overlook that there remain major technical obstacles that must be
conquered before these vehicles can be brought to market and can become
commercially successful.
Let me be clear about the progress represented by our fuel cell
demonstration vehicles. The progress is rapid and encouraging, but we
are not there yet. Although we are well on the way to achieving
automotive performance levels required for reliability, durability,
safety and full capability in harsh weather extremes, including the
ability to withstand all environment and in-use abuse that automobiles
and trucks worldwide are subjected to every day. We must achieve these
goals and, more importantly, affordability before this technology will
be considered an option by our customers.
Achieving full automotive performance and affordability targets is
key to customer acceptance and enthusiasm. These targets require huge
investments that can only be responsibly made if we believe the
infrastructure will be there to allow us to introduce fuel cell
vehicles to the public. Government policy today must drive the
development of the hydrogen economy by accelerated R&D in hydrogen
storage, pilot-scale distribution networks, and refueling stations and
incentives for their proliferation.
Selective demonstration vehicles or captive fleet tests will not
suffice to encourage major timely investment by the energy producers
and the full automotive supply base before a hydrogen infrastructure is
seen to be evolving. Nor will potential creators of the hydrogen
infrastructure invest until they see a rapid expansion of hydrogen fuel
cell vehicles and even then, there is the economic burden of supporting
that infrastructure during the long period of transition from today's
gasoline-powered fleet.
Stewardship of this transition requires a carefully thought out
plan which allows the automotive manufacturers, their material and
component suppliers, the hydrogen fuel providers and governmental
regulatory bodies to progress hand-in-hand. This careful coordination
must also take into account the technical, financial and environmental
realities that a successful transition requires.
This is the basis on which a government-industry partnership must
be based.
Within General Motors, the magnitude of our fuel cell investment
creates an intense business dilemma-the choice between using our
resources to meet the expanding funding needs to achieve a
revolutionary vision at the expense of short-term focused initiatives,
or to fund the aggressive pursuit of more incrementally focused
initiatives.
To a large degree, the outcome of that internal debate will depend
on the development of a long-term, stable set of governmental policies
and initiatives upon which we can properly balance the investment of
our finite financial and technical resources.
As a closing thought, I believe that fuel cells and hydrogen-based
transportation are the future. The pace of technical progress is
accelerating. We cannot be left behind or sitting on the sidelines. 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.
General Motors and our partners are driving to bring first-
generation fuel cell technology to market as rapidly as possible. To a
large degree, this initiative was made possible by pioneering R&D work
sponsored by NASA and later extended by the Department of Energy. We
now look forward to not only realizing the full benefits of that
pioneering work in automobiles, but, additionally, working together
with government to create new generations of breakthrough technologies
in advanced hydrogen storage and fuel cell materials.
Thank you.
I look forward to responding to your questions.
Senator Brownback. Thank you, Mr. McCormick. This is very
encouraging testimony.
Mr. Preli?
Mr. Preli. Preli.
Senator Brownback. Very good to have you here today.
STATEMENT OF FRANCIS R. PRELI, JR., VICE PRESIDENT-
ENGINEERING, UNITED TECHNOLOGIES CORPORATION
FUEL CELLS
Mr. Preli. Good afternoon Mr. Chairman, Senator.
My name is Frank Preli. I'm vice president of engineering
for UTC Fuel Cells, a business of UTC Power, which is a
division of United Technologies Corporation. I appreciate the
opportunity to participate in today's hearing.
UTC Fuel Cells is one of the largest and most experienced
fuel cell companies in the U.S. and the world. We're the only
company addressing space, stationary, and transportation
markets. We employ a total of 850 individuals, of which 350 are
dedicated solely to fuel cell research and technology
development. Over the years, our employees have amassed a
patent portfolio of more than 550 U.S. patents.
UTC Fuel Cells produced its first fuel cell in 1961 for the
space application. And since then, we've supplied fuel cells
for every U.S. manned space mission. UTC Fuel Cells has also
led the way with terrestrial fuel cell applications. We've sold
255 stationary 200-kilowatt units, known as the PC25, to
customers in 25 states, 19 countries on five continents. Our
installed base of PC25 has generated clean energy for over 6
million hours.
We're also a leader in the development of fuel cell systems
for the transportation market. We count Nissan, Hyundai, and
BMW among our transportation fuel cell partners. In addition,
California's only hydrogen fuel cell transit bus in revenue
service is operated by SunLine Transit and is powered by one of
our fuel cell power plants.
Great progress has been made in fuel cell technology. For
example, in the past 5 years, the life of a fuel cell stack has
been extended from hundreds of hours to a thousand hours and,
in recent lab tests, close to 10,000 hours. Costs have also
come down dramatically from $600,000 a kilowatt for the space
application to $4,500 a kilowatt for our PC25 stationary power
plant. Our next-generation stationary product is targeted at an
initial cost of around $2,000. And, of course, for automotive
transportation uses, that has to go much, much lower, probably
down to $50 a kilowatt or below. We've also achieved 50 percent
reductions in size since 1977. The weight has decreased
approximately the same amount. But we still have a long way to
go.
The automotive application is the most challenging based on
cost, durability, and performance requirements. The internal
combustion engine has a 100-year head start and benefits also
from huge volumes. Therefore, it will take longer for fuel
cells to successfully compete in this market.
But the auto market also offers the largest payoff in terms
of environmental benefits and our ability to reduce the
Nation's dependence on foreign oil. We believe fuel cells will
be deployed first in stationary devices, in fleet vehicles,
such as transit buses, and only later in the personal auto
market.
Transit buses are a strategic enabler on the path to autos
powered by fuel cells. Hydrogen fueling stations can be made
available, given the relatively small number of inner-city bus
stations, and the power plant size and weight requirements are
less demanding than those associated with automobiles.
We need to walk before we run, and gain experience in real-
world operating conditions. Fleet vehicles represent a perfect
candidate for this type of practical experience. As the
industry gains experience in deploying fuel cells for
stationary, inner-city buses, and fleet applications, these
successes can pave the way for zero-emission fuel cell cars and
serve as benchmarks to measure progress.
A team effort that involves original equipment
manufacturers, power plant, component, and raw-material
suppliers, energy companies, and governments will be required,
with substantial sustained global investment by both public and
private sectors.
Our recipe for successful fuel cell commercialization is
included in my written statement. The top ingredients, however,
are, one, development of a comprehensive, long-term national
strategy with sustained national commitment and leadership;
two, robust investment by the private and public sector focused
on research, development, and demonstration programs for both
fuel cells and hydrogen infrastructure, with an emphasis on
renewable sources of hydrogen; three, financial incentives and
government purchases; four, elimination of regulatory barriers;
and, five, harmonized codes and standards that permit global
involvement with open access to markets.
We've covered a lot of distance in the past few years, but
we are engaged in a marathon, not a 100-yard dash. If the
technical challenges are met, the private and public sector
make robust investments, suppliers perform as predicted,
consumer acceptance is won, and the necessary infrastructure
develops as required, we anticipate the early adopter vehicle
fleets will result in at least 10,000 fuel cell cars, trucks,
and buses on the road by 2010, and a substantial amount of
stationary fuel cell-generation capacity deployed. Mass
production of fuel cell vehicles could then begin, starting in
the 2012/2015 time frame.
UTC Fuel Cells believes that in order to meet the
automotive challenge, a national strategy for fuel cell
commercialization must focus on stationary and fleet vehicles
to ensure our success in the automotive market and get us there
sooner. At UTC Fuel Cells, we're proud of our past
accomplishments, we're excited about meeting the challenges and
opportunities that lie ahead so that the many benefits of fuel
cells can be enjoyed not just by a lucky few, but on a global
scale.
We look forward to working with you, Mr. Chairman and other
Members of Congress, to ensure the fuel cell agenda noted above
becomes a reality, and the full promise of fuel cell technology
is realized.
Thank you, Mr. Chairman, for the opportunity to testify.
[The prepared statement of Mr. Preli follows:]
Prepared Statement of Francis R. Preli, Jr., Vice President-
Engineering, United Technologies Corporation Fuel Cells
Good afternoon, Mr. Chairman. My name is Frank Preli. I am Vice
President of Engineering for UTC Fuel Cells (UTCFC), a business of UTC
Power, which is a unit of United Technologies Corporation (UTC). UTC is
based in Hartford, Connecticut, and provides a broad range of high
technology products and support services to the building systems and
aerospace industries. UTC Power is focused on the growing market for
distributed energy generation to provide clean, efficient and reliable
power. One of UTC Power's businesses is UTC Fuel Cells, a world leader
in the production of fuel cells for commercial, space and
transportation applications. I appreciate the opportunity to
participate in today's hearing on ``The Future of the Hydrogen Fuel
Cell.''
UTC Fuel Cells employs a total of 850 individuals and I lead a team
of 350 engineers focused solely on fuel cell research and technology
development. Over the years our employees have amassed an impressive
list of more than 550 U.S. patents related to fuel cell technology.
UTC Fuel Cells produced its first fuel cell in 1961 for the space
application and since then we've supplied all the fuel cells for every
U.S. manned space mission. UTC Fuel Cells has also led the way with
terrestrial fuel cell applications. We've sold 255 stationary 200-
kilowatt size units known as the PC25 to customers in 25 states and 19
countries on five continents. Our installed base of PC25s has generated
six million hours of clean energy.
We're also a leader in the development of fuel cell systems for the
transportation market. We count Nissan, Hyundai and BMW among our
transportation fuel cell partners. In addition, California's only
hydrogen fuel cell transit bus in revenue service today is operated by
SunLine Transit and is powered by one of our power plants.
In 1839 Sir William Grove discovered that combining hydrogen and
oxygen in the presence of a catalyst could generate electricity. For
many years the potential of fuel cells was untapped. Its use in the
space program to generate electricity and provide drinking water for
the astronauts represented its first practical application.
More recent technical advances plus the growing appreciation of the
benefits of fuel cells including their clean, efficient, quiet
operation and ability to reduce our dependence on foreign oil have
captured the interest of not just the President of the United States,
but also auto manufacturers, Fortune 500 companies, small business
entrepreneurs, Wall Street, Congress, foreign governments and the
general public.
The automotive application is the most daunting challenge and
therefore it will take longer for fuel cells to successfully compete in
this market. It's the most demanding in terms of cost, durability and
performance. On the other hand, the auto market offers the largest
payoff in terms of reducing toxic air emissions and greenhouse gas
emissions related to global warming, achieving oil import independence
and providing incentives for supplier investment due to the huge volume
of cars produced each year.
The vision of an economy fueled by hydrogen generated from
renewable energy sources is a revolutionary concept that will require
evolutionary, incremental progress. We believe fuel cells will be
deployed first in stationary devices and fleet vehicles such as transit
buses and only later in the personal auto market. Transit buses are a
strategic enabler on the pathway to autos powered by fuel cells.
Hydrogen-fueling stations can be made available more readily given the
relatively small number of inner city bus stations and the power plant
size and weight requirements are less demanding than those associated
with autos.
We need to walk before we run and gain experience in real world
operating conditions. Fleet vehicles represent a perfect candidate for
this type of practical experience since they offer an opportunity to
enhance the range of operation for the vehicle, gain experience with
heavy-duty cycles and train a core group of technicians.
As the industry gains experience in deploying fuel cells for
stationary, inner city buses and fleet applications, these successes
can pave the way for zero emission fuel cell cars and serve as
benchmarks to measure progress towards the goals of the
Administration's FreedomCAR and Fuel initiative. Similarly, we believe
it is wise to continue the investments being made in electric drive
train technology for hybrid cars and buses since fuel cell vehicles
will incorporate this same technology and benefit from the technical
advances and experience gained from these earlier vehicles.
Fuel cells must meet certain technical and performance criteria if
they are going to be commercially viable and accepted in the
marketplace. These metrics vary depending on the application, but
automobiles represent the most daunting challenge. We believe consumers
will demand that fuel cell power plants deliver cost, durability and
performance equivalent to the internal combustion engine.
From a technical perspective, we've made tremendous strides in
reducing the cost, size, and weight of fuel cells while increasing
efficiency, and substantially improving durability. But we still have a
long way to go.
For example, in the past five years we've seen extraordinary
improvements in the life of the fuel cell stack, which is where the
electricity is produced and represents the heart of the power plant. In
1998, proton exchange membrane (PEM) fuel cell stacks had a life of 100
hours. By 2001, our fuel cell stacks experienced a tenfold improvement
to 1,000 hours and just recently UTC Fuel Cells demonstrated close to
10,000 hours of durability in laboratory tests.
Perhaps the most remarkable aspect of this significant progress is
that it's been accomplished not in decades, but in a matter of years.
Building on fuel cell experience from the 1960s, 70s and 80s, the use
of sophisticated computer simulations, custom designed testing
equipment and the extraordinary talent of dedicated and experienced
engineers has made this possible. We're very optimistic that with
continued investment in public private partnerships and focused
demonstration programs to verify and validate our laboratory findings,
we'll meet our durability target by 2010.
Fuel cell costs have also seen a dramatic decline. Fuel cells used
in the space application cost $600,000 per kW; our 200 kW PC25
stationary unit introduced in 1992 costs $4,500 per kW; and our next
generation stationary product that will be introduced next year is
targeted at an initial cost of around $2,000 per kW. We've achieved
similar dramatic reductions in size and weight that also have
contributed to the reduction in costs. For example, fuel cell stack
size has been reduced by 50 percent since 1997 and weight has decreased
by approximately the same.
So while we've made substantial progress, we still have some
challenges ahead if we are going to be competitive with the one hundred
year old internal combustion engine technology that is produced in high
volume. The cost improvements made to date have been achieved through a
variety of strategies including improved use and performance of exotic
materials, reduced number of parts, and enhanced manufacturing
processes, but further development is required. Ultimately, we need to
couple these technical successes with higher volumes to reduce unit
costs.
At UTC Fuel Cells we're confident about meeting the technical
challenges that lie ahead. Our forty years of experience in this
business has taught us that there will be surprises (both good and bad)
along the way and that the best way to learn is by doing. We're
encouraged by progress to date, but we also know that the last
percentage points of improvement are sometimes the most difficult to
achieve and the most costly.
But there are other factors beyond our control that can influence
the future of the hydrogen fuel cell. For example, we must ensure that
similar progress is made in the development of the necessary hydrogen
infrastructure including hydrogen production, storage and distribution.
Codes and standards and safety procedures must be developed and
uniformly adopted. Consumer confidence and acceptance must be won. The
supplier base must be developed and must meet demanding specifications.
A team effort that involves original equipment manufacturers,
component and raw material suppliers, energy companies and governments
will be required with substantial, sustained global investment by
public and private partners. Our recipe for successful fuel cell
commercialization includes the following key ingredients:
1. Articulation of a comprehensive, long term national
strategy that addresses stationary, portable and transportation
applications;
2. Sustained national commitment and leadership;
3. Robust investment by the private and public sector;
4. Public private partnerships for research, development and
demonstration programs for both fuel cells and hydrogen
infrastructure with a focus on renewable sources of hydrogen;
5. Development and deployment of hydrogen production, storage
and distribution infrastructure;
6. Financial incentives and government purchases;
7. Elimination of regulatory barriers;
8. Harmonized codes and standards in the U.S. and globally;
9. Global involvement with open access to markets; and
10. Education and outreach to ensure consumer acceptance.
We've covered a lot of distance in the past few years, but we are
engaged in a marathon not a 100-yard dash. Fuel cell technology has
experienced a long gestation period and will not reach its full
maturity for some time. We anticipate the early adopter vehicle fleets
will result in 10,000 fuel cell cars, trucks and buses on the road by
2010 and a substantial amount of stationary fuel cell generation
capacity deployed.
This assumes that the technical challenges are met, the private and
public sector make robust investments, suppliers perform as predicted,
consumer acceptance is won and the necessary infrastructure develops as
required. If all these efforts come together successfully, we can see
mass production of fuel cell vehicles starting in the 2012-2015
timeframe. We envision a bright future for fuel cells, but recognize
the challenges and uncertainties that we must address collectively.
My testimony today has focused on the progress made to date and the
challenges facing the automotive market since this is both the most
challenging and rewarding application. But UTC Fuel Cells believes that
in order to meet the automotive challenge, a national strategy for fuel
cell commercialization must focus on stationary and fleet vehicles to
ensure our success in the automotive market and get us there sooner.
At UTC Fuel Cells we're proud of our past accomplishments and
excited about meeting the challenges and opportunities that lie ahead
so the many benefits of fuel cells can be enjoyed not just by a lucky
few, but on a global scale. We look forward to working with you, Mr.
Chairman and other Members of Congress, to ensure the fuel cell agenda
noted above becomes a reality and the full promise of fuel cell
technology is realized.
Thank you Mr. Chairman for the opportunity to testify.
Senator Brownback. Thank you, and that is very encouraging.
Ten thousand vehicles on the road by 2010. These fleet
vehicles, that's what you project now.
Mr. Preli. Obviously, a projection of how much will happen
in the future is wrought with uncertainty. But if you look at
extrapolations based upon the number of vehicles today, the
number that some auto companies are projecting for 2005/2007,
if we can make inroads in infrastructure, and if the technology
comes home and the cost comes down, we think that's a
reasonable assumption.
Senator Brownback. That's a pretty short time frame to get
there, too. I mean, a 7-year time frame to be able to do that.
Mr. Preli. Right. I think the opportunity is here now. If
you look at fuel cell technology development--it was invented
in 1830. Not an awful lot happened. In the 1960s we did some
work in space; in the 1970s and 1980s, in commercial. But I
would say over the last 10 years, the level of interest and
investment in this PEM technology, which is the potential
technology for automotive, has vastly increased the number of
minds and the amount of money being brought forward. And,
really, the achievements over the last 5 years, maybe 10 years,
are really stunning in terms of the evolution of fuel cells,
since the 1830s.
Senator Brownback. Is it safe to say, and I don't care who
would want to respond to this--that as the scientific and
engineering community looks to the future and wants to take the
automobile out of the environmental equation, that this is, by
far, the most promising technology?
Mr. McCormick. I'll take that on for General Motors.
Unambiguously, we believe that. And it's because we think that,
in a sense, moving from petroleum to hydrogen gives us an awful
lot of very substantial societal benefits. But moving to the
electric driving allows us to do things with the automobile
that we haven't been able to do before, as evidenced by our Hy-
Wire concept, where we now can package cars and design them in
ways that give better style and better utility than the
conventional designs we have that have to design around the
hard mechanical interfaces between the engine, transmission,
and wheels. And so, in a sense, this idea of having customers
that want to buy, what we sell is performance, transportation,
for sure, utility, which has something to do with how the
vehicle is designed. And most people buy vehicles, to a large
degree, based on style and fun, as well. So you've got to put
all that together. And these new concepts allow us to design
vehicles that we think people absolutely want to buy. So, from
our viewpoint, it's a win all the way around.
Dr. Friedman. If I might add to that. I think this is one
of the areas that's really encouraging, because the automotive
industry and, generally, the environmental community and
scientific communities agree that fuel cells hold amazing long-
term promise. I do have to underscore, though, that it is
promise. Hydrogen is only as clean as how it is made. So if it
is made from coal, if it is made from other dirty resources, we
will definitely not be taking vehicles out of the equation. So
it's very important that as we look forward to developing fuel
cell vehicles, that development also happen for the energy
resources to make sure that the hydrogen can be as clean as
possible.
It's also important that we develop a lot of other
technologies. A lot of the conventional technologies and a lot
of the hydro technologies will actually feed into fuel cell
vehicles. For example, the electric motors in hybrid vehicles
and the aerodynamic improvements or better rolling-resistance
tires, in conventional vehicles all are very important to
ensure that fuel cell vehicle costs can come down and that
their efficiency can be maximized.
So there's a real synergy between those technologies that's
important to take advantage of.
Senator Brownback. But, Dr. Friedman, I want to make sure I
understand. You believe, as well, representing the Union of
Concerned Scientists, that hydrogen technology represents the
most promising aspect of taking the automobile out of the
environmental impact equation?
Dr. Friedman. As long as hydrogen technology is linked to
renewable fuels, definitely.
Senator Brownback. Mr. Preli, do you agree with that
statement, too, that hydrogen is the key opportunity that we
have here in taking the automobile out of the environmental
equation?
Mr. Preli. Yes, I think we agree with that, and I think our
concern is really when--Sooner or later, fossil fuel reserves
dwindle down, you have to make a switch. How quickly do you
move toward that goal?
Senator Brownback. Mr. Friedman, I want to go to a
statement that you made that hydrogen is an energy carrier, not
a ``energy fuel.'' And I see your difference, and I agree with
that. What sources--and perhaps you can state even generally
from the environmental community--should we be deriving
hydrogen from?
Dr. Friedman. Well, certainly that's a near-term and a
long-term question. In the near-term, I think natural gas is
likely the most promising source of hydrogen. If you look at
this projection for basically getting 50 percent of the new
vehicles as fuel cell vehicles by 2030, then kind of look back
at 2020, where we're expecting maybe 10 percent of the new
vehicles would be fuel cell vehicles, the hydrogen demand is on
the order of one quad of energy. To make that from natural gas,
that's about two quads of energy, which is less than 10 percent
of the projected natural gas demand in that time frame. So as a
transition fuel, natural gas makes a lot of sense, specifically
because you can put a natural gas reformer at the fueling
station. So instead of necessarily having to build up the
infrastructure in the short term to pipe hydrogen to fueling
stations, you have a reformer----
Senator Brownback. You just pipe natural gas to the
station.
Dr. Friedman. Exactly, and then you crack the fuel there.
Senator Brownback. Is it that cheap to be able to make that
transfer technology where you crack it right at the station?
Dr. Friedman. Well, in terms of technology, that technology
is actually what UTC Fuel Cells is using for their stationary
technology for the PC250s or PC25--sorry if I'm saying them
wrong. Certainly, it's still more expensive than gasoline, and
it will take time to get that down. It will also probably take
tax credits, infrastructure tax credits and fuel tax credits
such as are being looked at in the CLEAR Act in order to help,
in the short term, bring down those costs.
In the long term, because fuel cell vehicles can be on the
order of two to three times more efficient than the cars we
have today. The price for the fuel can be higher than gasoline,
but because the vehicle is so much more efficient, the actual
on-the-road price can be quite similar.
Now, in the long term, though, we can't rely on natural
gas. Obviously, there are still carbon emissions associated
with natural gas, and there are some upstream emissions and air
pollutants associated with producing natural gas. Ultimately,
we do need to move to electrolysis-type technologies based off
of wind and solar energy, as well as using biomass to gasify
and produce hydrogen fuel.
Senator Brownback. Gentlemen, do either of you have any
comments to make about his analysis of the sourcing of the
hydrogen?
Mr. McCormick. Maybe we see it somewhat differently. And if
you use the analogy of electricity, which, in the future, we
envision, there are two energy carriers, one being electricity,
one being hydrogen. The earlier we begin to get the
infrastructure in, get the vehicles out there, and get the
fueling infrastructure in, then we have the opportunity over
time to balance environmental policies, economics, balance-of-
trade kind of issues and other real-world things that we have
to balance in order to fundamentally come up with what's our
national policy around these issues. And so a bit like
electricity, once the grid's in, then you can decide
incrementally how do I want to move my base production of
electricity, how do I want to deal with the environmental
issues. And so the quicker we begin to get the vehicles out
there and get the infrastructure in, the better we are in terms
of developing that path to renewables that we've just talked
about.
Senator Brownback. You know, it's exciting to hear it being
talked about here, as it's frequently--as long as I've been
around, there's been tension between the automobile community
and the environmental community, and I don't sense that same
level of tension here. There's a, it seems to me, a coming
together of interests, which is a delight to see.
Mr. McCormick, congratulations on the historic announcement
this morning that GM did with Dow Chemical, provide fuel cells
with, as I understand it, generating capacity of 35 megawatts
at Dow's Freeport, Texas plant. Could you speak to some of the
business advantages that both companies experienced? Because
you noted this was a straight business-to-business arrangement
that both saw advantages from.
Mr. McCormick. Right. And, if I may, I'd like to generalize
some business-to-business opportunities beyond this.
First of all, it's in the nature of the chemical industry
that quite often one of the things they produce is hydrogen.
And they have----
Senator Brownback. What do we do with that now?
Mr. McCormick. Pardon?
Senator Brownback. What's done with that now?
Mr. McCormick. Well, what they do with it now is one of two
or three things. They'll sell it into the merchant hydrogen
business, they'll clean it and sell it. Second of all, they'll
combust it to create some heat or to create--put it into a
turbine or something and generate some additional power. Or,
thirdly, in some cases it's vented. And, therefore, that
hydrogen is there as an economic commodity. And if we then put
it through a fuel cell and take advantage of the efficiency of
the fuel cell, we allow Dow, then, onsite to generate
electricity to help run their own facility. So what they're
doing is they're taking the basically free hydrogen, running it
through a fuel cell and playing that off against the need to
buy electricity off of the grid. And in so doing, you notice
that also now that they're going to have some real big
environmental benefits, because they are not driving coal-fired
power plants or other power plants to generate that electricity
for their facility. So it has many, many wins, both societal
and business-wise. But, fundamentally, that's the win for them.
The win for us is that you don't go from the laboratory to
generating 5- to 10 million vehicles a year all in one step.
And so what we need to do is take that automotive technology
and begin to build 1,000, then 10,000, then 100,000. Because
not only is it important what we do in General Motors, but we
have an entire supply base to transition. And our suppliers
that make sensors or membranes or catalysts or gaskets or
whatever have to go through that learning with us. And so it's
very important that we bring this out of the laboratory and
start getting real experience with it.
So this was a pure business-to-business opportunity. At the
cost of fuel cell as we have them, or will have them during the
next couple of years, it turns out it's a profitable venture
for both of us. Pure business.
Now, I would comment that----
Senator Brownback. Well, I hope when you open that up,
you'll have a public announcement and reception for people so
that they can look at that. That's an exciting development.
Mr. McCormick. One of the other things that I think is
implied in the discussion of what we call ``forecourt
manufacturing'' of hydrogen in the filling station is that the
technologies we're talking about, fuel cells, work well in
small sizes and in large sizes. The fuel processors are nicely
scalable. We built a car which had a small fuel processor on
it. The people at UTC build small fuel processors, large fuel
processors. Electrolyzers also work well when they're small or
well when they're large.
Consequently, the notion that you have to do everything
centralized in some big massive capital-intensive way is not
appropriate in this environment. So the idea that we can start
to put in small fuel processors, small electrolyzers, as
there's a few cars out there and the demand's not large, and
later put in larger facilities as that demand grows, gives us
an opportunity to, sort of, manage that transition. And that's
a key difference, in terms of how this transition can happen.
It also means that whenever there's an economic
inefficiency, because we've got lots of sources of energy and
lots of ways to convert it to hydrogen, if one of the economic
factors is out of whack, somebody can arbitrage it. That is,
somebody can make hydrogen from some other source, and so you
start to get free-market competition here, which, at the end of
the day, is going to stabilize markets and drive good
competitiveness.
So the key is for us to get the fuel cell vehicles out
there and begin to get that infrastructure started.
Senator Brownback. Now, you stated that a typical fuel cell
vehicle produces 50 to 75 kilowatts of electrical power, and I
think you also noted that not all of that's going to be needed
in the vehicle and that in turn could be used to generate
electricity?
Mr. McCormick. Well----
Senator Brownback. I mean, you're not going to plug your
car into the house and start running the house, are you?
Mr. McCormick. Well, in fact, look at that. We had--well,
think about the tornados in your state and others recently
where there's disruption of electric power. A couple of weeks
ago in Detroit, we had an ice storm that caused 175,000 people
to be without power. And so right off the bat, the notion of a,
let me say, ``reconfigurable electric grid'' becomes very, very
pragmatic. Now the electric cars can help power the grid and
help deal with emergencies, homeland security, those kind of
things.
Finally, because of the way that--I've got to be very
careful how I say this, because I'm not an expert on it--but,
quite often, utility rates are set by the peak that you use
over some period: a year, a month, or whatever. The ability to
plug your car in and just occasionally peak-shave, particularly
during the summers when your air conditioner is driving a lot
of the power, could change the utility rates a lot. Remember
that the brownouts in California and other places are not due
to base-load generation; they're due to peak. And so what you'd
like to be able to do, as a society, is take that peak offline
so that you don't have to build all that base load. So the
vehicles, again, could play a key role and be economically a
very, very pragmatic solution to that.
Senator Brownback. Mr. Preli, would you comment about that?
Mr. Preli. Well, I think if you look at the automobiles,
particularly in the United States, it's a largely underutilized
capability. Automobiles are operated about 10 percent of the
time, and the other 90 percent of the time they're sitting in a
parking lot or a garage. So if you were able to tap that, then
all of the effort that goes into building an automobile could
be put to much better use, in that you could use it for
generation of electricity at an industrial site, at a home, or
anywhere else that you need electricity. Really, the home load
would be an automobile more or less idling. Its idle capability
is more than enough to power a home. And maybe you would even
form micro-grids at an industrial site to tap that power if you
had hydrogen available.
Senator Brownback. So, you would see the possibility that
people drive into work, when they get there, they would plug
their car in to generate electricity at the work site?
Mr. Preli. It's certainly possible, but we would have to
change the design of the power plant for the automobile a
little bit, because right now, let's say an automobile lasts
for 10 years, which is 87,000 hours, of which maybe you'll use
it for 8,700 hours, perhaps. If you're going to use it more,
then the power plants would have to be designed to live more
like a stationary power plant. For example, the PC25 power
plant we currently market has a minimum life of 40,000 hours,
and we have units that have run to 60,000 hours. So if you're
going to use these as more of a stationary power-generation
capability, you would have to improve upon the design life of
the power plant. But that's certainly doable, both GM and
ourselves are looking at the stationary market as an early
market for these types of fuel cell power plants.
Senator Brownback. What are the top two or three policy
issues that we have to get right to press this technology
forward?
Dr. Friedman?
Dr. Friedman. I think there is--the top policies in one
is--sadly, we don't have a fuel supplier here today, but
supplying the fuel and making sure the fuel gets out there is
probably one of the most important hurdles; and that's much
less of a technical hurdle, it's much less of an engineering
hurdle, and it's more of a question of sustained commitment
from the Government to provide certainty for fuel companies
that they're going to have a market.
The auto companies have been investing billions of dollars
over the last several years to get fuel cell vehicles
developed, and they've been really making a lot of progress.
The fuel companies have not been really been making as
large an investment, because they're waiting for a lot of the
vehicles to be out there. But the vehicles aren't going to be
out there unless the fuel is out there, and you get into this
chicken-and-egg problem, which is where I think the Government
can play a very significant role in helping to assure the fuel
companies that there is going to be a market, to help mitigate
their risk and their financial risk.
Part of the way to do that is by providing tax credits for
putting in infrastructure, tax credits for actually selling the
fuel, especially in the early years so that you can bring down
the initial costs of hydrogen.
I think, second, it is very important to deal with the
storage issue, as we heard earlier today, but I don't see that
as as major of a stumbling block. We've seen studies by Ford
Motor Company that show that, with really good packaging, they
can get over a 300-mile range with 5,000 psi tanks. But storage
is an important issue.
And I think, also, education is important. It's very
important that we train the next generation of engineers so
that they are ready to deal with fuel cells and fuel cell
technology. It requires a much more interdisciplinary engineer
than your typical mechanical, electrical, or chemical engineer.
Finally, I would say that one of the important things we
need to do to make ourselves ready for fuel cell vehicles is to
do something about oil consumption as soon as possible,
investing in other conventional technologies so that the
problem doesn't continue to grow and so that the urgency for
fuel cell vehicles maybe isn't as large and we can wait and we
can afford to wait until the technology is ready.
Senator Brownback. Mr. McCormick?
Mr. McCormick. Well, I have four. First of all, when people
talk about the cost of hydrogen, a lot of that cost is in the
capitalization of the hydrogen generation hardware; it's not
necessarily in the hydrogen itself or the raw fuel that makes
the hydrogen. So as we go forward, policies that enable people
to put in the capitalization and get it amortized or get it
written off quickly; or maybe, in the extreme cases, in the
railroads when they were put in the United States west of the
Mississippi, they were highly subsidized by the Government,
because there wasn't enough population to support having
profit-making railroads there. So there's a number of ways that
the Government can think about dealing with what I'll call the
``capital issue.'' I don't want people to be misled, to think
that the cost of hydrogen is purely a technical issue. In fact,
to a minor degree, it's a technical issue. It's primarily a
financial issue.
The second one is codes and standards, and it comes in two
forms. Codes and standards as it relates to putting in the
hydrogen fueling stations, in particular. When we did the
electrical vehicles in California, we found that we had to go
to every municipality, every--people that handle jaws of life,
everybody that could license anything and try and convince them
to put the electric chargers in. It means that nationally we
have to really start harmonizing codes and standards work
across the national Government.
Number two, if we're going to have this--around codes and
standards, if we're going to have this merging of hydrogen and
electricity and the ability to switch back and forth between
the two or use the vehicles to power the grid or have
distributed generation, it means that we need codes and
standards for connection onto the electrical grid. Right now,
public utility commissions in each location have sway over how
that happens, and so consequently it's a very difficult
proposition to really move distributed electrical generation
into the market, except in select places.
Number three, this sounds strange, but I think this is a
long-term proposition. We start, if we're going to make a
change that happens in 30 years or even 50 years, the first 10
years, this next 10 years, are absolutely pivotal to us, and so
what we need are policies that don't change every year or two.
They've got to be policies that envision continuity for periods
of 20 and 25 years if you want this kind of a transition to
happen.
As we talk to fleet users, one of the problems with some of
the earlier initiatives is that fleet users will begin to get
ready to take advantage of the tax credits, only to find out
the tax credits have gone away because they're 4 years out, and
by the time people get the planning, get the capital, get ready
to do it, all of a sudden the incentive to do it is gone. So I
think we need to be looking at 20-year kinds of policies and
make them consistent.
And then, lastly, we're beginning on a journey. And, in a
sense, as one college student told me recently, we're moving
away from the theme of fire to the theme of electrochemistry.
And when we look at that, the fuel cells that we're putting out
in the next 10 years are going to be absolutely antiquated and
obsolete by the technology that's possible. And so,
consequently, I think that we need now to be energizing some of
the best scientists in the country, places like National
Science Foundation, NIST, many other of the research agencies
and people who could take on very aggressive kinds of things.
We're going to drive that cost curve, our technical
suppliers and the supply community are going to do that, but I
look to the day when we don't even think about using precious-
metal catalysts, maybe organometallic catalysts and things that
are much more aggressive. And I think now is the time, as we
get those first vehicles out there and we start moving, that
there's a whole body of new technologies for us to implement in
the 2010 to 2020 time frame.
Again, I think we should be looking at the short term to
implement, but I'd also like to see some really good research
to get some of those Nobel Prize winners to look beyond what
we're doing. And those would be the four things I would have in
mind.
Senator Brownback. Mr. Preli?
Mr. Preli. Perhaps this is redundant. It may be surprising
that we all agree. I'll run down my list, maybe for
reinforcement.
I think we need to lead in the development of technology,
both short-term technologies, like improving durability and
lowering cost, but, in particular, we need to lead in advanced
concepts. We're at the Model-T stage in terms of fuel cell
development, and there's many, many more advancements to come,
and I think the U.S. needs to lead in that regard.
I think we need to provide a forum for demonstrating these
technologies, make things easier to demonstrate, in stationary,
bus and fleets, and auto.
I think we need to lead in the development of an
infrastructure, because one fear I have is that the technology
is moving very, very rapidly, maybe more rapidly than some of
us originally anticipated, but the technology is not very
useful without an infrastructure to fuel.
And then, finally, to continue to spur the market through
incentive programs.
Senator Brownback. That's very good. Very good thoughts and
comments.
Gentlemen, I very much appreciate your testimony, your
enthusiasm, your unity on an important, important topic for us.
This was an exciting forward-looking hearing.
I would like to join Mr. McCormick in inviting people here
to go view--I hope to drive it. My license is good, I have
insurance to be able to drive it. Where is the vehicle located,
Mr. McCormick?
Voice: Back by the Russell Building, out the back door, on
the corner of C Street and First.
Senator Brownback. Oh, very good.
Mr. McCormick. If you follow that gentleman right there,
he'll----
Senator Brownback. So if we follow the gentleman over here,
then people can look and see, possibly drive it.
It's an exciting issue, and I hope you'll continue to work
with us.
Thank you all for coming. The hearing is adjourned.
[Whereupon, at 4:24 p.m., the hearing was adjourned.]
A P P E N D I X
Response to Written Questions Submitted by Hon. Bill Nelson
to Francis R. Preli, Jr.
Questions 1. What does one do with the water byproduct? Store it on
board, release it to the atmosphere/street?
Answer. Excess water is released to the atmosphere as water vapor
and as liquid water. Internal combustion engines also release large
amounts of water, but because they operate at higher temperatures than
Proton Exchange Membrane fuel cells, the water is usually in the
gaseous form. Sometimes, particularly when the engine is cold, you can
see water dripping from the exhaust pipes. With fuel cells, on cold
days, some heating of the water may be needed to make sure that a lot
of liquid water does not drip out.
Questions 1a. And do we have enough clean water to make this thing
work, or do we need to be looking at large water purification plants to
accompany hydrogen plants?
Answer. Water is formed as a by-product of the hydrogen and oxygen
reaction and so large amounts of pure water do not need to be supplied
to the fuel cell engine. About 3-10 liters of water may be required at
initial start-up, but the fuel cell uses its own water to make up any
losses.
Questions 2. Where does the oxygen come from? (A fuel cell combines
oxygen and hydrogen to make water and heat/electricity. We're focusing
on making hydrogen. Is the oxygen pulled out of the air, or is it
stored onboard like the hydrogen?)
Answer. The oxygen comes from the air. The fuel cell operates
better on pure oxygen (as in our fuel cells for the space shuttle), but
operates very well using oxygen from air. The improved performance from
pure oxygen does not outweigh the cost, storage and safety issues
encountered with pure oxygen.
Questions 3. How quickly can you see hydrogen powered vehicles
making a significant impact? (e.g., 20 percent of the market by 2020,
2030 . . . ?)
Answer. As indicated in our written testimony, the answer to this
question depends on many variables. Assuming that the technical
challenges are met, the private and public sector make robust
investments, suppliers perform as predicted, consumer acceptance is won
and the necessary infrastructure develops as required, we can see mass
production of fuel cell vehicles starting in the 2012-2015 timeframe.
This scenario also requires that we are successful in the deployment of
stationary and fleet vehicles such as transit buses as important
stepping-stones to the deployment of fuel cell automobiles.
UTC Fuel Cells is working diligently with its auto and fleet
customers to increase the durability and reduce the cost and size of
fuel cell power plants so they can compete with the internal combustion
engine. We estimate that size/power density is within 30 percent of the
target required for wide spread auto usage of fuel cells and progress
on durability is very encouraging. Cost, however, remains a significant
challenge since the internal combustion engine enjoys a one hundred
year head start and benefits from high volume production.
The convergence of the required size and cost of a fuel cell system
for the automotive market with all the performance criteria demanded by
consumers is very dependent on continued R&D investment from the auto
sector and fuel cell component and raw material suppliers. Presuming
that investment continues to accelerate, we could foresee a truly
competitive fuel cell system in the 2015 time frame. Of course there
will be niche markets as much as five years earlier than that.
The milestones to watch for are continued investment from the major
automotive companies in fuel cell R&D, particularly when those
investments are made in the absence of legislative initiatives. When
that happens, it will be a signal that the automakers believe they will
compete head-to-head within the next ten years on the efficacy of their
respective fuel cell technologies. If those R&D investments decline
when legislative initiatives lose momentum, it will be a signal that
fuel cell market entry will be delayed. Additionally, if there are
significant legislative initiatives or a major upward swing in the cost
of petroleum products, the introduction of fuel cells to the auto
market place could be accelerated by as much as three to five years.
Questions 4. Will hydrogen be able to compete in the absence of
policy measures (e.g., carbon credits), considering that it is more
costly with the present carbon-based fuel prices?
Answer. The conversion to hydrogen will be costly. The U.S. must
use some form of incentives to stimulate the conversion process and
must lead the development of infrastructure.
Questions 5. Should the federal government be picking hydrogen and
fuel cell vehicle technologies over other technologies, such as hybrid
vehicles and lean burn engines?
Answer. Hybrids are an important bridging technology for fuel cells
because they will solve the electric drive issues and will help reduce
the costs of such systems. High-volume manufacturing of hybrid vehicles
will make the eventual conversion to hydrogen fuel cells easier.
Questions 6. Would the designation of a target deadline for
commercialization of fuel cell vehicles help focus the program and make
better use of funding resources? Alternately, would such a deadline
force manufacturers to abandon other promising technologies or create
an unfair burden on the industry?
Answer. A plan that includes aggressive milestones is appropriate.
These milestones should include both technology and product goals so
progress can be measured on an annual basis. We believe too much
emphasis is being placed on 2015 commercialization goals without
looking carefully at the intermediate steps.
Questions 7. Should the government focus on long-term research or
should it focus on technologies closer to commercialization, or both?
Answer. The government should develop and implement both short and
long term strategies. In the near term, the deployment of stationary
fuel cells needs the support of the government through tax credits and
as a purchaser of fuel cell products. In the mid term, fuel cell busses
are the best way to begin deploying the technology for transportation
because the technical requirements are not as demanding as for
automobiles and hydrogen infrastructure can be developed. A near and
long term R&D program is also needed to improve durability, operability
and to lower the cost. But a single focus on long-term R&D will
discourage near-term applications and reduce the ability to acquire
design and usage feedback for today's state of the art technology.