[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]


 
                    FUELING THE FUTURE: ON THE ROAD
                        TO THE HYDROGEN ECONOMY

=======================================================================

                             JOINT HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON ENERGY

                                AND THE

                        SUBCOMMITTEE ON RESEARCH

                          COMMITTEE ON SCIENCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 20, 2005

                               __________

                           Serial No. 109-23

                               __________

            Printed for the use of the Committee on Science


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




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                                 ______

                          COMMITTEE ON SCIENCE

             HON. SHERWOOD L. BOEHLERT, New York, Chairman
RALPH M. HALL, Texas                 BART GORDON, Tennessee
LAMAR S. SMITH, Texas                JERRY F. COSTELLO, Illinois
CURT WELDON, Pennsylvania            EDDIE BERNICE JOHNSON, Texas
DANA ROHRABACHER, California         LYNN C. WOOLSEY, California
KEN CALVERT, California              DARLENE HOOLEY, Oregon
ROSCOE G. BARTLETT, Maryland         MARK UDALL, Colorado
VERNON J. EHLERS, Michigan           DAVID WU, Oregon
GIL GUTKNECHT, Minnesota             MICHAEL M. HONDA, California
FRANK D. LUCAS, Oklahoma             BRAD MILLER, North Carolina
JUDY BIGGERT, Illinois               LINCOLN DAVIS, Tennessee
WAYNE T. GILCHREST, Maryland         RUSS CARNAHAN, Missouri
W. TODD AKIN, Missouri               DANIEL LIPINSKI, Illinois
TIMOTHY V. JOHNSON, Illinois         SHEILA JACKSON LEE, Texas
J. RANDY FORBES, Virginia            BRAD SHERMAN, California
JO BONNER, Alabama                   BRIAN BAIRD, Washington
TOM FEENEY, Florida                  JIM MATHESON, Utah
BOB INGLIS, South Carolina           JIM COSTA, California
DAVE G. REICHERT, Washington         AL GREEN, Texas
MICHAEL E. SODREL, Indiana           CHARLIE MELANCON, Louisiana
JOHN J.H. ``JOE'' SCHWARZ, Michigan  DENNIS MOORE, Kansas
MICHAEL T. MCCAUL, Texas
VACANCY
VACANCY
                                 ------                                

                         Subcommittee on Energy

                     JUDY BIGGERT, Illinois, Chair
RALPH M. HALL, Texas                 MICHAEL M. HONDA, California
CURT WELDON, Pennsylvania            LYNN C. WOOLSEY, California
ROSCOE G. BARTLETT, Maryland         LINCOLN DAVIS, Tennessee
VERNON J. EHLERS, Michigan           JERRY F. COSTELLO, Illinois
W. TODD AKIN, Missouri               EDDIE BERNICE JOHNSON, Texas
JO BONNER, Alabama                   DANIEL LIPINSKI, Illinois
BOB INGLIS, South Carolina           JIM MATHESON, Utah
DAVE G. REICHERT, Washington         SHEILA JACKSON LEE, Texas
MICHAEL E. SODREL, Indiana           BRAD SHERMAN, California
JOHN J.H. ``JOE'' SCHWARZ, Michigan  AL GREEN, Texas
VACANCY                                  
SHERWOOD L. BOEHLERT, New York       BART GORDON, Tennessee
               KEVIN CARROLL Subcommittee Staff Director
            ELI HOPSON Republican Professional Staff Member
          DAHLIA SOKOLOV Republican Professional Staff Member
           CHARLES COOKE Democratic Professional Staff Member
                     COLIN HUBBELL Staff Assistant
                                 ------                                

                        Subcommittee on Research

                  BOB INGLIS, South Carolina, Chairman
LAMAR S. SMITH, Texas                DARLENE HOOLEY, Oregon
CURT WELDON, Pennsylvania            RUSS CARNAHAN, Missouri
DANA ROHRABACHER, California         DANIEL LIPINSKI, Illinois
GIL GUTKNECHT, Minnesota             BRIAN BAIRD, Washington
FRANK D. LUCAS, Oklahoma             CHARLIE MELANCON, Louisiana
W. TODD AKIN, Missouri               EDDIE BERNICE JOHNSON, Texas
TIMOTHY V. JOHNSON, Illinois         BRAD MILLER, North Carolina
DAVE G. REICHERT, Washington         VACANCY
MICHAEL E. SODREL, Indiana           VACANCY
MICHAEL T. MCCAUL, Texas             VACANCY
VACANCY                                  
SHERWOOD L. BOEHLERT, New York       BART GORDON, Tennessee
                 DAN BYERS Subcommittee Staff Director
            JIM WILSON Democratic Professional Staff Member
      MELE WILLIAMS Professional Staff Member/Chairman's Designee
        ELIZABETH GROSSMAN, KARA HAAS Professional Staff Members
                 RACHEL JAGODA BRUNETTE Staff Assistant


                            C O N T E N T S

                             July 20, 2005

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

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

                           Opening Statements

Statement by Representative Judy Biggert, Chairman, Subcommittee 
  on Energy, Committee on Science, U.S. House of Representatives.     8
    Written Statement............................................    10

Statement by Representative Bob Inglis, Chairman, Subcommittee on 
  Research, Committee on Science, U.S. House of Representatives..     8
    Written Statement............................................     9

Statement by Representative Michael M. Honda, Ranking Minority 
  Member, Subcommittee on Energy, Committee on Science, U.S. 
  House of Representatives.......................................    11
    Written Statement............................................    11

Prepared Statement by Representative Jerry F. Costello, Member, 
  Subcommittee on Energy, Committee on Science, U.S. House of 
  Representatives................................................    12

Prepared Statement by Representative Sheila Jackson Lee, Member, 
  Subcommittee on Energy, Committee on Science, U.S. House of 
  Representatives................................................    12

Prepared Statement by Representative Russ Carnahan, Member, 
  Subcommittee on Energy, Committee on Science, U.S. House of 
  Representatives................................................    13

                               Witnesses:

Mr. Douglas L. Faulkner, Acting Assistant Secretary, Energy 
  Efficiency and Renewable Energy, Department of Energy
    Oral Statement...............................................    14
    Written Statement............................................    15
    Biography....................................................    21

Dr. David L. Bodde, Director, Innovation and Public Policy, 
  International Center for Automotive Research, Clemson 
  University
    Oral Statement...............................................    22
    Written Statement............................................    24
    Biography....................................................    32

Mr. Mark Chernoby, Vice President, Advanced Vehicle Engineering, 
  DaimlerChrysler Corporation
    Oral Statement...............................................    33
    Written Statement............................................    36
    Biography....................................................    44

Dr. George W. Crabtree, Director, Materials Science Division, 
  Argonne National Laboratory
    Oral Statement...............................................    44
    Written Statement............................................    45
    Biography....................................................    48

Dr. John B. Heywood, Director, Sloan Automotive Laboratory, 
  Massachusetts Institute of Technology
    Oral Statement...............................................    48
    Written Statement............................................    50
    Biography....................................................    62

Discussion.......................................................    62

             Appendix 1: Answers to Post-Hearing Questions

Mr. Douglas L. Faulkner, Acting Assistant Secretary, Energy 
  Efficiency and Renewable Energy, Department of Energy..........    92

Dr. David L. Bodde, Director, Innovation and Public Policy, 
  International Center for Automotive Research, Clemson 
  University.....................................................    96

Mr. Mark Chernoby, Vice President, Advanced Vehicle Engineering, 
  DaimlerChrysler Corporation....................................    98

Dr. George W. Crabtree, Director, Materials Science Division, 
  Argonne National Laboratory....................................    99

Dr. John B. Heywood, Director, Sloan Automotive Laboratory, 
  Massachusetts Institute of Technology..........................   101

Dr. Arden L. Bement, Jr., Director, National Science Foundation..   103

             Appendix 2: Additional Material for the Record

Statement by Michelin North America..............................   110

Basic Research Needs for the Hydrogen Economy, Report of the 
  Basic Energy Sciences Workshop on Hydrogen Production, Storage, 
  and Use, May 13-15, 2003.......................................   113

Biomass as Feedstock for a Bioenergy and Bioproducts Industry: 
  The Technical Feasibility of a Billion-Ton Annual Supply, April 
  2005, U.S. Department of Energy, and U.S. Department of 
  Agriculture....................................................   291


        FUELING THE FUTURE: ON THE ROAD TO THE HYDROGEN ECONOMY

                        WEDNESDAY, JULY 20, 2005

                  House of Representatives,
                 Subcommittee on Energy, joint with
                      the Subcommittee on Research,
                                      Committee on Science,
                                                    Washington, DC.

    The Subcommittees met, pursuant to call, at 10:00 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Judy 
Biggert [Chairwoman of the Subcommittee on Energy] and Hon. Bob 
Inglis [Chairman of the Subcommittee on Research] presiding.


                            hearing charter

                  SUBCOMMITTEE ON ENERGY, JOINTLY WITH

                      THE SUBCOMMITTEE ON RESEARCH

                          COMMITTEE ON SCIENCE

                     U.S. HOUSE OF REPRESENTATIVES

                    Fueling the Future: On the Road

                        to the Hydrogen Economy

                        wednesday, july 20, 2005
                         10:00 a.m.-12:00 p.m.
                   2318 rayburn house office building

1. Purpose

    On Wednesday, July 20, 2005, at 10:00 a.m., the Energy and Research 
Subcommittees of the House Science Committee will hold a joint hearing 
to examine the progress that has been made in hydrogen research since 
the launch of the President's Hydrogen Initiative and the next steps 
the Federal Government should take to best advance a hydrogen economy.

2. Witnesses

Mr. Douglas Faulkner is the Acting Assistant Secretary for Energy 
Efficiency and Renewable Energy at the Department of Energy (DOE).

Dr. David Bodde is the Director of Innovation and Public Policy at 
Clemson University's International Center for Automotive Research 
(ICAR).

Mr. Mark Chernoby is Vice President for Advanced Vehicle Engineering at 
the DaimlerChrysler Corporation.

Dr. George Crabtree is the Director of the Materials Science Division 
at Argonne National Laboratory.

Dr. John Heywood is the Director of the Sloan Automotive Laboratory at 
the Massachusetts Institute of Technology.

3. Overarching Questions

    The hearing will focus on the following overarching questions:

        1.  What progress has been made toward addressing the principal 
        technical barriers to a successful transition to the use of 
        hydrogen as a primary transportation fuel since the 
        Administration announced its hydrogen initiatives, FreedomCAR 
        and the President's Hydrogen Fuel Initiative? What are the 
        remaining potential technical ``showstoppers?''

        2.  What are the research areas where breakthroughs are needed 
        to advance a hydrogen economy? How has DOE responded to the 
        report by the National Academy of Sciences (NAS) calling for an 
        increased emphasis on basic research? How is DOE incorporating 
        the results of the Basic Energy Sciences workshop on basic 
        research needs for a hydrogen economy into the research agenda 
        for the hydrogen initiative?

        3.  The NAS report suggested that the research agenda should be 
        developed with future policy decisions in mind. How has DOE 
        increased its policy analysis capabilities as recommended by 
        the NAS? How will the results of that analysis be applied to 
        the research agenda?

4. Overview

          In his 2003 State of the Union speech, President Bush 
        announced the creation of a new Hydrogen Fuel Initiative, which 
        built on the FreedomCAR initiative announced in 2002. Together, 
        the initiatives aim to provide the technology for a hydrogen-
        based transportation economy, including production of hydrogen, 
        transportation and distribution of hydrogen, and the vehicles 
        that will use the hydrogen. Fuel cell cars running on hydrogen 
        would emit only water vapor and, if domestic energy sources 
        were used, would not be dependent on foreign fuels.

          Industry is participating in the hydrogen 
        initiatives, and has invested heavily in hydrogen technology, 
        particularly the automobile manufacturers and oil companies. 
        The FreedomCAR program is a partnership between Ford, GM, 
        DaimlerChrysler, and the Federal Government, and the 
        President's Hydrogen Fuel Initiative expanded that partnership 
        to include major oil companies such as Shell and BP, and 
        merchant producers of hydrogen like Air Products and Chemicals, 
        Inc. Although exact amounts of industry investment are 
        proprietary, GM alone is estimated to have spent over $1.5 
        billion, and other automakers have invested similar amounts.

          The National Academy of Sciences (NAS) recommended 
        changes to the hydrogen initiatives in its 2004 report, The 
        Hydrogen Economy: Opportunities, Costs, Barriers, and R&D 
        Needs. The report particularly stressed the need for a greater 
        emphasis on basic, exploratory research because of the 
        significant technical barriers that must be overcome. DOE has 
        responded by expanding the hydrogen program into the Office of 
        Science, and has requested $33 million for fiscal year 2006 
        (FY06) to fund basic research efforts in DOE's Office of 
        Science.

          In addition, the NAS report noted that DOE needs to 
        think about policy questions as it develops its research and 
        development (R&D) agenda: ``Significant industry investments in 
        advance of market forces will not be made unless government 
        creates a business environment that reflects societal 
        priorities with respect to greenhouse gas emissions and oil 
        imports.. . .The DOE should estimate what levels of investment 
        over time are required--and in which program and project 
        areas--in order to achieve a significant reduction in carbon 
        dioxide emissions from passenger vehicles by mid-century.'' DOE 
        has expanded its hydrogen policy and analysis efforts to be 
        able to answer questions like those posed by the NAS, but the 
        analytical work is still in progress, and available results are 
        still preliminary.

          Even with the most optimistic of assumptions, it will 
        take some time for hydrogen vehicles to compose a significant 
        part of the automobile fleet. The NAS estimates that sales of 
        hydrogen vehicles will not be significant enough for the full 
        benefits of a hydrogen economy to be realized at least until 
        2025.

          During the transition to a hydrogen economy, many of 
        the technologies being developed for hydrogen vehicles, such as 
        hybrid systems technology and advanced lightweight materials 
        could be deployed in conventional automobiles to provide 
        reduced oil dependence and emissions. Without the proper 
        incentives, vehicle improvements are likely to continue to be 
        used to increase performance, rather than improving fuel 
        economy, as they have been for the past twenty years. The 
        Environmental Protection Agency estimates that if today's 
        vehicles had the same weight and acceleration as cars did in 
        1987, they would get 20 percent better gas mileage due to 
        technology improvements.

5. Background

What are the technical challenges?
    Major advances are needed across a wide range of technologies for 
hydrogen to be affordable, safe, cleanly produced, and readily 
distributed. The production, storage and use of hydrogen all present 
significant technical challenges. While the research effort at DOE has 
produced promising results, the program is still a long way from 
meeting its goals in any of these areas.
    Hydrogen does not exist in a usable form in nature, and has to be 
produced from something else, such as coal or natural gas. But one goal 
of using hydrogen is to reduce emissions of carbon dioxide. If hydrogen 
is to be produced without emissions of carbon dioxide, then the 
technology to capture and store carbon dioxide while making hydrogen 
must improve significantly. The other main goal of using hydrogen is to 
reduce the use of imported energy. Today most hydrogen is produced from 
natural gas, but in order to supply the entire transportation sector 
significant imports of natural gas would be required. Other possible 
means of producing hydrogen, including nuclear energy and renewable 
energy sources, are inherently cleaner than coal, but are far from 
affordable with existing technology.
    Another major hurdle is finding ways to store hydrogen, 
particularly on board a vehicle. Hydrogen is a small molecule with 
properties that make it difficult to store in small volumes and in 
lightweight materials. The American Physical Society argued in its 2004 
report on hydrogen, The Hydrogen Initiative, that a new material would 
have to be discovered in order to meet the FreedomCAR goals.
    The NAS estimated that fuel cells themselves would need a ten- to 
twenty-fold improvement before fuel cell vehicles become competitive 
with conventional technology. Large improvements have been made since 
the report has been released, but additional improvements are still 
needed. DOE estimates that roughly a five-fold decrease in cost will be 
required, while at the same time increasing performance and durability. 
Current fuel cells wear out quickly, and lifetimes are far short of 
those required to compete with a gasoline engine. Small-scale 
distributed hydrogen production also needs improvement, and the NAS 
report recommended increased focus in that area because it may be among 
the first hydrogen-related technologies to be deployed.
What are the non-technical challenges, in the policy and regulatory 
        areas?
    Since many of the benefits of a hydrogen economy, such as reduced 
greenhouse gas emissions, are not currently accounted for in the 
marketplace, it will be difficult for hydrogen vehicles to compete with 
conventional technology. Even if all the technical challenges are met, 
and industry has the capability to produce hydrogen vehicles that are 
competitive with conventional vehicles, a successful hydrogen economy 
is not guaranteed. First, the transition to a hydrogen economy will 
require an enormous investment to create a new infrastructure. Changes 
in regulation, training and public habits and attitudes will also be 
necessary. Estimates of the cost of creating a fueling infrastructure 
(replacing or altering gas stations and distribution systems) alone are 
in the hundreds of billions of dollars. DOE is initiating an effort to 
better understand the economics and influences of policy incentives on 
a possible transition to hydrogen.
How are the Hydrogen Initiatives funded?
    The FreedomCAR and the Hydrogen Fuel Initiative are expected to 
cost $1.7 billion over five years from FY03 to FY08. The President 
called for $358 million across DOE for these programs in the FY06 
request, an increase of $48 million, 16 percent over levels 
appropriated for the initiatives in FY05. However, this increase comes 
at a time when R&D programs in the other energy efficiency and 
renewable energy programs are seeing decreasing requests overall, by 
$74 million, 10 percent to $692 million. Unless additional funding is 
provided to renewable energy and energy efficiency programs at DOE in 
general, the projected further increases in the FreedomCAR and Hydrogen 
Fuel Initiative will likely result in more cuts to other efficiency and 
renewable programs.




Technology Background

What is a Fuel Cell?
    Central to the operation of the hydrogen-based economy is a device 
known as a fuel cell that would convert hydrogen fuels to electricity. 
In cars, these devices would be connected to electric motors that would 
provide the power now supplied by gasoline engines. A fuel cell 
produces electricity by means of an electrochemical reaction much like 
a battery. There is an important difference, however. Rather than using 
up the chemicals inside the cells, a fuel cell uses hydrogen fuel, and 
oxygen extracted from the air, to produce electricity. As long as 
hydrogen fuel and oxygen are fed into the fuel cell, it will continue 
to generate electric power.
    Different types of fuel cells work with different electrochemical 
reactions. Currently most automakers are considering Proton Exchange 
Membrane (PEM) fuel cells for their vehicles.
Benefits of a Hydrogen-based Economy
    A hydrogen-based economy could have two important benefits. First, 
hydrogen can be manufactured from a variety of sources, including 
natural gas, biofuels, petroleum, coal, and even by passing electricity 
through water (electrolysis). Depending on the choice of source, 
hydrogen could substantially reduce our dependence on foreign oil and 
natural gas.
    Second, the consumption of hydrogen through fuel cells yields water 
as its only emission. Other considerations, such as the by-products of 
the hydrogen production process, will also be important in choosing the 
source of the hydrogen. For example, natural gas is the current 
feedstock for industrial hydrogen, but its production releases carbon 
dioxide; production from coal releases more carbon dioxide and other 
emissions; and production from water means that pollution may be 
created by the generation of electricity used in electrolysis. 
Production from solar electricity would mean no pollution in the 
generation process or in consumption, but is currently more expensive 
and less efficient than other methods.

6. Witnesses Questions

    The witnesses have been asked to address the following questions in 
their testimony:
Mr. Douglas Faulkner:

          What progress has been made toward addressing the 
        principal technical barriers to a successful transition to the 
        use of hydrogen as a primary transportation fuel since the 
        Administration announced its hydrogen initiatives, FreedomCAR 
        and the President's Hydrogen Fuel Initiative? What are the 
        remaining potential technical ``showstoppers?''

          What are the research areas where breakthroughs are 
        needed to advance a hydrogen economy? How has DOE responded to 
        the report by the National Academy of Sciences (NAS) calling 
        for an increased emphasis on basic research? How is DOE 
        incorporating the results of the Basic Energy Sciences workshop 
        on basic research needs for a hydrogen economy into the 
        research agenda for the hydrogen initiative?

          The NAS report suggested that the research agenda 
        should be developed with future policy decisions in mind. How 
        has DOE increased its policy analysis capabilities as 
        recommended by the NAS? How will the results of that analysis 
        be applied to the research agenda?

          How is DOE conducting planning for, and analysis of, 
        the policy changes (such as incentives or regulation) that 
        might be required to accelerate a transition to hydrogen? What 
        other agencies are involved in planning for, or facilitating, 
        such a transition?

Mr. Mark Chrenoby:

          What criteria does DaimlerChrysler consider when 
        making investment decisions regarding its portfolio of advanced 
        vehicle research and development programs? What factors would 
        induce DaimlerChrysler to invest more in the development of 
        hydrogen-fueled vehicles? What do you see as a probable 
        timeline for the commercialization of hydrogen-fueled vehicles? 
        What about the other advanced vehicle technologies 
        DaimlerChrysler is currently developing, such as hybrid 
        vehicles and advanced diesel engines?

          What do you see as the potential technology 
        showstoppers for a hydrogen economy? To what extent is Daimler 
        relying on government programs to help solve those technical 
        challenges?

          How are automakers using, or how do they plan to use, 
        the advanced vehicle technology developed for hydrogen-fueled 
        vehicles to improve the performance of conventional vehicles?

Dr. David Bodde:

          What progress has been made toward addressing the 
        principal technical barriers to a successful transition to the 
        use of hydrogen as a primary transportation fuel since the 
        Administration announced its hydrogen initiatives, FreedomCAR 
        and the President's Hydrogen Fuel Initiative? What are the 
        remaining potential technical ``showstoppers?''

          What are the research areas where breakthroughs are 
        needed to advance a hydrogen economy? How has DOE responded to 
        the report by the National Academy of Sciences (NAS) calling 
        for an increased emphasis on basic research? How is DOE 
        incorporating the results of the Basic Energy Sciences workshop 
        on basic research needs for a hydrogen economy into the 
        research agenda for the hydrogen initiative?

          Is the current balance between funding of hydrogen-
        related research and research on advanced vehicle technologies 
        that might be deployed in the interim before a possible 
        transition to hydrogen appropriate? What advanced vehicle 
        choices should the Federal Government be funding between now 
        and when the transition to a hydrogen economy occurs? How are 
        automakers using, or how do they plan to use, the advanced 
        vehicle technology developed for hydrogen-fueled vehicles to 
        improve the performance of conventional vehicles? Are 
        automakers likely to improve fuel economy and introduce 
        advanced vehicles without government support? How will ICAR 
        encourage automakers to introduce technologies to improve fuel 
        economy?

          What role do entrepreneurs, start-up companies, and 
        venture capital investors have to play in accelerating the 
        commercial introduction of advanced hydrogen-fueled vehicles?

Dr. George Crabtree:

          What progress has been made toward addressing the 
        principal technical barriers to a successful transition to the 
        use of hydrogen as a primary transportation fuel since the 
        Administration announced its hydrogen initiatives, FreedomCAR 
        and the President's Hydrogen Fuel Initiative? What are the 
        remaining potential technical ``showstoppers?''

          What are the research areas where breakthroughs are 
        needed to advance a hydrogen economy? How has DOE responded to 
        the report by the National Academy of Sciences (NAS) calling 
        for an increased emphasis on basic research? How is DOE 
        incorporating the results of the Basic Energy Sciences workshop 
        on basic research needs for a hydrogen economy into the 
        research agenda for the hydrogen initiative?

          The NAS report suggested that the research agenda 
        should be developed with future policy decisions in mind. How 
        has DOE increased its policy analysis capabilities as 
        recommended by the NAS? How will the results of that analysis 
        be applied to the research agenda?

          How is DOE conducting planning for, and analysis of, 
        the policy changes (such as incentives or regulation) that 
        might be required to accelerate a transition to hydrogen? What 
        other agencies are involved in planning for, or facilitating, 
        such a transition?

Dr. John Heywood:

          How might the future regulatory environment, 
        including possible incentives for advances vehicles and 
        regulations of safety and emissions, affect a transition to 
        hydrogen-fueled motor vehicles? How could the Federal 
        Government most efficiently accelerate such a transition?

          Is the current balance between funding of hydrogen-
        related research and research on advanced vehicle technologies 
        that might be deployed in the interim before a possible 
        transition to hydrogen appropriate? What advanced vehicle 
        choices should the Federal Government be funding between now 
        and when the transition to a hydrogen economy occurs? How are 
        automakers using, or how do they plan to use, the advanced 
        vehicle technology developed for hydrogen-fueled vehicles to 
        improve the performance of conventional vehicles? Are 
        automakers likely to improve fuel economy and introduce 
        advanced vehicles without government support?

          What role should the Federal Government play in the 
        standardization of local and international codes and standards 
        that affect hydrogen-fueled vehicles, such as building, safety, 
        interconnection, and fire codes?
    Chairwoman Biggert. Good morning. I want--the hearing will 
come to order.
    I want to welcome everyone to this joint hearing of the 
Energy and Research Subcommittees of the House Science 
Committee. Today, we are going to get a status report on the 
progress of federal research efforts driving the development of 
fuel cells and the hydrogen to power them.
    This hearing has become something of an annual tradition 
for the Science Committee. We have had a Full--we have had Full 
Committee hearings, field hearings, and Energy Subcommittee 
hearings on this topic. This year, I am pleased that our 
colleagues in the Research Subcommittee are joining us to 
examine the contributions of individual researchers and 
university research activities to the hydrogen and FreedomCAR 
initiatives.
    At this time, it is a privilege for me to recognize my 
colleague from South Carolina, the Chairman of the Research 
Subcommittee, Mr. Inglis, for his opening statement.
    Chairman Inglis. Thank you, Madame Chairman.
    Good morning. And I am excited about convening this 
hearing. It is the first on the hydrogen economy this Congress, 
I believe. And this topic has the potential for being the next 
``giant leap for mankind.'' That is certainly our hope.
    The way I see it, there are three keys necessary to unlock 
the door to a full hydrogen economy. The first is commitment. 
The second is collaboration. And the third is discovery.
    We need a commitment from the United States similar to the 
one that President Kennedy made when he challenged Congress in 
1961 to land a man on the Moon before the end of the decade. 
The President's hydrogen fuel initiative and FreedomCAR are 
steps in the right direction, and I welcome the testimony on 
the progress that has been made on these initiatives to date.
    Strong public and private collaboration is the second 
imperative if we are to see real and hopeful ahead-of-schedule 
success. And in my District, Clemson University is building the 
International Center for Automotive Research, ICAR, funded in 
significant part by BMW and Michelin. At ICAR, researchers will 
do what they do best, industry will do what it does best, and 
markets will establish the winners and losers. You will hear 
more about this collaborative effort today from Dr. David 
Bodde, Director of Innovation and Public Policy at ICAR.
    The third key, discovery, is where our greatest challenges 
lie. That is why it is critically important that we fund basic 
research supporting the production, storage, and distribution 
of hydrogen. The development of a hydrogen economy depends on 
breakthroughs in these areas. At the same time, we should also 
be pursuing other advanced technologies, such as better 
batteries, photovoltaic cells that may take us to a new plateau 
of energy independence.
    One of these technologies may turn out to be the ``8-
track'' of the hydrogen economy. Another may be the ``cassette 
player,'' yet another unknown technology may prove to be the 
``CD'' of automobiles, which, in turn, may be followed by the 
MP3.
    Transition to a hydrogen economy holds great promise on 
many levels. All along the way, the air will be getting 
cleaner, the oil pressure could come off the Middle East, 
entrepreneurs will be making money and employing people, and we 
will be winning our energy independence.
    Admittedly, there are technology and cost challenges ahead 
of us, but I do not believe them to be insurmountable. In fact, 
I think we are definitely up to the challenge.
    I look forward to hearing from the witnesses on all of 
these issues, and I thank you, Madame Chairman, for convening 
your hearing.
    [The prepared statement of Chairman Inglis follows:]

               Prepared Statement of Chairman Bob Inglis

    Good morning, and thank you Madam Chairman for bringing us together 
for our first hearing on the hydrogen economy this Congress. I am 
pleased that we have convened this joint hearing on an issue that I 
believe has the potential to be the next ``giant leap for mankind.''
    The way I see it, there are three keys necessary to unlock the door 
to a full hydrogen economy: (1) commitment, (2) collaboration and (3) 
discovery.
    We need a commitment in the U.S. similar to the one we made when 
President Kennedy challenged Congress in 1961 to land a man on the Moon 
before the end of the decade. The President's Hydrogen Fuel Initiative 
and FreedomCAR are steps in the right direction, and I welcome the 
testimony on the progress that has been made on these initiatives to 
date.
    Strong public and private collaboration is imperative if we are to 
see real and, hopefully, ahead-of-schedule success. In my district, 
Clemson University is building the International Center for Automotive 
Research (ICAR), funded in significant part by BMW and Michelin. At 
ICAR, researchers will do what they do best; industry will do what it 
does best; and the markets will establish winners and losers. You will 
hear more about this collaborative effort today from Dr. David Bodde, 
Director of Innovation and Public Policy at ICAR.
    The third key, discovery, is where our greatest challenges lie. 
That is why it is critically important that we fund basic research 
supporting the production, storage and distribution of hydrogen. The 
development of a hydrogen economy depends on breakthroughs in these 
areas. At the same time, we should also be pursuing other advanced 
technologies such as better batteries and photovoltaic cells that may 
take us to a new plateau of energy dependence. One of these 
technologies may turn out to be the eight-track of the hydrogen 
economy. Another may be the cassette player. Yet another yet-unknown 
technology may prove to be the CD of automobiles, which, in turn, may 
be followed by the MP3.
    The transition to a hydrogen economy holds great promise on many 
levels. All along the way, the air will be getting cleaner, the oil 
pressure will be coming off the Middle East, entrepreneurs will be 
making money and employing people, and we will be winning our energy 
independence. Admittedly, there are technology and cost challenges 
ahead of us, but I do not believe them to be insurmountable. In fact, I 
think we're definitely up to the challenge.
    I look forward to hearing from the witnesses on all of these 
issues.

    Chairwoman Biggert. Well, thank you, Chairman Inglis.
    At last year's hearing on this topic, we closely examined 
two reports, one prepared by the National Academy of Sciences, 
the other by the American Physical Society, both of which 
emphasized the importance of basic research to the long-term 
success of the President's hydrogen and FreedomCAR initiatives.
    I am pleased that President Bush took these recommendations 
to heart and increased funding in his fiscal year 2006 budget 
request for the Department of Energy's Office of Science to 
address some of the fundamental obstacles to greater use of 
hydrogen and fuel cells. I am anxious to hear how the results 
of this basic research are being incorporated into the fuel 
cell and hydrogen technologies under development and how they 
are shaping the research agenda going forward.
    I think that research designed to benefit the Nation 
significantly in the long-term could benefit us marginally in 
the near-term, ultimately giving us the greater return on our 
investments in hydrogen and fuel cell research. We couldn't ask 
for more in this era of tight budgets. We have a diverse panel 
of witnesses today representing some exceptional institutions 
engaged in all kinds of hydrogen and fuel research.
    [The prepared statement of Chairman Biggert follows:]

              Prepared Statement of Chairman Judy Biggert

    This hearing will give this committee another opportunity to get an 
update on the work underway at the Department of Energy as part of the 
President's Hydrogen Fuel and FreedomCAR initiatives. I also want to 
thank the witnesses for being so generous with their time, and for 
agreeing to share with us their insight and expertise on the topics of 
fuel cells and hydrogen.
    I have a keen interest in both the fuel cell and hydrogen 
initiatives that the President announced in 2002 and 2003 respectively. 
My district is, of course, home to Argonne National Laboratory, which 
has a strong fuel cell R&D program. My district also is home to small 
businesses like H2Fuels and various auto parts suppliers, corporations 
like BP, and research organizations like the Gas Technology Institute. 
In short, I have the privilege to represent a region that has much to 
contribute to the continued development of fuel cells and the hydrogen 
needed to fuel them.
    As I've said many times before, I do not believe that affordable 
energy and a clean and safe environment are mutually exclusive. America 
has the ingenuity and the expertise to meet our future energy demands 
and promote energy conservation, and we can do so in environmentally 
responsible ways that set a standard for the world. Most importantly, 
America now has the motivation perhaps like no other time since the oil 
crisis of the `70's - to find newer and better ways to meet our energy 
needs.
    There clearly are many compelling reasons to work towards our 
shared vision of a hydrogen economy. Today, we will hear testimony not 
only about the progress DOE has made already in hydrogen research but 
also about those research questions--both basic and applied--that 
remain as questions yet to be solved. While we want to know about any 
potential scientific or technical ``showstoppers,'' we also want to 
know whether there are any new problems that have been identified as a 
result of on-going research. We will hear testimony about how DOE is 
incorporating the results of basic research needs for a hydrogen 
economy into the research agenda for the hydrogen initiative. Finally, 
we will hear how the Department's hydrogen research agenda has been 
modified to account for anticipated future policy decisions, as 
suggested by the National Academy of Sciences.
    It is clear that the vision of a hydrogen economy is a tremendously 
challenging endeavor. But, it is also clear that it will take us many 
years to reach our goal. Once they become available, hydrogen vehicles 
will require a number of years until they compose a significant part of 
the automobile fleet. The NAS estimates that sales of hydrogen vehicles 
will not be significant enough for the full benefits of a hydrogen 
economy to be realized at least until 2025. In light of that, we need 
to next ask, ``Are we working to meet our goals in the best way that we 
can?''
    I would also observe that during the transition to a hydrogen 
economy, many technologies developed for hydrogen vehicles--such as 
hybrid systems technology and advanced lightweight materials--could be 
deployed in conventional automobiles to provide reduced oil dependence 
and emissions. Congress and the Administration need to understand 
whether we can design proper incentives so that those technologies are 
deployed for improving the fuel economy of conventional automobiles, 
rather than continuing an exclusive focus on ever increasing 
performance, as has been the norm for the past twenty years. We need to 
next ask, ``Are we getting all the benefits we can from our investment 
in hydrogen research?''
    Our job at this hearing is to look at what we've learned in our 
initial research efforts, and to gain insight into whether we have an 
appropriately balanced research effort. I look forward to hearing more 
about how the DOE is moving the Nation ever-closer to realizing the 
promise and potential of fuel cells and hydrogen.
    Thank you.

    Chairwoman Biggert. But before we hear from them, I want to 
recognize the Ranking Member of the Energy Subcommittee, Mr. 
Honda from California, for his opening statement.
    Mr. Honda. Thank you, Madame Chair, and I do appreciate the 
Chair's work in putting this hearing together.
    At a Full Committee hearing held earlier this year, we 
heard about two reports, which suggested that resources should 
be directed away from demonstration projects and towards more 
basic R&D because there are significant technical barriers to 
overcome.
    I agree that there are many technical barriers to be 
overcome, but I also note that demonstration programs have 
served to help us identify some of those technical barriers.
    I hope that the witnesses can comment on the role that 
the--that investments made in demonstration projects by other 
agencies can play in helping the Department of Energy's work to 
make hydrogen feasible. For example, the Santa Clara Valley 
Transportation Authority's Zero-Emission Bus program is funded 
by a transit sales tax, the Federal Transit Administration, the 
California Energy Commission, and the Bay Air Quality 
Management District.
    It will be useful to know whether DOE is able to work with 
programs like this to gain knowledge about the infrastructure 
needs and identify potential technical obstacles that we will 
need to overcome.
    Finally, we must remember that hydrogen is not an energy 
source, it is an energy carrier. We cannot afford to look at 
only the hydrogen piece of the puzzle. We must figure out where 
we are going to get that hydrogen.
    I hope that the witnesses will discuss whether we are doing 
the necessary work to develop the electricity-generating 
infrastructure that will clearly be necessary to provide the 
fuel for hydrogen vehicles.
    I look forward to this hearing and hope that the witnesses 
can address some of these concerns. And I yield back the 
balance of my time.
    [The prepared statement of Mr. Honda follows:]

         Prepared Statement of Representative Michael M. Honda

    Chairman Inglis, Chairwoman Biggert, Ranking Member Hooley, thank 
you all for holding this hearing today to receive updates on the 
progress that is being made in addressing technical barriers to the use 
of hydrogen in vehicles.
    At a Full Committee hearing held earlier this year, we heard 
testimony about two reports which suggested that resources should be 
directed away from demonstration projects and towards more basic R&D 
because there are significant technical barriers to overcome.
    I agree with the conclusion that there are many technical barriers 
to be overcome, and I look forward to hearing from the witnesses their 
thoughts on the breakthroughs they believe will need to be made in 
order to overcome these barriers.
    But I also note that prior demonstration programs have served to 
help to identify some of the very technical barriers that an increased 
emphasis on research would aim to overcome. I fear that we might miss 
more obstacles until after we have made significant investments of time 
and resources if we stop working on demonstration projects.
    I hope that the witnesses can comment on the role that investments 
made in demonstration projects by other agencies can play in helping 
the Department of Energy's work to make hydrogen feasible. For example, 
the Santa Clara Valley Transportation Authority's Zero Emission Bus 
program is funded by a transit sales tax, the Federal Transit 
Administration (FTA), the California Energy Commission (CEC), and the 
Bay Area Air Quality Management District.
    It will be useful to know whether DOE is able to work with programs 
like this to gain knowledge about infrastructure needs and identify 
potential technical obstacles that we will need to overcome.
    Finally, we must remember that hydrogen is not an energy source, it 
is an energy carrier. We cannot just look at the hydrogen piece of the 
equation, assuming that an infinite supply of fuel will be available 
for vehicles if only we can make those vehicles.
    Where is the energy going to come from to produce hydrogen? 
Converting natural gas is one option, but supplies of that fuel are 
already limited.
    Barring that, a switch to hydrogen vehicles looks like it will also 
require a commensurate increase electricity generating capacity to 
supply the fuel. I hope the witnesses will discuss whether we are 
undertaking the necessary efforts to address this critical piece of the 
puzzle.
    I look forward to this hearing, and hope the witnesses can address 
some of these concerns. I yield back the balance of my time.

    Chairwoman Biggert. Thank you, Mr. Honda.
    Any additional opening statement submitted by the Members 
may be added to the record.
    [The prepared statement of Mr. Costello follows:]

         Prepared Statement of Representative Jerry F. Costello

    Good morning. I want to thank the witnesses for appearing before 
our committee to examine the progress that has been made in hydrogen 
research since the launch of the President's Hydrogen Initiative. A 
greater reliance on hydrogen requires modification of our existing 
energy infrastructure to ensure greater availability of this new fuel 
source. Making the transition to a hydrogen economy will require an 
enormous investment to create a new infrastructure. It is my 
understanding that the Department of Energy is initiating an effort to 
better understand the economics and influences of policy incentives on 
a possible transition to hydrogen. Since the President's Initiative has 
left many questions unanswered, I am hopeful our witnesses here today 
will provide more insight into the funding and technology challenges 
facing the Hydrogen Initiative.
    I agree that a hydrogen-based economy could have important benefits 
that could help relieve our dependence on foreign oil. First, hydrogen 
can be manufactured from a variety of sources, such as coal. I strongly 
support the President's Integrated Sequestration and Hydrogen Research 
Initiative, entitled FutureGen, which is a coal-fired electric and 
hydrogen production plant. The prototype plant will serve as a large-
scale engineering laboratory for testing and will expand the options 
for producing hydrogen from coal.
    As the Administration begins to consider locations for the new 
plant, I would hope they would consider Southern Illinois. I have led 
the effort to locate FutureGen in Illinois, including leading a 
bipartisan effort in the House to secure funding for the project. The 
region is rich in high-sulfur coal reserves and the Coal Center at 
Southern Illinois University Carbondale (SIU-C) has been doing 
extensive work with hydrogen and coal. The geology of the region is 
well suited to the carbon-trapping technology to be developed and 
Illinois is home to oil and gas reserves and deep saline aquifers that 
can permanently sequester carbon dioxide.
    I have been tracking this issue closely since its inception and I 
am anxious to see the Department's program plan. This Administration 
has touted FutureGen as one of the most important climate change 
technologies at our disposal and heightened its international 
visibility to extraordinary levels and I am committed to working with 
my colleagues and the Administration to move forward on a path that is 
technically, financially, and politically viable.
    I again thank the witnesses for being with us today and providing 
testimony to our committee.

    [The prepared statement of Ms. Jackson Lee follows:]

        Prepared Statement of Representative Sheila Jackson Lee

    Let me thank Chairwoman Biggert and Ranking Member Honda of the 
Energy Subcommittee as well as Chairman Inglis and Ranking Member 
Holley of the Research Subcommittee for holding this joint hearing on 
the future of hydrogen energy. Clearly, hydrogen technologies hold 
great potential; however we do not know how long it will be before 
hydrogen can represent a significant portion of our fuel consumption. I 
hope this hearing will shed some light on the path that we must take to 
make the potential of hydrogen into a reality.
    In his 2003 State of the Union speech, President Bush announced the 
creation of a new Hydrogen Fuel Initiative, which built on the 
FreedomCAR initiative announced in 2002. Together, the initiatives aim 
to provide the technology for a hydrogen-based transportation economy, 
including production of hydrogen, transportation and distribution of 
hydrogen, and the vehicles that will use the hydrogen. Fuel cell cars 
running on hydrogen would emit only water vapor and provide 
environmental benefits in addition to being an alternative source of 
energy.
    However, as I stated we must make this potential in to a reality 
and we are not yet at that point. The National Academy of Sciences 
(NAS) recommended changes to the hydrogen initiatives in its 2004 
report, The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D 
Needs. The report particularly stressed the need for a greater emphasis 
on basic, exploratory research because of the significant technical 
barriers that must be overcome. The Department of Energy (DOE) has 
responded by expanding the hydrogen program into the Office of Science, 
and has requested $33 million for fiscal year 2006 (FY06) to fund basic 
research efforts in DOE's Office of Science.
    The fact is that even with the most optimistic of assumptions, it 
will take some time for hydrogen vehicles to compose a significant part 
of the automobile fleet. The NAS estimates that sales of hydrogen 
vehicles will not be significant enough for the full benefits of a 
hydrogen economy to be realized at least until 2025. But, this should 
not be a deterrent to developing hydrogen technology, instead it should 
serve as incentive for the scientific community to move towards this 
technology that holds so much promise.
    While in this transition to a hydrogen economy, many of the 
technologies being developed for hydrogen vehicles, such as hybrid 
systems technology and advanced lightweight materials could be deployed 
in conventional automobiles to provide reduced oil dependence and 
emissions. Without the proper incentives, vehicle improvements are 
likely to continue to be used to increase performance, rather than 
improving fuel economy, as they have been for the past twenty years. In 
fact the Environmental Protection Agency estimates that if today's 
vehicles had the same weight and acceleration as cars did in 1987, they 
would get 20 percent better gas mileage due to technology improvements. 
I sincerely hope that we use our resources to improve gas mileage and 
make hydrogen technology a reality for the American public.
    Thank you.

    [The prepared statement of Mr. Carnahan follows:]

           Prepared Statement of Representative Russ Carnahan

    I am pleased that we are holding this very important hearing this 
morning.
    The U.S. Federal Government often serves the role of jump-starting 
research in fields that cannot be immediately lucrative, yet provide 
American citizens the promise of improved health, efficiency, or 
lifestyle. We again find ourselves in this role, and we must do our 
best to advance a hydrogen economy in this country.
    I am particularly interested in the FreedomCAR program that 
partners with DaimlerChrysler. As we recognize the potential of 
FreedomCAR and the hydrogen initiative, I am excited about the promise 
that developments in this field may provide for many of my constituents 
who are employees of Chrysler.
    Furthermore, I would like to recognize the good research being 
conducted at the University of Missouri on the Plug-In Hybrid Power 
System Partnership for Innovation, a research project that will examine 
how regenerative fuel cell systems, which produce high hydrogen and 
oxygen pressures, will be designed, fabricated and then demonstrated in 
the laboratory.
    Thank you for your willingness to join us, Mr. Faulkner, Dr. Bodde, 
Mr. Chernoby, Dr. Crabtree and Dr. Heywood. I am eager to hear your 
testimony.

    Chairwoman Biggert. And at this time, I would like to 
introduce all of the witnesses and thank you for coming before 
us this morning.
    First off, we have Mr. Douglas Faulkner. He is the Acting 
Assistant Secretary for Energy Efficiency and Renewable Energy 
at the Department of Energy. There is a lot of energy in there. 
Dr. David Bodde, Director of Innovation and Public Policy at 
Clemson University's International Center for Automotive 
Research. And thank you. Mr. Mark Chernoby, Vice President for 
Advance Vehicle Engineering at the DaimlerChrysler Corporation. 
Thank you. And Dr. George Crabtree, Director of the Materials 
Science Division at Argonne National Laboratory, a familiar 
place. And Dr. John Heywood, Director of the Sloan Automotive 
Laboratory at the Massachusetts Institute of Technology. 
Welcome.
    As the witnesses probably know, spoken testimony will be 
limited to five minutes each, after which the Members will have 
five minutes each to ask questions. This is Wednesday and one 
of, probably, our busiest days, so we are going to be pretty 
strict on the time, if you can keep it to five minutes.
    We will begin with Mr. Faulkner. And the fact that there 
are two Committees here, we expect a lot of questions.
    So we will begin with Mr. Faulkner.

    STATEMENT OF MR. DOUGLAS L. FAULKNER, ACTING ASSISTANT 
 SECRETARY, ENERGY EFFICIENCY AND RENEWABLE ENERGY, DEPARTMENT 
                           OF ENERGY

    Mr. Faulkner. Thank you.
    Madame Chairman, Mr. Chairman, Members of the 
Subcommittees, I appreciate the opportunity today to testify on 
the Department's hydrogen program.
    Since President Bush launched the Hydrogen Fuel Initiative 
over two years ago, we have made tremendous progress. We have 
implemented valuable feedback from the National Academy of 
Sciences and the Department's Basic Energy Sciences Workshop 
and are already seeing results. In fact, as we speak, the 
Academy is completing its biannual review of the program and 
will publish its findings in coming weeks.
    The Academy called for us to improve integration and 
balance of activities within the relevant offices of the 
Department of Energy's Renewables, Nuclear, Fossil, Science, 
prioritizing the efforts within and across program areas, 
establishing milestones, and go/no-go directions. We have done 
this. In the Hydrogen Posture Plan, we have identified 
strategies and milestones to enable a 2015 industry 
commercialization decision on the viability of hydrogen and 
fuel cell technologies. Each office has, in turn, developed a 
detailed research plan, which outlines how the high-level 
milestones will be supported. We are now implementing these 
research plans, and we are making tangible progress.
    The Department competitively selected over $510 million in 
total federal funding for projects to address critical 
challenges. Of these projects, the Office of Science announced 
70 new competitively selected projects, $64 million over three 
years. Topics include new materials for hydrogen storage and 
development of catalysts at the nanoscale, all recommended by 
the Basic Energy Sciences Workshop. Sixty-five projects were 
initiated on hydrogen production and delivery, funded at $170 
million over four years. And the results here are already 
promising.
    We believe we can meet our goal of $2 to $3 gallon of 
gasoline equivalent, which is independent of the production 
pathway. The basic research component of the program is 
especially valuable to long-term concepts, such as 
photoelectrochemical hydrogen production. I would also like to 
underscore that our ultimate hydrogen production strategy is 
carbon-neutral and emphasizes resource diversity.
    We launched a Grand Challenge focusing on materials 
discovery and development of hydrogen storage, one of the 
critical technologies for the hydrogen economy. We established 
a National Hydrogen Storage project at over $150 million over 
five years, including three Centers of Excellence with multi-
disciplinary teams of university, industry, and federal 
laboratories.
    Closely coordinated with the new Office of Science 
Research, our activities address the Academy's recommendation 
to shift toward more exploratory work as well as to partner 
with a broader range of academic and industrial organizations. 
We are already seeing results from this work, too.
    Recent progress in materials discovery allows hydrogen to 
be stored at low temperature--low pressures and modest 
temperatures. We need both fundamental understanding and 
engineering solutions to address key issues, like charging and 
discharging hydrogen at practical temperatures and pressures.
    To address fuel cell cost and durability, a new $75 million 
solicitation will soon be released, complementing the current 
$17.5 million solicitation on new membrane materials as well as 
existing efforts. Results are already being achieved.
    As highlighted by Secretary Bodman in earlier Congressional 
testimony, this high-volume cost of automotive fuel cells was 
reduced from $275 per kilowatt to $200 per kilowatt. And the 
Office of Science has initiated new basic research projects on 
nanoscale catalysts and membrane materials for fuel cell design 
and applications.
    Through better techniques for fabricating electrodes and 
new strategies for improved durability, we believe the targets 
we have set are achievable. We must keep sight of our ultimate 
goal to transfer research to the real world, and we have 
complemented our research efforts with a learning demonstration 
activity. We conduct research on safety codes and standards 
working with the Department of Transportation, standards 
development organizations, and other organizations. We are also 
creating a road map now with the Department of Commerce and 
other federal agencies for developing manufacturing 
technologies to bridge the continuum from basic research to 
commercialization. That effort will help attract new business 
investment, create new high-technology jobs, and build a 
competitive U.S. supply base.
    The Academy also recommended a systems analysis and 
integration activity. We are developing that capability. 
Analysis of various scenarios for hydrogen production delivery 
are underway. These efforts will be valuable in providing 
rigorous data and potential guidance for policy decisions in 
future years.
    Madame Chairman, Mr. Chairman, the DOE hydrogen program is 
committed to a balanced portfolio. We do not do stand-alone 
test tube research, but rather we have an integrated effort of 
basic, applied, and engineering sciences. This Committee, in 
particular, has been instrumental in providing valuable 
guidance to us.
    This completes my prepared statement. I would be happy to 
answer any questions you have.
    [The prepared statement of Mr. Faulkner follows:]

               Prepared Statement of Douglas L. Faulkner

    Madam Chairman and Members of the Subcommittee, I appreciate the 
opportunity to testify on the Department of Energy's (DOE or 
Department) Hydrogen Program activities which support the President's 
Hydrogen Fuel Initiative. Today I will provide an overview and status 
update of the Hydrogen Program's accomplishments and plans.
    Over two years ago, in his 2003 State of the Union address, 
President Bush announced a $1.2 billion Hydrogen Fuel Initiative over 
FY 2004--2008 to reverse America's growing dependence on foreign oil by 
developing the hydrogen technologies needed for commercially viable 
fuel cells--a way to power cars, trucks, homes, and businesses that 
could also significantly reduce criteria pollutants and greenhouse gas 
emissions. Since the launch of the Initiative, we have had many 
accomplishments on the path to taking hydrogen and fuel cell 
technologies from the laboratory to the showroom in 2020, following an 
industry commercialization decision in 2015. The Department's Program 
encompasses the research and development (R&D) activities necessary to 
achieve the President's vision, including basic research, applied 
research and technology development, and learning demonstrations that 
are an extension of our research. These activities benefit from 
detailed planning efforts conducted by the Department, and the National 
Academies study and the Office of Science Basic Research Needs for the 
Hydrogen Economy workshop, in which two other speakers today, Dr. Bodde 
and Dr. Crabtree, have made major contributions. I will talk about 
progress in these areas as we continue on the road to solving the 
technical barriers that stand between us and this vision of a new 
energy future.

Hydrogen Vision and Overview

    As a nation, we must work to ensure that we have access to energy 
that does not require us to compromise our security or our environment. 
Hydrogen offers the opportunity to end petroleum dependence and to 
virtually eliminate transportation-related greenhouse gas emissions by 
addressing the root causes of these issues. Petroleum imports already 
supply more than 55 percent of U.S. domestic petroleum requirements, 
and those imports are projected to account for 68 percent by 2025 under 
a business-as-usual scenario. Transportation accounts for more than 
two-thirds of the oil use in the United States, and vehicles contribute 
to the Nation's air quality problems and greenhouse gas emissions 
because they release criteria pollutants and carbon dioxide.
    At the G8 Summit earlier this month, President Bush reiterated his 
policy of promoting technological innovation, like the development of 
hydrogen and fuel cell technologies, to address climate change, reduce 
air pollution, and improve energy security in the United States and 
throughout the world. The Department's R&D in advanced vehicle 
technologies, such as gasoline hybrid electric vehicles, will help 
improve energy efficiency and offset growth in the transportation fleet 
in the near- to mid-term. But, for the long-term, we ultimately need a 
substitute to replace petroleum. Hydrogen and fuel cells, when 
combined, have the potential to provide carbon-free, pollution-free 
power for transportation.
    Hydrogen will be produced from diverse domestic energy resources, 
which include biomass, fossil fuels, nuclear energy, solar, wind, and 
other renewables. We have planned and are executing a balanced research 
portfolio for developing hydrogen production and delivery technologies. 
The Department's hydrogen production strategy recognizes that most 
hydrogen will likely be produced by technologies that do not require a 
new hydrogen delivery infrastructure in the transition to a hydrogen 
economy, such as distributed reforming of natural gas and of renewable 
liquid fuels like ethanol and methanol. As research, development, and 
demonstration efforts progress along renewable, nuclear, and clean coal 
pathways, a suite of technologies will become available to produce 
hydrogen from a diverse array of domestic resources. These technologies 
will be commercialized as market penetration grows and demand for 
hydrogen increases.
    The economic viability of these different production pathways will 
be strongly affected by regional factors, such as feedstock or energy 
source availability and cost, delivery approaches, and the regulatory 
environment so that each region will tailor its hydrogen infrastructure 
to take advantage of its particular resources. Our ultimate hydrogen 
production strategy is carbon-neutral and emphasizes diversity. During 
the transition, net carbon emissions on a well-to-wheels basis, from 
vehicles running on hydrogen produced from natural gas would be 25 
percent less than gasoline hybrid vehicles and 50 percent less than 
conventional internal combustion engine vehicles. Natural gas is not a 
long-term strategy because of import concerns and the demands of other 
economic sectors for natural gas. In the long-term, in a hydrogen 
economy using renewables, nuclear, and coal with sequestration, near-
zero carbon light duty vehicles are our goal. I want to emphasize that 
hydrogen from coal will be produced directly from gasification, not 
coal-based electricity. This is consistent with technology currently 
under development for carbon capture and sequestration.
    My testimony today will specifically address the Subcommittees' 
questions:

1.  What progress has been made toward addressing the principal 
technical barriers to a successful transition to the use of hydrogen as 
a primary transportation fuel since the Administration announced its 
hydrogen initiatives, FreedomCAR and the President's Hydrogen Fuel 
Initiative? What are the remaining potential technical 
``showstoppers?''

Progress and Accomplishments
    Since the President launched the Hydrogen Fuel Initiative, we have 
made tremendous progress. The Department has developed a comprehensive 
technology development plan, the Hydrogen Posture Plan, fully 
integrating the hydrogen research of the Offices of Energy Efficiency 
and Renewable Energy; Science; Fossil Energy; and Nuclear Energy, 
Science, and Technology. This plan identifies technologies, strategies, 
and interim milestones to enable a 2015 industry commercialization 
decision on the viability of hydrogen and fuel cell technologies. Each 
Office has, in turn, developed a detailed research plan which outlines 
how the high-level milestones will be supported.
    We are now implementing these research, development, and 
demonstration plans:

        --  Using FY 2004 and FY 2005 appropriations and contingent 
        upon future appropriations over the next three years, the 
        Department competitively selected over $510 million in projects 
        ($755 million with cost-share) to address critical challenges 
        such as fuel cell cost, hydrogen storage, hydrogen production 
        and delivery cost, diverse ways of producing hydrogen, as well 
        as research for hydrogen safety, codes and standards.

        --  Of this total, 65 projects are for hydrogen production and 
        delivery, funded at $107 million over four years. These include 
        hydrogen production from renewables, distributed natural gas, 
        coal, and nuclear sources.

        --  We initiated three Centers of Excellence and 15 independent 
        projects in Hydrogen Storage at $150 million over five years. 
        The Centers include 20 universities, nine federal laboratories 
        and eight industry partners, representing a concerted, multi-
        disciplinary effort to address on-board vehicular hydrogen 
        storage--one of the critical enabling technologies for a 
        hydrogen economy. These activities are closely coordinated with 
        the Office of Science research in hydrogen storage.

        --  To address fuel cell cost and durability, five new projects 
        were initiated at $13 million over three years. A new $75 
        million solicitation will be released this fall to address cost 
        and durability of fuel cell systems. This is in conjunction 
        with a $17.5 million solicitation currently open focusing on 
        R&D addressing new membrane materials.

        --  We established a national vehicle and infrastructure 
        ``learning demonstration'' project at $170 million over six 
        years, with an additional 50 percent cost share by industry. 
        This effort takes some of the research from the laboratory to 
        the real world, and is critical to measuring progress and to 
        providing feedback to our R&D efforts.

        --  Most recently, to address basic science for the hydrogen 
        economy, 70 new projects were selected by the Office of Science 
        at $64 million over three years to address the fundamental 
        science underpinning hydrogen production, delivery, storage, 
        and use. Topics of this basic research include novel materials 
        for hydrogen storage, membranes for hydrogen separation and 
        purification, designs of catalysts at the nanoscale, solar 
        hydrogen production, and bio-inspired materials and processes. 
        Such research is important for exploring fundamental science 
        that may be applicable in the long-term and is responsive to 
        the National Academies' report recommending a shift to more 
        exploratory research.

    With these new competitively selected awards, the best scientists 
and engineers from around the Nation are actively engaged. The stage is 
now set for results.

Technical Progress
    Ongoing research has already led to important technical progress.

        --  As highlighted by Secretary Bodman in earlier Congressional 
        testimony, I am pleased to report that our fuel cell activities 
        recently achieved an important technology cost goal--the high-
        volume cost of automotive fuel cells was reduced from $275 per 
        kilowatt to $200 per kilowatt. This was accomplished by using 
        innovative processes developed by national labs and fuel cell 
        developers for depositing platinum catalyst. This 
        accomplishment is a major step toward the Program's goal of 
        reducing the cost of transportation fuel cell power systems to 
        $45 per kilowatt by 2010.

        --  In hydrogen production, we have demonstrated our ability to 
        produce hydrogen at a cost of $3.60 per gallon of gasoline 
        equivalent at an integrated fueling station that generates both 
        electricity and hydrogen. This is down from about $5.00 per 
        gallon of gasoline equivalent prior to the Initiative.

        --  To ensure a balanced portfolio, we must keep sight of our 
        ultimate goal to transfer research to the real world and we 
        have complemented our research efforts with a `learning 
        demonstration' activity. Most importantly, with the `learning 
        demonstration' activity we have the key industries that will 
        ultimately have to invest in the hydrogen economy, the auto and 
        energy companies, working together to ensure seamless 
        integration of customer acceptable technology. This activity 
        will evaluate vehicle and refueling infrastructure technologies 
        under real-world conditions and is key to measuring progress 
        toward technical targets and to help focus R&D.

2.  What are the research areas where breakthroughs are needed to 
advance a hydrogen economy? How has the Department of Energy (DOE) 
responded to the report by the National Academy of Sciences (NAS) 
calling for an increased emphasis on basic research? How is DOE 
incorporating the results of the Basic Energy Sciences workshop on 
basic research needs for a hydrogen economy into the research agenda 
for the hydrogen initiative?

    Starting in FY 2005, the Department of Energy (DOE) Office of 
Science has been included in the Hydrogen Fuel Initiative in order to 
focus basic research on overcoming key technology hurdles in hydrogen 
production, storage, and conversion. The Office of Science-funded 
research seeks fundamental understanding in areas such as non-precious-
metal catalysts, membranes for fuel cells and hydrogen separation, 
multi-functional nanoscale structures, biological and 
photoelectrochemical hydrogen production, and modeling and analytical 
tools.
    For example, basic research can help address the critical challenge 
of hydrogen storage: How do you safely store hydrogen on board a 
vehicle to enable customer expectations of greater than 300 mile 
driving range, without compromising passenger or cargo space? The 
National Academy of Sciences recommended ``a shift. . .away from some 
development areas towards more exploratory work'' to address issues 
like storage, stating that ``the probability of success is greatly 
increased by partnering with a broader range of academic and industrial 
organizations. . .'' Through the Department's ``Grand Challenge'' 
solicitation, a ``National Hydrogen Storage Project'' was established 
to broaden our scope. The new awards in basic research, with an 
additional $20 million for 17 projects over three years supported by 
the Office of Science, are integrated into this national project and 
provide value in developing a fundamental understanding of hydrogen 
interactions with materials. These multi-disciplinary efforts focused 
on materials-based technology for hydrogen storage, directly address 
the recommendations from the Basic Energy Sciences workshop on basic 
research needs for a hydrogen economy. By implementing the NAS 
recommendations, recent progress in materials discovery and technology 
allows hydrogen to be stored at low pressures and modest temperatures. 
Further basic and applied research will lead to better fundamental 
understanding and engineering solutions to address some of the key 
storage issues such as charging and discharging hydrogen at practical 
temperatures and pressures. Rather than `stand alone' test tube 
research, we have an integrated effort to address basic, applied, and 
engineering sciences to develop materials and systems for storing 
hydrogen.
    We face another set of challenges in hydrogen production. In this 
area, our research efforts are focused on reducing cost, improving 
energy efficiencies, and ensuring a diversity of pathways based on 
domestic resources for energy security that do not result in greenhouse 
gas emissions. Some pathways are further along in development and will 
be commercially viable sooner than others. For the transition, we 
envision producing hydrogen from natural gas or renewable liquids such 
as ethanol, at the fueling point, thus eliminating the need for a 
dedicated hydrogen distribution network. Centralized hydrogen 
production from coal with sequestration, biomass, nuclear, and 
distribution networks can follow later once market penetration 
justifies the capital investment required. Basic science is critical to 
understanding materials performance, failure mechanisms, and 
theoretical technology limits. The basic research component of the 
program contributes to longer-term concepts such as photocatalytic 
including biological hydrogen production and direct 
photoelectrochemical conversion to produce hydrogen. In fact, we have 
nearly $20 million of federal funding in new projects selected by the 
Office of Science on solar hydrogen production, membranes for 
separation and purification, and for bio-inspired materials and 
processes.
    As for fuel cells, key issues are cost and durability. Significant 
progress has been made by national laboratories as well as industry to 
reduce the amount of platinum, and hence cost, within the fuel cell 
electrode. In addition to the targeted activities in fuel cells 
previously mentioned, the Office of Science has initiated new basic 
research projects on the design of catalysts at the nanoscale and 
membrane materials related to fuel cell applications. More effective 
catalysts, combined with better techniques for fabricating these 
membrane electrode assemblies and new strategies for improved 
durability of fuel cells, will enable us to meet the aggressive cost 
and performance targets we have set for fuel cells. We are also 
expanding our activities to include manufacturing issues that will help 
take these new technologies from the laboratory to the marketplace.

3.  The NAS report suggested that the research agenda should be 
developed with future policy decisions in mind. How has DOE increased 
its policy analysis capabilities as recommended by the NAS? How will 
the results of that analysis be applied to the research agenda?

    I would like to emphasize that this Program is a research effort. 
However, as stated earlier, in response to the National Academies' 
recommendation, the Program has established the Systems Analysis and 
Integration effort to provide a disciplined approach to the research, 
design, development, and validation of complex systems. A fact-based 
analytical approach will be used to develop a balanced portfolio of R&D 
projects to support the development of production, delivery, storage, 
fuel cell, and safety technologies. Through analysis, the impact of 
individual components on the hydrogen energy system as a whole will be 
evaluated and the interaction of the components and their effects on 
the system will be assessed. Systems Analysis and Integration efforts 
will be available to examine and understand the cost implications of 
policy and regulations on technology R&D direction. Analysis of various 
scenarios for hydrogen production and delivery is critical to the 
transition plan for developing the infrastructure and carbon-neutral 
hydrogen resources for a hydrogen economy. The planned analysis efforts 
will be valuable in providing rigorous data and potential guidance for 
policy decisions in future years.

4.  How is DOE conducting planning for, and analysis of, the policy 
changes (such as incentives or regulation) that might be required to 
encourage a transition to hydrogen? What other agencies are involved in 
planning for, or facilitating, such a transition?

    Currently, the focus of the DOE Hydrogen Program is research and 
development to address key technical challenges. Research and 
development on the codes and standards necessary to implementing 
hydrogen and fuel cell technologies will form a scientific and 
technical basis for future regulations. We are actively working with 
the Department of Transportation and interface with Standards 
Development Organizations (SDOs) and Codes Development Organizations 
(CDOs) on safety, codes and standards.
    As part of the Systems Analysis efforts, we have started to model 
and explore options and pathways to achieve a successful transition to 
hydrogen. This effort is in collaboration with the Vehicle Technology 
Office and the overall Energy Efficiency and Renewable Energy modeling 
efforts. The Energy Information Administration (EIA) is also providing 
guidance. This work includes the incorporation of rigorous hydrogen 
production, delivery, and vehicle technology components into the 
National Energy Management System (NEMS) model architecture, as well 
development of a more detailed transportation sector model that 
includes conventional, hybrid, and alternative fuel options. These 
modeling efforts will also allow us to examine the potential impacts of 
policy and regulations on the introduction and long-term use of 
hydrogen.

Now I will talk about our partners and our future plans.

    We are working with partners on all fronts to address the 
challenges to a hydrogen economy. Under the FreedomCAR and Fuel 
Partnership, DOE is collaborating with the U.S. Council for Automotive 
Research (USCAR) and five major energy companies to help identify and 
evaluate technologies that will meet customer requirements and 
establish the business case. Technical teams of research managers from 
the automotive and energy industries and DOE are meeting regularly to 
establish and update technology roadmaps in each technology area.
    An Interagency Hydrogen R&D Task Force has been established by the 
White House Office of Science and Technology Policy (OSTP) to leverage 
resources and coordinate interrelated and complementary research across 
the entire Federal Government. In 2005, the Task Force has initiated a 
plan to coordinate a number of key research activities among the eight 
major agencies that fund hydrogen and fuel cell research. Coordination 
topics include novel materials for fuel cells and hydrogen storage, 
inexpensive and durable catalysts, hydrogen production from alternative 
sources, stationary fuel cells, and fuel-cell vehicle demonstrations. 
The Task Force has also launched a website, Hydrogen.gov. In the coming 
year, the OSTP Task Force plans to sponsor an expert panel on the 
contributions that nanoscale research can make to realizing a Hydrogen 
Economy.
    Last year, we announced the establishment of the International 
Partnership for the Hydrogen Economy, or the IPHE. IPHE, which now 
includes 16 nations and the European Commission, establishes world-wide 
collaboration on hydrogen technology. The nations have agreed to work 
cooperatively toward a unifying goal: practical, affordable, 
competitively-priced hydrogen vehicles and refueling by 2020; and 
projects involving collaboration between different countries are being 
proposed and reviewed for selection.
Toward the Hydrogen Future
    The Department is looking to the future as well. Just as we have 
made tremendous progress, we plan to have significant advances to 
report next year on the R&D projects we have launched through the 
solicitations I mentioned. The progress will be tracked using 
performance-based technical and cost milestones that provide clear and 
quantifiable measures. We will report this progress next year to this 
Subcommittee, and annually to Congress and to the Office of Management 
and Budget. In fact, as we speak, the NAS is completing its biennial 
review of the program. We anticipate more valuable feedback and will 
have more details to report in the coming months.
    For the critical targets, it is important that we verify our 
progress in a way that is independent and transparent. In Fiscal Year 
2006, the major technical milestones will be assessed using a rigorous 
methodology established by the Hydrogen Program.

        --  First, in Hydrogen Storage, we will determine the maximum 
        storage potential of cryogenic-compressed hydrogen tanks and 
        the feasibility of this technology towards meeting DOE's 2010 
        targets.

        --  Second, in Fuel Cells, we will evaluate fuel cell cost per 
        kilowatt using current materials to determine if $110/kilowatt 
        is feasible towards meeting the 2010 target of $45/kilowatt 
        (assuming high volume manufacturing).

        --  And third, in Hydrogen Production, we will determine if the 
        laboratory research will lead to $3 per gasoline gallon energy 
        equivalent (gge) using a distributed natural gas reformer 
        system.

    In addition to measuring progress, we continue to develop and 
improve processes to facilitate innovation and to accelerate R&D. For 
instance, we plan an annual solicitation, starting in 2006, in the 
critical area of hydrogen storage to complement the Centers of 
Excellence. This will improve our flexibility to continuously evaluate 
new ideas and rapidly fund competitively selected projects.
    Validation of fuel cell vehicle and hydrogen infrastructure 
technologies under `real world' operating conditions is essential to 
track progress and to help guide research priorities. Technology and 
infrastructure validation will provide essential statistical data on 
the status of fuel cell vehicle and infrastructure technologies 
relative to targets in the areas of efficiency, durability, storage 
system range, and fuel cost. This activity will also provide 
information to support the development of codes and standards for the 
commercial use of hydrogen, and feedback on vehicle and infrastructure 
safety. Through cost-shared partnerships with the energy industry, 
Fiscal Year 2006 activities include opening eight hydrogen fueling 
stations, and validating performance, safety, and cost of hydrogen 
production and delivery technologies. By 2009, the program is expected 
to validate fuel cell vehicle durability of 2,000 hours, a 250-mile 
vehicle range, and full-scale hydrogen production cost of less than 
$3.00 gge.
    In addition, a critical need for lowering the costs of hydrogen and 
fuel cells is high volume manufacturing processes and techniques. 
Manufacturing R&D challenges for a hydrogen economy include developing 
innovative, low-cost fabrication processes for new materials and 
applications and adapting laboratory fabrication techniques to enable 
high volume manufacturing. The Hydrogen Program is working with 
Department of Commerce and other federal agencies to create a roadmap 
for developing manufacturing technologies for hydrogen and fuel cell 
systems as part of the President's Manufacturing Initiative. The 
roadmap will help to guide budget requests in Fiscal Year 2007 and 
beyond. This work is part of the Interagency Working Group on 
Manufacturing R&D, which is chaired by OSTP and includes 14 federal 
agencies. The working group has identified nanomanufacturing, 
manufacturing R&D for the hydrogen economy, and intelligent and 
integrated manufacturing systems as three focus areas for the future. 
Manufacturing R&D for the hydrogen economy will be critical in 
formulating a strategy to transfer technology successes in the 
laboratory to new jobs, new investments, and a competitive U.S. 
supplier base in a global economy.
    Successful commercialization of hydrogen technologies requires a 
comprehensive database on component reliability and safety, published 
performance-based domestic standards, and international standards or 
regulations that will allow the technologies to compete in a global 
market. Initial codes and standards for the commercial use of hydrogen 
are only now starting to be published. Research will be conducted in 
Fiscal Year 2006 to determine flammability limits and the reactive and 
depressive properties of hydrogen under various conditions, and also to 
quantify risk. Through such efforts, critical data will be generated to 
help write and adopt standards and to develop improved safety systems 
and criteria.

Conclusion

    Madam Chairman, all the panelists here today will agree that 
achieving the vision of the hydrogen energy future is a great 
challenge. The DOE Hydrogen Program is committed to a balanced 
portfolio, conducting the basic and applied research necessary to 
achieve this vision. 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 to achieving the President's vision. We appreciate 
the leadership taken by the Senate, and most recently the House, in 
establishing Hydrogen and Fuel Cell Caucuses. 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 
address the root cause of greenhouse gas emissions; we can help with 
the quality of the air; and we can make a fundamental difference for 
the future of our children. This committee in particular has been 
instrumental in providing that kind of leadership over the years, and 
we look forward to continuing this dialogue in the months and years 
ahead.
    We at the Department of Energy welcome the challenge and 
opportunity to play a vital role in this nation's energy future and to 
help address our energy security challenges in such a fundamental way. 
This completes my prepared statement. I would be happy to answer any 
questions you may have.

                   Biography for Douglas L. Faulkner

    Douglas Faulkner was appointed by President George W. Bush on June 
29, 2001, to serve as the political deputy in the Office of Energy 
Efficiency and Renewable Energy (EERE). This $1.2 billion research and 
development organization has over five hundred federal employees in 
Washington, D.C. and six regional offices, supported by thousands of 
contractors at the National Renewable Energy Laboratory and elsewhere.
    Mr. Faulkner oversees all aspects of EERE's operations in a close 
partnership with the Office's two career Deputy Assistant Secretaries. 
He has worked closely with Assistant Secretary David K. Garman to 
reorganize EERE, replacing an outdated and fragmented organization with 
what arguably is the most innovative business model ever used in the 
Federal Government. This has resulted in fewer management layers, fewer 
but more productive staff, streamlined procedures, stronger project 
management in the field and lower operating costs overall. These 
reforms have been recognized as a success by the White House and the 
National Association of Public Administration.
    Mr. Faulkner organized and led an internal management board which 
completely revamped EERE's biomass programs. Many projects were ended 
and those funds pooled for an unprecedented solicitation to refocus R&D 
for new bio-refineries.
    Interviews of Mr. Faulkner about renewable energy and energy 
efficiency have appeared on television and radio and in the print 
media.
    Before assuming his leadership post in EERE, Mr. Faulkner had 
progressed rapidly through the ranks of the civil service at the 
Central Intelligence Agency and the Department of Energy. In his over-
twenty year career he rose from junior China intelligence analyst to a 
nationally-recognized leader in bio-based products and a senior policy 
advisor to the Secretaries of Energy in both Bush Administrations.
    Born and raised in central Illinois, Principal Deputy Faulkner 
received a Bachelor's degree in Asian Studies from the University of 
Illinois and a Master's degree from the Johns Hopkins University, 
School of Advanced International Studies. He also attended the 
University of Singapore as a Rotary Scholar. At these institutions, he 
studied French and Mandarin Chinese languages. Mr. Faulkner played 
intercollegiate basketball at home and abroad.
    He is involved in his church and community as well as Boy Scouts 
and youth baseball. Mr. Faulkner was appointed in the early 1990s to 
two Arlington County, Virginia, economic commissions.
    Mr. Faulkner lives in Arlington, Virginia, with his wife and son.

    Chairwoman Biggert. Thank you very much.
    And then, Dr. Bodde, you are recognized for five minutes.

   STATEMENT OF DR. DAVID L. BODDE, DIRECTOR, INNOVATION AND 
 PUBLIC POLICY, INTERNATIONAL CENTER FOR AUTOMOTIVE RESEARCH, 
                       CLEMSON UNIVERSITY

    Dr. Bodde. Thank you, Madame Chairman.
    I would like to speak this morning to three basic ideas: 
first, the importance of recognizing and focusing on the 
transition from the current infrastructure to a hydrogen 
infrastructure; second, the need for long-term, fundamental 
research to resolve five key questions in the hydrogen economy; 
and third, the importance of enabling entrepreneurs and 
innovators to take the results of this research and move them 
into the marketplace and move them into commercial practice.
    Let me take those ideas one at a time.
    First, the transition is a competitive transition. I think 
it is helpful to think of three competing infrastructures: 
first, the internal combustion engine, both spark ignition and 
compression ignition, and the fuel industries that have built 
up around that, which are perfectly satisfactory from a 
consumer point of view, offering mobility services that are 
reasonably priced and widely available; the next competing 
infrastructure that is emerging into the market, the hybrid 
electric vehicle that uses that same fuels infrastructure; and 
then the third one, the hydrogen fuel cell vehicle, the 
ultimate competitor that removes oil as the issue in our 
national life and removes carbon as an environmental issue.
    Now if you look at the competitive battle amongst these 
three, there are some lessons that come out of this look for 
market share. First, it is a 50-year struggle. It takes a long 
time to change out these infrastructures. Second, and equally 
important, that means that all three infrastructures will co-
exist during some period during the transition, and that means 
the hybrid electric vehicle will also be an important 
contributor, both because of its fuel efficiency and also 
because it will pioneer some key electric management 
technologies later useful for the hydrogen fuel cell vehicle. 
Policies that accelerate this transition will be helpful, will 
gain more traction, than those that are not cognizant of the 
transition.
    Now what technologies would be useful? Well, one thing that 
would would be a hydrogen appliance for service stations. This 
is one of the recommendations that came out of the National 
Academy of Sciences' report that--I served on that committee, 
also, advanced technology for hydrogen production with 
electrolysis, this is for small-scale distributed manufacturing 
of hydrogen, breakthrough technologies for small-scale 
performing, and integrated standard fueling station. All of 
these are needed for a distributed hydrogen production economy 
that will be part of any transition to hydrogen.
    The second key idea is that fundamental research is needed 
to answer five big questions. And these five questions are: 
one, can we store hydrogen on board vehicles at near 
atmospheric pressures? I believe that if we cannot do this, if 
we have to rely on either cryogenic liquids or high-pressure 
gas, that this is--comes about as near to be a showstopper for 
the hydrogen economy as anything that I could think of. And 
basic research in a variety of areas to accomplish this, I 
think, is of fundamental importance.
    The second major question concerns carbon. Can we capture 
and sequester the carbon dioxide from hydrogen manufacturing in 
a societally acceptable way? If the answer is yes, then coal as 
a feedstock offers a very large and very cost-effective pathway 
to the hydrogen economy. If the answer is no, then we have to 
be about very quickly developing alternatives to coal.
    And that is the third major question: can we sharply reduce 
the cost of hydrogen from non-coal resources, in particular, 
from nuclear, nuclear electricity, both in terms of high-
temperature electrolysis of steam and in terms of 
thermochemical cycles that would chemically produce the 
hydrogen?
    Fourth, fuel cells. We need to have improved fuel cells in 
order to gain the efficiency on board the vehicle that offsets 
the inefficiencies from manufacturing hydrogen.
    And finally, improved batteries.
    Now all of these require broad-based programs, basic 
research, a wide-scale search for ideas.
    The third major idea is enabling entrepreneurship. This is 
particularly important when the locus of innovation in the 
motor industry is shifting from the OEM, that is the big three 
automakers, down toward the suppliers, the tier one, the tier 
two, the tier three suppliers, and it is becoming a networked 
pattern of innovation as opposed to a linear pattern of 
innovation.
    Now in many other industries, mature industries, from 
computers to aerospace, entrepreneurs have become the agents of 
change and the most important agents of change. It is important 
that entrepreneurs be enabled, and programs such as the SBIR, 
STTR, the ATP, the various alphabet soup of technology and 
entrepreneur support, are quite important for that.
    But in addition, the kind of commitment that Congressman 
Inglis talked about in terms of long-term stability of 
government policies is very important here, because 
entrepreneurs seek opportunity, and they seek opportunities 
that will be stable across the tenure of time that it takes to 
launch and mature a high-growth, high-technology kind of 
company.
    States and universities have a strong role here, and we at 
Clemson University are very pleased with our work at the 
International Center for Automotive Research, called the ICAR. 
We intend for this institution to be a major player and 
innovation laboratory in moving technology not only from our 
own laboratories and the laboratories in South Carolina, but 
from any place in the world into the entire automotive cluster, 
not only the major manufacturers but the suppliers as well.
    That concludes my statement, Madame Chairman.
    [The prepared statement of Dr. Bodde follows:]

                  Prepared Statement of David L. Bodde

    Thank you, ladies and gentlemen, for this opportunity to discuss 
the Road to the Hydrogen Economy, a road I believe we must travel if we 
are to ensure a world well supplied with clean, affordable energy 
derived from secure sources. I will speak to this from the perspective 
of motor vehicle transportation and address the questions posed by the 
Committee within the framework of three basic ideas.
    First, research policy should view the hydrogen transition as a 
marketplace competition. For the next several decades, three rival 
infrastructures will compete for a share of the world auto market: (a) 
the current internal combustion engine and associated fuels 
infrastructure; (b) the hybrid electric vehicles, now emerging on the 
market; and (c) the hydrogen fueled vehicles, now in early 
demonstration. We can judge policy alternatives and applied research 
investments by their ability to accelerate the shift in market share 
among these competing infrastructures.
    Second, and in parallel with the marketplace transition, 
fundamental research should focus on sustaining the hydrogen economy 
into the far future. Key issues include: (a) storing hydrogen on-board 
vehicles at near-atmospheric pressure; (b) sequestering the carbon-
dioxide effluent from manufacturing hydrogen from coal; (c) sharply 
reducing the cost of hydrogen produced from non-coal resources, 
especially nuclear, photobiological, photoelectrochemical, and thin-
film solar processes; (d) improving the performance and cost of fuel 
cells; and (e) storing electricity on-board vehicles in batteries that 
provide both high energy performance and high power performance at 
reasonable cost.
    And third, the results of this research must be brought swiftly and 
effectively to the marketplace. This requires economic policies that 
encourage technology-based innovation, both by independent 
entrepreneurs and those operating from the platform of established 
companies. Clemson University, through its International Center for 
Automotive Research and its Arthur M. Spiro Center for Entrepreneurial 
Leadership, intends to become a major contributor to this goal.
    In what follows, I will set out my reasoning and the evidence that 
supports these three basic ideas.

THE HYDROGEN TRANSITION: A MARKETPLACE COMPETITION

    Much thinking about the hydrogen economy concerns ``what'' issues, 
visionary descriptions of a national fuels infrastructure that would 
deliver a substantial fraction of goods and services with hydrogen as 
the energy carrier. And yet, past visions of energy futures, however 
desirable they might have seemed at the time, have not delivered 
sustained action, either from a public or private perspective. The 
national experience with nuclear power, synthetic fuels, and renewable 
energy demonstrates this well.
    The difficulty arises from insufficient attention to the transition 
between the present and the desired future--the balance between forces 
that lock the energy economy in stasis and the entrepreneurial forces 
that could accelerate it toward a more beneficial condition.
    In effect, the present competes against the future, and the pace 
and direction of any transition will be governed by the outcome. 
Viewing the transition to a hydrogen economy through the lens of a 
competitive transition can bring a set of ``how'' questions to the 
national policy debate--questions of how policy can rebalance the 
competitive forces so that change prevails in the marketplace.
A Model of the Competitive Transition
    The competitive battle will be fought over a half century among 
three competing infrastructures:\1\
---------------------------------------------------------------------------
    \1\ Another concept, the battery electric vehicle (BEV), offers an 
all-electric drive-train with all on-board energy stored in batteries, 
which would be recharged from stationary sources when the vehicle is 
not in operation. I have not included this among the competitors 
because battery technology has not advanced rapidly enough for it to 
compete in highway markets. In contrast, BEV have proven quite 
successful in the personal transportation niche.

          The internal combustion engine (ICE), either in a 
        spark-ignition or compression-ignition form, and its attendant 
---------------------------------------------------------------------------
        motor fuels supply chain;

          The hybrid electric vehicle (HEV), now entering the 
        market, which achieves superior efficiency by supplementing an 
        internal combustion engine with an electric drive system and 
        which uses the current supply chain for motor fuels; and,

          The hydrogen fuel cell vehicle (HFCV), which requires 
        radically distinct technologies for the vehicle, for fuel-
        production, and for fuel distribution.

    Figure 1 shows one scenario, based on the most optimistic 
assumptions, of how market share could shift among the contending 
infrastructures (NRC 2004). Several aspects of this scenario bear 
special mention. First, note the extended time required for meaningful 
change: these are long-lived assets built around large, sunk 
investments. They cannot be quickly changed under the best of 
circumstances. Second, the road to the hydrogen economy runs smoothest 
through the hybrid electric vehicle. The HEV offers immediate gains in 
fuel economy and advances technologies that will eventually prove 
useful for hydrogen fuel cell vehicles, especially battery and electric 
system management technologies. Although this scenario shows 
significant market penetration for the HEV, its success cannot be 
assured. The HEV might remain a niche product, despite its current 
popularity if consumers conclude that the value of the fuel savings 
does not compensate for the additional cost of the HEV. Or, its gains 
in efficiency might be directed toward vehicle size and acceleration 
rather than fuel economy. Either circumstance would make an early 
hydrogen transition even more desirable.



    Any transition to a HFCV fleet, however, will require overcoming a 
key marketplace barrier that is unique to hydrogen--widely available 
supplies of fuel. And to this we now turn.
The Chicken and the Egg\2\
---------------------------------------------------------------------------
    \2\ Alternatively framed: ``Which comes first, the vehicle or the 
fuel?''
---------------------------------------------------------------------------
    Most analyses suggest that large-scale production plants in a 
mature hydrogen economy can manufacture fuel at a cost that competes 
well with gasoline at current prices (NRC 2004). However, investors 
will not build these plants and their supporting distribution 
infrastructure in the absence of large-scale demand. And, the demand 
for hydrogen will not be forthcoming unless potential purchasers of 
hydrogen vehicles can be assured widely available sources of fuel. 
Variants of this ``chicken and egg'' problem have limited the market 
penetration of other fuels, such as methanol and ethanol blends (M85 
and E85) and compressed natural gas. This issue--the simultaneous 
development of the supply side and demand sides of the market--raises 
one of the highest barriers to a hydrogen transition.
Distributed Hydrogen Production for the Transition
    To resolve this problem, a committee of the National Academy of 
Sciences (NRC 2004) recommended an emphasis on distributed production 
of hydrogen. In this model, the hydrogen fuel would be manufactured at 
dispensing stations conveniently located for consumers. Once the demand 
for hydrogen fuel grew sufficiently, then larger manufacturing plants 
and logistic systems could be built to achieve scale economies. 
However, distributed production of hydrogen offers two salient 
challenges.
    The first challenge is cost. Figure 2, below, shows the delivered 
cost of molecular hydrogen for a variety of production technologies. 
The ``distributed'' technologies, to the right in Figure 2, offer 
hydrogen at a cost between two and five times the cost of the large-
scale, ``central station'' technologies, on the left in Figure 2. 
Technological advances can mitigate, but not remove entirely, this cost 
disadvantage.




    The second challenge concerns the environment. Carbon capture and 
sequestration do not appear practical in distributed production. During 
the opening stage of a hydrogen transition, we might simply have to 
accept some carbon releases in order to achieve the later benefits.
Research to Accelerate a Transition by Distributed Hydrogen Production
    A study panel convenienced by the National Academy of Sciences 
(NAS) recently recommended several research thrusts that could 
accelerate distributed production for a transition to hydrogen (NRC 
2004). These include:

          Development of hydrogen fueling ``appliance'' that 
        can be manufactured economically and used in service stations 
        reliably and safely by relatively unskilled persons--station 
        attendants and consumers.

          Development of an integrated, standard fueling 
        facility that includes the above appliance as well as 
        generation and storage equipment capable of meeting the sharply 
        varying demands of a 24-hour business cycle.

          Advanced technologies for hydrogen production from 
        electrolysis, essentially a fuel cell operated in reverse, to 
        include enabling operation from intermittent energy sources, 
        such as wind.

          Research on breakthrough technologies for small-scale 
        reformers to produce hydrogen from fossil feedstocks.

    The Department of Energy has adopted the NAS recommendations and 
modified its programs accordingly. It remains too early to judge 
progress, but in any case these technologies should receive continued 
emphasis as the desired transition to hydrogen nears. However, progress 
in research is notoriously difficult to forecast accurately. This 
suggests consideration be given to interim strategies that would work 
on the demand side of the marketplace, either to subsidize the cost of 
distributed hydrogen production while demand builds or to raise the 
cost of the competition, gasoline and diesel fuels. Such actions would 
relieve the research program of the entire burden for enabling the 
transition.

FUNDAMENTAL RESEARCH TO SUSTAIN A HYDROGEN ECONOMY

    At the same time that the marketplace transition advances, several 
high-payoff (but also high-risk) research campaigns should be waged. 
These include:

          Storing hydrogen on-board vehicles at near-
        atmospheric pressure;

          Sequestering the carbon-dioxide effluent from 
        manufacturing hydrogen from coal;

          Sharply reducing the cost of hydrogen produced from 
        non-coal resources, especially nuclear, photobiological, 
        photoelectrochemical, and thin-film solar processes;

          Improving the performance and cost of fuel cells; 
        and,

          Storing electricity on-board vehicles in batteries 
        that provide both high energy performance and high power 
        performance at reasonable cost.

On-Vehicle Hydrogen Storage
    The most important long-term research challenge is to provide a 
more effective means of storing hydrogen on vehicles than the 
compressed gas or cryogenic liquid now in use. In my judgment, failure 
to achieve this comes closer to a complete ``show-stopper'' than any 
other possibility. I believe this true for two reasons: hydrogen 
leakage as the vehicle fleet ages, and cost.
    With regard to leakage, high pressure systems currently store 
molecular hydrogen on demonstration vehicles safely and effectively. 
But these are new and specially-built, and trained professionals 
operate and maintain. What can we expect of production run vehicles 
that receive the casual maintenance afforded most cars? A glance at the 
oil-stained pavement of any parking lot offers evidence of the leakage 
of heavy fluids stored in the current ICE fleet at atmospheric 
pressure. As high pressure systems containing the lightest element in 
the universe age, we might find even greater difficulties with 
containment. With regard to cost, the energy losses from liquefaction 
and even compression severely penalize the use of hydrogen fuel, 
especially when manufactured at distributed stations.
    The NAS Committee, cited earlier (NRC 2004), strongly supported an 
increased emphasis on game-changing approaches to on-vehicle hydrogen 
storage. One alternative could come from novel approaches to generating 
the hydrogen on board the vehicle.\3\ Chemical hydrides, for example, 
might offer some promise here, such as the sodium borohydride system 
demonstrated by DaimlerChrysler.
---------------------------------------------------------------------------
    \3\ I do not include on-board reforming of fossil feedstocks, like 
gasoline, among these. These systems offer little gain beyond that 
achievable with the HEV, and most industrial proponents appear to have 
abandoned the idea.
---------------------------------------------------------------------------
Carbon Sequestration
    Domestic coal resources within the United States hold the potential 
to relieve the security burdens arising from oil dependence--but only 
if the environmental consequences of their use can be overcome. 
Further, as shown in Figure 2, coal offers the lowest cost pathway to a 
hydrogen-based energy economy, once the transient conditions have 
passed. Thus, the conditions under which this resource can be used 
should be established as soon as possible. The prevailing assumption 
holds that the carbon effluent from hydrogen manufacturing can be 
stored as a gas (carbon dioxide, or CO2) in deep underground 
formations. Yet how long it must be contained and what leakage rates 
can be tolerated remain unresolved issues (Socolow 2005). Within the 
Department of Energy, the carbon sequestration program is managed 
separately from hydrogen and vehicles programs. The NAS committee 
recommended closer coordination between the two as well as an ongoing 
emphasis on carbon capture and sequestration (NRC 2004).

Producing Hydrogen Without Coal
    Manufacturing hydrogen from non-fossil resources stands as an 
important hedge against future constraints on production from coal, or 
even from natural gas. And under any circumstance, the hydrogen economy 
will be more robust if served by production from a variety of domestic 
sources.
    The non-fossil resource most immediately available is nuclear. 
Hydrogen could be produced with no CO2 emissions by using 
nuclear heat and electricity in the high-temperature electrolysis of 
steam. Here the technology issues include the durability of the 
electrode and electrolyte materials, the effects of high pressure, and 
the scale-up of the electrolysis cell. Alternatively, a variety of 
thermochemical reactions could produce hydrogen with great efficiency. 
Here the needed research concerns higher operating temperatures 
(700+C to 1000+C) for the nuclear heat as well as 
research into the chemical cycles themselves. In both cases, the safety 
issues that might arise from coupling the nuclear island with a 
hydrogen production plant bear examination (NRC 2004).
    In addition, hydrogen production from renewable sources should be 
emphasized, especially that avoiding the inefficiencies of the 
conventional chain of conversions: (1) from primary energy into 
electricity; (2) from electricity to hydrogen; (3) from hydrogen to 
electricity on-board the vehicle; (4) from electricity to mobility, 
which is what the customer wanted in the first place. Novel approaches 
to using renewable energy, such as photobiological or 
photoelectrochemical, should be supported strongly (NRC 2004).

Improved Fuel Cells
    The cost and performance of fuel cells must improve significantly 
for hydrogen to achieve its full potential. To be sure, molecular 
hydrogen can be burned in specially designed internal combustion 
engines. But doing so foregoes the efficiency gains obtainable from the 
fuel cell, and becomes a costly and (from an energy perspective) 
inefficient process. The NAS Committee thought the fuel cell essential 
for a hydrogen economy to be worth the effort required to put it in 
place. They recommended an emphasis on long-term, breakthrough research 
that would dramatically improve cost, durability, cycling capacity, and 
useful life.

Improved Batteries
    The battery is as important to a hydrogen vehicle as to a hybrid 
because it serves as the central energy management device. For example, 
the energy regained from regenerative braking must be stored in a 
battery for later reuse. Though energy storage governs the overall 
operating characteristics of the battery, a high rate of energy release 
(power) can enable the electric motor to assist the HEV in acceleration 
and relieve the requirements for fuel cells to immediately match their 
power output with the needs of the vehicle. Thus, advanced battery 
research becomes a key enabler for the hydrogen economy and might also 
expand the scope of the BEV.

ENTREPRENEURSHIP FOR THE HYDROGEN ECONOMY

    For the results of DOE research to gain traction in a competitive 
economy, entrepreneurs and corporate innovators must succeed in 
bringing hydrogen-related innovations to the marketplace. In many 
cases, independent entrepreneurs provide the path-breaking innovations 
that lead to radical improvements in performance, while established 
companies provide continuous, accumulating improvement.\4\ The Federal 
Government, in partnership with states and universities, can become an 
important enabler of both pathways to a hydrogen economy.
---------------------------------------------------------------------------
    \4\ See the Appendix: The Process of Innovation and Implications 
for the Hydrogen Transition for a more complete discussion.
---------------------------------------------------------------------------
Federal Policies Promoting Entrepreneurship
    From the federal perspective, several policies could be considered 
to build an entrepreneurial climate on the ``supply'' side of the 
market. These include:

          Special tax consideration for investors in new 
        ventures offering products relevant to fuel savings. The intent 
        would be to increase the amount of venture capital available to 
        startup companies.

          Commercialization programs might enable more 
        entrepreneurs to bring their nascent technologies up to 
        investment grade. For example, an enhanced and focused Small 
        Business Innovation Research (SBIR) program might increase the 
        number of participating entrepreneurs participating in fuel-
        relevant markets. A portion of the Advanced Technology Program 
        (ATP) could be focused in like manner.

          Outreach from the National Laboratories to 
        entrepreneurs might be improved. Some laboratories, the 
        National Renewable Energy Laboratory (NREL) for example, offer 
        small, but effective programs. But more systematic outreach, 
        not to business in general, but to entrepreneurial business, 
        would also increase the supply of market-ready innovations.

    On the demand side, any policy that increases consumer incentives 
to purchase fuel efficient vehicles will provide an incentive for 
ongoing innovation--provided that the policy is perceived as permanent. 
Entrepreneurs and innovators respond primarily to opportunity; but that 
opportunity must be durable for the 10-year cycle required to establish 
a new, high-growth company.

States and Universities as Agents of Innovation/Entrepreneurship
    Innovation/entrepreneurship is a contact sport, and that contact 
occurs most frequently and most intensely within the context of 
specific laboratories and specific relationships. I will use Clemson's 
International Center for Automotive Research (ICAR) to illustrate this 
principle. Most fundamentally, the ICAR is a partnership among the 
State of South Carolina, major auto makers,\5\ and their Tier I, Tier 
II, and Tier III suppliers. The inclusion of these suppliers will be 
essential for the success of ICAR or any similar research venture. This 
is because innovation in the auto industry has evolved toward a global, 
networked process, much as it has in other industries like 
microelectronics. The ``supply chain'' is more accurately described as 
a network, and network innovation will replace the linear model.
---------------------------------------------------------------------------
    \5\ BMW was the founding OEM and most significant supporter of the 
ICAR.
---------------------------------------------------------------------------
    For these reasons, the ICAR, when fully established, will serve as 
a channel for research and innovation to flow into the entire cluster 
of auto-related companies in the Southeast United States. We anticipate 
drawing together and integrating the best technology from a variety of 
sources:

          Research performed at Clemson University and at the 
        ICAR itself;

          Research performed at the Savannah River National 
        Laboratory and the University of South Carolina; and,

          Relevant science and technology anywhere in the 
        world.

    Beyond research, the ICAR will include two other components of a 
complete innovation package: education, and entrepreneur support. With 
regard to education, the Master of Science and Ph.D. degrees offered 
through the ICAR will emphasize the integration of new technology into 
vehicle design, viewing the auto and its manufacturing plant as an 
integrated system. In addition, courses on entrepreneurship and 
innovation, offered through Clemson's Arthur M. Spiro Center for 
Entrepreneurial Leadership, will equip students with the skills to 
become effective agents of change within the specific context of the 
global motor vehicle industry.
    With regard to entrepreneur support, the ICAR will host a state-
sponsored innovation center to nurture startup companies that originate 
in the Southeast auto cluster and to draw others from around the world 
into that cluster. In addition, the ICAR innovation center will welcome 
teams from established companies seeking the commercial development of 
their technologies. The State of South Carolina has provided 
significant support through four recent legislative initiatives. The 
Research University Infrastructure and the Research Centers of Economic 
Excellence Acts build the capabilities of the state's universities; and 
the Venture Capital Act and Innovation Centers Act provide support for 
entrepreneurs.
    None of these elements can suffice by itself; but taken together 
they combine to offer a package of technology, education, and 
innovation that can serve the hydrogen transition extraordinarily well.

A CONCLUDING OBSERVATION

    Revolutionary technological change of the kind contemplated here is 
rarely predictable and never containable. Every new technology from the 
computer to the airplane to the automobile carries with it a chain of 
social and economic consequences that reach far beyond the technology 
itself. Some of these consequences turn out to be benign; some pose 
challenges that must be overcome by future generations; but none have 
proven foreseeable.
    For example, a hydrogen transition might bring prolonged prosperity 
or economic decline to the electric utility industry depending upon 
which path innovation takes. A pathway that leads through plug-hybrids 
to home appliances that manufacture hydrogen by electrolysis would 
reinforce the current utility business model. A pathway in which 
hydrogen fuel cell vehicles serve as generators for home electric 
energy would undermine that model. The same holds true for the coal 
industry. A future in which carbon sequestration succeeds will affect 
coal far differently from one in which it cannot be accomplished.
    The only certainty is that the energy economy will be vastly 
different from that which we know today. It will have to be.

REFERENCES

Socolow, Robert H. ``Can We Bury Global Warming?'' Scientific American, 
        July 2005, pp. 49-55.
Sperling, Daniel and James D. Cannon, The Hydrogen Transition, Elsevier 
        Academic Press, 2004.
U.S. National Research Council, The Hydrogen Economy: Opportunities, 
        Costs, Barriers, and R&D Needs, The National Academies Press, 
        2004.

APPENDIX:\6\ THE PROCESS OF INNOVATION AND IMPLICATIONS FOR THE 
                    HYDROGEN TRANSITION
---------------------------------------------------------------------------

    \6\ This Appendix draws heavily upon a previous statement prepared 
for the 9 February, 2005 hearing of the House Science Committee.
---------------------------------------------------------------------------
    At the beginning, it might be helpful to review some general 
principles regarding technological innovation and how it advances 
performance throughout the economy. We should begin by understanding 
technology from the customer perspective--not as a ``thing,'' but as a 
service.
Technology Viewed as a Service
    Fuels and vehicles have little value in themselves, but enormous 
utility as providers of mobility services. These valued services 
include performance vectors like:

          Time saving: will the vehicle travel far enough that 
        the driver does not waste time with frequent refueling?

          Safety: how well does the vehicle protect its 
        occupants, both by its ability to avoid accidents and by its 
        ability to survive them?

          Comfort: can the vehicle mitigate the stress and 
        hassles of road travel for the driver and passengers?

          Image: what does driving this particular vehicle say 
        about its occupants?

          Ancillary services: does the vehicle have enough 
        generating capacity to meet the growing demand for on-board, 
        electricity-based services?

    At any time, consumers emphasize some of these performance 
dimensions while satisficing along others. Consider the consumer 
preferences revealed by an EPA analysis of automobile performance from 
1981 to 2003. Over this period, average horsepower nearly doubled (from 
102 to 197 horsepower), weight increased markedly (from 3,201 to 3,974 
lbs), and the time required to accelerate from zero to 60 mph dropped 
by nearly 30 percent. An energy policy that added fuel security to the 
competitive performance dimensions for road transportation would do 
much to promote the hydrogen transition.

Technology-based Innovation: Accumulating
    Technological innovations can be grouped into two general classes: 
those that advance performance by accumulating incremental 
improvements, and those that offer discontinuous leaps in performance. 
The term accumulating applies to technologies that advance performance 
along dimensions already recognized and accepted by customers. Each 
improvement might be incremental, but the cumulative effect compounds 
to yield markedly improved performance--consider the improvements in 
processor speed for computers, for example. Auto manufacturers are 
accustomed to competing along these dimensions, and the cumulative 
effect can lead to important advances--but only if the technology 
competition continues long enough for the gains to accumulate. Most of 
the fuel saving technologies discussed at this hearing are incremental 
in nature, and so nurturing this kind of innovation could become an 
important policy goal.

Technology-based Innovation: Discontinuous
    In contrast, discontinuous technologies introduce performance 
dimensions quite distinct from what the mainstream customers have come 
to value, sometimes offering inferior performance along the accustomed 
dimensions. Because of their inferior mainstream performance, these 
technologies initially gain traction only in niche markets. With 
continued use and improvement, however, discontinuous technologies gain 
adequacy along the original dimensions and then enter the mainstream 
markets.
    Consider the battery electric vehicle (BEV), for example. Many 
analysts have written off electric vehicles because of their inferior 
performance in mainstream auto markets--acceleration, range, and 
recharge time. Yet electric vehicle technologies are emerging in an 
important niche: the market for personal transportation. This includes 
golf carts, all-terrain vehicles, touring vehicles for resorts, 
transportation within gated communities, and so forth. In that market, 
the chief performance dimensions are convenient access, economy, and 
ease of use--and style. The current state of electric vehicle 
technology is adequate for the limited range and acceleration 
requirements of this niche. But, could electric vehicle technology 
advance to the point of entry into mainstream markets? Or, could it 
compete effectively in personal transportation markets in developing 
countries--say Thailand or China? That is, of course, unknowable. But, 
please recall that the personal computer was once considered a 
hobbyists toy, inherently without enough power to enter mainstream 
applications.
    Discontinuous innovation tends to be the province of the 
entrepreneur, and the companies that such persons found become 
platforms for the innovations that radically change all markets. Yet 
entrepreneurs often have low visibility relative to the market 
incumbents in policy discussions, and their companies are far from 
household words.\7\ This is because the entrepreneurs' story is about 
the future, not the present; about what could be and not about what is. 
For that reason, policies that encourage entrepreneurship in 
technologies relevant to the hydrogen transition should become part of 
the energy policy conversation.
---------------------------------------------------------------------------
    \7\ Consider, for example, Zap!, a company founded 10 years ago in 
response to the zero-emissions vehicle market emerging in California. A 
description can be found at: http://www.zapworld.com/index.asp

                      Biography for David L. Bodde

Senior Fellow and Professor: Arthur M. Spiro Center for Entrepreneurial 
        Leadership; Director, Innovation and Public Policy, 
        International Center for Automotive Research, Clemson 
        University. Research and teaching in:

          Intellectual property management

          Markets for new energy technology

          Corporate entrepreneurship

          Next-generation hybrid electric and hydrogen fuel 
        cell vehicles

PREVIOUS PROFESSIONAL EXPERIENCE

University of Missouri-Kansas City, July 1996 to September 2004
    Charles N. Kimball Chair in Technology and Innovation at the 
University of Missouri, Kansas City. Joint appointment as Professor of 
Engineering and Business Administration.

Midwest Research Institute (MRI), January 1991 to July 1996
    Corporate Vice President and President of MRI's for-profit 
subsidiary, MRI Ventures. Responsible for new enterprise development 
through cooperative research, new ventures, licenses, and international 
agreements. Managed technology development consortium of five private 
companies to commercialize technology from the National Renewable 
Energy Laboratory (NREL). Worked with Department of Energy and senior 
NREL management on strategic initiatives for the laboratory.
National Academy of Sciences, April 1986 to January 1991
    Executive Director, Commission on Engineering and Technical 
Systems. Directed research and studies on public and private issues in 
science and technology.

U.S. Government, March 1978 to March 1986
    Assistant Director, Congressional Budget Office, United States 
Congress. Directed economic analyses of legislation affecting energy, 
industrial competitiveness, agribusiness, science, technology, and 
education.

    Deputy Assistant Secretary, Department of Energy. Policy research 
regarding nuclear energy, coal, synthetic fuels, electric utilities, 
technology transfer and national security. Emphasis on nuclear breeder 
reactors and nuclear non-proliferation. U.S. delegate to International 
Nuclear Fuel Cycle Evaluation, which sought an international agreement 
on plutonium recycle and measures to slow the proliferation of nuclear 
weapons.

TRW, Inc., January 1976 to March 1978
    Manager, Engineering Analysis Office, Energy Systems Planning 
Division. Built business using systems analysis and engineering 
studies. Emphasis on application of aerospace technology to energy 
problems, especially radioactive waste disposal and synthetic fuels.

U.S. Army, 1965 to 1970
    Captain. Platoon leader, company commander, and battalion 
operations officer. Airborne and Ranger qualified. Service as combat 
engineer in Vietnam (1968-69). Bronze Star, Army Commendation Medals. 
Remained in the Army Reserve as an R&D officer advising on the 
management of defense laboratories and nuclear research programs.

EDUCATION

Harvard University
    Doctor of Business Administration, March 1976. Doctoral thesis on 
the influence of regulation on the technical configuration of the 
commercial nuclear steam supply system. Thesis research cited in 
subsequent books on nuclear energy. Harding Foundation Fellowship.

Massachusetts Institute of Technology
    Master of Science degrees in Nuclear Engineering (1972) and 
Management (1973). Atomic Energy Commission Fellowship. Experimental 
thesis on irradiation-induced stress relaxation.

United States Military Academy
    Bachelor of Science, 1965. Commissioned Second Lieutenant, U.S. 
Army.

CORPORATE BOARD MEMBERSHIPS

Great Plains Energy
    Board member of electric energy company, 1994-present. Chair, 
Nuclear Committee; Chair, Governance Committee; Member, Audit 
Committee.

The Commerce Funds
    Founding director of family of mutual funds, currently with $2.2 
billion assets under management. Growth and Bond Funds achieved 
Morningstar 5-Star ranking. 1995-present.

PERSONAL BACKGROUND

    Grew up in Kansas City, Missouri. Married (since 1967) with four 
children. Enjoy competitive athletics, especially racquetball and 
tennis. Frequent backpacker, amateur historian, bad poet, and worse 
musician. Publications in technology management, energy, and policy.

    Chairwoman Biggert. Thank you very much, Dr. Bodde.
    Mr. Chernoby.

   STATEMENT OF MR. MARK CHERNOBY, VICE PRESIDENT, ADVANCED 
        VEHICLE ENGINEERING, DAIMLERCHRYSLER CORPORATION

    Mr. Chernoby. We are going to shift a little bit and use 
some visual aids to support my conversation, so go ahead to the 
next slide, please.
    [Slide.]
    I want to thank the Chairs and the distinguished Members of 
the House Committee for this opportunity to appear before you 
today.
    I am going to briefly describe DaimlerChrysler's 
involvement in the Administration's hydrogen initiative, what 
we are trying to do to advance the overall hydrogen economy, 
and then as well as some of the specific questions raised 
today.
    Mr. Chairman, you mentioned three keys. You mentioned 
commitment, collaboration, and discovery. And as I go through 
these slides, I am going to try and point that out.
    In the slide you see before you now, what I am trying to 
describe is DaimlerChrysler, we have been working on fuel cell 
technology for over 10 years. We have poured a billion dollars 
into different technologies for fuel cells that run on 
different fuel sources. We are committed. We have now centered, 
in the past few years, all of our work on hydrogen as the base 
fuel for these fuel cell products. And as you can see on the 
slide with the various pictures, we are attempting to look at 
products that could be attractive to a broad range of the--of 
customers, be it heavy buses for certain types of environments 
all of the way down to the small and compact car.
    Next slide, please.
    [Slide.]
    One of the critical enablers is collaboration. We 
participate as a member for the United States Council for 
Automotive Research with our partners at Ford and General 
Motors. And then most recently, we think it is exceptional to 
have added partners from BP, ChevronTexaco, ConocoPhillips, 
Exxon, and Shell, because we truly think the march to a 
completely new technology, a different way of life in the 
hydrogen economy is going to truly require collaboration in a 
pre-competitive environment across these multiple industries. 
We have got to bring together both vehicle and the 
infrastructure. And as you see in the center of this slide, the 
joint partnership and how we work together in certain task 
teams to understand how these infrastructures interface with 
the vehicle, what about the fuel, fuel quality, how does that 
relate to the fuel cell, it has all got to come together in 
order to realize a successful transition to the hydrogen 
economy.
    Next slide, please.
    [Slide.]
    At DaimlerChrysler, as Mr. Honda mentioned, we are proud to 
be a participant in the Department of Energy's demonstration 
program. We have numerous vehicles that are on the road in the 
United States already providing information to the Department 
of Energy. We have also shared information off of these 
vehicles with the Environmental Protection Agency. And really, 
there are several key things we are trying to get out of the 
demonstration product. We are moving from the lab to the road. 
That is critical. We have already found failure modes and 
systems to components that we had not seen in the lab 
environment. And as was mentioned, these now become initiatives 
and challenges for us to work on both in the research and the 
development environment as we move forward. So it is critical, 
when you are moving from a technology, like the internal 
combustion engine that we have on the road for well more than 
50 years, we understand how that affects the environment. With 
the new technology, we have to develop that understanding. That 
is why we are participating in three different environments. 
And DaimlerChrysler, outside of this demonstration project, we 
have vehicles around the world in a multitude of environments. 
And as you can see, our demonstration vehicles range from the 
small vehicle, the F-cell, up to the large sprinter, because 
these two types of vehicles clearly operate in different 
environments between the commercial and more of the daily use. 
So we absolutely think the demonstration fleet is providing 
very valuable data to feed the codes and standards efforts as 
well as helping us find new barriers and challenges we need to 
overcome to bring this product to a reality.
    Next slide, please.
    [Slide.]
    There was a question raised about, you know, what does 
DaimlerChrysler do. What do we focus on in order to make 
decisions on where we put our research funds and how much 
research funds get placed against a certain topic?
    As you can see on the slide, we basically look at five key 
factors. I would like to tell you there is a perfect math 
formula that with algebra you can just plug in the numbers and 
say this is where you put your money. Unfortunately, the world 
and life isn't that easy. We do look at probability of 
technical success, the probability of commercial success in the 
market, the value from a customer perspective, how does it fit 
with our business strategy, and then what strategic leverage 
does it provide the company. All of these factors, any type of 
research that we do, are calibrated, assessed, and then with 
that assessment, we look at, all right, how are we going to 
prioritize our funding and our people resource over a said time 
period.
    Next slide, please.
    [Slide.]
    There was a question raised about how do we see the fuel 
cell vehicle, the infrastructure coming together in terms of 
time in transitioning to truly the hydrogen-based economy for 
this transportation sector.
    At DaimlerChrysler, we think we are--we project we are 
going to go through four different phases. Right now, we have 
moved from basically what we call market preparation. That is 
basically setting up the infrastructure, setting up the 
vehicles in the lab environment, and getting ready to put some 
vehicles actually on the road that are fit for daily use. Fit 
for daily use, I have to qualify, only in certain environments. 
As an example, we have had severe challenges with cold start, 
so you will find many of the vehicles around the world aren't 
necessarily in extremely cold environments.
    We think we are going to go through two more stages before 
this finally becomes the reality. We are going to head to a 
ramp-up stage. That is where we think some of the technological 
barriers that are facing us through all of this great pre-
competitive research are going to be overcome. And we will be 
able to put a larger fleet in the field. This larger fleet is 
going to be limited by the growth of the infrastructure. We 
have got to have both the infrastructure there, the fueling, 
along with the vehicle to make it work. So we project that will 
be the next stage.
    And then the final stage will actually be 
commercialization. This is where the--all of the major 
technical barriers, including cost and value to the customer, 
and then broad-based movement of the infrastructure have to 
come together to make it viable to move to large-scale 
production and then large-scale purchase and use by the 
customer base.
    Next slide, please.
    [Slide.]
    At DaimlerChrysler, though, we are absolutely convinced, 
both in the short-term, the near-term, and potentially in the 
long-term, there is going to be a wide range of technologies 
that are going to be attractive to the marketplace. We are 
working on all of them at once, because we believe there is a 
place for each one of these technologies in the market where 
they provide maximum value to the customer. As an example, a 
hybrid provides maximum value to the customer who operates in a 
city environment. The customer who drives mostly on the highway 
may be more attracted to a diesel. And so as we transition 
between now and the hydrogen economy, we are going to keep 
working on trying to provide a broad-based set of propulsion 
technologies for the market to enable them to implement them to 
benefit not only the environment, but energy security, because 
penetration is what is going to matter. We don't get a benefit 
from either one of those unless we get market penetration, and 
so we have got to provide maximum value to the customer.
    Next slide, please.
    [Slide.]
    There are several key technology challenges in front of us 
to transition to the hydrogen economy. We have--we would 
summarize them into the fuel cell system itself, durability, 
cost. We have done some great work in terms of the pre-
competitive environment, between academia, government, and 
industry in overcoming a challenge such as cold start. So that 
is one behind us, but we have got many more to go. The battery 
system, as was commented earlier, is a significant challenge as 
well. And then finally, hydrogen storage, as Dr. Bodde 
mentioned, is a very significant challenge that we absolutely 
must find a way to overcome if we expect to have broad-based 
penetration of the market and not take space away from the 
customer.
    Next slide, please.
    [Slide.]
    So if we look at the--how we think we are going to 
transition, obviously, we are very focused at DaimlerChrysler 
on the near-term in providing both the advanced powertrains and 
hybrid technology. And then we, obviously, are very committed 
to a transition to an H2 fuel cell vehicle and then the 
ultimate infrastructure and economy that is going to come 
together with the broad-based focus on zero emissions, ultimate 
low energy consumption for the environment, and then finally 
the concept of energy self-sufficiency and energy security that 
comes along with it.
    Next slide, please.
    [Slide.]
    I think that is it.
    Thank you, and I would be happy to answer any questions you 
may have.
    [The prepared statement of Mr. Chernoby follows:]
                  Prepared Statement of Mark Chernoby
    I want to thank the Chairs and distinguished Members of the House 
Committee on Science for this opportunity to appear today.
    I am coming before you today to describe our involvement in the 
Administration's Hydrogen Initiatives, and what DaimlerChrysler is 
doing to advance the overall hydrogen economy, as well as, address the 
questions presented to me by the Subcommittee on Research and the 
Subcommittee on Energy.

What is DaimlerChrysler doing to advance a hydrogen economy?

    DaimlerChrysler has been working on fuel cell technology for 
transportation utilizing hydrogen for over ten years. We have invested 
over $1 Billion in R&D and have developed five generations of vehicles 
(NECAR1, 2, 3, and 4, and the F-Cell). Of all manufacturers, we have 
the largest world wide fleet of fuel cell cars and buses (100 vehicles) 
participating in several international demonstration projects in the 
United States, Europe, and Asia. (See Figure 1: DaimlerChrysler Fuel 
Cell History)

How does DaimlerChrysler participate in the Administration's Hydrogen 
Initiatives?

    As a member of the United States Council for Automotive Research 
(USCAR), DaimlerChrysler is a partner in the Department of Energy's 
(DOE) FreedomCAR and Fuel Partnership along with General Motors and 
Ford Motor Company, and BP America, ChevronTexaco Corporation, 
ConocoPhillips, Exxon Mobil Corporation, and Shell Hydrogen. The recent 
addition of these five major energy providers has strengthened the 
Partnership considerably, by providing expertise to solve the 
infrastructure challenges. DaimlerChrysler has also been working with 
the DOE since 1993 on advanced automotive technology research. We 
support the initiative as members on technical teams related to 
advanced automotive technology, including:

        --  Energy Storage

        --  Light Weight Materials

        --  Advanced Combustion

        --  Hydrogen Storage

        --  Fuel Cell

        --  Codes & Standards

        --  Electrical and Electronics

        --  Vehicle Systems Analysis

    Through these tech teams, we help develop priorities based on 
future needs and manage a portfolio of research projects directed at a 
set of Research Goals and Objectives. (See Figure 2: FreedomCAR and 
Fuel Partnership)
    We also are one of four recipients to participate in the DOE 
Hydrogen and Fleet Demonstration Project. By the end of 2005, we will 
have 30 vehicles located in three ecosystems (Southern California, 
Northern California, and Southeastern Michigan) and were the first OEM 
to provide valuable technical data to the DOE. (See Figure 3: DOE 
Hydrogen Fleet & Infrastructure Demonstration & Validation Project)

What criteria does DaimlerChrysler consider when making investment 
decisions regarding its portfolio of advanced vehicle research and 
development programs?

    DaimlerChrysler uses five factors of measurement to determine 
investment priorities in our advance technology portfolio. They are:

        --  Probability of Technical Success

        --  Probability of Commercial Success

        --  Value

        --  Business Strategy Fit, and

        --  Strategic Leverage

    (See Figure 4: Five Key Investment Factors)

What factors would induce DaimlerChrysler to invest more in the 
development of hydrogen-fueled vehicles?

    Several factors could contribute to inducing DaimlerChrysler to 
invest more in the development of hydrogen fueled vehicles. Key factors 
include:

        --  Significant technological advances in fuel cells and 
        hydrogen storage/production

        --  Major governmental policy support such as incentives, 
        regulatory shifts,

        --  Changes in consumer demand and competitive pressure

        --  Significant long-term increases in gasoline prices

What do you see as a probable timeline for the commercialization of 
hydrogen-fueled vehicles?

    The current technology is being evaluated in several fleet 
demonstration projects around the world. The largest is the DOE's 
program in the United States. These programs include a few hundred 
vehicles worldwide and several hydrogen fueling stations.
    DaimlerChrysler projects that the hydrogen fueled vehicle 
technologies will evolve in discreet phases driven be the following 
cadence of events:

        --  Breakthrough in basic research

        --  Bench/laboratory development

        --  ``On road'' testing and development

        --  Parallel manufacturing process development

    Within the next 4-6 years, we will enter another phase utilizing 
technologies that address some of the current deficiencies including 
durability, range, and cold start, as well as, lower cost. This phase 
will see vehicle numbers in the low thousands and the beginning of a 
local infrastructure to support them.
    The third phase will require significant vehicle technical 
breakthroughs in hydrogen storage, fuel cell cost, and a significantly 
expanded infrastructure. Technological breakthroughs are required in 
hydrogen storage and fuel cell technology (focused on cost & 
durability). DaimlerChrysler shares a commitment with our partners in 
USCAR effort to achieve these gains. It is a challenge to predict a 
definitive timeline for technological discovery. The vehicle fleet 
could grow to tens of thousands if significant shifts occur in the 
infrastructure and value to the consumer. The infrastructure must 
expand to a much larger scale beyond local support. This will be 
critical to support the freedom to travel that consumers will demand 
when we move from a market dominated by local ``fleet'' customers to 
the average consumer.
    High volume commercialization will require a highly distributed 
infrastructure capable of delivering cost competitive hydrogen and fuel 
cell powered vehicles that can compete with other fuel efficient 
technologies. It is likely that this will require continued government 
policy support for vehicle and fuel. (See Figure 5: DaimlerChrysler 
Fuel Cell Strategy)

What about the other advanced vehicle technologies DaimlerChrysler is 
currently developing, such as hybrid vehicles and advanced diesel 
engines?

    DaimlerChrysler is engaged in a broad range of advanced propulsion 
technologies. Fuel cell vehicles are a long-term focus of this 
technology portfolio, which also includes efficient gasoline engines, 
advanced diesels, and hybrid powertrain systems. (See Figure 6: 
DaimlerChrysler's Advanced Propulsion Technologies)
    DaimlerChrysler is focused on providing the market with the ability 
to select the advanced propulsion technology that best fits the needs 
of the individual customer. Each of the short-term technologies 
optimizes its benefit to the consumer in specific drive cycles (hybrid/
city, diesel/highway) and hence its value to the customer.
    DaimlerChrysler has developed and implemented technologies that 
improve the efficiency of the current gasoline propulsion system. We 
must continue to enhance the gasoline combustion propulsion system 
since it will be the dominant choice in the market for many years to 
come. We offer the Multi-Displacement System (MDS) available in the 
HEMI in seven Chrysler Group vehicles. MDS seamlessly alternates 
between smooth, high fuel economy four-cylinder mode when less power is 
needed and V-8 mode when more power from the 5.7L HEMI engine is in 
demand. The system yields up to 20 percent improved fuel economy.
    We are also working on further development of gasoline direct-
injection which considerably enhances fuel economy by closely 
monitoring fuel atomization.
    DaimlerChrysler offers four different diesel powertrains in the 
United States, not including heavy trucks. Advanced diesel technology 
offers up to 30 percent better fuel economy and 20 percent less 
CO2 emissions when compared to equivalent gasoline engines. 
The diesel provides maximum benefit in highway driving which for many 
customers is a daily occurrence. Advanced diesel is a technology that 
is available today and can help reduce our nation's dependency on 
foreign oil.
    Designing more engines to run on Biodiesel is a current objective 
at DaimlerChrysler. Biodiesel fuel reduces emissions of diesel 
vehicles, including carbon dioxide, and lowers petroleum consumption. 
Each Jeep Liberty Common Rail Diesel (CRD) built by DaimlerChrysler is 
delivered to customers running on B5 biodiesel fuel. Nationwide use of 
B2 fuel (two percent biodiesel) would replace 742 million gallons of 
gasoline per year, according to the National Biodiesel Board.
    DaimlerChrysler and GM have recently combined efforts to develop a 
two-mode hybrid drive system that surpasses the efficiency of today's 
hybrids. The partnership will cut development and system costs while 
giving customers an affordable hybrid alternative that improves fuel 
economy. The first use of the system will be in early 2008 with the 
Dodge Durango.

What do you see as the potential technology showstoppers for a hydrogen 
economy?

    The most significant technology showstoppers that DaimlerChrysler 
recognizes as challenging the viability of the hydrogen economy include 
fuel cell durability, on-board hydrogen storage and advanced battery 
durability performance. Though there are major efforts and investment 
being put into fuel cell development, the current systems have to make 
significant gains in life expectancy and extreme operating conditions 
that the average consumer will demand.
    No current on-board hydrogen storage system meets the FreedomCAR 
and Fuel Partnership targets for cost and performance. To meet customer 
expectations for driving range, a large amount of hydrogen is required 
to be stored on-board. Today's compressed hydrogen storage technology 
has limits in storage density which leads to a compromise in passenger 
compartment space in order to provide the driving range that consumer's 
enjoy today. Additionally, the current level of technology for high-
pressure storage tanks that are available has associated manufacturing 
processes that take multiple days per tank. The on-board hydrogen 
storage tank industry currently does not have the capacity to support 
even low-volume production levels. Alternative and novel methods of 
storing hydrogen on-board are critical to the hydrogen economy.
    While several advancements have been made in battery technology in 
recent years, the current level of technology does not support 
performance requirements for power, energy and durability. (See Figure 
7: Technology Showstoppers)
    In addition to the technology challenges identified above, the cost 
challenges are significant barriers. To realize large scale market 
penetration, we will have to approach the value that customers enjoy 
with current propulsion technologies.
    Even with a viable vehicle, the hydrogen economy will not become a 
reality without a highly distributed infrastructure. Our Energy 
Partners in the FreedomCAR and Fuel effort are committed to the 
research and technology development required to realize this goal. 
Industry and government will need to work together to develop an 
implementation plan with financial viability for all entities.

To what extent is DaimlerChrysler relying on government programs to 
help solve those technical challenges?

    DaimlerChrysler realizes that the technical challenges associated 
with moving towards the hydrogen economy are too great and too costly 
for any one company to solve. Therefore, we see a benefit in multiple 
companies working together with government in pre-competitive 
technology development. Due to the enormity of this transition, 
DaimlerChrysler actively participates in USCAR with Ford Motor Company 
and General Motors and in the FreedomCAR and Fuel Partnership along 
with the other USCAR members as well as the U.S. Department of Energy, 
BP America, ChevronTexaco Corporation, ConocoPhillips, Exxon Mobil 
Corporation and Shell Hydrogen. The research required to solve the 
technical challenges of the hydrogen economy is universally viewed as 
``high risk'' by industry. The research sponsored by DOE through the 
FreedomCAR and Fuel Partnership provides a forum to pull together some 
of the best minds and organizations involved in advancement of the 
hydrogen economy to help address that risk. The development of the 
hydrogen infrastructure must progress in parallel with fuel cell 
vehicle technologies. (See Figure 8: Technology Relationship Strategy)

How are automakers using, or how do they plan to use, the advanced 
vehicle technology developed for hydrogen-fueled vehicles to improve 
the performance of conventional vehicles?

    As stated earlier, DaimlerChrysler is working on a broad portfolio 
of technologies to improve the efficiency and environmental impact of 
transportation. In the short-term we continue to improve the internal 
combustion engine (ICE). In the mid-term we are developing hybrid 
vehicles utilizing electric drive systems, integrated power modules and 
advanced batteries. In the long-term fuel cell vehicles with on-board 
hydrogen storage from a national hydrogen infrastructure will emerge.
    The current portfolio of R&D within the DOE's FreedomCAR and Fuel 
Initiative is focused on the long-term hydrogen vision, but many of the 
technologies are useful and will mature in the shorter-term as 
transition technologies. Cost effective, light-weight materials can be 
applied to vehicles in the short-term to improve fuel efficiency 
regardless of the propulsion technology. Advanced energy storage and 
motors will benefit both hybrid and fuel cell vehicles. Novel 
approaches to hydrogen storage are uniquely required by hydrogen fueled 
vehicles, but can support stationary and portable applications in the 
industrial and consumer markets.
    It is important to advance and mature many of the aspects of the 
technology as early as possible. There are many challenges and 
breakthroughs needed to realize the President's vision of a ``Hydrogen 
Economy.''



                      Biography for Mark Chernoby

    Mark Chernoby is the Vice President of Advance Vehicle Engineering 
for the Chrysler Group Business Unit at DaimlerChrysler. In this 
position, he is responsible for engineering Chrysler Group products in 
the early stages of the program cycle, CAE, Crossfire programs, GEM 
operation and Government Collaborative Programs. He was promoted to 
this position in November, 2003.
    During his 19 years at Chrysler & DaimlerChrysler, Mark has worked 
in component, system, and full vehicle engineering. He worked in 
powertrain component and system engineering for the first nine years of 
his career. Mark then moved to full vehicle engineering managing the 
NVH development for Chrysler's products for a period of five years. 
Mark then had a position responsible for managing all of the functional 
requirements for a new line of large passenger cars. In has last 
position, Mark was responsible for the NVH, Crash, and Core Vehicle 
Dynamics of Chrysler Group Products.
    Mark graduated from Michigan State University in 1983 with a B.S. 
in Engineering, University of Michigan-Dearborn in 1985 with a M.S. in 
Engineering, and from the University of Michigan in 1990 with a MBA.

    Chairwoman Biggert. Thank you.
    Dr. Crabtree, you are recognized. Turn on your microphone, 
please.

   STATEMENT OF DR. GEORGE W. CRABTREE, DIRECTOR, MATERIALS 
         SCIENCE DIVISION, ARGONNE NATIONAL LABORATORY

    Dr. Crabtree. Is it working?
    Yes. Good. Thanks.
    Chairman Biggert, Chairman Inglis, Members of the Energy 
and Research Subcommittees, thank you for the opportunity to 
testify today and share my thoughts on the hydrogen economy.
    I will address the role of basic research in bringing the 
hydrogen economy to fruition. As background for my testimony, I 
would like to introduce into the record the report ``Basic 
Research Needs for the Hydrogen Economy'' based on the workshop 
held by the Department of Energy Office of Basic Energy 
Sciences. This report documents the vision of hydrogen as the 
fuel of the future and the scientific challenges that must be 
met to realize a vibrant and competitive hydrogen economy. 
(This information appears in Appendix 2: Additional Material 
for the Record.)
    The enormous appeal of hydrogen as a fuel is matched by an 
equally enormous set of critical scientific and engineering 
challenges. Currently, nearly all of the hydrogen we use is 
produced by reforming natural gas. In a mature hydrogen 
economy, this production route simply exchanges a dependence on 
foreign oil for a dependence on foreign gas, and it does not 
reduce the production of environmental pollutants or greenhouse 
gases. We must find carbon-neutral production routes for 
hydrogen with the capacity to displace a large percentage of 
our fossil fuel use.
    The most appealing route is splitting water renewably, 
because the supply of water is effectively inexhaustible, free 
of geopolitical constraints, and splitting it produces no 
greenhouse gases or pollutants. Although some routes for 
splitting water renewably are known, we do not know how to make 
them cost-effective, nor do we understand how to adapt them to 
a diversity of renewable energy sources. The onboard storage of 
hydrogen for transportation is the second critical basic 
science challenge. To allow a 300-mile driving range without 
compromising cargo and passenger space, we must store hydrogen 
at high density and with fast release times.
    Since the 1970s, over 2,000 hydrogen compounds have been 
examined for their storage capability. None have been found 
that meet the storage demands. This critical storage challenge 
cannot be met without significant basic research. We must 
better understand the interaction of hydrogen with materials 
and exploit this knowledge to design effective storage media.
    The critical challenges for fuel cells are cost, 
performance, and reliability. High cost arises from expensive 
catalysts and membrane materials. Performance is limited by the 
low chemical activity of catalysts and the ionic conductivity 
of membranes.
    Although catalysts have been known for centuries, we still 
do not understand why or how they work. Our approach to 
catalysis is largely empirical. We often find that the best 
catalysts are the most expensive metals, like platinum. The 
challenge is to understand catalysis on the molecular level and 
use that understanding to design low-cost, high-performance 
catalysts targeted for fuel cells.
    Membranes are another critical basic research challenge for 
fuel cells. Currently, fuel cells for transportation depend 
almost exclusively on one membrane: a carbon-fluorine polymer 
with sulfonic side chains. Our ability to design alternative 
membranes is limited by our poor understanding of their ion 
conduction mechanisms. Significant basic materials research is 
needed before practical new membrane materials can be found and 
developed.
    These three challenges are critical for the long-term 
success of the hydrogen economy: production of hydrogen by 
splitting water renewably, storage of hydrogen at high density 
with fast release times, and improved catalysts and membranes 
for fuel cells.
    For each of these challenges, incremental improvements in 
the present state-of-the-art will not produce a hydrogen 
economy that is competitive with fossil fuels. Revolutionary 
breakthroughs are needed of the kind that come only from high-
risk, high-payoff basic research.
    The outlook for achieving such breakthroughs is promising. 
The recent worldwide emphasis on nanoscience and nanotechnology 
opens up many new directions for hydrogen materials research. 
All of the critical challenges outlined above depend on 
understanding and manipulating hydrogen at the nanoscale. 
Nanoscience has given us new fabrication tools capable of 
creating molecular architectures of unprecedented complexity 
and functionality.
    The explosion of experimental techniques to probe matter at 
ever-smaller link scales and time scales brings new knowledge 
within our reach. Numerical simulations running on computer 
clusters of hundreds of nodes can model the atomic processes of 
water splitting, hydrogen storage and release, catalysis, and 
ion motion in membranes. These recent scientific developments 
set the stage for breakthroughs in hydrogen materials science 
needed for a mature, sustainable, and competitive hydrogen 
economy.
    Thank you.
    [The prepared statement of Dr. Crabtree follows:]

                Prepared Statement of George W. Crabtree

    Chairmen Biggert and Inglis, and Members of the Energy and Research 
Subcommittees, thank you for the opportunity to testify today and share 
my thoughts on the hydrogen economy. I will address the role of basic 
research in bringing the hydrogen economy to fruition. As background 
for my testimony, I would like to introduce into the record the report 
on ``Basic Research Needs for the Hydrogen Economy'' based on the 
Workshop held by the Department of Energy (DOE), Office of Basic Energy 
Sciences. This report documents the vision of hydrogen as the fuel of 
the future, and the scientific challenges that must be met to realize a 
vibrant and competitive hydrogen economy.
    Let me start my testimony by recalling the energy challenges that 
motivate the transition to a hydrogen economy. Our dependence on fossil 
fuel requires that much of our energy come from foreign sources; 
securing our energy supply for the future demands that we develop 
domestic energy sources. Continued use of fossil fuels produces local 
and regional pollution that threatens the quality of our environment 
and the health of our citizens. Finally, fossil fuels produce 
greenhouse gases like carbon dioxide that threaten our climate with 
global warming.
    Hydrogen as a fuel addresses all of these issues: it is found 
abundantly in compounds like water that are widely accessible without 
geopolitical constraints, it produces no pollutants or greenhouse gases 
as byproducts of its use, and it converts readily to heat through 
combustion and to electricity through fuel cells that couple seamlessly 
to our existing energy networks.

Critical Challenges: Production

    The enormous appeal of hydrogen as a fuel is matched by an equally 
enormous set of critical scientific and engineering challenges. Unlike 
fossil fuels, hydrogen does not occur naturally in the environment. 
Instead, hydrogen must be produced from natural resources like fossil 
fuels, biomass or water. Currently nearly all the hydrogen we use is 
produced by reforming natural gas. To power cars and light trucks in 
the coming decades we will need 10 to 15 times the amount of hydrogen 
we now produce. This hydrogen cannot continue to come from natural gas, 
as that production route simply exchanges a dependence on foreign oil 
for a dependence on foreign gas, and it does not reduce the production 
of environmental pollutants or greenhouse gases. We must find carbon-
neutral production routes for hydrogen. The most appealing route is 
splitting water renewably, because the supply of water is effectively 
inexhaustible and splitting it produces no greenhouse gases or 
pollutants. Although some routes for splitting water renewably are 
known, we do not know how to make them cost-effective, nor do we know 
how to adapt them to a diversity of renewable energy sources. Splitting 
water renewably is a critical basic science challenge that must be 
addressed if the hydrogen economy is to achieve its long-term goals of 
replacing fossil fuels, reducing our dependence on foreign energy 
sources, and eliminating the emission of pollution and greenhouse 
gases.

Critical Challenges: Storage

    The on-board storage of hydrogen for transportation is a second 
critical basic science challenge. To allow a 300-mile driving range 
without compromising cargo and passenger space, we must store hydrogen 
at densities higher than that of liquid hydrogen. This may seem a 
daunting task, but in fact there are a host of materials where hydrogen 
combines with other elements at densities 50 percent to 100 percent 
higher than that of liquid hydrogen. Since the 1970s over two thousand 
hydrogen compounds have been examined for their storage capability; 
none has been found that meet the storage demands. The challenge is to 
satisfy two conflicting requirements: high storage capacity and fast 
release times. High hydrogen capacity requires close packing and strong 
chemical bonding of hydrogen, while fast release requires loose packing 
and weak bonding for high hydrogen mobility. This critical storage 
challenge cannot be met without significant basic research: we must 
better understand the interaction of hydrogen with materials and 
exploit this knowledge to design effective storage media.

Critical Challenges: Fuel Cells

    The use of hydrogen in fuel cells presents a third critical 
scientific challenge. Fuel cells are by far the most appealing energy 
conversion devices we know of. They convert the chemical energy of 
hydrogen or other fuels directly to electricity without intermediate 
steps of combustion or mechanical rotation of a turbine. Their high 
efficiency, up to 60 percent or more, is a major advantage compared to 
traditional conversion routes like gasoline engines with about 25 
percent efficiency. The combination of hydrogen, fuel cells, and 
electric motors has the potential to replace many of our much less 
efficient energy conversion systems that are based on combustion of 
fossil fuels driving heat engines for producing electricity or 
mechanical motion.
    The critical challenges for fuel cells are cost, performance and 
reliability. High cost arises from expensive catalysts and membrane 
materials; performance is limited by the low chemical activity of 
catalysts and ionic conductivity of membranes; and reliability depends 
on effective design and integration of the component parts of the fuel 
cell. Although catalysts have been known for centuries, we still do not 
understand why or how they work. Our approach to catalysts is largely 
empirical; we often find that the best catalysts are the most expensive 
metals like platinum. Nature, by contrast, uses inexpensive manganese 
to split water in green plants and abundant iron to create molecular 
hydrogen from protons and electrons in bacteria. These natural examples 
show that cheaper, more effective catalysts can be found. The challenge 
is to understand catalysis on the molecular level and use that 
understanding to design low cost, high performance catalysts targeted 
for fuel cells.
    Membranes are another critical basic research challenge for fuel 
cells. Currently fuel cells for transportation depend almost 
exclusively on one membrane, a carbon-fluorine polymer with sulfonic 
side chains. While this membrane is an adequate ion conductor, it 
requires a carefully managed water environment and it limits the 
operating temperature of the fuel cell to below the boiling point of 
water. We need new classes of membrane materials that will outperform 
the one choice currently available. Our ability to design alternative 
membranes is limited by our poor understanding of their ion conduction 
mechanisms. Significant basic materials research is needed before 
practical new membrane materials can be found and developed.

Meeting the Challenges: Basic Research

    The three challenges outlined above are critical for the success of 
a hydrogen economy:

          Production of hydrogen by splitting water renewably;

          Storage of hydrogen at high density with fast release 
        times; and

          Improved catalysts and membranes for fuel cells.

    For each of these challenges, incremental improvements in the 
present state-of-the-art will not produce a hydrogen economy that is 
competitive with fossil fuels. Revolutionary breakthroughs are needed, 
of the kind that come only from high-risk/high-payoff basic research.
    The outlook for achieving such breakthroughs is promising. The 
recent worldwide emphasis on nanoscience and nanotechnology opens up 
many new directions for hydrogen materials research. All of the 
critical challenges outlined above depend on understanding and 
manipulating hydrogen at the nanoscale. Nanoscience has given us new 
fabrication tools, through top-down lithography and bottom-up self-
assembly, that can create molecular architectures of unprecedented 
complexity and functionality. The explosion of bench-top scanning 
probes and the development of high intensity sources of electrons, 
neutrons and x-rays for advanced materials research at DOE's user 
facilities at Argonne and other national laboratories brings new 
physical phenomena at ever smaller length and time scales within our 
reach. Numerical simulations using density functional theory and 
running on computer clusters of hundreds of nodes can now model the 
processes of water splitting, hydrogen storage and release, catalysis 
and ionic conduction in membranes. These scientific developments set 
the stage for the breakthroughs in hydrogen materials science needed 
for a vibrant and competitive hydrogen economy.
    Significant progress in basic research for the hydrogen economy is 
already occurring. Basic research on catalysis for fuel cells published 
in 2005 revealed that a single atomic layer of platinum on certain 
metal substrates has more catalytic power than the best catalysts now 
in use; this discovery could significantly reduce the cost and enhance 
the performance of fuel cells. A new route for splitting water using 
sunlight was created with the self-assembly of porphyrin nanotubes 
decorated with gold and platinum nanoparticles. These tiny nanoscale 
composites have already demonstrated water splitting driven by solar 
radiation, and they minimize manufacturing cost through their ability 
to self-assemble. Models of hydrogen storage compounds using density 
functional theory now predict the density of hydrogen and strength of 
its binding with unparalleled accuracy. This permits an extensive 
theoretical survey of potential storage materials, many more than could 
be practicably fabricated and tested in the laboratory.

Conclusion

    The vision of the hydrogen economy as a solution to foreign energy 
dependence, environmental pollution and greenhouse gas emission is 
compelling. The enormous challenges on the road to achieving this 
vision can be addressed with innovative high-risk/high-payoff basic 
research. The great contribution of basic research to society is the 
discovery of entirely new approaches to our pressing needs. The 
phenomenal advances in personal computing enabled by semiconductor 
materials science and their impact in every sphere of human activity 
illustrates the power of basic science to drive technology and enhance 
our daily lives. The challenges for the hydrogen economy in production, 
storage and use are known. Recent developments in nanoscience, in high 
intensity sources for scattering of electrons, neutrons and x-rays from 
materials at DOE's user facilities, and in numerical simulation using 
density functional theory open promising new directions for basic 
research to address the hydrogen challenges. The breakthroughs that 
basic research produces in hydrogen materials science will enable the 
realization of a mature, sustainable, and competitive hydrogen economy.
    Thank you, and I will be happy to answer questions.

                    Biography for George W. Crabtree

    George Crabtree is a Senior Scientist at Argonne National 
Laboratory and Director of its Materials Science Division. He holds a 
Ph.D. in Condensed Matter Physics from the University of Illinois at 
Chicago, specializing in the electronic properties of metals. He has 
won numerous awards, most recently the Kammerlingh Onnes Prize for his 
work on the properties of vortices in high temperature superconductors. 
This prestigious prize is awarded only once every three years; Dr. 
Crabtree is its second recipient. He has won the University of Chicago 
Award for Distinguished Performance at Argonne twice, and the U.S. 
Department of Energy's Award for Outstanding Scientific Accomplishment 
in Solid State Physics four times, a notable accomplishment. He has an 
R&D 100 Award for his pioneering development of Magnetic Flux Imaging 
Systems, is a Fellow of the American Physical Society, and is a charter 
member of ISI's compilation of Highly Cited Researchers in Physics.
    Dr. Crabtree has served as Chairman of the Division of Condensed 
Matter of the American Physical Society, as a Founding Editor of the 
scientific journal Physica C, as a Divisional Associate Editor of 
Physical Review Letters, as Chair of the Advisory Committee for the 
National Magnet Laboratory in Tallahassee, Florida, and as Editor of 
several review issues of Physica C devoted to superconductivity. He has 
published more than 400 papers in leading scientific journals, and 
given approximately 100 invited talks at national and international 
scientific conferences. His research interests include materials 
science, nanoscale superconductors and magnets, vortex matter in 
superconductors, and highly correlated electrons in metals. Most 
recently he served as Associate Chair of the Workshop on Basic Research 
Needs for the Hydrogen Economy organized by the Department of Energy's 
Office of Basic Energy Sciences, which is the subject of this hearing.

    Chairwoman Biggert. Thank you very much, Dr. Crabtree.
    Dr. Heywood, you are recognized for five minutes.

 STATEMENT OF DR. JOHN B. HEYWOOD, DIRECTOR, SLOAN AUTOMOTIVE 
       LABORATORY, MASSACHUSETTS INSTITUTE OF TECHNOLOGY

    Dr. Heywood. It is a pleasure to be here to testify before 
you this morning.
    This hearing is focused on hydrogen. I want to spend a 
couple of minutes developing my understanding of the context 
within which we ought to think about hydrogen. And that--the 
critical part of that context is that our U.S. transportation 
systems' petroleum consumption, first of all, is so large that 
it is almost beyond our comprehension, and that makes changing 
what we do extraordinarily difficult. And that consumption is 
growing at a significant rate. The consumption is already 
large. Twenty-five years from now, it is projected to be 60 
percent higher. Fifty years from now, it is expected to be 
twice what it is today.
    What are our options for dealing with this in a broader way 
before we focus on hydrogen? And I find it useful to talk about 
this in two ways, to say there are two pars that we should be 
pursuing aggressively.
    And the first of these is to improve the performance of our 
mainstream internal combustion engines, transmissions, other 
vehicle components step by step, and there is a lot of 
potential for doing that. The challenge is, it costs more, so 
the price goes up. It goes up a bit if the improvement is 
small. It goes up more if the improvements are larger. Hybrid 
vehicle technology is a clear example of that. And to date, the 
response of the market to somewhat higher cost but more 
efficient vehicles has not been to reduce fuel consumption. It 
has largely been traded for higher vehicle--larger vehicle 
size, higher vehicle weight, and better vehicle performance.
    We need to do something with a sense of urgency to reduce 
our petroleum consumption through these mainstream technology 
improvements, and we need to reinforce that more broadly within 
the government by developing a combination of fiscal and 
regulatory strategies to raise the importance of vehicle fuel 
consumption in the marketplace so that vehicle buyers and 
vehicle users are much more aware of their fuel consumption, 
what it costs them, and what it costs the Nation more broadly.
    Now the second path relates to the longer-term, because 
even with improvements in mainstream technology, without 
drastic changes in our technology and our vehicles, we will 
still be dependent on petroleum-like fuels, and the greenhouse 
gas emissions that come from our transportation sector will 
still be significant. If we want to get to much lower energy 
consumption, recognizing that the availability of petroleum is 
going to decline as this century progresses, we need approaches 
like hydrogen and fuel cell technology to make--to take the 
next step.
    But our challenge is that big changes in technology, 
whether it be to hydrogen and fuel cells or to advanced 
batteries and electricity as the energy carrier, take a long 
time to have an impact. Yes, we have hydrogen vehicles out 
there, a limited number already driving around, they cost in 
the order of $1 million each. In 10 or 15 years, there will be 
trial fleets, prototypes of what these technologies could be, 
but the costs will still be substantially above what 
conventional vehicle costs are.
    Our own estimates are that to look at when hydrogen and 
fuel cells could have a noticeable impact on transportation's 
energy consumption, we judge that to be at least 40 or 50 years 
away. That is much longer than most people are willing to 
acknowledge. And the reason is that most people leave out the 
time required to build up production facilities for any new 
technology so that it is both sold and then out there in the 
in-use vehicle fleet in sufficient quantities driving around to 
have an impact on transportation's energy consumption.
    Let me comment more specifically for a couple of minutes on 
the government programs that you are here reviewing today.
    I think it is important that we have major programs 
developing hydrogen technology and ideas and the technology 
needed for a hydrogen infrastructure. But there are 
alternatives. Hydrogen--success with hydrogen is not 
guaranteed, and there are alternatives that we are investing in 
but not with the same sense of commitment and urgency. One is 
electric vehicles using electricity as the energy carrier, and 
the critical technology there is advanced energy storage 
batteries. Another is producing fuels from biomass in energy-
efficient ways. Yes, we have programs designed to develop those 
technologies, but that could be a very important contributor on 
this longer-term time scale, and we don't understand how we can 
best do that yet nor what the environmental impacts could well 
be.
    And then we have to think seriously about very different 
vehicle concepts. I think we have really got to give up on the 
``living room on wheels'' current American vehicle. It has got 
to be a lot smaller ``living room'' with much smaller 
``furniture'' in it, because it has to be much lighter, because 
we cannot continue on this transportation energy growth path 
that we are now on. And that will take inventiveness in vehicle 
concepts as well as new materials and new fabrication and 
assembly processes.
    All of these need strong emphasis. The future may not be 
hydrogen alone. It may be hydrogen plus electricity plus 
biofuels plus very different vehicle concepts as we move into 
the middle of this century. And it is our government's 
responsibility to invest in the R&D that examines these options 
and starts to pull them into real life where they could make a 
contribution.
    Let me end by saying that I think our Department of Energy 
hydrogen program is a substantial program. It is well 
organized. The DOE people managing this program interact 
strongly with the auto and energy industries. All of that is 
essential to producing a good research and advanced development 
agenda. There is also a strong strategic plan and vision behind 
that and a concrete set of milestones and deliverables that 
make this, I think, a very appropriate program on hydrogen.
    But our programs that are dealing with improving mainstream 
technology, engines, transmissions, and other vehicle 
components, new materials for vehicles, we have these programs, 
but they don't have the same scope and intensity, nor do our 
efforts on advanced batteries. And I offer for your 
consideration the need to build these other programs up to the 
point where they are much more aggressively pursuing these 
parallel opportunities to hydrogen.
    Thank you.
    [The prepared statement of Dr. Heywood follows:]

                 Prepared Statement of John B. Heywood

    It is a pleasure to testify before your committee today on meeting 
the future energy needs of our U.S. transportation system. I have been 
working in this area at MIT for the past 37 years doing technical 
research and broader strategic analysis on how to reduce the 
environmental impacts and fuel consumption of our transportation 
vehicles. Summaries of our groups' relevant recent studies are attached 
to this testimony.
    Our work, and that of others, looking ahead some 10-30 years 
underlines how important it is that we in the U.S. aggressively pursue 
two parallel paths related to transportation energy and greenhouse gas 
emissions. By we, I mean the relevant people in the government, the 
auto and petroleum industries, the R&D community, and the broader car 
buying and car using public.
    The two paths are:

        1.  Working effectively to improve current engine and 
        drivetrain technologies, reduce vehicle weight and drag so we 
        significantly reduce vehicle fuel consumption, and to provide 
        incentives to individual light-duty vehicle owners and users to 
        buy such improved technology vehicles and drive them less.

        2.  Developing the framework and knowledge base for an eventual 
        transition to transportation energy sources, vehicle 
        technologies, and energy consumption rates that offset the 
        expected declining availability and rising cost of petroleum-
        based fuels, and which on a well-to-wheels and cradle-to-grave 
        basis have low greenhouse gas emissions. This future 
        transportation energy carrier could be hydrogen, it could 
        include electricity, and in part it could be biomass derived 
        fuels.

    It is very much in our national interest to pursue both these paths 
aggressively, and with a real sense of urgency. The only feasible way 
to impact our steadily growing U.S. petroleum imports and consumption 
within the next twenty-five years is through reducing the fuel 
consumption of our U.S. transportation fleet. There are many ways to 
improve current vehicle technology to increase efficiency, but for most 
of these, the initial vehicle cost goes up by more than past experience 
indicates this consumer market will support. There is a strong need, 
therefore, for the U.S. Government to provide incentives to all the 
involved stakeholders (including consumers), as soon as possible, to 
``pull and push'' this technology into the marketplace and ensure it is 
used. I will discuss some of my MIT groups' work on this shortly. 
However, even these actions will not result in much lower petroleum 
consumption and very low greenhouse gas emissions from the U.S. light-
duty fleet. The importance of these actions is that given the size of 
our vehicle fleet (some 230 million light-duty vehicle), this is the 
only way to get off the projected growth from today's light-duty 
vehicle fleets consumption of 140 billion gallons of gasoline a year 
(an enormous amount!) to some 1.6 times that (220 billion gallons per 
year) twenty-five years from now. Whether petroleum resources are 
available to allow this growth is unclear. While it is likely that 
``unconventional petroleum'' such as gasoline and diesel like fuels 
made from tar sands, natural gas, and biomass, will increase their 
contribution, it will still be modest compared to this projected 25-
year ahead total.
    Thus the primary driver for this first path is to reduce the impact 
that higher petroleum prices, petroleum availability concerns and 
shortages, and rising negative balance of payment issues could have on 
our security, economy, and way of life.
    In addition, however, success along this first path will have a 
significant enabling impact on the second path. It is anticipated by 
many that by mid-century we will need (in the U.S. and elsewhere) to be 
on a transition path to much lower vehicle fleet greenhouse gas 
emissions. If the transportation energy demand in the U.S. at mid-
century is as large as many current projections now indicate, then that 
transition task due to its size, technological difficulty, and likely 
cost is unbelievably challenging. We are now starting to learn just how 
challenging that will be. If through improved efficiency and 
conservation we in the U.S. have cut that energy transition challenge 
in half, just think how large a difference that will make.
    It will not be easy to ``cut the challenge in half.'' Over the last 
20-30 years, consumers have bought larger and heavier vehicles, with 
higher performance, and have thus negated the roughly 30 percent 
improvement in vehicle fuel efficiency that improvements in engine and 
transmission efficiencies, reduced drag, and materials substitution 
have realized. A coordinated set of government actions will be needed 
to provide the push and pull to realize in-use fuel consumption 
benefits from future improvements. My group has been analyzing such a 
coordinated regulatory and fiscal approach. Our assessment is that an 
integrated multi-strategy approach has the best chance of realizing our 
objectives, since it shares the responsibility even handedly amongst 
the major stakeholders--industry and consumers, and each strategy 
reinforces the others. Gains only will come if we tackle all aspects of 
the problem simultaneously. Our proposal is to combine on improved 
version of CAFE regulations to push more fuel-efficient technology into 
new vehicles with a reinforcing feebate system imposed at time of 
vehicle purchase (substantial fees for purchasers who buy high fuel-
consuming vehicles and rebates for those who buy low fuel consuming 
vehicles). Such a feebate system could be revenue neutral. To reinforce 
more fuel-efficient choices at vehicle purchase, taxes on 
transportation fuels should be steadily increased year by year for the 
next few decades by some 10 cents per gallon per year. These additional 
fuel taxes could be used to expand the now depleted Highway Trust Fund 
revenues to renovate our deteriorating highway systems and provide 
adequate maintenance. On the fuel side, in parallel, targets and a 
schedule could usefully be set for steadily increasing the amount of 
low greenhouse gas emitting biomass-based transportation fuels produced 
to augment our petroleum-based fuel supply. This would draw the 
petroleum and alternative fuel industries fully into our national 
effort. Details of our proposal area given in the attached MIT Energy 
and Environment article, ``A Multipronged Approach to Curbing Gasoline 
Use'' June, 2004, and its Bandivadekar and Heywood reference. Such a 
multi-strategy approach could also provide a transition period so major 
U.S. market suppliers with different model lineups, and health care and 
pension legacy costs, would have time to respond appropriately.
    Now let me say a few words about the second and longer-term path--
working to implement a low greenhouse gas emitting energy stream for 
transportation. It may be that hydrogen will turn out to be the best of 
the low greenhouse gas emitting choices we have identified to date. 
There are, however, other options that warrant substantial federal and 
industry R&D. The time scales for radical changes in technology to be 
implemented and have impact are long, much longer than we realize. My 
group at MIT is working hard to understand these important time scales 
better. There are several sequential steps that a new automotive 
technology must go through before that technology becomes a large 
enough fraction of the on-the-road vehicle fleet to make a difference. 
The first step is developing the new technology to the point where it 
is competitive in the marketplace with standard technology vehicles. 
While more expensive new-technology more-efficient vehicles can be 
subsidized, this can only be done to push their introduction up to 
modest levels. Once market competitive, the production volumes of the 
new technology components must expand to a significant fraction of 
total new vehicle production. For engines, for example, this takes one 
to two decades. For fuel cell hybrid vehicles we estimate this to be 
20-30 years. Then the new technology must penetrate the in-use vehicle 
fleet and be driven significant mileage, which takes almost as long as 
the production expansion step. Thus for internal combustion engine 
hybrids the total time to noticeable impact is expected to be some 30-
plus years. For hydrogen and fuel-cell hybrids it is likely to be more 
than 50 years. Hence my emphasis on the first path for nearer-term 
improvements, and my judgment that any transition to hydrogen on a 
large scale is many decades away. (See MIT Energy & Environment 
article, ``New Vehicle Technologies: How Soon Can They Make a 
Difference,'' March, 2005, attached).
    Now, some comments on a transition to hydrogen-fueled vehicles. 
First, the rationale for attempting such a transition is to 
significantly reduce greenhouse gas emissions from our transportation 
systems in the longer-term. Thus the source of the energy used to 
produce hydrogen is critical. It would have to be either coal or 
natural gas with effective carbon capture and sequestration, or nuclear 
power systems which generate both hydrogen and electricity. 
Electrolysis of water with ``renewable electricity'' from solar or wind 
energy does not appear a plausible way to produce hydrogen; it makes 
much more sense to use renewable electricity to displace coal in the 
electric power generating sector. Thus not only are there major 
hydrogen fuel cell technology issues (including cost) to be resolved, 
there are also major technical and cost challenges in the production, 
distribution and storage of hydrogen to be resolved as well. Hydrogen 
produced directly from fossil fuels without carbon sequestration, or 
from the electric power grid via electrolysis, even when used in fuel 
cell powered vehicles (which could be significantly more efficient than 
internal combustion engine powered vehicles), will not save energy nor 
reduce greenhouse gases.
    Are there alternatives that warrant greater federal resources? The 
above discussion suggests that electric vehicles with advanced high-
energy-density batteries recharged with electricity from renewable or 
low CO2 electric power systems is one at least partial 
alternative. Such vehicles would be range limited, but if that range is 
more than say 200 miles these could be a substantial fraction of the 
market. Efficiently produced biofuels can also be low net CO2 
emitting and the extent these can contribute is not yet clear. New, 
much lighter weight, vehicle concepts, may be significantly smaller in 
size, are also likely to be a significant and necessary long-term 
option. All of these should be important parts of the U.S. Government's 
R&D transportation energy initiatives. While they are part of the 
Government's current portfolio, the level of funding, strategic 
planning, and industry and R&D community involvement should be 
increased.
    Our longer-term list of plausible efficient vehicle technologies 
and the energy sources that go with them is too short, and the 
difficulties in realizing these options in the real world are so 
challenging, that a much larger federal effort on this second path I 
have been discussing is warranted.
    The above discussion broadly to addresses the first two questions 
asked in the Committee's letter requesting testimony. Let me now 
provide a more focused summary of my response.

Question 1: How might the future regulatory environment, including 
possible incentives for advanced vehicles and regulations of safety and 
emissions, affect a transition to hydrogen-fueled motor vehicles? How 
could the Federal Government most efficiently accelerate such a 
transition?

    I have explained how important it is for the U.S. Federal 
Government through regulatory and fiscal policies to reduce the energy 
requirements of our total transportation system. Not only would this 
help reduce our petroleum consumption and thus our oil imports in the 
nearer-term; it would also make the task of a future hydrogen 
transition (or more complex mix of low greenhouse gas emitting energy 
sources and technologies) significantly less challenging.

Question 2: Is the current balance of funding between hydrogen-related 
research and research on advanced vehicle technologies that might be 
deployed in the interim before a possible transition to hydrogen 
appropriate? What advanced vehicle choices should the Federal 
Government be funding between now and when the transition to a hydrogen 
economy occurs? How are automakers using, or how do they plan to use, 
the advanced vehicle technology developed for hydrogen-fueled vehicles 
to improve the performance of conventional vehicles? Are automakers 
likely to improve fuel economy and introduce advanced vehicles without 
government support?

    The government's FreedomCAR and Fuels program is a thoughtfully 
structured program of significant scale intended to advanced hydrogen 
fuel and vehicle technologies. It is a partnership between DOE, Ford, 
DaimlerChrysler, GM and several petroleum companies. Its focus is on 
applied research with some pre-competitive advanced development. The 
program plan has had, and continues to have, substantial industry 
input. DOE cost shares major advanced development projects with the 
auto companies. The companies involved have substantial programs of 
their own in these areas, though the details of these programs are 
largely proprietary. This program approach in my judgment does a 
reasonable job of using federal funds to encourage the necessary 
development of new and better ideas, and new knowledge related to 
hydrogen and its use in transportation.
    The FreedomCAR and Fuels Program also supports activities intended 
to improve the efficiency of mainstream engine and propulsion system 
technologies. Given the importance of the first pathway I have 
described, this federal effort should be expanded. Also, efforts on 
advanced battery research and development, and biofuels should be 
expanded to better meet their potential importance in the longer-term. 
The Federal Government must play the role of supporting a broad 
portfolio of research relevant to transportation energy and 
transportations greenhouse gas emissions and involve all sectors of the 
R&D community that can contribute. Our universities, the source of the 
technical leadership we will need over the next several decades, must 
be more actively involved.

Question 3: What role should the Federal Government play in the 
standardization of local and international codes and standards that 
affect hydrogen-fueled vehicles, such as building, safety, 
interconnection, and fire codes?

    I have not addressed this question directly. Due to the long time 
scales involved in any transition to hydrogen or other new 
technologies, this is not as urgent a task as is technology 
development. However, as is already happening in the FreedomCAR and 
Fuels Program, work on these issues should be underway with the 
relevant Standards and Codes organizations, and with the industries 
involved.

Attachments

    Three articles from MIT's Laboratory for Energy and the Environment 
publication ``Energy & Environment'':

        1.  ``Vehicles and Fuels for 2020: Assessing the Hydrogen Fuel-
        Cell Vehicle,'' March, 2003.

        2.  ``A Multipronged Approach to Curbing Gasoline Use,'' June, 
        2004.

        3.  ``New Vehicle Technologies: How Soon Can They Make a 
        Difference?'' March, 2005.
        
        
        
                     Biography for John B. Heywood

    Professor Heywood did his undergraduate work in Mechanical 
Engineering at Cambridge University and his graduate work at MIT. He 
then worked for the British Central Electricity Generating Board on 
magnetohydrodynamic power generation. Since 1968 he has been on the 
faculty in Mechanical Engineering Department at MIT, where is he now 
Director of the Sloan Automotive Laboratory and Sun Jae Professor of 
Mechanical Engineering. His current research is focused on the 
operating, combustion and emissions characteristics of internal 
combustion engines and their fuels requirements. He is involved in 
studies of automotive technology and the impact of regulation. He has 
also worked on issues relating to engine design in MIT's Leaders for 
Manufacturing Program; he was Engineering Co-Director of the Program 
from 1991-1993. He is currently involved in studies of future road 
transportation technology and fuels. He has published some 180 papers 
in the technical literature and has won several awards for his research 
publications. He holds a Sc.D. degree from Cambridge University for his 
published research contributions. He is a author of a major text and 
professional reference ``Internal Combustion Engine Fundamentals,'' and 
co-author with Professor Sher of ``The Two-Stroke Cycle Engine: Its 
Development, Operation, and Design.'' From 1992-1997 he led MIT's 
Mechanical Engineering Department's efforts to develop and introduce a 
new undergraduate curriculum. In 1982 he was elected a Fellow of the 
Society of Automotive Engineers. He was honored by the 1996 U.S. 
Department of Transportation National Award for the Advancement of 
Motor Vehicle Research and Development. He is a consultant to the U.S. 
Government and a number of industrial organizations. He was elected to 
membership in the National Academy of Engineering in 1998. In 1999, 
Chalmers University of Technology awarded him the degree of Doctor of 
Technology honoris causa. He was elected a Fellow of the American 
Academy of Arts and Sciences in 2001. He is now directing MIT's 
Mechanical Engineering Department's Center for 21s' Century Energy 
which is developing a broader set of energy research initiatives. In 
January 2003, Professor Heywood was appointed Co-Director of the Ford-
MIT Alliance. In 2004, City University, London, awarded him the degree 
of Doctor of Science, honoris causa.

                               Discussion

    Chairwoman Biggert. Thank you very much, Dr. Heywood. And 
thank you to all of the panelists.
    We will now move to Member questions.
    And I will yield myself five minutes.
    I had the opportunity to drive a hydrogen car about a month 
ago, and we are going to have to change all our terminology. 
You don't have a gearshift. You just push a button for drive. 
You can't step on the gas. I don't know how we are going to get 
used to saying ``stepping on the hydrogen'' or something. It 
just doesn't seem to fit as well. But it was quite an 
experience. And then opening the hood and being able to put 
your hand on the engine and it is not hot, it is cool. It is--
it must be energy efficient. But I understand that they are 
talking about it being within the next decade that this might 
be coming out.
    But my question really goes to the development of the fuel 
and how that is going to be. And I think it was Dr. Bodde that 
mentioned that the type of hydrogen that would be used. I 
understood from that that it was either--the car that I was 
driving was liquid hydrogen, which was stored under the back 
seat. And then they--but they haven't decided whether 
compressed hydrogen or liquid would be something that would be 
used. I--this was a GM car. Sorry. But I know you are all 
working together. But--and then it can be filled right from 
the--again, it couldn't be called a gas pump. We would have to 
change to the hydrogen pump or whatever. But are we really that 
close? It seemed that they hadn't--at least this--and I am--and 
from all of your testimony, I see that there hasn't been a 
decision yet, but it seemed to me between liquid and compressed 
or whatever we might find. It is kind of like beta versus VHS. 
You know, which is going to be the way to go, because will this 
be made, you know, on an industry-wide basis with the research 
from--on the FreedomCAR? How are we--who is making those 
decisions, and how is this all integrated with the Department 
of Energy and the basic research?
    So whoever would like to answer that. Mr. Faulkner.
    Mr. Faulkner. Well, I could start, and some of my 
colleagues can fill in.
    I think the timeline that we are working on with our 
industry partners is 2015 for a commercialization decision. The 
Department of Energy, the government, doesn't make these 
vehicles, doesn't make the fuels. We work on research and 
development to help them, our private sector partners, make 
these decisions. So looking at that time scale, roughly 2015, 
start to make the entry point in the market about 2020. There 
are some cars on the road. You have driven them, I have driven 
them. But they are not cost-effective yet. There are technology 
issues we have to sort through, but that is the time scale we 
are on, and every year, we are progressing closer to that.
    Chairwoman Biggert. Any other comments?
    Dr. Crabtree. Yes.
    Chairwoman Biggert. Dr. Crabtree.
    Dr. Crabtree. You mentioned two alternatives: liquid or 
compressed gas. I think both of those have deficiencies that, 
in the long-term, really won't give us the driving range that 
we need. What we need to do is find a way to store hydrogen as 
part of a solid material as a hydrogen compound. And that is 
the thing that, really, we can't do yet. If you look at what we 
could do in the next five years, we could do either liquid 
storage or gas storage, but we really don't know how to go 
solid-state storage, and that is the one--that is the area that 
we need to do if we are going to have a long-time, long-term 
impact.
    So this really is a basic research issue.
    Chairwoman Biggert. Okay.
    Dr. Bodde.
    Dr. Bodde. Let me say that I concur with that completely.
    We know perfectly well how to compress hydrogen now. The 
issue, though, is what is going to become of an automobile that 
is given the casual maintenance that our cars do and that is 
fueled by a compressed gas at 10,000 p.s.i. for the lightest 
element on the Earth? Now as we all sit here in this hearing 
room, if your car is doing what my car is doing, it is out in 
the parking lot dripping atmospheric pressure fluids onto the 
paving. Imagine what would happen if it were a very high 
compressed tank of hydrogen.
    So I think for demonstration fleets, that will work fine. 
In order to pioneer the opening of the technology, it will work 
just fine. But for the long-term effective hydrogen economy, I 
agree with Dr. Crabtree. I think we have to have some form of 
solid-state storage or some form of that near atmospheric 
pressure storage.
    Chairwoman Biggert. Dr. Heywood.
    Dr. Heywood. Let me broaden that and say that this is one 
of many areas where we are learning that what we have today is 
fantastic. Gasoline and diesel fuel have an extraordinarily 
high energy density, lots of energy per unit volume, or mass, 
and they are liquids. And we are struggling mightily, and we 
will need new ideas and research to explore those ideas before 
we can make gaseous fuels, like hydrogen, manageable in 
anywhere near the same way.
    Chairwoman Biggert. Thank you. Thank you.
    Mr. Chernoby.
    Mr. Chernoby. Just in closing, I would agree with the 
comments of all of my colleagues here.
    At DaimlerChrysler, we do believe that compressed hydrogen 
is probably the near-term alternative for limited fleet use, 
but in the long-term, we absolutely must provide the customer 
with a range. We absolutely must provide them with the space, 
as Dr. Heywood said earlier, that they enjoy in their moving 
``living room,'' and that is going to require something 
different than compressed hydrogen, and we do not think that 
liquid, at this point, from what we see, is the answer. There 
has to be basic research to find something else that is going 
to find something that is going to satisfy all of those needs.
    Chairwoman Biggert. So it really will be a conglomerate 
that will make this--everyone will probably be on the same 
track because of the necessity when we find the right type of 
fuel?
    Dr. Crabtree. It is interesting, if you look at what is--
what the commercial options are now that--the demonstration 
fleets, some are liquid, some are gas. Each one has their own 
proponents. Not too many are solid-state. That is the one, I 
think, that has to come.
    Chairwoman Biggert. Thank you.
    Going back and forth, Mr. Carnahan, would you be ready, or 
should we have one more question from the other side of the 
aisle?
    [No response.]
    Chairwoman Biggert. Thank you. Chairman Inglis, you are 
recognized for five minutes.
    Chairman Inglis. Thank you, Madame Chairman.
    You know, when I was a kid, Alcoa Aluminum used to 
advertise on ``Meet the Press'' with a very effective jingle 
that said, ``Alcoa can't wait. We can't wait for tomorrow.'' 
And I wonder whether the role that we have is to be saying to 
the academics, ``We can't wait.'' And I wonder if the role of 
Mr. Chernoby and people in the private sector is to say, ``We 
have got to do it, because we want to make some money at it.'' 
But I wonder if our role is really to say, like President 
Kennedy did in 1961, we have got to get to the Moon before the 
end of the decade.
    So maybe you could comment on what is the role of the 
people up here, the government folks. What should we be saying? 
It seems to me that the statistics that you have cited are 
alarming. The--two things are alarming. One is our use of fuel, 
as Dr. Heywood talked about, and the other is the length of 
time that we are hearing. So these seem to be on a collision 
course. We have got this enormous use, and we have got this 
time that is working against us. And so one of my items here 
was talking about commitment, which is a question for us in the 
government. What kind of commitments should we make to really 
moving this along? And anybody want to comment on what should 
be the role of government in this process to light the fire on 
all of the researchers and to really insist, like Alcoa, ``We 
can't wait until tomorrow''?
    Dr. Heywood. And I am glad you said, ``We can't wait until 
tomorrow,'' because that is absolutely the case. And in some 
areas, we are getting a move on. We have got a sizable hydrogen 
program. In other areas, we are not, particularly, in my view, 
in government efforts to regulate through fiscal and 
regulations like CAFE, to force movement. I think the 
government's responsibility is to both push and pull these 
technologies into the marketplace.
    Research is another way of sort of smoothing, lubricating, 
seeding that process. And I think that is a very important 
thing for you to think about as well. But I urge you to hang on 
to this. We can't wait. We have got to assess how this problem 
is developing and getting worse and sort out what we, 
government and others, can do collectively to get a move on in 
resolving these problems.
    Chairman Inglis. Yes, sir.
    Dr. Crabtree.
    Dr. Crabtree. So you mentioned getting to the moon, which 
is often applied to hydrogen and sometimes to the larger energy 
problem as well. I think there is one difference from the 
Apollo program. There, President Kennedy could say, ``Let us do 
it,'' and he had the NASA do it. It was very well coordinated. 
In the case of energy, cars, and hydrogen, it has to be sort of 
the economy. It is a complex system. It is a lot of people 
interacting and making independent decisions, so you don't get 
that direction from the top.
    So I think what the government can do is incentivize that 
activity. And there are really two aspects to it. One is what 
we can do now, sort of incremental hydrogen economy, and we 
have heard some of the--my colleagues have talked about that. 
One is what we would like to be able to do, the mature one that 
we need, let us say, 20 or 30 years from now that would really 
have an energy impact. The first one is sort of a commercial 
demonstration stage now. So you need one kind of incentive for 
that.
    The second one is really basic research. You need a 
completely different kind of incentive for that. You have to 
work on both levels, and soon these two, sort of--these two 
prongs will come together and we will get the result that we 
want.
    Chairman Inglis. Here is my idea. Somebody comment on this, 
maybe Mr. Chernoby or Dr. Bodde might want to talk about this, 
is that gas at $3 a gallon lights a fire in the consuming 
public. When it gets to that level and you go to fill up your 
SUV and it is $42, I think you say, ``This can't be.'' I mean, 
``I can't continue to spend $42 per fill-up.'' Right? I mean, 
does that light the--DaimlerChrysler, does that get you going? 
Does that get you excited?
    Mr. Chernoby. Well, a couple of things.
    You talked about commitment of the researchers. I can just 
share that the researchers we deal with, I can assure you, 
there is huge commitment, huge tenacity and focus on trying to 
get these problems solved, so I am not worried, really, about 
the motivation of the researchers. But similar to what Dr. 
Heywood said earlier and what you just mentioned, I think the 
role of government is two critical areas.
    Number one, it is obviously to help all of us in a pre-
competitive environment with basic research, because we have 
got to overcome these challenges. But then you talked about the 
marketplace. That is the key here. That is--for me, that is the 
big difference between this challenge and the Apollo program. 
Without the marketplace in poll, there is no penetration, and 
without product penetration, there is no motivation to build an 
infrastructure.
    So I would say, short-term, it is not just about seeing the 
research, but it is about sitting down with all of us, the 
energy industry, the auto industry, and other constituents, and 
we have got to talk about how can we get that motivation in the 
marketplace. I don't personally--and this is not speaking for 
the company, personally, I don't believe $3 is going to do it. 
I mean, you are--like Dr. Heywood said, I mean, you look at the 
costs and the challenges we have to overcome on some of these 
technologies today, there has got to be a pretty big incentive 
or a reason for a customer to value and move to that. That is 
why we think there is a lot of transition, like Dr. Heywood 
said, that we are going to go through before we ultimately get 
to the hydrogen economy. But working closely with all of us on 
what is the business model going to be and how can the 
government play a role in that business model to make it viable 
for not only an automotive company but an energy company as 
well to make this a reality. But without the marketplace, it is 
not going anywhere.
    Dr. Bodde. My observation on federal policies, if you allow 
me.
    If you look at the history of federal policy and energy, 
going back to the first Arab oil embargo of October of 1973, 
the chief problem, as I see it, has been consistency. We have 
gone from one thing to another thing. When oil prices were high 
in the 1970s, there was Project Independence. When oil prices 
fell in the 1980s, it was all, ``Well, what the heck. Let the 
market reign here.'' I think the chief ingredient of any 
effective federal policy is going to be consistency. Durability 
over the long-term. That allows entrepreneurs, innovators, 
investors to plan on the economic regime that is going to 
prevail over the time scale that it takes for them to bring 
technologies into the marketplace.
    And so item one, I would say, is consistency.
    Item two is attention to the demand side. All of this talk 
about research, about CAFE standards, and so forth, all deals 
with the supply side, that is the supply of vehicles, the 
supply of fuels. There has to be a demand side pull from 
consumers as well.
    Now it is interesting to observe, as Dr. Heywood has, the 
response to the more fuel-efficient vehicles that haven't 
proven to be the more fuel-economic vehicles. Fuel-efficiency, 
that is in the sense of moving metal down the road, has 
improved consistently over the last 20 years. Fuel economy has 
been flat. The reason is the increase efficiency was taken as 
greater weight, as greater acceleration, as greater vehicle 
performance, and this is what the marketplace is demanding.
    My guess, also, is that at $3 a gallon, that might not 
change very much, and I think serious consideration has to be 
given to other demand-side policies that start to create a 
consumer interest in translating greater efficiency into 
greater economy.
    Mr. Faulkner. Sir, your red light has been on for a while, 
but you raise a really fascinating and philosophical question. 
Could I respond for a minute?
    Chairman Inglis. If the Chair will allow it.
    Mr. Faulkner. Is that allowed?
    You noted the alarming rise in the use of oil. That is 
true. That has been going on for some time. Many are aware of 
that, and the length of time we are talking about, 2015, 2020, 
full breakout in the market 2030, 2040, 2050, and then you 
noted, we can't wait. But I think--it may be unpopular, but I 
think, in a sense, it is our duty to say we have to wait, not 
that that is complacent but that fundamental science doesn't 
occur overnight. Some of these things everyone has talked 
about, breakthroughs that are needed, and if you are set on the 
right pace research and development. You talk about 
commercialization of these technologies in the private sector. 
It is going to take a while to affect those changes.
    And I would note that the President sees the urgency of 
that, that is why he set the vision. That is what he talked 
about this fundamental issue we have to address. And for the 
government, the federal role, the Department of Energy, we have 
to manage it. There are several different programs. It is a 
difficult task to integrate the Office of Science's fundamental 
research in our office and other departments.
    And Congress's role is to hold our feet to the fire. Ask us 
for metrics. Ask us to come in and justify what we are 
spending. And I think, as the President has said, and the 
Secretary, pass an energy bill.
    Chairwoman Biggert. Thank you.
    The gentleman from Missouri, Mr. Carnahan, is recognized 
for five minutes.
    Mr. Carnahan. Thank you, Madame Chairman.
    Welcome to all of you, and this is a very timely and 
important discussion that we are having here today. And I was 
fascinated just recently reading the--if you haven't seen it, 
look at the August issue of National Geographic on things that 
are coming after petroleum, basically, and they highlight a lot 
of these new technologies.
    But I want to particularly ask Mr. Chernoby, or anybody 
else on the panel, about the FreedomCAR research and where you 
see that going from here, and really give me a better idea of 
where that is today.
    Mr. Chernoby. I would summarize a few key points.
    We have talked a lot about hydrogen and fuel cells and 
hydrogen storage today. If you look at the FreedomCAR research 
portfolio, we manage a portfolio that is even broader than 
that. Similar to what Dr. Heywood said earlier, it is critical 
as well, as we research things for the long-term, what can we 
be doing to implement things we learn in the short-term? There 
is quite a bit of research going on still in lightweight 
advanced materials, very important, and as soon as something 
gets on the shelf that engineers can grab and use and the 
supply base can figure out how to process, we will implement 
it, if it provides the right value to the customer: lighter 
weight vehicles, more fuel efficiency. We don't have to wait 
for a hydrogen economy. There is basic battery research going 
on, another critical enabler.
    We have several examples like that that we manage in this 
pre-competitive environment at FreedomCAR. So we absolutely 
believe that--DaimlerChrysler, and I think my compatriots and 
Ford and GM would agree, this is absolutely the best way to 
make sure we compile some of the brightest minds, not only in 
industry, but in academia and the other research environments 
around the world. And it is that combination of minds that is 
actually going to help us get these breakthroughs to market, 
not just in the long-term for the hydrogen, but feeding in all 
of the other things we are doing in our portfolio to provide 
benefit in the near-term as well.
    Mr. Faulkner. Sir, if I could add, the Secretary----
    Mr. Carnahan. Yes, please.
    Mr. Faulkner.The Secretary of Energy, Sam Bodman, was out 
in Michigan recently where he did two events in one day. He cut 
the ribbon, groundbreaking of the new solar factory, but he 
also was with Mr. Chernoby and his colleagues to talk about 
renewing two agreements with the U.S. Car Group. One of them 
was on batteries and one of them was on materials.
    And I think that kind of success that we have in partnering 
together with the auto industry, if there wasn't success, they 
wouldn't be wanting to sign up and renew these agreements. And 
there are--am I correct that the batteries that we have 
pioneered in that consortium are now on every hybrid in 
America?
    Mr. Chernoby. Yeah, absolutely. Some of the very basic and 
preliminary work on what we call nickel metal hydride batteries 
was done through that consortium, and that is what you will 
find in basically every hybrid vehicle on the road today.
    Mr. Carnahan. We have also talked about several incentives 
here today, and I have worked with some here in the Congress 
about instituting a tax credit that would go partially to 
consumers and partially to manufacturers to help in this 
transitional time period to these alternative fuel vehicles.
    What kind of impact do you see that having? Some have 
argued because the demand is growing and the technology is 
coming online that those kinds of incentives aren't necessary. 
And I would be interested in your comments about that.
    Mr. Chernoby. Well, I would add, similar to what Dr. 
Heywood said earlier, let the data speak for itself.
    If you look at the penetration of these--some of these 
technologies, it has not been in astronomically large numbers. 
I mean, they occupy a very, very small percentage of the annual 
vehicle sales in, not only the United States, but around the 
world. So any incentive that is going to help the customer find 
the right value equation, and that is why I urge you to think 
about not only incentives--don't pick a single technology. 
Think about the broad range of technologies. One may be more 
attractive to one customer versus another. And that is what we 
have got to focus on, providing the ability for those 
technologies to penetrate across as broad of a range of the 
market as we can. We, at DaimlerChrysler, feel we very much 
ought to focus on today's clean and advanced diesel to augment 
the hybrid discussion, because there are a lot of customers who 
drive in a highway-driving environment.
    So absolutely, we believe that we have to do something, as 
Dr. Bodde said, on the demand side and continue to do so, not 
only in the long-term hydrogen economy, but in the short-term 
as well.
    Dr. Bodde. That said, however, perhaps we should not be too 
pessimistic about reading the current data. It is 
characteristic of any technology, if there is a long gestation 
period in which not much seems to be happening in the 
marketplace in which market share growth and market penetration 
doesn't happen, then a tipping point is reached and the 
technology takes off.
    I mean, you look at Internet use, Internet subscribers. The 
Internet has been around for a long time, and it is only in the 
last five years that we get this vertical--near-vertical 
acceleration.
    My guess is that the same thing is going to happen with the 
hybrid vehicles, perhaps hybrid diesel vehicles. The same thing 
is going to happen with the hydrogen fuel cell vehicles.
    What we need to be about is to look at the conditions 
needed for that marketplace takeoff to occur and to work 
specifically to put those conditions in place so that the 
market itself will then take it over.
    Mr. Faulkner. Just another comment.
    I think it is important not to get too far ahead of the 
technology in incentives. The President has proposed tax 
incentives for hybrids, but I think the fuel cell vehicles are 
still a ways down the road, and you can consider those as that 
technology improves. Timing is very important.
    Dr. Crabtree. Briefly, that--we heard a lot about 
incentivizing and getting the technology out there for the 
consumer and for the manufacturer, but I think it is important 
to incentivize the research as well. The things we can do now 
and put out now or that consumers can decide about now and make 
now are really not the ones that we want to do 20 years from 
now to have a big impact on energy.
    So we shouldn't leave that basic research component out of 
the equation.
    Mr. Carnahan. Thank you.
    Chairwoman Biggert. Timing is everything.
    Mr. Carnahan. Thank you, Madame Chair.
    Chairwoman Biggert. And your time has expired.
    And the gentleman from Maryland, Mr. Bartlett, is 
recognized for five minutes.
    Mr. Bartlett. Thank you very much.
    I have many questions, but time will permit, perhaps, only 
three quick ones.
    I understand that if we were to wave a magic wand and every 
American car could have a fuel cell in it with platinum as a 
catalyst that one generation--and it doesn't last all that 
long, I understand, but one generation would use all of the 
platinum in all of the world. Is that true?
    Secondly, right now today, 85 percent of all of the energy 
we use in this country comes from fossil fuels. Are you all 
familiar with Hubbard's Peak? Do you know what is meant by 
Hubbard's Peak? Okay. We now may be at Hubbard's Peak in terms 
of oil. If that is true, gas is not far behind.
    And I would caution, don't be sanguine about this enormous 
supply of coal. At current use rates, it will last 250 years. 
If you increased its use exponentially only two percent a year, 
and we will have to do more than that if we run down Hubbard's 
Peak with gas and oil, it lasts 85 years. When you recognize 
that you probably are not going to run your car by putting the 
trunk full of coal, you are going to have to convert it to a 
gas or a liquid, now you have shrunk it to 50 years. That is 
all that is out there at two percent growth rate and converting 
it to some form we are going to use.
    Only 15 percent of our energy today comes from renewables. 
I include in that the eight percent that comes from nuclear and 
only seven percent from true renewables. Since hydrogen is not 
an energy source, you will always use more energy producing the 
hydrogen than you get out of it. Where are we going to get all 
of this energy as we run down Hubbard's Peak? Are we going to 
have a really nuclear nation, because the effective growth in 
energy from the renewables is really pretty darn limited?
    And the third question deals with: all of you seem to agree 
that if hydrogen--if we are going to move to a hydrogen 
economy, you have got to have solid-state storage. Is there 
something in the science that inherently makes hydrogen storage 
a higher density than electron storage? What you are really 
talking about now is just another battery, aren't you, which is 
what hydrogen solid-state storage is going to be? Another 
battery? In the science, is there something inherently so 
superior about hydrogen storage that it is going to be a better 
battery than storing electrons?
    Is it true about platinum that one generation of American 
cars lasting, what, 200 hours for each solar--for each fuel 
cell, we have used all of the platinum in all of the world?
    Dr. Crabtree. Well, may I comment on that?
    I really don't--I have heard that statement as well, and I 
haven't tried to verify it.
    Mr. Bartlett. Could you, for the record, all of you, give 
us some input on that? It is really nice to know that, because 
if that is the path we are running down, it is not going to be 
a very fruitful one.

              Insert for the Record by Douglas L. Faulkner

    A study by TIAX, LLC determined that there are sufficient platinum 
resources in the ground to meet long-term projected platinum demand if 
the amount of platinum in fuel cell systems is reduced to the 
Department of Energy's (DOE) target level. The DOE-sponsored study 
shows that total world platinum demand (including jewelry, fuel cell 
and industrial applications) by 2050 would be 20,000 metric tons 
against a total projected resource of 76,000 metric tons. This study 
assumes that fuel cell vehicles attain 80 percent market penetration by 
2050 (from U.S., Western Europe, China, India and Japan). The study 
shows that the limiting factor in keeping up with increased platinum 
demand is the ability of the industry to respond and install additional 
production infrastructure. Since in the out-years, recycling would 
provide almost 60 percent of the supply, the industry will have to be 
careful not to overbuild production capacity in a more accelerated 
market demand scenario.

          Platinum availability is a strategic issue for the 
        commercialization of hydrogen fuel cell vehicles. Platinum is 
        expensive and is currently critical to achieving the required 
        levels of fuel cell power density and efficiency.

           As such, the Department has been focused on reducing and 
        substituting for (with non-precious metal catalysts) the amount 
        of platinum in fuel cell stacks (while maintaining performance 
        and durability) so that hydrogen fuel cells can be cost 
        competitive with gasoline internal combustion engines.

          Significant progress has been made and is still being 
        made by national laboratories, universities and industry to 
        reduce the amount of platinum needed in a fuel cell stack by 
        replacing platinum catalysts with platinum alloy catalysts or 
        non-platinum catalysts, enhancing the specific activity of 
        platinum containing catalysts, and depositing these catalysts 
        on electrodes using innovative processes. The Office of Science 
        has recently initiated new basic research projects on the 
        design of catalysts at the nanoscale that focus on continued 
        reduction in the amount of platinum catalyst required in fuel 
        cell stacks.

          Typically, it takes three to five years to increase 
        platinum production capacity in response to an increase in 
        demand. Fuel cell vehicle production may create a brief 
        platinum supply deficit, leading to short-term price increases.

          The TIAX study shows that platinum prices over the 
        last one hundred years fluctuated based on major world events 
        (e.g., world war, etc.); however, the mean price (adjusted for 
        inflation) remained stable at $300 per troy ounce. However, 
        over the last couple of years platinum has been higher at $900 
        per troy ounce.

    Mr. Bartlett. Secondly, where are you going to get all of 
this energy, if we are at Hubbard's Peak, and we probably are, 
with oil at $60 a barrel and going nowhere but up, I think? 
Where are you going to get this energy?
    We have got to have a big culture change until we are using 
less energy. We are like a young couple that just had a big 
inheritance from their grandparents, and they have affected a 
lifestyle where 85 percent of the money they are spending comes 
from their grandparents' inheritance, only 15 percent from 
their income. And their grandparents' inheritance is not going 
to last until they die. Now they have got to somehow transition 
themselves from this lavish lifestyle, living largely on the 
inheritance from their grandparents. How are we going to do 
that, and where are you going to get the energy from from this 
hydrogen economy?
    You know, what we are really doing is nibbling at the 
margins. We have got to face the fundamental problem that we 
are at Hubbard's Peak and going to start down the other side 
shortly. Where are you going to get the energy to come from? 
What are you telling people?
    Dr. Heywood. May I respond to that one, please?
    That is one reason I have talked about these two paths 
forward, because to make the drastic changes that--in culture 
lifestyle economies that you are really suggesting, which I 
think we will have to consider, within this century most 
likely, have to make. That is going to take time.
    But in the nearer-term, there are things we can do that are 
better than nibbling at the edges. Yes, they have that 
characteristic, but they will do more. We can--you know, we 
could half our transportation energy consumption with the sort 
of technologies that are almost ready today, but we need to 
realize that that is what we will have to do in some way to 
survive in the long-term. And I think that discussion needs to 
be held much more publicly, and we have all got to contribute 
to this and understand the dilemma that we are facing.
    Mr. Bartlett. Thank you very much.
    Before my time runs out, is there something scientifically, 
inherently so much better about a hydrogen battery than there 
is an electron battery that we should be pouring these billions 
of research into that?
    Dr. Heywood. The recharge time is one big difference. You 
could recharge a hydrogen tank relatively quickly compared to 
recharge an energy storage battery.
    Mr. Bartlett. I sleep all night. My battery can charge 
while I sleep.
    Is there something inherently better about density?
    Dr. Crabtree. May I comment on that?
    I think the energy density that you can store in hydrogen, 
as a chemical fuel, is higher than you can get from electricity 
as an electrical fuel----
    Mr. Bartlett. But we are still working on that and don't, 
in fact, know, correct?
    Dr. Crabtree. If you look at some interesting charts in 
this report, you will see that hydrogen has the ability to 
replace your battery in your laptop and give you three times or 
four times the run time for the same weight and the same 
volume.
    Mr. Bartlett. Good. We ought to be moving----
    Dr. Crabtree. As a matter of fact, it is better.
    Mr. Bartlett. We ought to be moving quickly then.
    Thank you.
    Dr. Bodde. One final comment, if I may, sir.
    You asked the old what source of energy. Eventually, you 
get to nuclear and renewables that eventually--this 85 percent 
inheritance is gone, no matter what scenario you are in, an 
environmentally limited one or other, and you are into nuclear 
for whatever supply you have.
    Mr. Bartlett. Thank you for helping to get that message 
out.
    Chairwoman Biggert. The gentleman from Alabama, Mr. Sodrel, 
is recognized for five minutes.
    Mr. Sodrel. Indiana.
    Chairwoman Biggert. Indiana.
    Mr. Sodrel. Yeah, Indiana.
    Chairwoman Biggert. Excuse me. There is a little 
difference.
    Mr. Sodrel. But--well, now we do say ``you all'' in 
southern Indiana, and I understand how you could make a 
mistake.
    Going to the question that Mr. Bartlett framed about how we 
produce hydrogen, I understand the Icelanders that--embarked on 
a robust program trying to create hydrogen using geothermal 
energy. Are any of you familiar with what is going on there? It 
is kind of a joint industry effort, is it not, where they are--
they have a lot of volcanoes and a lot of heat. And I 
understand they are trying to convert their entire country to 
hydrogen fuel. Given that their country only has 300,000 
population, it would be a little bit like us converting a city 
to hydrogen fuel, but do you know how that is coming along?
    No?
    Mr. Faulkner. We can get you details for the record, 
though, sir, if you wish.
    Mr. Sodrel. Yeah, I would appreciate it.

              Insert for the Record by Douglas L. Faulkner

    Iceland's goal is to become the first nation in the world to 
achieve the vision of a hydrogen economy. The move to a hydrogen 
economy has significant government support, and surveys conducted by 
Icelandic New Energy indicate significant public support as well. With 
a population of less than 300,000 (the majority of which resides in the 
capital of Reykjavik), transforming the Icelandic transportation sector 
to hydrogen will require far fewer hydrogen fueling stations than what 
will be required in the United States. Advances include:

          Iceland has an abundance of relatively inexpensive 
        renewable energy that is used for heating and provides 100 
        percent of the Nation's electricity (80 percent from hydropower 
        and 20 percent from geothermal).

          Currently, there is one hydrogen fueling station, 
        located along a major highway in Reykjavik, which serves as a 
        national demonstration project. Hydrogen is produced on site 
        via renewable electrolysis. The station is a publicly 
        accessible retail fueling station that also offers gasoline and 
        diesel and includes a convenience store. It supports the 
        operation of three hydrogen fuel cell buses that run regular 
        routes around Reykjavik; there are no other hydrogen vehicles 
        at this time.

          The next phase of the country's hydrogen 
        demonstration will involve the conversion of the entire 
        Reykjavik bus fleet to hydrogen. Future phases will include 
        promoting the integration of fuel cell powered vehicles for 
        passenger use and examining the possibility of replacing the 
        fishing fleet with hydrogen based vessels.

          Iceland collaborates with the United States through 
        the International Partnership for the Hydrogen Economy (IPHE), 
        which was established in November 2003 to facilitate global 
        collaboration on hydrogen and fuel cell research, development, 
        and demonstration (RD&D). With a membership including 16 
        countries and the European Commission, the IPHE provides a 
        forum for leveraging scarce RD&D funds, harmonizing codes and 
        standards, and educating stakeholders and the general public on 
        the benefits of and challenges to the hydrogen economy.

    Mr. Sodrel. The second question relates to the FreedomCAR 
initiative.
    We have a lot of foreign manufacturers of automobiles. I 
know Toyota has an enormous plant in Georgetown, Kentucky. It 
is kind of in my neighborhood. Honda, and other foreign 
automobile manufacturers have made significant investments in 
fuel cell. How do you feel about greater involvement of foreign 
car makers that have domestic plants in this FreedomCAR 
initiative? Would it help shorten the time frame here or should 
we ask them to participate?
    Dr. Bodde. Well, in my opinion, the world auto industry is 
truly a global auto industry, and frankly, it makes little 
sense, in my opinion, to distinguish between what is domestic 
and what is foreign. I mean, if you look at the research 
alliances that are now created, you see them between General 
Motors and Toyota. You see them between Ford and other foreign 
companies. And so these things all kind of fit together anyway 
as an international research picture. And so I think almost 
whether you do or don't include them in the U.S. program, that 
technology is going to get to them one way or another, because 
it is a worldwide technology institution.
    Mr. Chernoby. Well, we have had some discussion in the U.S. 
Car/FreedomCAR effort about including some of our compatriots 
around the world. At this time, we haven't made any final 
decisions on whether we want to do that or not, but we 
absolutely, in the pre-competitive environment, like Dr. Bodde 
had said, look at what we are doing around the world. One of 
the challenges that we do have, though, is there isn't 
necessarily consensus in some of the world governments on how 
we ought to approach this effort, and the codes and standards, 
and the effect, eventually, on not only the infrastructure of 
the vehicles that go along with it.
    So worldwide harmonization is clearly one of the barriers 
that we always work on in the auto industry and both jointly 
with government. And it is likely to be one here unless we 
figure out a way to get it under control.
    Mr. Sodrel. Thank you. I don't have any further questions.
    Chairwoman Biggert. I thank the gentleman from Indiana.
    The gentleman from Minnesota, Mr. Gutknecht.
    Mr. Gutknecht. Ohio.
    No, I am from Minnesota.
    Chairwoman Biggert. It is nice that you care to admit it.
    Mr. Gutknecht. Listen. First of all, let me offer this 
disclaimer. I am not a scientist. I don't play one. And we are 
honored to have you scientists here to talk to us.
    Those of you who did not hear Roscoe Bartlett's special 
order last night, I hope you will all at least get a chance, 
and I hope Roscoe will put together a ``Dear Colleague'' to 
share with the rest of us some of the interesting information 
he has shared in his special order last night on the House 
Floor. It was last night, wasn't it, Roscoe?
    Mr. Bartlett. Yes.
    Mr. Gutknecht. Okay. And what he really said, and I will 
just extend his remarks a bit here, was he said that energy is 
so cheap today, and he had some--in fact, I would yield to the 
gentleman a minute, if he wants, to share some of the examples 
of just how cheap energy really is.
    Mr. Bartlett. Oh, thank you very much.
    A barrel of oil is about $60 today. And you can buy the 
refined product of that for about $100 at the pump, 42 gallons 
of gas, $2 and something a gallon, right? That will buy you the 
work equivalent of 12 people working all year for you. That is 
the work output you are buying from $100 worth of gasoline. If 
you go out this weekend and work really hard all day, I will 
get more mechanical work done with an electric motor with less 
than 25 cents worth of electricity. That is what you are worth, 
in terms of mechanical work: less than 25 cents a day.
    This--these fossil fuels are so darn cheap. We are just as 
assuredly addicted to them as a cocaine addict is to his drug. 
It has become a drug for us.
    Mr. Gutknecht. Well, reclaiming my time, and I--those were 
just some of the remarks he made last night, and I thought it 
was fascinating. And it really sort of underscores the 
importance of this meeting, but it also--I think we need to 
look at this whole energy thing in that context, that fossil 
fuel energy is incredibly cheap, even at $60 a barrel. Somebody 
figured it out, we still pay four times more for a gallon of 
water in a convenience store than we pay for that gallon of 
gasoline, even at $60 a barrel. And I am not defending the oil 
companies or the oil barons that have us ``over the barrel,'' 
no pun intended.
    I want to come back to--and I was particularly interested 
in some of the comments by Dr. Heywood, because I think that, 
in some respects, you nailed it, that--I am a believer in doing 
all we can to advance the science relative to hydrogen power 
and some of these other things, but I have come to the 
conclusion, at least, again, as a layman, that hydrogen is, in 
some respects, a very, very good battery, but I think we have 
to--we don't want to oversell it long-term, in terms of its 
value as an energy source. And I am interested in some of the 
other technology.
    And maybe, Dr. Faulkner, you could comment on this, because 
I know there are some people--there are people who have come in 
to see me, and again, I am not a scientist. I don't play one 
here in the Congress, but I am just a curious guy. One of the 
technologies that people have talked to me about are super 
magnets. Are any of you doing any work with super magnets? And 
do you know what I am talking about?
    All right. We will have them come and talk to you, because 
I found it fascinating that we now have--well, I will go on to 
a different subject.

              Insert for the Record by Douglas L. Faulkner

    The term ``Super magnets'' is a broad description for several 
families of rare Earth magnets. I am not aware of any DOE work in the 
area of super magnets. Superconducting magnets, on the other hand, are 
electromagnets, which use an electric current to generate a magnetic 
field, and the electricity runs through superconducting materials, such 
that very large magnetic fields can be generated without electrical 
resistance creating large amounts of waste heat. The Department's 
Office of Science uses superconducting magnets in some of its particle 
accelerators.

    Mr. Gutknecht. And that subject is really about renewable 
fuels, because on the other Committee that I serve on, the 
House Agriculture Committee, I chair a Subcommittee, and we 
have responsibility for some of the renewable fuel programs. 
And there again, there are some amazing things happening, 
sometimes without any oversight responsibility or funding from 
the Federal Government in terms of producing this fuel even 
cheaper.
    Just out of curiosity, how many of you know right now how 
much it costs at a--one of our more advanced ethanol plants to 
produce a gallon of ethanol? What would the cost be? What would 
you guess?
    Dr. Faulkner.
    Mr. Faulkner. Well, about $2.10.
    Mr. Gutknecht. Next?
    Dr. Bodde. I would have to look that one up for you, but I 
go with his number in the absence of anything else.
    Mr. Gutknecht. All right.
    Mr. Chernoby. I would have been more in the $3 realm.
    Mr. Gutknecht. Okay.
    Dr. Heywood. I would add that those costs depend on where 
you draw your boundary and what costs that add up to that 
figure are included. There is a lot of variability in studies 
of producing ethanol and the reality, and it depends how the 
numbers are worked out.
    Mr. Gutknecht. Well, let us do simple arithmetic. You have 
to buy the corn, right? It is about $2.20 a bushel right now. 
And you have to amortize the cost of the plant, right? The 
biggest cost in producing ethanol right now is in energy. I 
mean, you have to cook the corn. But according to my most 
efficient plants in my District, right now, at $2.20 a bushel 
of corn, and we have to assume the cost of producing that corn, 
and believe it or not, maybe even a little profit for the guy 
who grows it is in that $2.20, the answer is, and not only from 
my ethanol plants, but also according to the Chief Economist at 
USDA, the answer is 95 cents a gallon. Does that surprise you? 
It surprises most Americans. And I say that, because right now, 
in both the pure cost basis and in terms of BTUs, ethanol is 
cheaper than gasoline.
    I yield back my time.
    Chairwoman Biggert. Thank you.
    The gentleman from California, Mr. Rohrabacher.
    Mr. Rohrabacher. Thank you very much.
    I am from California. I am very proud of being from 
California.
    I would just like to get down to some fundamentals, and 
first of all, let me suggest that Roscoe Bartlett adds a great 
deal to every hearing that I go to, and I am happy to have him 
with us and making his contributions.
    Let us--I would like to ask--go back to the cost of 
hydrogen. From what I take it, after the exchange between you 
folks and Roscoe, is that there actually isn't an energy 
savings reasons to go to hydrogen as a fuel, because it 
actually would use more energy to create it than what you get 
out of it once it is actually manufactured, is that correct? So 
we are actually--the hydrogen fuel angle is that it will--it is 
a cleaner burning fuel for the air, is that why we want to go 
in that direction?
    Mr. Bartlett. If the gentleman would yield for a quick 
moment.
    Mr. Rohrabacher. Yes.
    Mr. Bartlett. It is true that it takes more energy to 
produce hydrogen than what you get out of it. When you use 
hydrogen, you can conveniently use it in a fuel cell that gets 
at least twice the efficiency of the reciprocating engine. So 
at the end of the day, you may use less energy, in spite of the 
energy loss. We are not going to suspend the second----
    Mr. Rohrabacher. Right.
    Mr. Bartlett.--law of thermodynamics. In spite of that 
loss, we may end up using less energy with hydrogen.
    Mr. Rohrabacher. So would it depend on, as Roscoe is 
suggesting, that we--that the development of fuel cell type 
engines rather than the current type of engines that we have in 
automobiles?
    Dr. Bodde. Well, both are certainly true. You do need a 
fuel cell, of course, to offset the inefficiencies in producing 
the hydrogen. But on the other hand, anything that you 
manufacture is subject to the second law. And so there is 
always an increase in entropy or a degrading of the energy 
source, no matter--from any human activity.
    Mr. Rohrabacher. Well, I have--actually, I have been told--
we just had a briefing the other day on biodiesel that 
suggested that that is not the case with biodiesel, with canola 
oil, that actually you get more BTUs out of--there are more 
BTUs left over by the process by a three to one margin than it 
takes to actually produce the biodiesel.
    Dr. Bodde. As Dr. Heywood said, it depends where you draw 
the boundaries around the system.
    Mr. Rohrabacher. But none of you have heard that that is--
you think that is an inaccurate statement if it is--when the 
boundaries are drawn the same around hydrogen as around 
biodiesel?
    Dr. Bodde. I don't know the specifics of that particular 
one, sir, but I would be suspicious of anything that appears to 
create energy out of nothing. That energy always comes from 
some place.
    Mr. Rohrabacher. Yeah, well, we know that solar--as my 
colleague is suggesting, that the plants are actually taking in 
solar energy, and that is part of the process that nature has 
provided us, and that is the explanation of where extra energy 
could come from. And do any of you have anything else to say 
about the--comparing a biodiesel approach to a hydrogen 
approach in terms of the cost of energy in creating your final 
product?
    Dr. Heywood. Let me comment on that.
    One advantage of hydrogen, and I think it is real, is that 
it has no carbon. So it is analogous to a gasoline or diesel 
fuel. You can put it in the tank of a vehicle. And when it is 
used to drive the vehicle, there is no carbon dioxide, no 
greenhouse gases, emitted, so that is one of its important 
advantages.
    Mr. Rohrabacher. Right. I think that is an advantage with 
the biodiesel as well. Is--does biodiesel create greenhouse 
gases? I----
    Dr. Heywood. Well, that----
    Mr. Faulkner. It might be a net zero, but----
    Dr. Heywood. That depends on the details.
    Mr. Rohrabacher. Right, because the plants absorb a certain 
amount of the----
    Dr. Heywood. And I would add that this may well not be an 
either or, because we talked primarily about passenger 
vehicles, but the freight part of our transportation system is 
very significant in terms of its energy consumption. And the 
big piece is the long-haul trucks, which use diesel engines. 
They are very efficient engines, and there is nothing on the 
horizon that looks like it could challenge them, in terms of 
efficiency.
    So sources of fuel for diesel engines in--of the long-term 
future, is something we should be looking at and----
    Mr. Rohrabacher. Right.
    Dr. Heywood.--exploring and developing, and biodiesel is 
one option.
    Mr. Rohrabacher. Well, it is--if you have to reconfigure 
the engine of every car that is manufactured in order to take 
hydrogen in a way that is efficient, meaning you have to end up 
with a fuel cell engine rather than the engines that we have, 
it is enormous costs in terms of transition. So we would want 
to make sure the end result was taking care of the fundamental 
problem, which is running out of energy.
    Let me ask you about the hydrogen engine.
    Now someone told me that a byproduct of a hydrogen engine 
or a fuel cell is water, and--pure water, but would this not be 
a problem in areas like in half of the United States where it 
freezes in the wintertime? Would this not be a--some kind of a 
problem to have water coming out of the engine?
    Mr. Chernoby. Well, actually--I will comment.
    That has been one of the challenges that we have been 
working on, not just water coming out of the engine, but water 
within the fuel cell itself. What you will find, during the 
process of converting the hydrogen to electricity in the fuel 
cell, there is quite a bit of heat that is generated to warm 
the water up. And the challenge we have been working on, I 
think, we--not only DaimlerChrysler, but other OEMs as well, 
have found ways to overcome is how do we manage that water 
within the fuel cell during that initial start-up stage when 
that heat is in there.
    So clearly, you are absolutely right. The challenge of that 
water being there in a cold environment is something that has 
to be managed.
    Mr. Rohrabacher. We have not--that particular hurdle has 
not been jumped over yet.
    Mr. Chernoby. We have made exceptional progress in the last 
12 months. I won't say we are done.
    Mr. Rohrabacher. Okay. Because I can't imagine--I can--
coming from California, as I do, we wouldn't mind having, I 
guess, more water on our roads, but if it froze, if we lived in 
Minnesota, as my friend here does, I would imagine that a 
significant part of the year, the last thing you want to have 
is water spread on the road and having to drive your car or 
have to rely on the road for transportation.
    So this is a significant--it seems to me that that would be 
a significant problem.
    Thank you very much, Madame Chairman.
    Chairwoman Biggert. Thank you.
    The gentleman yields back.
    The gentleman from Texas, Mr. McCaul.
    Mr. McCaul. Thank you, Madame Chairman.
    I am a member of the hydrogen fuel cell caucus, and we were 
introduced to a hydrogen fuel cell car, and I was able to drive 
it. And it was a great experience, but I asked them how much it 
cost to build them--and we obviously have the technology today 
to do it, but I asked how much did it cost to build this, and 
the answer was $1 million for the car.
    That is obviously the issue here, bringing the cost down.
    The energy companies in my district, when I talk to them 
about this issue, and I am very interested in it, they tell me 
that the timeline is 20 to 30 years out in the future. I don't 
want to accept that answer, and I wanted to get your response 
to that.
    And in addition, I wanted to ask the question or possibly 
get a comment on the energy bill that we hope is going to come 
out of conference committee. There will be approximately $2 
billion appropriated for alternative energy, including 
hydrogen. And where would you think--where would you direct 
that money if you were king for a day and could call the shots 
on that?
    And then finally, the role of the universities, I have a 
university in my District, and in my view, I think the 
universities have a role to play with respect to developing 
these alternative energies.
    I will just open it up to the panel.
    Dr. Heywood. Let me comment on the time scales.
    It is important that we say--or sort out time scale to 
what. And we have got fuel cell cars out already. There will be 
larger fleets 10 or 15 years from now. The DOE 
commercialization decision is pitched for 2015, 10 years from 
now. Our judgment was that fuel cells--we will know whether 
they are marketable within about 15 years. That is not all that 
different.
    But then there is this time scale to build up production. 
And we have never gone through a large-scale change in a 
propulsion system, except for the diesel transition in Europe. 
Diesels took over from 10 percent of the market in Europe in 
1980 to 50 percent now. So it took 25 years. Diesels, a well-
established technology, to go from small scale to 50 percent of 
the market. How long will it take fuel cells? That is where we 
get to 20, 30, 40 years before there are enough fuel cells to 
have an impact on our energy consumption.
    Mr. McCaul. So the energy companies are--they are accurate 
when they say that?
    Dr. Heywood. They are right.
    Mr. McCaul. Okay.
    Dr. Crabtree. May I comment?
    The last two parts of your question about where should the 
funding go and what--and the role of universities.
    I believe that there is an enormous amount of basic 
research that needs to be done, and the best place--one of the 
best places to do that is universities. Universities and 
national labs working together can actually accomplish that 
goal.
    When you have $2 billion to spend, you--it actually isn't a 
lot if only a fraction of it goes to hydrogen. You have to be 
careful with how you spend it, and I think there needs to be a 
balance. So there should be a balance between helping industry 
do the research, as many of the companies do, and universities 
and national labs. I think these are the three places it should 
go----
    Mr. McCaul. Good.
    Dr. Crabtree.--with very carefully targeted goals.
    Dr. Bodde. Let me offer a comment, also, sir, if I may, on 
the role of the universities.
    I think it is important to recognize that universities are 
fundamentally ``people factories.'' That is, their basic 
product is people. And turning out people who are not only 
capable in the technology, but capable innovators is probably a 
very primary thing and probably one that may have been 
underappreciated in the university for a number of years.
    Beyond that, of course, is the basic research, the blue sky 
research. But I think there is an emerging role for 
universities, also, as innovation centers, as centers not only 
for the creation of new technology ideas, but the capturing of 
those--of the economic value in those ideas, because as we look 
at competitive worldwide industries, we are beginning to see 
increasing pressures on the central R&D functions in virtually 
every company. And if that is to happen, if that translating 
function is to happen, then it has got to go someplace, and I 
believe the universities can emerge and play some role, not the 
only role, of course, but an increasing role in that.
    Mr. Faulkner. A couple of comments, sir.
    Universities are a key partner for my office across the 
board, and they are for this hydrogen initiative. I mentioned 
in my oral testimony that we have three Centers of Excellence 
we have initiated. They include 20 universities just in that 
alone.
    On the cost, I think one thing to mention is, yes, there 
aren't that many cars on the road, so just like anything else, 
the prices are high. The more you make, the more the costs come 
down.
    One thing we have started to look at, and I mentioned this 
in my oral testimony, I think this is an exciting field, is 
manufacturing R&D. I think we need to look more at this and 
other renewable areas, too, but to look at how to take things 
in the laboratory out into the plant floor or the factory floor 
and move it on out into commercialization. And we are going to 
be looking more and more at that in the years ahead. This is a 
spin-off of the President's manufacturing initiative. And we 
are looking at things like high-volume manufacturing, 
standardizing components, developing an infrastructure, 
developing a supplier base. And this is going to be a critical 
factor in helping to bring those costs down as you manufacture 
the hydrogen initiative.
    Mr. McCaul. If I could ask one more question, Madame Chair.
    Twenty to thirty years to have market saturation, but when 
do we think the first hydrogen cars will actually be out on the 
market?
    Mr. Chernoby. Well, again, it gets back to your time 
question. I don't find it so easy to actually put a specific 
date on the invention of technology and research. If we had 
that kind of crystal ball, I think we would be in a lot better 
shape. But we look forward to vehicles, and then when you say 
ready, it depends upon, again, at what value for the customer 
and what price point. But during the--this next decade is when 
we would expect, at DaimlerChrysler, we ought to have that 
commercial vehicle viable for the marketplace, from a technical 
perspective.
    But it is only as good as having available the 
infrastructure. I thought the ethanol discussion was very 
interesting. We have built millions of vehicles capable of 
running on ethanol, and they are out there in the marketplace 
today. But yet it shows you that unless you have got market 
pull and market incentive, it doesn't all come together to 
benefit either the environment or energy security.
    Mr. McCaul. Thank you, Madame Chair.
    Chairwoman Biggert. Thank you.
    I think we have time for a few more questions, if everybody 
is very brief asking the question and answering the question.
    So Chairman Inglis, would you like to go ahead for five 
minutes?
    Thank you.
    Chairman Inglis. I thank you.
    Mr. Chernoby, I understand that you have some dealings with 
the--with codes and standards tech team. And one of the 
significant roles of the Federal Government or government 
somewhere may be the setting of codes and standards, especially 
for the storage of hydrogen. Do you want to comment on any 
suggestions that you have for us at the federal level or what 
should be our approach? It is a little bit early, I know, to--
maybe to project those, but suggestions from you about how to 
approach codes and standards.
    Mr. Chernoby. I would give you three key suggestions.
    Number one, don't try to move to locking down a code or a 
standard too early while technology is still in the 
evolutionary stage. When technology starts to settle down, 
then, in a pre-competitive environment, we can all work 
together, both industry and government, to set the right 
standards.
    So number one, don't move too quickly.
    Number two, as you already do in a very proactive mode, 
work with us. We will all work together to try to find the 
right balance to make sure that every standard we issue is 
going to be viable in the marketplace and provide everything it 
has got to do, whether it be safety for the consumer right on 
down to the various environmental benefits we might need.
    And then finally, we have got to work together to keep an 
eye on the global codes and standards. And I know the 
government is already participating in some harmonization 
community--or collective efforts around the world. We have got 
to do our best, as we try and develop these codes and 
standards, that they are very similar so that we can gain 
volumes of scale, bring the costs down, and make the vehicles 
viable in the marketplace.
    Chairman Inglis. With these test vehicles that have been 
mentioned that we are driving around, have there been any local 
fire chiefs in various cities that have said, ``Not in our 
city,'' or anything like that, I mean, such that we are already 
seeing some discrepancies in the standards?
    Mr. Chernoby. I wouldn't say in those terms, but there have 
been local fire chiefs that have raised their hand and said, 
``Come talk to me. We would like to have some input. We would 
like to work with you.'' And that is virtually in almost every 
state where we are participating today. So we absolutely 
welcome and--that type of conversation effort, so we are 
collectively working together to find the rest--the best 
answer.
    Chairman Inglis. Anybody else want to comment on that? The 
codes and standards?
    Thank you, Madame Chair.
    Chairwoman Biggert. Thank you.
    We will--I think we will skip over, if you don't mind, Dr. 
Bartlett, to Mr. Schwarz from Michigan, who just arrived for 
his first round.
    Mr. Schwarz. Thank you, but I have no questions.
    Chairwoman Biggert. Oh, well, then we won't.
    Mr. Bartlett is recognized.
    Mr. Bartlett. Thank you very much.
    Let me take just a moment to define, for those who are 
listening or those who may be reading this testimony, what we 
mean by ``Hubbard's Peak.'' This resulted from the work of a 
geologist working for the Shell Oil Company back in the 1940s 
and 1950s who noticed the exploitation and exhaustion of oil 
fields that tended to follow a bell curve, increasing 
production to a peak and then falling off as you pull the last 
oil out of the field. He--in estimating the fields yet to be 
found and adding those to the fields he knew were in existence 
for the United States, he predicted, in 1956, that the United 
States would peak in oil production in about 1970. His 
prediction turned out to be exactly right. Every year since 
1970, we have not only found less oil, we have pumped less oil.
    Using his analysis techniques, he predicted that the world 
would peak at about 2000. That slipped a little because of the 
Arab oil embargo, oil price spike hikes, and a worldwide 
recession. And there are many insiders who believe that we are 
now at Hubbard's Peak.
    And so Hubbard's Peak represents the peak oil production in 
the world, and it is only downhill after that. A plateau for a 
while, and then downhill after that.
    I would just like to caution and get your comment on it, 
that we shouldn't be too optimistic about the energy we are 
going to get from agriculture. Tonight, 20 percent of the world 
will go to bed hungry. Until we learned to do no-till cropping, 
we were losing the battle with maintaining our topsoil. It was 
ending up in our bays, and from the whole central part of our 
country, to the Mississippi delta. If--to get a lot of energy 
from agriculture, we are either going to have to eat the corn 
that we would have fed to the pig, we are going to have to live 
lower on the food scale, because you can't feed the corn to the 
pig and then eat the pig, because there is an awful--that is a 
very poor energy transfer, by the way, when you are doing that.
    Also, if we are going to take a lot of the biomass off, I 
have some real concern about our ability to maintain topsoil. 
As I said, until we learned to do no-till farming, we were 
losing that battle. We are just now barely able to hold the 
quality of our topsoil with no-till farming. If we are raping 
the soil of a lot of this organic material, the tills will 
deteriorate, the soil will have no acceptable tills, and we 
are--you know, it is going to become a mud pit when it is wet 
and a brick when it is dry. That is how you make brick. You 
take soil that has no humus in it and put it in an oven and 
bake it.
    Do you share some concerns about the potential for getting 
energy from agriculture in the long haul?
    Dr. Heywood. Let me respond.
    Yes, I do. There is a question what--how big a contribution 
we think it might be able to make.
    There are several questions. One is how big a contribution, 
and the other is exactly what you have just talked about, what 
are the long-term environmental impacts of monocultures grown 
on a large scale to produce fuel.
    And I have a Ph.D. student who is working on a project that 
is focused exactly on that, because there is very--there is not 
a lot of prior work that looks at these longer-term impacts. 
And what we have found so far is that people's predictions on 
these impacts vary a lot. So there really is a need to dig into 
that question and understand it better.
    But even if biofuels contribute five percent or 10 percent 
to our liquid transportation fuel system, that is--it is not 
easy to find five and 10 percent. So that might be an important 
five and 10 percent.
    Mr. Faulkner. I believe, sir, a quick answer for me is I am 
more sanguine than you might be on that subject. I would note 
that the Department of Energy and Agriculture just recently 
published a report that we internally call ``The Billion Ton 
Study.'' That is over a billion tons of forest material and 
agricultural material, that is not just the corn kernel. There 
is starch. It is also waste material, like corn stalks and 
sugar cane gas, are available--or could be available in the 
future to produce biofuels, products, and power, and I think 
that is a study I would like to get to you, if that is okay.

              Insert for the Record by Douglas L. Faulkner

    In April 2005, the U.S. Departments of Energy and Agriculture 
published the following report assessing the potential of the land 
resources in the United States for producing sustainable biomass: 
Biomass as Feedstock for a Bioenergy and Bioproducts Industry: The 
Technical Feasibility of a Billion-Ton Annual Supply. This study 
indicates that a billion tons of biomass supply consisting of renewable 
resources from both agricultural and forestry supplies could be 
utilized in an environmentally and economically sustainable manner. 
According to the report, these resources are capable of supplying more 
than 30 percent of the Nation's present petroleum consumption and 
include agricultural residues such as corn stalks and sugarcane 
bagasse. Presently, the Department is supporting the Department of 
Agriculture in its efforts to determine how much of the residue can be 
removed without reducing soil fertility and depressing grain yields in 
subsequent years after residue removal.
    [The report appears in Appendix 2: Additional Material for the 
Record.]

    Mr. Bartlett. Mr. Secretary, I am not sure we--it is 
appropriate to call these things ``waste material.'' Anything 
that goes back to the soil to maintain the health of the soil, 
putting organic material back into the soil, that is really not 
a ``waste material.'' For one year, you may see it as ``waste 
material,'' but if you keep doing that for a long time, I have 
some concern about what is going to happen to our topsoil and 
our ability to grow these crops.
    Dr. Crabtree. May I make one comment on your question about 
where the energy will come from after Hubbard's Peak?
    It is just one statistic, you might be interested, one 
fact. The sun gives, in one hour, more energy to the Earth than 
we use in one year, so there is an enormous resource in solar 
energy, if we knew how to tap it, that would, indeed, supply 
our needs.
    Mr. Bartlett. Thank you. I am a big solar enthusiast. I 
have a place in West Virginia off the grid, and we produce all 
of our electricity, so I will tell you that you have to be 
pretty sparing in your use of electricity. And we have a number 
of panels. You are going to have to have a very different 
lifestyle when you can't use your grandparents' inheritance 
anymore, you have to live on your 15 percent income.
    Dr. Bodde. With that said, sir, I think we are just 
beginning to see the effects of energy conservation, or 
efficient energy use, I guess I should say, and as energy 
prices rise, as engineers begin to look at the services that 
energy provides, as opposed to the energy itself, I think there 
is huge potential for that to relieve some of this problem 
already. Will it relieve the whole thing? No, of course not. 
But as Dr. Heywood said, five or 10 percent is not bad.
    Mr. Bartlett. Just one comment, Madame Chairman. Thank you 
for the time.
    We better do that, sir, or we are going to have no energy 
to invest in the alternatives that we must transition to. 
Today, we are using all of our energy, just barely able, at $60 
a barrel, to produce enough to keep our economies going. We 
have no energy to invest, essentially none to invest. We have 
to make big investments of time and energy if we are going to 
transition. And we will transition, by the way. We will either 
do it on our course or at nature's course. But we will 
transition from fossil fuels to renewables. The question is, 
how bumpy will that ride be?
    Chairwoman Biggert. Thank you.
    The gentlelady from Texas, Ms. Jackson Lee.
    Ms. Jackson Lee. Thank you very much, Madame Chairperson. 
This is a very important hearing.
    While you gentlemen are sitting there, conferees are 
meeting on the massive energy policy bill, and I would venture 
to say that although the Science Committee and the previous 
speaker and others worked their heart out, the predominance of 
the bill obviously deal with fossil fuel.
    But the Science Committee did have its voice, and I am 
pleased to note that there were a number of options and 
alternatives and excellent additions to the legislation per 
this committee.
    I am also pleased to note, as I understand it, Mr. 
Faulkner, that we have added $33 million in fiscal year 2006 
regarding the hydrogen program. I hope that is accurate, and 
you might comment in my questions.
    Let me just say that I come from Texas, so I come from oil 
country. And in fact, one of my amendments in the bill spoke to 
determining the extent of deposits off the Gulf of Mexico so 
that we could plan long range in a more organized manner what 
we had at our access, if we will, particularly in light of the 
fact that the greater exploration is probably more off the 
Louisiana and Texas coasts than it might be off of Texas--off 
of California and Florida.
    So there are some concerns about energy resources, 
particularly oil and gas, even though there are those of us who 
live in that environment and certainly support that environment 
in a safe and healthy way, we are also open-minded to recognize 
that the United States has to have options.
    And so I pose these questions with the backdrop of the 
development that is going on off the shores of Louisiana and 
Mexico and also international oil development and the new 
findings on LNG. There are options that I think that we should 
be involved in.
    I will pose two questions, keeping that in mind, and a sub-
question.
    One, it may have been asked, but I am interested in the 
proposed sources for hydrogen, particularly the options include 
nuclear and natural gas, clean coal, wind, and renewables. And 
I would be interested from all of you as to what shows the most 
promise.
    Then we have done some work in the Science Committee on 
fuel cells. And in fact, we had some amendments along those 
lines in the energy bill. Fuel cells and fuel production are 
experiencing competitive pressures significant enough to affect 
pricing, is my question, is the market in fuel cells, if that 
pressure is affecting pricing? And if it is not, when will we 
see a truly competitive fuel cell market? And what drives down 
prices and advances technology?
    Mr. Chernoby, in your remarks, I would be interested in 
whether you have hybrid cars already, using hydrogen or other 
alternatives.
    And then for all of you to answer the question of the great 
need to educate more scientists and engineers, which is an 
issue that I have worked on on this committee. I am frightened 
by the prospect that we may not have a farm team of physicists 
and chemists, engineers, and I have worked to help finance the 
historically black colleges and Hispanic-serving colleges and 
community colleges. But I welcome your comments on what we 
could do on expanding that area.
    And I yield to the gentlemen.
    I ask, also, that my remarks may be submitted into the 
record.
    Chairwoman Biggert. Without objection.
    Ms. Jackson Lee. Mr. Faulkner, would you start, please? And 
is that $33 million accurate? Do you know? Or have we given you 
more?
    Mr. Faulkner. Yes, ma'am. The President announced an 
initiative for $1.2 billion over five years. We are on track 
for that initiative. I was looking at the chart in front of me. 
Fiscal year 2005 appropriations for the whole initiative, which 
includes my office, the Nuclear Office, Fossil Office, Science, 
and also the Department of Transportation, appropriations for 
fiscal year 2005, was, roughly, $225 million. Our presidential 
request for that same group is roughly $260 million.
    You mentioned----
    Ms. Jackson Lee. And you are getting more money for 
hydrogen? That is what I was asking. You don't have that----
    Mr. Faulkner. Well, this is the hydrogen fuel initiative. 
It is fuel cells, hydrogen production----
    Ms. Jackson Lee. Thank you.
    Mr. Faulkner. You asked several other questions. I will 
provide answers for a couple of those, and my colleagues will 
probably fill in others.
    You asked what shows the most promise for sources of 
hydrogen. I think, right now, it is too early to say. We are 
pursuing several different pathways. We are still early in this 
initiative, and I would hate to cut off promising research and 
development by picking a winner or a loser this early in the 
game.
    You talked about scientists and engineers, and I would just 
note that we have an initiative that I personally am very fond 
of in our office with the National Association for State 
Universities and Land Grant Colleges that we have been working 
on with them for the last couple of years. It's not directly 
related to the hydrogen initiative, but we think there is a lot 
of excitement here, and we share your interest in building 
these--growing more scientists--the scientists and engineers in 
America. And if you would like, we could give you more 
information on that, and that does include historically black 
colleges you mentioned.
    Ms. Jackson Lee. I would. Thank you.

              Insert for the Record by Douglas L. Faulkner

    Since 2004, the Department of Energy's (DOE) Office of Energy 
Efficiency and Renewable Energy (EERE) and the National Association of 
State Universities and Land Grant Colleges (NASULGC) have been building 
a partnership to improve communication between the two scientific 
communities, advance the development and use of energy efficiency and 
renewable technologies, and educate the young scientists and engineers 
that America needs for securing our energy future.
    For EERE, the 217 NASULGC institutions of higher education, which 
include 18 historically black institutions and 33 American Indian land-
grant colleges, provide an opportunity for focusing research, 
extension/outreach, and curriculum development activities on energy 
efficiency and renewable energy issues. EERE can use NASULGC's 
Cooperative Extension and Outreach networks to improve the 
dissemination of results coming from university researchers and DOE 
research laboratories, and to spread the use and adoption of energy-
saving and renewable energy technologies and products for residential, 
commercial, and other sectors.
    For NASULGC affiliated institutions, the outcome is to develop 
relevant curriculum, research, and outreach programs with EERE's latest 
technologies that will assist their students and the citizens of their 
state. NASULGC can work with EERE to help its member institutions 
increase their responsiveness to practical issues and provide 
opportunities for faculty and students to gain access to research and 
cutting edge knowledge.
    EERE and NASULGC are working together to assist young people's 
understanding and appreciation for math and science through a hands-on 
learning program with 4-H kids. Young participants apply physics, 
mathematics, and other disciplines to lighting and other energy 
technologies. Energy efficiency and renewable education programs are 
also being delivered to youth and adults.

    Dr. Bodde. One comment, if I may, on the colleges and 
colleges as ``people factories,'' in particular.
    I think that is very important to the economic growth and 
the scientific growth of this country.
    One of the things, though, that I think that research 
universities have to do is learn to become more effective 
partners with technical colleges to allow an effective 
transition and effective unified program between them. That is 
one of the things that we are trying to put in place at the 
ICAR now is a partnership with a--the local technical 
university so that we provide to the upstate coalition in--or 
the upstate auto cluster, I should say, a completely unified 
educational program that ranges from the technical level to the 
graduate research level.
    Dr. Heywood. Could I comment on that question about 
education?
    From our perspective, I think government graduate 
fellowships focused on specific areas do several very useful 
things. They pull young people into those areas, and they 
become--that becomes their area of expertise. And also, 
fellowship students are extremely useful, from a faculty 
member's perspective, because they are, in a sense, free labor 
to start on a new topic. And so they really have an effect of 
allowing faculty members to branch out into new research areas, 
and that is exactly the sort of--pulling young people into 
this--these areas that are going to be critical to us for the 
next many, many decades, and also providing opportunities for 
starting up new and, hopefully, interesting and promising 
research activities.
    Back to the sources of hydrogen, I would like to add just 
one comment.
    I think it is--Mr. Faulkner is quite right. It is too early 
to start to make choices, but I think it is worth saying 
something about many people's feeling that if we have got 
renewable electricity, then we can make hydrogen with, sort of, 
no environmental impacts. Well, if we got renewable 
electricity, that is fantastic stuff, and it will displace 
coal-generated electricity. And I sometimes feel like, well, 
why would you take a really good wine and convert it into a not 
so good wine. Electricity is a fantastic wine. Hydrogen isn't 
quite as good.
    So I think that is a very good question. There are 
questions like that that we need to dig into, but it is too 
early to say. But we are going to have to be imaginative, 
because if we don't produce the hydrogen without releasing 
greenhouse gases, we have really--we have not moved forward 
very much at all.
    Dr. Crabtree. Yeah, may I comment on that, too?
    I would like to reinforce what Dr. Heywood said that it is 
very important to produce the hydrogen without carbon. And the 
one way in which you can do that is to split water. There are 
many ways to split water. You mentioned nuclear and 
electrolysis, but there are other ways, too, notably solar 
energy. It would be wonderful to take a beaker of water, put it 
into a container that is highly technological, set it in the 
sun, and simply produce hydrogen with no other energy input. 
And in fact, that can be done in the laboratory now with about 
18 percent efficiency. Of course, it is much too expensive to 
do commercially, but I think that is the challenge.
    So if we can do that, we have solved lots of problems: we 
don't have any dependence on foreign energy sources, because 
the sun falls on everyone's head; we don't produce any 
greenhouse gases; we don't produce any pollutants; and the 
supply is, effectively, inexhaustible.
    So I think this is the route we should go. It is a question 
of which renewable energy sources we use.
    Dr. Bodde. One further comment on universities.
    The American university has become truly an international, 
multi-national enterprise. There are students coming to us 
preferentially from all over the world. We have attracted into 
our universities some extraordinary talent, the greatest talent 
that exists in many countries. I think we need to find ways to 
retain that talent within this country, not only when they are 
graduate students, but afterwards. And I think we should look 
again at our security policies and ask if we are not straining 
out a whole lot of folks that we really wish that we would have 
around here?
    Mr. Chernoby. And just to close your question on the fuel 
cell vehicles.
    Yes, at DaimlerChrysler, we have approximately 100 
different fuel cell vehicles on the road around the world, many 
of those here in the United States in the DOE demonstration 
project, gaining valuable data to help us understand what are 
the new problems we face when we move from the lab to the 
environment.
    And I would add, on education, we don't--we, at 
DaimlerChrysler, also very--think it is very important to 
attract young people to the technical arenas. We participate 
very strongly in efforts at the elementary school level, the 
middle school level, and through things like the first robotics 
competition at the high school level. It is absolutely critical 
to attract them to the technical fields in the first place 
before they get to the collegiate type of environment.
    Ms. Jackson Lee. Thank you.
    Chairwoman Biggert. The gentlelady's time has expired.
    Ms. Jackson Lee. Thank you very much.
    Chairwoman Biggert. Just a quick couple of questions to--
before we close.
    Dr. Bodde, the first recommendation of the National 
Academy's report was for DOE to develop an increased ability to 
analyze the impact of new technologies, such as hydrogen, on 
the entire energy system so that the Department can wisely set 
priorities for energy R&D. How would you rate the Department's 
current systems analysis effort? And should it be changed, in 
your opinion, to improve it?
    Dr. Bodde. Well, it is certainly too early to judge, but I 
think the response from the Department of Energy was quite 
immediate and quite effective. The office was established, 
housed at the National Renewable Energy Laboratory, and has 
begun to--a wide-scale set of works.
    But I think this modeling of the entire energy system is 
very important, because, in the end, it has got to function as 
an integrated system where we have got to understand how it can 
function as an integrated system. Further, we have to 
understand how that system is evolving. So it is one thing to 
create models for the system, but it is another thing, also, to 
monitor progress as it goes along to monitor where bets are 
being placed, say, in the private sector. Where is private 
venture capital going in these things?
    And I guess if I could offer one suggestion for a direction 
that this systems integration or modeling effort would go, it 
is to add to those capacities an ability to look at where the 
private sector is going right now, the bets that private 
investors are placing in new technologies.
    Chairwoman Biggert. Thank you.
    And then, Dr. Crabtree, the DOE is currently funding 
learning demonstrations with the auto makers and energy 
companies. Is the information that DOE is getting from the auto 
makers worth the price of the demonstrations, given the 
technical challenges that remain?
    Dr. Crabtree. Well, that is a very difficult question to 
answer. Let me say something generally, which may not be quite 
the specific answer you are looking for.
    I think it is very important to have demonstration 
projects, because there you learn what the problems are, and 
you learn how to innovate. And if you look at the history of 
energy, and let us say, internal combustion engines, that is 
how the progress was made. So we can't discount that as a very 
important way to go forward.
    I would balance that with the feeling that we need to put 
basic research on the table as well. It is really both of those 
efforts that are going to make the hydrogen economy vibrant, 
competitive, innovative, and lasting for 100 years, as the 
fossil fuel economy has done.
    Chairwoman Biggert. Would you say that the money would be 
better spent on basic research, or does there need to be a 
balance?
    Dr. Crabtree. I think there needs to be a balance. There 
absolutely needs to be a balance.
    Chairwoman Biggert. Thank you.
    And I have one more here, if I can find it.
    Mr. Chernoby, what role do the entrepreneurs or start-up 
companies and venture capitalist investors have to play in 
helping DaimlerChrysler accelerate the commercial introduction 
of the advanced hydrogen fuel cell vehicles?
    Mr. Chernoby. Absolutely, they are going to play a critical 
role, especially in those areas where we develop a new 
technological innovation that may not be of significant 
interest to a big company at this point in time to invest. The 
entrepreneur may be our avenue to actually get that into the 
commercialization, as Dr. Bodde mentioned earlier.
    So we absolutely see that linkage as one that may be a very 
critical path in order to get this to a reality.
    Dr. Bodde. Just a footnote on that, Madame Chairman.
    Chairwoman Biggert. Sure.
    Dr. Bodde. When the laser was first invented at Bell Labs, 
the inventors of it had a very hard time getting it patented.
    And why did they have a hard time getting it patented? 
Well, it turns out that, for the telephone, it was then 
understood there was absolutely no use for this innovation. And 
so it was only by great persuasion that Bell Labs actually 
managed to capture the patents for this enormously useful, 
broadly applicable innovation.
    Chairwoman Biggert. Thank you.
    And with that note, we will--before we bring the hearing to 
a close, I want to thank our panelists for testifying before 
the Subcommittee today. I think it was--you are just experts in 
your fields, and it was very, very helpful to all of us.
    And if there is no objection, the record will remain open 
for additional statements from the Members and for answers to 
any follow-up questions the Subcommittee may ask of the 
panelists. So without objection, so ordered.
    The hearing is now adjourned.
    [Whereupon, at 12:05 p.m., the Subcommittee was adjourned.]

                              Appendix 1:

                              ----------                              


                   Answers to Post-Hearing Questions
Responses by Douglas L. Faulkner, Acting Assistant Secretary, Energy 
        Efficiency and Renewable Energy, Department of Energy

Questions submitted by Chairman Judy Biggert and Chairman Bob Inglis

Q1.  Dr. Bodde recommended that the Department of Energy (DOE) keep 
track of the efforts of auto suppliers and smaller private ventures 
that support the automotive industry. Has DOE taken any steps in this 
direction, and what else can be done?

A1. We agree that it is important to stay abreast of commercial and 
technical developments of auto suppliers and smaller private ventures. 
A strong supplier base capable of providing parts for advanced vehicles 
is important to maintain the U.S. auto industry's competitiveness 
especially given auto manufacturers' increased reliance in recent years 
on their first and second tier suppliers.
    We monitor developments at supplier companies and smaller private 
ventures by regularly attending technical conferences, sponsoring 
technology assessments, tracking the technical literature, visiting R&D 
facilities, and meeting with researchers. Most importantly, we provide 
a substantial portion of our transportation-related R&D funding to such 
companies. In FY05, the Department of Energy's, Hydrogen, Fuel Cell and 
Infrastructure Program spent approximately $72 million, or 32 percent 
of its budget and the FreedomCAR and Vehicle Technologies Program spent 
approximately $35 million, or 40 percent of its light duty vehicles 
budget to fund research at such companies. In addition, many suppliers 
work directly with our national laboratories which provides further 
insights into the types of technology challenges arising and how they 
are being addressed.

Q2.  How is DOE working to ensure that the technologies developed under 
the FreedomCAR program that can be used in conventional vehicles are 
moved into the marketplace, and that the efficiency gains from the 
technologies are used to improve fuel economy?

A2. New vehicle technologies normally take about 15 years to reach 
maximum market penetration. Ultimately, companies must make independent 
decisions on which combination of technologies makes sense for each to 
commercialize based upon the establishment of viable business cases. 
Even if performance and cost targets are met, other market factors 
(e.g., availability and price of gasoline, investment capital 
conditions/risk, etc.) will influence industry's decision to 
commercialize a particular technology.
    DOE works closely with industry through the FreedomCAR and Fuel 
Partnership and our cost-shared R&D projects to help strengthen the 
business case for the adoption of technologies on which we work. 
Partnerships help facilitate technology transfer and information 
dissemination by creating a common understanding of technical 
capabilities and barriers and by providing a forum in which to exchange 
ideas. In addition, as technical progress is made, performance targets 
are met and validated, and cost is reduced, the technologies become 
more attractive for industry to adopt and commercialize.

Q3.  What steps might the industry take to assure customers that 
hydrogen-powered vehicles meet the same or higher standards of safety 
compared to current vehicles?

A3. Ultimately, customer assurance of safety will be accomplished by 
establishing a safety record and experience base that demonstrates safe 
use of hydrogen by the public. Since that experience base does not yet 
exist, it is critical that early hydrogen demonstrations operate with 
safety at the highest priority level. To accomplish this, both DOE and 
industry are working together through the following activities to 
ensure safety:

          Establishing codes and standards. All major domestic 
        and international codes and standards organizations are working 
        with industry and other stakeholders to establish the initial 
        safety standards and codes which will guide the roll-out of 
        hydrogen technology. A number of key codes and standards have 
        been completed and are in the process of being adopted. As the 
        technology evolves over the next decade, these codes and 
        standards will be revised. In addition, the Department of 
        Transportation is performing their regulatory role of 
        establishing vehicle standards, crash worthiness and pipeline 
        safety.

          Ensuring safety of demonstration vehicles and 
        fueling. To ensure safety during hydrogen demonstrations, 
        layers of safety systems are being employed. For example: 1) 
        Vehicles are equipped with a number of hydrogen leak detectors 
        that trip below the concentration level of hydrogen that would 
        support combustion, 2) Accident sensors (similar to those used 
        to deploy air bags) are employed to prevent fuel flow following 
        an accident, and 3) Service stations are equipped with sensors 
        and monitors, and refueling operations are conducted by trained 
        personnel.

          Ensuring safety of DOE projects. DOE has implemented 
        a series of measures to ensure safe operation of our R&D 
        program: A primary measure is the DOE Hydrogen Safety Panel, an 
        independent group which counsels DOE on safety matters, 
        performs reviews of project safety plans and conducts site 
        audits of facility conducting R&D.

          Training. DOE is working with government, industry 
        and fire professionals to develop and conduct training for 
        first responders.

          Reporting incidents and lessons learned. DOE is in 
        the process of establishing an international hydrogen incident 
        database so that information from hydrogen incidents or ``near-
        misses'' from around the world can be shared throughout the 
        hydrogen community, helping to prevent future safety problems.

Q4.  Professor Heywood argues that because of the high risk of failure 
of the hydrogen research initiative, DOE should increase funding for 
alternative vehicle technologies, such as electric vehicles and biomass 
fuels. What do you think the chances are that technical barriers will 
cause the hydrogen initiative to fail? Is DOE providing enough funding 
to alternatives?

A4. We believe the Administration's requests have provided enough 
funding for R&D in vehicles and biomass. We agree that their merits are 
significant. We also believe the chance of achieving technical success 
in the development of hydrogen technologies is very good, due to 
extensive program planning, management and review.

Question submitted by Representative Roscoe G. Bartlett

Q1.  In your opinion, is a limited world platinum supply likely to be a 
barrier to the widespread adoption of fuel cells?

A1. No. A study by TIAX, LLC determined that there are sufficient 
platinum resources in the ground to meet long-term projected platinum 
demand if the amount of platinum in fuel cell systems is reduced to the 
Department's target level. The DOE-sponsored study, shows that world 
platinum demand (including jewelry, fuel cell and industrial 
applications) by 2050 would be 20,000 metric tons against a total 
projected resource of 76,000 metric tons. This study assumes that fuel 
cell vehicles attain 80 percent market penetration by 2050 (from U.S., 
Western Europe, China, India and Japan). The study shows that the 
limiting factor in keeping up with increased platinum demand is the 
ability of the industry to respond and install additional production 
infrastructure. Since in the out-years, recycling would provide almost 
60 percent of the supply, the industry will have to be careful not to 
overbuild production capacity in a more accelerated market demand 
scenario.

          Platinum availability is a strategic issue for the 
        commercialization of hydrogen fuel cell vehicles. Platinum is 
        expensive and is currently critical to achieving the required 
        levels of fuel cell power density and efficiency. As such, the 
        Department has been focused on reducing and substituting for 
        (with non-precious metal catalysts) the amount of platinum in 
        fuel cell stacks (while maintaining performance and durability) 
        so that hydrogen fuel cells can be cost competitive with 
        gasoline internal combustion engines.

          Significant progress has been made and is still being 
        made by national laboratories, universities and industry to 
        reduce the amount of platinum needed in a fuel cell stack by 
        replacing platinum catalysts with platinum alloy catalysts or 
        non-platinum catalysts, enhancing the specific activity of 
        platinum containing catalysts, and depositing these catalysts 
        on electrodes using innovative processes. The Office of Science 
        has recently initiated new basic research projects on the 
        design of catalysts at the nanoscale that focus on continued 
        reduction in the amount of platinum catalyst required in fuel 
        cell stacks.

          Typically, it takes three to five years to increase 
        platinum production capacity in response to an increase in 
        demand. Fuel cell vehicle production may create a brief 
        platinum supply deficit, leading to short-term price increases.

          The TIAX study shows that platinum prices over the 
        last one hundred years fluctuated based on major world events 
        (e.g., world war, etc.), however, the mean price (adjusted for 
        inflation) remained stable at $300 per troy ounce. However, 
        over the last couple of years platinum has been higher at $900 
        per troy ounce.

Question submitted by Representative Michael E. Sodrel

Q1.  Please provide details of Iceland's effort to convert entirely to 
a hydrogen economy. Is DOE working with Iceland on this effort? Have 
they made any advances, including in geothermal energy, that will help 
to advance a hydrogen economy in the U.S.?

A1. Iceland's goal is to become the first nation in the world to 
achieve the vision of a hydrogen economy. The move to a hydrogen 
economy has significant government support, and surveys conducted by 
Icelandic New Energy indicate significant public support as well. With 
a population of less than 300,000 (the majority of which resides in the 
capital of Reykjavik), transforming the Icelandic transportation sector 
to hydrogen will require far fewer hydrogen fueling stations than what 
will be required in the United States. Advances include:

          Iceland has an abundance of relatively inexpensive 
        renewable energy that is used for heating and provides 100 
        percent of the Nation's electricity (80 percent from hydropower 
        and 20 percent from geothermal).

          Currently, there is one hydrogen fueling station, 
        located along a major highway in Reykjavik, which serves as a 
        national demonstration project. Hydrogen is produced on site 
        via renewable electrolysis. The station is a publicly 
        accessible retail fueling station that also offers gasoline and 
        diesel and includes a convenience store. It supports the 
        operation of three hydrogen fuel cell buses that run regular 
        routes around Reykjavik; there are no other hydrogen vehicles 
        at this time.

          The next phase of the country's hydrogen 
        demonstration will involve the conversion of the entire 
        Reykjavik bus fleet to hydrogen. Future phases will include 
        promoting the integration of fuel cell powered vehicles for 
        passenger use and examining the possibility of replacing the 
        fishing fleet with hydrogen based vessels.

          Iceland collaborates with the United States through 
        the International Partnership for the Hydrogen Economy (IPHE), 
        which was established in November 2003 to facilitate global 
        collaboration on hydrogen and fuel cell research, development, 
        and demonstration (RD&D). With a membership including 16 
        countries and the European Commission, the IPHE provides a 
        forum for leveraging scarce RD&D funds, harmonizing codes and 
        standards, and educating stakeholders and the general public on 
        the benefits of and challenges to the hydrogen economy.

Question submitted by Representative Michael M. Honda

Q1.  Given the level of innovation in advanced vehicle technologies as 
demonstrated by foreign-owned automobile manufacturers such as Toyota, 
Nissan and Honda, would it benefit the U.S. to expand more of the 
cooperative research, development and demonstration programs (including 
FreedomCAR) to include foreign-owned companies with domestic R&D and 
manufacturing facilities?

A1. The Department's public/private partnership to develop hydrogen and 
hybrid-electric vehicle technologies--the FreedomCAR and Fuel 
Partnership is not a partnership with individual auto companies, but is 
between DOE and the U.S. Council for Automotive Research (USCAR). Under 
the USCAR umbrella, car companies are able to engage in cooperative, 
pre-competitive research, and to coordinate the industry's interaction 
with government research organizations. Auto companies that are 
conducting substantial automotive research and development activities 
within the U.S. are able to apply for membership in USCAR.
    Even though many foreign companies have substantial production 
facilities within the United States, they do not have staff in North 
America with the appropriate R&D expertise or experience to qualify for 
participation in the development of technology goals and milestones for 
these programs.
    Foreign car companies, however, have been and continue to be able 
to contribute their ideas to the programs by meeting with DOE program 
managers and by participating in DOE workshops, stakeholder meetings, 
program reviews, and solicitations. They also are able to provide input 
through public comments on pre-solicitation and go/no-go decision 
notices. We also frequently visit their R&D facilities and monitor 
technological developments outside of the United States.

                   Answers to Post-Hearing Questions

Responses by David L. Bodde, Director, Innovation and Public Policy, 
        International Center for Automotive Research, Clemson 
        University

Questions submitted by Chairman Judy Biggert and Chairman Bob Inglis

Q1.  What steps might the industry take to assure customers that 
hydrogen-powered vehicles meet the same or higher standards of safety 
compared to current vehicles?

A1. Years of experience with hydrogen production and use clearly 
demonstrate that a high degree of safety can be achieved. But all this 
experience has been gained in applications that are professionally 
managed and maintained. When hydrogen is introduced into the consumer 
economy, an entirely different set of issues arise, not only for 
consumers but also for first-responders to emergencies.
    Safety will be especially important during the transition period, 
as any hydrogen-related accidents will draw intense public scrutiny. 
This applies to every part of the hydrogen supply chain--production, 
logistics, dispensing, and on-vehicle use. Thus, all parts of an 
emerging hydrogen industry, not just the vehicle makers, must move 
aggressively to define and resolve potential safety issues. The 
Department of Energy should take the lead here--for example, by raising 
the importance of safety in its FreedomCAR program. This could be done 
by creating a ``safety team'' in addition to the team developing codes 
and standards. Further, safety should be considered a system-wide issue 
and integrated into all the technical teams.
    Some specific issues pose special concerns. In my view, high 
pressure hydrogen storage on-board vehicles poses the greatest single 
safety challenge, especially as these vehicles age. Plainly, much 
design effort should be devoted to fail-safe systems, and manufacturers 
must build these vehicles for quality and durability. For the longer-
term, low-pressure, solid-state storage systems might offer relief, but 
for now these remain research goals and far from marketplace reality.
    Finally, all companies participating in the emerging hydrogen 
economy must share safety-related information widely. This serves their 
self interest, as an accident anywhere is likely to impugn hydrogen 
activities everywhere.

Q2.  What have you learned from your experience on the National 
Academies' review panel on FreedomCAR? What recommendations do you feel 
most important?

A2. The FreedomCAR and Fuel Partnership takes on an extraordinary 
challenge: to precipitate revolutionary change in a global vehicle and 
fuels infrastructure that has served well for over 100 years and that 
continues to perform well from a consumer perspective. The challenge is 
in part technological, but in equal measure it is social and economic--
yet the chief policy instrument used by the Federal Government has been 
technology development. The technologists, however, cannot do it all, 
and private businesses must respond to the marketplace. Therefore, 
success will require strong and consistent leadership from elected 
officials in order to supplement technology as a pathway to change.
    In my view, the most important recommendation from the National 
Academies' review were:

          Hydrogen storage and fuel cell performance. 
        Extraordinarily ambitious goals have been set for the 
        FreedomCAR and Fuel Partnership, especially in the crucial 
        areas of on-vehicle hydrogen storage and fuel cell performance. 
        Increased attention and support will be required, especially 
        for membrane research, new catalyst systems, electrode design, 
        and all aspects of energy storage.

          Risk hedging. As a hedge against delay in meeting 
        these goals, the program should emphasize:

                  Advanced combustion engines and emissions controls;

                  Battery storage of energy, a ``no regrets'' strategy 
                that will also serve the hybrid electric vehicles, 
                plug-hybrids, and eventually the hydrogen fuel cell 
                vehicle; and,

                  Management of electric energy systems, also serving 
                all forms of electric drive vehicles.

          Congressionally directed funding. The panel noted 
        that diversion of resources from critical technology areas 
        increases the risk that the program will not meet its goals in 
        a timely manner.

Q3.  Professor Heywood argues that because of the high risk of failure 
of the hydrogen research initiative, the Department of Energy (DOE) 
should increase funding for alternative vehicle technologies, such as 
electric motors and biomass fuels. What do you think the chances are 
that technical barriers will cause the hydrogen initiative to fail? Is 
DOE providing enough funding to alternatives?

A3. My own concern is not so much that the hydrogen initiative will 
fail by encountering some fundamental physical barrier. Rather, I fear 
that technical barriers and parsimonious funding will delay deployment 
of a hydrogen economy well beyond the goals set by the DOE.
    In the meantime, this nation--and, indeed, the world--will continue 
to rely in the internal combustion engine. Therefore, simple prudence 
would suggest we hedge our bets (as above) both with improvements to 
the ICE and with alternative fuels that could backstop a delayed 
hydrogen economy.

Question submitted by Representative W. Todd Akin

Q1.  In your testimony, you stated that, ``coal offers the lowest cost 
pathway to a hydrogen based energy economy.'' However, within DOE, the 
carbon sequestration program is managed separately from the hydrogen 
and vehicles programs. What can we do as a Congress to encourage 
greater cooperation between these programs, and how does the current 
structure of DOE hinder efforts to use coal for hydrogen fuel cells?

A1. This separation has concerned at least two National Academies' 
committees as well. The concern is to bring the several parts of this 
very complex set of programs to fruition at the appropriate time. The 
systems analysis function was established to provide the analytical 
means to accomplish this. However, implementation, as you note, is in 
question.

Question submitted by Representative Roscoe G. Bartlett

Q1.  In your opinion, is the limited world platinum supply likely to be 
a barrier to the widespread adoption of fuel cells?

A1. Yes, we plainly must develop alternative design approaches that 
avoid the use of expensive materials like platinum. Otherwise, fuel 
cells will become too costly for wide scale deployment. Membrane and 
catalyst research will be important here--see response A2 to Chairman 
Biggert and Chairman Inglis, above.

Question submitted by Representative Michael M. Honda

Q1.  Given the level of innovation in advanced vehicle technologies as 
demonstrated by foreign-owned automobile manufacturers such as Toyota, 
Nissan, and Honda, would it benefit the U.S. to expand more of the 
cooperative research, development, and demonstration programs 
(including FreedomCAR) to include foreign-owned companies with domestic 
R&D and manufacturing facilities?

A1. Yes, I think there could be some value in that, though the 
information sharing must be reciprocal. But more importantly, I believe 
the FreedomCAR and Fuel Partnership should make greater efforts to 
engage the entrepreneurial sector of the U.S. economy. If we look at 
past technological revolutions, we observe that the industry incumbents 
rarely led the change. The telegraph companies did not bring us the 
telephone, the telephone companies did not bring us the Internet, and 
the electron tube makers did not bring us solid state electronics. 
Thus, much evidence suggests that encouraging entrepreneurship in road 
transportation might provide a powerful pathway to a hydrogen economy.

                   Answers to Post-Hearing Questions

Responses by Mark Chernoby, Vice President, Advanced Vehicle 
        Engineering, DaimlerChrysler Corporation

Questions submitted by Chairman Judy Biggert and Chairman Bob Inglis

Q1.  What steps might the industry take to assure customers that 
hydrogen-powered vehicles meet the same or higher standards of safety 
compared to current vehicles?

A1. Hydrogen-powered vehicles will be required to meet the same safety 
standards as current vehicles. What government and industry can do 
together to prepare the public for hydrogen vehicles is safety 
education. For example, first responders to a hydrogen vehicle accident 
need to know proper procedures for ensuring safety of the vehicle 
occupants just as they have been trained for current vehicles. A good 
first step towards this end is the Department of Energy's Hydrogen 
Vehicle Validation program. Government and industry are working 
together to develop public education programs that include hydrogen 
safety.

Q2.  Professor Heywood argues that because of the high risk of failure 
of the hydrogen research initiative, DOE should increase funding for 
alternative vehicle technologies, such as electric vehicles and biomass 
fuels. What do you think the chances are that technical barriers will 
cause the hydrogen initiative to fail? Is DOE providing enough funding 
to alternatives?

A2. As a partner of the FreedomCAR program we are satisfied with the 
diversity of the Department of Energy's alternative vehicle research 
programs. DaimlerChrysler also believes as Professor Heywood in a broad 
research portfolio approach to the future. Hydrogen storage is one of 
the high risk challenges for public acceptance of a hydrogen vehicle. 
The challenge is high but it is a risk we must take as we pursue all 
alternatives to the current vehicle propulsion technologies.

Question submitted by Representative Roscoe G. Bartlett

Q1.  In your opinion, is a limited world platinum supply likely to be a 
barrier to the widespread adoption of fuel cells?

A1. The current platinum loading of fuel cell electrodes is cost 
prohibitive for most commercial applications. In order to gain consumer 
acceptance platinum in a fuel cell must be reduced to a fraction of the 
current level. Therefore, the supply of platinum will be of less 
concern when fuel cells are ready for the mass market.

                   Answers to Post-Hearing Questions

Responses by George W. Crabtree, Director, Materials Science Division, 
        Argonne National Laboratory

Questions submitted by Chairman Judy Biggert and Chairman Bob Inglis

Q1.  What steps might the industry take to assure customers that 
hydrogen-powered vehicles meet the same or higher standards of safety 
compared to current vehicles?

A1. The public acceptance of hydrogen depends not only on its practical 
and commercial appeal, but also on its record of safety in widespread 
use. The special flammability, buoyancy, and permeability of hydrogen 
present challenges to its safe use that are different, but not 
necessarily more difficult, than for other energy carriers. One 
important step to insuring hydrogen safety is research to understand 
the combustibility of hydrogen in open spaces where it is naturally 
diluted and in closed spaces where it may concentrate by accumulation. 
Additional areas of research needed for hydrogen safety are the effect 
of mixing with volatile hydrocarbons like gasoline or alchohol, on 
hydrogen ignition, the embrittlement of materials by exposure to 
hydrogen that may cause leaks, and the development of sensing 
techniques selective for hydrogen.
    A second key element is development of effective safety standards 
and practices that are widely known and routinely used, like those for 
self-service gasoline stations or plug-in electrical appliances. 
Despite the danger of open exposure to gasoline and household 
electricity, the injury rate from these hazards has been minimized by 
thorough education to a few simple codes and standards. Similar codes 
and standards need to be developed and widely disseminated for 
hydrogen.

Q2.  In your testimony, you explain the challenge of hydrogen storage 
as follows: that we are searching for a material that allows, at the 
same time, both close and loose packing and weak and strong bonding of 
hydrogen molecules. Is there any known precedent or parallel phenomenon 
that gives us some confidence that such a material exists or can be 
created?

A2. The challenge of simultaneously satisfying the twin criteria of 
high storage capacity and fast charge/release rates is formidable. 
However advances in nanoscience over the last five years open promising 
new horizons for satisfying the seemingly conflicting requirements of 
strong bonding and close packing for high capacity and weak bonding and 
loose packing for fast charge/release. A storage medium composed of 
tiny nanoparticles, for example, can provide short diffusion lengths 
for hydrogen within the nanoparticle leading to high charge/release 
rates, combined with dense packing of hydrogen as a chemical compound 
with the host medium. Two promising new materials have been developed 
in the last year: ammonium borane (NH3BH3) and 
MgC12(NH3)6, each of which can be 
artificially nanostructured to enhance its release rate while 
maintaining its high hydrogen storage capacity.
    The search for new nanostructured storage materials is enormously 
streamlined by theoretical modeling of their storage behavior using 
modern density functional theory implemented on computer clusters 
containing hundreds of nodes. Such advanced modeling enables accurate 
simulation of the storage capacity and release rate of hundreds of 
candidate materials without the expensive and time consuming step of 
fabricating them in the laboratory. This efficient ``virtual 
screening'' dramatically increases the number of materials that can be 
searched, with only the most promising candidates tested for physical 
performance in the laboratory. The formulation of density functional 
theory and powerful computer clusters enabling this efficient screening 
were not available even a few years ago.

Q3.  Professor Heywood argues that because of the high risk of failure 
of the hydrogen research initiative, the Department of Energy (DOE) 
should increase funding for alternative vehicle technologies, such as 
electric vehicles and biomass fuels. What do you think the chances are 
that technical barriers will cause the hydrogen initiative to fail? Is 
DOE providing enough funding to alternatives?

A3. The demand for energy is projected to double by 2050 and triple by 
2100. This means that by 2050 we must create an energy supply chain and 
infrastructure that duplicates today's capacity. This challenge is 
beyond the reach of a single energy source or energy carrier. To meet 
the challenge, we must develop a mix of energy options and rely on each 
to shoulder a portion of the load. Like hydrogen, the alternatives 
suggested by Professor Heywood are worthy of serious consideration, but 
they are not without their risks. Electric vehicles substitute 
electricity for fossil fuels at the point of use, but the electricity 
they require must be generated, typically from burning fossil fuels 
like coal and natural gas. Thus the pollution, greenhouse gas emission, 
and fossil fuel consumption at the point of use is simply shifted to 
the point of electricity production. This option has approximately 
neutral impact on the national energy challenges of adequate supply, 
secure access, local pollution and climate change.
    Biomass fuels, while carbon neutral, are not plentiful enough to 
displace all the gasoline used for transportation in the Nation. Even 
the most optimistic estimates for biomass fuels claim only to be able 
to replace the foreign oil used for transportation, and this would 
occur only after a long development period graced by significant 
breakthroughs in genetic engineering that are presently beyond the 
reach of science. Because significant breakthroughs are required, it is 
impossible to rank the risk of failure of biomass fuels as greater or 
less than that of hydrogen.
    Many energy options must be developed simultaneously, and each will 
require breakthroughs that we do not know how to achieve at present. 
Hydrogen solves all four national energy challenges: it is abundant, 
widely accessible, and free of pollution and greenhouse gas emission if 
produced by splitting water renewably. Other energy options like 
electric cars and fuel from biomass address only some of the 
challenges, and may require equally expensive and difficult 
breakthroughs. Without the advantage of a crystal ball, it is prudent 
to invest in several of the most promising energy options. Hydrogen is 
among the most promising options, for its ability to address, and 
perhaps solve, all four energy challenges. Alternatives should also be 
funded, though electric cars themselves have little direct impact on 
the energy challenges. Biomass addresses climate change much less 
effectively than hydrogen (it is carbon-neutral, while hydrogen is 
carbon-free) and is only abundant enough, even with massive planting of 
energy crops, to supply a fraction of our transportation fuel needs.

Question submitted by Representative Roscoe G. Bartlett

Q1.  In your opinion, is a limited world platinum supply likely to be a 
barrier to the widespread adoption of fuel cells?

A1. There is consensus that if all the family cars and light trucks in 
the Nation were converted to hydrogen fuel cell propulsion, there is 
not enough platinum in the world to supply the catalysts needed for 
their operation. This is a clear barrier to the immediate replacement 
of internal combustion engines with fuel cells using present 
technology. However, many other factors, such as the lack of viable on 
board hydrogen storage media, the short lifetime of fuel cell energy 
converters under normal automotive use, the poor starting performance 
of fuel cells in cold weather, and the high expense of fuel cells 
compared to internal combustion engines, prevent significant 
penetration of fuel cell cars in the marketplace in the near future. 
Under these conditions, the scarcity of platinum for catalysts is not 
the major factor limiting widespread use of fuel cell automobiles.
    The replacement of platinum by less expensive and more active 
catalysts is a vibrant field of research with promise of significant 
progress before the other factors limiting fuel cell penetration are 
resolved. We know that plentiful, less expensive catalysts exist, 
because we see them every day in the biological world. Green plants use 
abundant, inexpensive manganese as their catalyst for the water 
splitting step in photosynthesis. The molecular configurations and 
reaction pathways for the catalysis of water splitting in plants, 
however, remains tantalizingly just beyond our scientific reach. Using 
powerful computer analysis and the world's most intense x-ray sources 
located at DOE national laboratories, scientists are now on the verge 
of solving the structures of the natural catalytic reactors that plants 
use in photosynthesis. When these catalytic mechanisms are fully 
revealed in a few years, we will be able to reproduce them, perhaps in 
improved form, for use in the artificial environment of fuel cells. 
This breakthrough, which is now within sight, will open new horizons 
for catalysis not only in fuel cells, but also in a host of other 
energy conversion applications. It's achievement will require 
significant advances in several scientific frontiers: high resolution 
structure determination, advanced density functional modeling of the 
structure and dynamics of the catalytic process, and nanoscale 
fabrication of artificial catalytic assemblies. Investments in these 
high risk-high payoff scientific advances will yield ample dividends in 
fundamental knowledge and control of the natural catalytic mechanism of 
green plants.
                   Answers to Post-Hearing Questions

Responses by John B. Heywood, Director, Sloan Automotive Laboratory, 
        Massachusetts Institute of Technology

Questions submitted by Chairman Judy Biggert and Chairman Bob Inglis

Q1.  What steps might the industry take to assure customers that 
hydrogen-powered vehicles meet the same or higher standards of safety 
compared to current vehicles?

A1. Safety is a major concern in the FreedomCAR and Fuels Program. The 
FreedomCAR and Fuels Program has a group within its management 
structure which involves representatives from industry that is focused 
on safety. An understanding of the key safety issues and appropriate 
responses to those issues are being developed. Existing vehicle and 
fuel safety regulations will apply to hydrogen-fueled vehicles, and the 
need for new requirements and standards is being explored. Dealing with 
hydrogen-related safety issues will be a significant challenge, but in 
my judgment is unlikely to be a show-stopper. Those involved in the 
program are well aware that major safety incidents would adversely 
affect the broader public's response to an evolving hydrogen-fueled 
vehicle program.

Q2.  You make several recommendations for areas to receive increased 
funding, ranging from improved combustion engines to electric 
batteries. Unfortunately, we are living in difficult budget times, and 
any increase must be accompanied by a decrease, or an increase in 
revenues. Are there areas of research that you feel the Federal 
Government should not be funding at current levels?

A2. We are living in difficult budget times because of the tax 
reductions the President and Congress have implemented over the past 
five years. Few of us have yet realized just how serious our 
transportation energy predicament is, or that petroleum availability 
shortages could affect our transportation system within the next decade 
or so. Failure of the supply of gasoline, diesel, and aviation fuel to 
grow to meet the anticipated growth in demand for these fuels (both in 
the U.S. an elsewhere) would be expected to create major economic and 
social impacts. It would take significant time before we would be able 
to respond effectively.
    We need to recognize that substantial government R&D support for 
several potentially promising engine, fuel, and vehicle technology 
opportunities will be required to move these technologies forward 
towards potential deployment. We need a broader and more balanced U.S. 
transportation energy technology R&D program; our current government 
efforts are too focused on hydrogen which, while promising, may not in 
the end prove to be implementable. Our longer-term choices in the 
transportation energy area (hydrogen and fuel cells, electricity and 
battery powered vehicles, much lighter and smaller vehicles, biomass-
based fuels, liquid fuels from oil sands, heavy oil, coal) are all 
extremely challenging ones to attempt to implement.
    Are there areas where the federal R&D budget could be cut to 
provide resources for a broader set of such initiatives? I do not have 
sufficient knowledge of our government's R&D activities in an overview 
sense to attempt an answer to that question. One factor that makes that 
an especially difficult question, in my judgment, is that our 
government lacks a coherent industrial and technology development 
policy. One consequence of that lack is that we risk losing our global 
leadership position in transportation energy technologies and the 
business opportunities that go with that leadership role.

Question submitted by Representative Roscoe G. Bartlett

Q1.  In your opinion, is a limited world platinum supply likely to be a 
barrier to the widespread adoption of fuel cells?

A1. Platinum production capacity would have to expand substantially if 
current technology fuel cells (which have a high platinum requirement) 
were produced in large numbers. However, they will not be produced in 
large numbers because current technology fuel cells are too expensive 
to be commercially viable, and their technology with its substantial 
platinum requirement will have to change significantly before fuel 
cells can become commercially viable. What is already happening that 
will stress the platinum supply system is the growth in light-duty 
vehicles worldwide (from 750 million today to an anticipated two 
billion in 2050), and the expanding demand for automotive catalysts and 
their requirement for noble metals like platinum that goes along with 
that worldwide vehicle growth. Thus, it is clear that much improved 
automotive fuel cell technology, with much lower platinum loadings, 
will need to be developed if fuel cells are to become a practical and 
marketable technology.



                   Answers to Post-Hearing Questions

Responses by Arden L. Bement, Jr., Director, National Science 
        Foundation

Q1a.  What progress has been made toward addressing the principal 
technical barriers to a successful transition to the use of hydrogen as 
a primary transportation fuel since the Administration announced its 
hydrogen initiatives, FreedomCAR and the President's Hydrogen Fuel 
Initiative?

A1a. The National Academies' report, The Hydrogen Economy: 
Opportunities, Costs, Barriers, and R&D Needs (http//www.nap.edu/books/
0309091632/html/), published in 2004, identifies the following 
principal technical barriers to a successful transition to the use of 
hydrogen as a primary transportation fuel: 1) Development and 
introduction of cost-effective, durable, safe, and environmentally 
desirable fuel cell systems and hydrogen storage systems; 2) 
development of the infrastructure to provide hydrogen for the light-
duty-vehicle user; 3) sharp reduction in the costs of hydrogen 
production from renewable energy sources over a time frame of decades; 
and 4) capture and storage (``sequestering'') of the carbon dioxide by-
product of hydrogen production from coal.
    The National Science Foundation, as part of the interagency 
Hydrogen R&D Task Force, established and co-chaired by OSTP and DOE, 
participates in monthly meetings at the White House Conference Center 
in order to ensure coordination among the agencies and to address 
relevant research related to potential technical barriers. NSF-
supported principal investigators (PIs) have contributed to important 
developments addressing hydrogen production and storage and fuel cell-
related basic research. For production of hydrogen, a progression can 
be expected of using natural gas, then coal, biomass, and ultimately 
water as feedstocks. One NSF PI is studying improved production of 
hydrogen from methane (a principal component of natural gas) and the 
oxygen in air using high pressures and reactor conditions that favor 
so-called ``cool flames.'' Such systems hold promise for substantially 
improving the ratio of hydrogen to water produced in the reaction and 
have the advantage that catalysts are not needed (http://www.nsf.gov/
awardsearch/showAward.do?AwardNumber=0215756).
    New reforming catalysts that produce hydrogen from hydrocarbons and 
steam and that have increased activity and improved stability toward 
key catalyst poisons are being identified through NSF awards. In 
addition, new catalytic routes to hydrogen from renewable resources 
like plant byproducts have been developed for use in water (http://
www.nsf.gov/od/lpa/news/03/pr0369.htm) and could to used in fuel cell 
applications. Some progress has been made in developing a new 
generation of non-platinum-based fuel cell catalysts.
    Advances in research related to formation of hydrogen from water 
are exemplified by Science magazine's having listed water as a 
Breakthrough of the Year for 2004. NSF PIs are determining structural 
and dynamic properties of nanoscale clusters of small numbers of water 
molecules and how they interact with the protons and electrons that are 
intimately involved in charge transfer leading to hydrogen production. 
Their studies are also addressing the nature of bonds between water 
molecules and surfaces, information that will help us understand 
reactions at fuel cell electrodes. Progress in catalyzed photo-induced 
electron transfer that is relevant to production of hydrogen from 
renewable solar energy has been reported from work conducted by NSF PIs 
and provides insight into the multiple electron transfer events that 
characterize this process.
    Materials for storing hydrogen are under active development by NSF 
PIs. ``Molecular containers'' that are porous on the nanoscale are 
being synthesized and their hydrogen-storage properties characterized, 
as are various solid-state materials ranging from metal alloys to 
carbon nanotubes. These developments have been recently summarized 
http://pubs.acs.org/isubscribe/journals/cen/83/i34/html/
8334altenergy.html. NSF PIs have also identified materials like 
palladium nanowires that can detect hydrogen at extremely low 
concentrations. Such sensor materials could serve as leak detectors for 
hydrogen and contribute to its safe use in storage and transportation 
systems.
    Fuel cell developments attributable to NSF support are exemplified 
by progress in low-temperature versions of these devices. In 
particular, improved performance has been seen with the introduction of 
fully fluorinated membranes and better electrode structures that 
increase catalyst utilization.
    High temperature Solid oxide fuel cells (SOFCs) have the potential 
to operate at high efficiency without noble metal catalysts. Currently 
available oxide membranes, which are critical for ionic transport in 
higher-temperature fuel cells, are inefficient and fail to operate at 
the lower temperatures needed for use in transportation. Several NSF 
projects are focused on studying lover-temperature oxide-ion membranes 
to minimize corrosion and differential thermal expansion, while 
maintaining selectivity and permeability.
    Also noteworthy has been the success of NSF PIs in exploiting the 
exquisite machinery of microbes, which can utilize hydrogen without the 
elaborate storage and pressure systems of conventional approaches. A 
single-chambered microbial fuel cell (http://www.nsf.gov/news/
news-summ.jsp?cntn-id=100337) has been shown 
recently to offer highly mobile and efficient energy production.

Q1b.  What are the remaining potential technical ``showstoppers?''

A1b. The aforementioned National Academies' report articulates several 
``showstoppers.'' For example, at this time, capabilities of hydrogen 
storage materials are still inadequate. If catalysts for fuel cells are 
to he economically competitive, they would either need to be about an 
order of magnitude more active and have high resistance to poisoning by 
carbon monoxide if they contain expensive platinum; or alternative, 
efficient non-platinum-based catalysts would need to be found. There 
are also challenges associated with developing manufacturing techniques 
that would enable catalyst coatings to be deposited uniformly on 
surfaces of arbitrary shape.

Q2a.  What are the research areas where breakthroughs are needed to 
advance a hydrogen economy?

A2a. Catalysis impacts many of the technical areas for which 
breakthroughs are needed to drive a hydrogen economy. Ranging from fuel 
cell electrodes to photo-induced production of hydrogen, better 
catalysts will be critical for making progress. In turn, catalyst 
improvement requires better understanding of a variety of technical 
issues. Membrane performance, for instance, demands excellent ionic 
conductivity along with physical and chemical durability. Such a 
combination of properties poses a challenge due to the lack of 
fundamental knowledge of synthesis-structure-function relationships in 
the polymers that are commonly employed as membranes. Another example 
involves the use of platinum supported on carbon for electro-catalysis 
in low-temperature acid fuel cells. Reduction of loadings of platinum 
or other precious metal in electrodes has been identified as essential 
in order to reduce system costs, but there are also problems with 
catalyst dissolution and corrosion of the material that supports the 
catalyst.
    Novel materials are needed for safe and reliable hydrogen 
production and storage, as well as for developing infrastructure to 
distribute hydrogen. Failure mechanisms due to materials degradation, 
such as hydrogen-induced embrittlement in pipelines, need to be 
understood and controlled. As noted above, better membrane materials 
for fuel cells and superior hydrogen storage materials are needed.
    Most hydrogen is currently synthesized from natural gas. Other 
potential sources of hydrogen include coal and biomass through 
gasification processes. Basic research is needed to identify optimal 
hydrogen production strategies from these feedstocks and, for biomass, 
to ensure effective gas cleanup. Carbon management must be addressed 
when using fossil fuels as a feedstock.
    Splitting water through electrolysis and photolysis needs to be 
aggressively pursued. Fundamental questions about water's properties at 
the molecular level still exist and must be resolved if we are to 
design systems that can more efficiently split water by photochemical 
or electrochemical means.
    There are also basic questions about biological systems that use 
hydrogen that hold promise for significant increases in energy 
efficiency if they could be used to form the basis for hydrogen-fueled 
systems. Central to our understanding of biological systems is the 
enzyme hydrogenase, the catalyst for reversible hydrogen oxidation. 
Hydrogenases are components of chemically driven energy production in 
microbes in the absence of oxygen. Understanding them using physical, 
genomic and biochemical methods could yield important information for 
design of systems that mimic the efficiency of chemical and light 
energy transduction found in biological systems. Guided by advances in 
theory, modeling and simulation, the synthesis of ``model'' systems 
that possess characteristics of hydrogenases represents a promising 
complementary approach to this objective.

Q2b.  How is NSF-funded research addressing those basic research 
questions?

A2b. The principal investments of NSF-funded research related to fuel 
cell and hydrogen themes are in the following areas: 1) mechanisms of 
hydrogen production and utilization in microbes and cellular membranes 
(Biological Sciences and Geosciences directorates); 2) catalysis, 
hydrogen production, purification and storage of hydrogen, fuel cell 
membrane characteristics, and fuel cell design (Engineering and 
Mathematical and Physical Sciences directorates); 3) experimental and 
theoretical studies of electrode reactions, water clusters, photo-
induced electron transfer reactions, and model hydrogenase systems 
(Mathematical and Physical Sciences directorate); and 4) materials, 
including preparation, processing, characterization and properties for 
potential fuel cell applications and for sequestration of greenhouse 
gases (Mathematical and Physical Sciences). Some representative 
projects illustrating how NSF PIs are addressing the research 
challenges outlined in section 2a were given in section 1a.
    It should be noted that many of NSF's investments are made in 
response to unsolicited proposals. These may involve individual 
investigators or multi-investigator teams. The level of investment in 
hydrogen- and fuel cell-related research, approximately $20 M annually, 
reflects the strong interest in the U.S. academic scientific and 
engineering research community in the basic research issues associated 
with these technologies.
    It is also noteworthy that there has been considerable synergy with 
developments arising from investments in nanotechnology. In addition to 
the examples of palladium nanowire hydrogen sensors and nanoporous 
solids that can store hydrogen, membranes prepared from multiple 
nanostructured layers appear to have promising characteristics with 
respect to fuel cell usage. Bacteria, which might be regarded as 
``nano-machines,'' have recently been found to use hydrogen in extreme 
environments such as hot springs, (http://www.eurekalert.org/
pub-releases/2005-01/uoca-ymf012405.php. Learning how these 
organisms live on hydrogen and how they convert it to other forms of 
energy may have the potential for transformative discoveries upon which 
to build a hydrogen economy.

Q3a.  What hydrogen research is NSF currently funding?

A3a. Areas of concentration are reflected in the interagency Hydrogen 
R&D Task Force topic areas. NSF is represented on 14 teams focusing on 
catalysis; materials for hydrogen storage; materials research; 
materials performance, measurement, and analysis; biological and 
biomimetic hydrogen production; physical and chemical interactions of 
materials and hydrogen; multi-functional materials and structures; 
photo-electrochemical hydrogen production; characterization and new 
synthesis tools; hydrogen internal combustion engines; hydrogen 
turbines; SBIR/STTR; and workforce/education. Currently, NSF funds 
approximately 130 awards per year in the areas listed above.

Q3b.  How much of this research, if any, is collaborative with private 
industry?

A3b. The principal mechanisms that NSF uses to promote interactions 
with industry are the SBIR/STTR and Grant Opportunities for Academic 
Liaison with Industry (GOALI) programs, although the latter is only a 
small fraction of the agency's portfolio. Some individual investigator 
awards also have industrial collaborations. NSF estimates a current 
investment of about $4 M in SBIR/STTR awards in hydrogen-related 
technology. NSF and DOE established a Memorandum of Understanding that 
offers NSF SBIR/STTR grantees with technology of interest to DOE 
additional resources through DOE's ``Commercialization Assistance 
Program.''

Q3c.  How much, if any, is coordinated with the basic research effort 
at the Department of Energy (DOE)?

A3c. There is considerable coordination with DOE in areas of mutual 
interest. For example, the two agencies co-chaired a session at the 
National Hydrogen Association (NHA) Annual National Hydrogen Conference 
this past April that focused on funding opportunities across agencies 
for the SBIR/STTR community. For essentially all of the topic areas 
being coordinated by the interagency Hydrogen R&D Task Force in which 
NSF participates (section 3a), DOE is also represented. Staff members 
of these two agencies are collaborating in developing short white 
papers describing the specific technical challenges associated with 
each topic area, along with representatives from other agencies as 
appropriate. Informal relationships have included extending invitations 
to workshops and contractors' meetings, and sharing information on 
program announcements, proposals, and awards. The information that is 
shared helps to ensure appropriate partitioning of investments between 
the targeted, often short-time-frame perspective of DOE and the high-
risk, often longer-term perspective of NSF.

Q4a.  How does the NSF coordinate with the Office of Science and 
Technology Policy, DOE and the other agencies involved with the 
Hydrogen Interagency Task Force?

A4a. The interagency Hydrogen R&D Task Force holds monthly meetings at 
the White House Conference Center. This provides an excellent 
opportunity to meet with representatives from OSTP, DOE and the other 
agencies involved with the Task Force. NSF currently has two 
representatives who regularly attend the meetings.

Q4b.  How is this information exchanged between the agencies and to 
what extent is it beneficial to NSF?

A4b. We have found that the topic areas have been effective in 
connecting staff members across agencies that support research in areas 
of common interest. Additionally, the Task Force established a website, 
http://www.hydrogen.gov, that provides information from all of the 
participating agencies that is of value both to the agencies and the 
external community.

Q4c.  How does NSF ensure that its research results are available to 
other agencies?

A4c. Beyond the informal contacts of technical staff facilitated by the 
Task Force, the NSF has a searchable award database and collects annual 
and final reports from its PIs. All of this information is available to 
technical staff at other agencies. NSF convenes workshops on topics 
related to the hydrogen initiative. The Task Force meetings and 
contacts provide a mechanism for inviting representatives from other 
agencies to participate in the workshops and learn about the latest 
results of NSF's PIs and their thoughts on promising future research 
and education directions.

Q4d.  Is the Task Force successful in helping agencies understand what 
hydrogen issues other agencies are working on, and to what degree?

A4d. Our experience has been that the Task Force has been quite 
successful thus far in lowering barriers to interagency collaboration 
and providing broader perspectives for investments related to the 
hydrogen initiative. Most meetings include updates from agency 
representatives on the various topical areas, meetings, and workshops. 
In addition, there have been presentations on the International 
Partnership for the Hydrogen Economy and on specific programs of 
participating agencies that have provided useful information on the 
scope of the federal investment.

                              Appendix 2:

                              ----------                              


                   Additional Material for the Record

                  Statement by Michelin North America

    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to present this testimony today on behalf of Michelin North 
America.
    Since 1889, Michelin has been contributing to progress in the area 
of mobility, through its expertise in the field of tires and suspension 
systems and the company's willingness to invest in innovation. In a 
number of instances, Michelin has been the force behind technological 
breakthroughs, such as the radial tire, the ``Green tire'' and the X 
One single wide-based tire.
    Michelin is the world leader in the tire industry. We manufacture 
and sell tires for every type of vehicle, including airplanes, 
automobiles, bicycles, earthmovers, farm equipment, heavy-duty trucks, 
motorcycles, and the Space Shuttle. The company also publishes travel 
guides, maps and atlases covering North America, Europe, Asia and 
Africa. In 2004 Michelin produced nearly 195 million tires and printed 
19 million maps and guides. Our net sales totaled approximately $19 
billion. Our tire activities and support services account for 98 
percent of our net sales. Suspension systems, mobility assistance 
services, travel publications and Michelin Lifestyle products account 
for the remaining two percent of our total business.
    Michelin sells its products in over 170 countries, operates 74 
production manufacturing facilities in 19 countries and employs nearly 
127,000 people around the world. Michelin operates three technology 
centers on three continents, one of which is located in Greenville, 
South Carolina. Greenville is the headquarters of Michelin North 
America which employs over 23,000 people and operates 21 manufacturing 
facilities in 17 locations.
    Michelin is in the business of sustainable mobility. What does that 
mean? How goods and services move has been a fundamental factor in the 
development of society, as a tool of discovery and a means of 
communication and interaction between people.
    Roads have played a key role in the phenomena of urbanization, 
globalization of exchanges and, more generally, economic growth. Road 
mobility provides access to the world and makes for a more fluid job 
market, by increasing travel opportunities to and from our homes and 
places of work. Roads provide those located in areas away from economic 
centers with a way of bringing products to the marketplace.
    Furthermore, mobility is freedom, perhaps one of the most basic 
freedoms in any country. To encourage mobility, to support the growth 
of infrastructure and ease of travel is to encourage freedom itself. 
With freedom comes responsibility--to travel safely, to conserve 
limited resources and to respect the environment.
    Alongside these advantages, advances in modern modes of transport 
have often involved significant social and environmental impacts. 
Transport worldwide, and road transport in particular, is currently 
developing in a context of population growth, urban development and an 
increasing awareness of the impact of human activity on the 
environment. In light of these factors, a transition towards a new 
attitude to mobility is clearly needed. Sustainable mobility takes into 
account the necessity of providing satisfactory responses to travel 
requirements. It must also move toward a reduction in the impact of 
mobility on the environment, become accessible to more people in as 
safe a manner as possible and be compatible with the economic 
objectives and constraints of public authorities, private companies and 
non-governmental organizations.
    Michelin views this concept of sustainable mobility as being in 
concert with our five core values: respect for customers, respect for 
facts, respect for people, respect for shareholders and respect for the 
environment. These values, and how we concretely translate these values 
to executable actions, are articulated in Michelin's Performance and 
Responsibility Charter and subsequent Performance and Responsibility 
reports.
    Why is the notion of sustainable mobility important? Between 1950 
and 2003, the number of vehicles on the roads throughout the world went 
from 50 million to more than 830 million, including nearly 700 million 
cars. According to the projections of the World Business Council for 
Sustainable Development (WBCSD), the number of passenger vehicles on 
the roads throughout the world will reach 1.3 billion in 2030. The 
distances traveled by people will increase by nearly 50 percent between 
2000 and 2030. Over the same period of time, truck freight is forecast 
to increase by 75 percent.
    As stated earlier, this increase in road traffic has an impact on 
the environment. Transport represents 26 percent of carbon dioxide 
emission (17 percent for road transport, nine percent for other modes 
of transport) according to the International Energy Agency. In 
industrialized countries, transport consumes about 65 percent of oil 
resources.
    In 2000, as a way of responding to the consequences of increased 
mobility, Michelin joined with 11 other corporate members of the 
WBCSD--BP, DaimlerChrysler, Ford, General Motors, Honda, Nissan, Norsk 
Hydro, Renault, Shell, Toyota and Volkswagen--to establish the 
Sustainable Mobility Project. The goal of this group was to carry out 
an assessment of mobility throughout the world, analyze the challenges 
facing the sector and identify the directions to take in order to 
address these challenges.
    Even before participating in the Sustainable Mobility Project, 
Michelin recognized the necessity of addressing the impacts of rapidly 
increasing road transport. In 1998, for the celebration of the 
hundredth anniversary of Bibendum--Michelin's corporate icon known 
around the world as the ``Michelin Man''--Michelin organized a rally of 
advanced technology vehicles. Challenge Bibendum has won worldwide 
recognition as the premier clean and safe vehicle event in the world, 
where industry, policy-makers and experts can review the latest 
technologies and share their visions. The event provides the 
opportunity to evaluate different technical options that exist to 
tackle the energy, environmental and safety issues associated with 
freight and individual mobility worldwide. This event has taken place 
in Europe, in North America and, last year for the first time, in Asia.
    Challenge Bibendum is a mechanism that assists in resolving 
questions associated with emissions, oil consumption, urban congestion 
and road safety. It is a unique event for several reasons:

          Challenge Bibendum is open to all energy sources and 
        all powertrain options. No other event is solution-neutral in 
        both concept and competition.

          Vehicles are evaluated in real driving conditions, 
        using precisely defined criteria relating to performance, 
        safety and the environment.

          Advanced technology vehicles are tested using today's 
        on-road vehicles as a point of reference.

          A ``ride and drive'' enables all participants to test 
        and experience for themselves the various technologies.

          An educational information center and a symposium, 
        all organized in partnership with the event's participants, 
        complete the technological competition.

          Challenge Bibendum is an open forum where all parties 
        concerned from the public and private sectors can freely 
        exchange opinions.

    Challenge Bibendum provides an international platform for road 
vehicle manufacturers to demonstrate state-of-the-art technologies and 
for participants to witness, assess and document the progress which 
these advanced, real-world technologies continue to make, as well as 
showcase the opportunities they represent.
    This event, unlike any other in the world, serves as a testing 
ground and the only one that showcases concept cars featuring 
technologies, often for the first time, alongside production vehicles 
that have already made very significant progress. Furthermore, 
Challenge Bibendum serves as an exchange forum for industry leaders, 
university researchers, public policy-makers and the media.
    Representatives from numerous organizations from around the world, 
such as the U.S. Department of Energy, the U.S. Environmental 
Protection Agency, the World Bank, the European Commission, Japan's 
Ministry of Land, Infrastructure and Transport and the WBCSD attended 
the 2004 event in Shanghai, China. In all, 2,000 people, representing 
more than 200 organizations from 45 countries, gathered at the 2004 
Challenge Bibendum.
    What conclusions could one draw from the 2004 Challenge Bibendum 
and the follow-on Bibendum Forum and Rally held in Japan just last 
month? First, there is no single technology, device, or component that 
resolves the question of how to achieve sustainable mobility within the 
parameters we have constructed. The fact that Challenge Bibendum is an 
event that displays multiple technologies underscores the fact that 
many of those technologies will help us attain the goal of sustainable 
mobility. A more holistic view needs to be taken as we move forward. 
Likewise, when environmental impact issues are examined, it is 
appropriate to view the consequences of transport from a ``well to 
wheel'' perspective. The environmental impact to gather, refine or 
otherwise provide the energy to the vehicle from its source must be 
taken into consideration.
    From the standpoint of technology, the 2004 Challenge Bibendum 
revealed the following:

          The future will include a variety of technologies and 
        non-petroleum fuels.

          Advanced internal combustion engines, both diesel and 
        gasoline, continue to make outstanding progress in terms of 
        cleaner combustion, more power density, less noise and less 
        energy consumption.

          Urban pollution can be tackled through sulfur free 
        fuels, particulate filters, next-generation combustion engines 
        and exhaust gas treatments, as well as the progressive 
        development of electric traction.

          Hybridization brings both great driving performance 
        and environmental efficiency, especially for higher power and 
        larger size vehicles; it opens a wide array of technical 
        solutions.

          Biofuels offer a very significant potential to help 
        reduce CO2 emissions.

          New generation batteries offer much greater promise 
        for electric traction of two-wheelers, cars, taxis, buses, by 
        providing higher power and energy densities--a range of more 
        than 200 miles is now a reality.

          Fuel cell vehicle driving performances are improving 
        rapidly; with a current range of up to 250 miles.

          Active safety systems such as Electronic Stability 
        Programs (ESP) have proven their efficiency, more systems are 
        becoming widely available, and passive safety is also improving 
        greatly.

    Some conclusions regarding policy were drawn, as well:

          In order to achieve improvements in air quality, 
        energy supply and safety, it is urgent to act now.

          Benefits will only be achieved when these advanced 
        technologies achieve significant market share.

          Progress will be faster by quickly disseminating and 
        implementing the advanced technologies already available while 
        working on future technologies. This has to happen in all 
        countries, especially in emerging countries to enable them to 
        develop their transportation systems.

          Different solutions will be developed in different 
        parts of the world depending on energy resources, 
        transportation requirements and existing infrastructures.

          Safer and cleaner vehicles go hand-in-hand.

          Cleaner fuels are on the critical path for many 
        emerging countries in order to enable the introduction of 
        advanced technologies.

          Joint action between industries and governments is 
        critical to achieve progress towards sustainable mobility.

          Moving towards greater global regulatory 
        harmonization is required to speed up the adoption of cleaner, 
        safer and more sustainable technologies.

    Michelin looks forward to hosting the next Challenge Bibendum (June 
2006) in order to measure additional progress. Until then, Michelin 
remains committed to improving mobility and reducing as much as 
possible the impact of its activities and products on the environment.



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