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





             THE HYDROGEN ECONOMY: IS IT ATTAINABLE? WHEN?

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

                                HEARING

                               before the

                  SUBCOMMITTEE ON ENERGY AND RESOURCES

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 27, 2005

                               __________

                           Serial No. 109-61

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html
                      http://www.house.gov/reform


                                 ______

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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
GINNY BROWN-WAITE, Florida           C.A. DUTCH RUPPERSBERGER, Maryland
JON C. PORTER, Nevada                BRIAN HIGGINS, New York
KENNY MARCHANT, Texas                ELEANOR HOLMES NORTON, District of 
LYNN A. WESTMORELAND, Georgia            Columbia
PATRICK T. McHENRY, North Carolina               ------
CHARLES W. DENT, Pennsylvania        BERNARD SANDERS, Vermont 
VIRGINIA FOXX, North Carolina            (Independent)
------ ------

                    Melissa Wojciak, Staff Director
       David Marin, Deputy Staff Director/Communications Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

                  Subcommittee on Energy and Resources

                 DARRELL E. ISSA, California, Chairman
LYNN A. WESTMORELAND, Georgia        DIANE E. WATSON, California
ILEANA ROS-LEHTINEN, Florida         BRIAN HIGGINS, New York
JOHN M. McHUGH, New York             TOM LANTOS, California
PATRICK T. McHENRY, North Carolina   DENNIS J. KUCINICH, Ohio
KENNY MARCHANT, Texas

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
                   Lawrence J. Brady, Staff Director
                 Dave Solan, Professional Staff Member
                          Lori Gavaghan, Clerk
          Richard Butcher, Minority Professional Staff Member


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 27, 2005....................................     1
Statement of:
    Burns, Lawrence D., vice president of research and 
      development and strategic planning for General Motors; 
      Dennis Campbell, CEO, Ballard Power Systems; Mujid Kazimi, 
      director, Center for Advanced Nuclear Energy Systems, 
      Massachusetts Institute of Technology; and Daniel Sperling, 
      director, Institute of Transportation Studies, University 
      of California at Davis.....................................    46
        Burns, Lawrence D........................................    46
        Campbell, Dennis.........................................    53
        Kazimi, Mujid............................................    60
        Sperling, Daniel.........................................    69
    Faulkner, Douglas L., Acting Assistant Secretary for Energy 
      Efficiency and Renewable Energy, U.S. Department of Energy; 
      Richard M. Russell, Associate Director for Technology, 
      Office of Science and Technology Policy; and Alan Lloyd, 
      agency secretary, California Environmental Protection 
      Agency.....................................................     5
        Faulkner, Douglas L......................................     5
        Lloyd, Alan..............................................    22
        Russell, Richard M.......................................    15
Letters, statements, etc., submitted for the record by:
    Burns, Lawrence D., vice president of research and 
      development and strategic planning for General Motors, 
      prepared statement of......................................    49
    Campbell, Dennis, CEO, Ballard Power Systems, prepared 
      statement of...............................................    55
    Faulkner, Douglas L., Acting Assistant Secretary for Energy 
      Efficiency and Renewable Energy, U.S. Department of Energy, 
      prepared statement of......................................     7
    Issa, Hon. Darrell E., a Representative in Congress from the 
      State of California, prepared statement of.................     3
    Kazimi, Mujid, director, Center for Advanced Nuclear Energy 
      Systems, Massachusetts Institute of Technology, prepared 
      statement of...............................................    62
    Lloyd, Alan, agency secretary, California Environmental 
      Protection Agency, prepared statement of...................    24
    Russell, Richard M., Associate Director for Technology, 
      Office of Science and Technology Policy, prepared statement 
      of.........................................................    17
    Sperling, Daniel, director, Institute of Transportation 
      Studies, University of California at Davis, prepared 
      statement of...............................................    71
    Watson, Hon. Diane E., a Representative in Congress from the 
      State of California, prepared statement of.................    81

 
             THE HYDROGEN ECONOMY: IS IT ATTAINABLE? WHEN?

                              ----------                              


                        WEDNESDAY, JULY 27, 2005

                  House of Representatives,
              Subcommittee on Energy and Resources,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 1:10 p.m., in 
room 2203, Rayburn House Office Building, Hon. Darrell E. Issa 
(chairman of the subcommittee) presiding.
    Present: Representatives Issa and Kucinich.
    Staff present: Larry Brady, staff director; Lori Gavaghan, 
legislative clerk; Dave Solan, Steve Cima, and Chase Huntley, 
professional staff members; Richard Butcher, minority 
professional staff member; and Cecelia Morton, minority office 
manager.
    Mr. Issa. Ladies and gentlemen, I appreciate your patience. 
Please remain standing, you will feel more comfortable. All 
those who are testifying or who may advise those testifying, 
please raise your right hands. It is our custom to have all 
witnesses sworn.
    [Witnesses sworn.]
    Mr. Issa. From everyone who is here in attendance today, a 
quorum is present. We do expect to have Members in and out. I 
apologize. The importance of this hearing caused us not to 
cancel it in spite of the fact that there are markups in 
virtually every committee of the House trying to get prepared 
for getaway day which should be Thursday, Friday, Saturday or 
Sunday.
    But this is an important hearing and I appreciate your very 
large attendance.
    Today we will discuss our country's progress toward a 
hydrogen economy. Are our goals attainable and when?
    The United States is increasingly dependent on imported 
energy sources to power the country's vehicles and sustain the 
Nation's growing economy.
    But our Nation's increasing reliance on overseas oil 
imports acts as a drag on our economy. This year high oil 
prices will likely account for more than a third of our annual 
trade deficit.
    Furthermore, all too often the foreign sources the United 
States depends on for fuels are located in insecure regions of 
the world and, in some cases, are under the control of nations 
which are hostile to the United States.
    At this time when national security and environmental 
concerns, including climate change, are at the forefront of our 
policy discussions, government and industries around the world 
are looking at hydrogen as a major energy carrier of the 
future.
    Hydrogen holds the potential to be the backbone of a safe, 
environmentally friendly and sustainable energy system for our 
Nation's future.
    However, clean, efficient and cost effective hydrogen 
production is a significant challenge.
    As a fuel, hydrogen does not exist in a readily usable form 
in nature like oil and coal. Rather it more closely resembles 
electricity, an energy carrier that must be generated from 
another fuel source.
    Moreover, commercially viable technologies to store and 
efficiently convert hydrogen into energy appear to be years 
away.
    In 2003, the President announced an ambitious effort to 
transition the country to an economy powered not by 
hydrocarbons, but by hydrogen. This hearing will assess how and 
when this goal might be attained.
    In other words, is a hydrogen economy attainable and if so, 
when?
    Our first panel will examine the status of the Federal 
initiatives aimed at realizing the President's vision, 
including the extent of Federal support for leading State 
initiatives.
    We are pleased to welcome three committed public servants: 
the Honorable Douglas Faulkner, Acting Assistant Secretary for 
Energy Efficiency and Renewable Energy at the Department of 
Energy; the Honorable Richard Russell, Associate Director for 
Technology at the White House Office of Science and Technology 
Policy; and Dr. Alan Lloyd, Agency Secretary of the California 
EPA and someone who I had a personal opportunity to begin the 
conversation with. I appreciate your appearing twice.
    Our second panel will offer their insights on these Federal 
initiatives, meaning whatever you say we are going to have the 
private sector address on the second panel.
    It will include Dr. Lawrence Burns, vice president of 
Research and Development at General Motors Corp.; Mr. Dennis 
Campbell, president and chief executive officer, Ballard Power 
Systems; Dr. Mujid Kazimi, member of the National Academies' 
Committee on hydrogen production and use; and Dr. Dan Sperling, 
director of the Institute of Transportation Studies at the 
University of California, Davis.
    I look forward to hearing your testimony. When the ranking 
member arrives, we will pause for her statement.
    Mr. Faulkner, you are first.
    [The prepared statement of Hon. Darrell E. Issa follows:]

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 STATEMENTS OF DOUGLAS L. FAULKNER, ACTING ASSISTANT SECRETARY 
FOR ENERGY EFFICIENCY AND RENEWABLE ENERGY, U.S. DEPARTMENT OF 
ENERGY; RICHARD M. RUSSELL, ASSOCIATE DIRECTOR FOR TECHNOLOGY, 
OFFICE OF SCIENCE AND TECHNOLOGY POLICY; AND ALAN LLOYD, AGENCY 
     SECRETARY, CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY

                STATEMENT OF DOUGLAS L. FAULKNER

    Mr. Faulkner. Mr. Chairman and members of the committee, I 
appreciate the opportunity to testify on the Department of 
Energy's hydrogen program. Today I will cover our plans, our 
progress and our partners focusing on State initiatives, 
demonstration projects and what we believe must be 
accomplished.
    Since President Bush launched the hydrogen fuel initiative 
over 2 years ago, we have implemented the valuable feedback 
from the National Academy of Sciences and have already seen 
results.
    In fact, as we speak the Academy is completing its biennial 
review of the program. We developed the Hydrogen Posture Plan 
with strategies, milestones to enable a 2015 industry 
commercialization decision. We are now implementing our plans 
and making tangible progress.
    The Department competitively selected over $510 million in 
Federal funding, subject to appropriations, for projects to 
address critical challenges. DOE's Office of Science announced 
70 new projects on topics such as new materials and catalyst 
design at the nano scale.
    We established the National Hydrogen Storage Project, 
including three centers of excellence to focus on hydrogen 
storage, a critical technology for the hydrogen economy.
    Sixty-five projects were initiated on hydrogen production 
and delivery and the results are already promising. We believe 
we can meet our goal of $2 to $3 per gallon of gasoline 
equivalent which is independent of production pathway. Our 
ultimate goal is carbon-neutral hydrogen production that 
emphasizes resource diversity.
    To address fuel cell costs and durability, we have a new 
$75 million solicitation of complement current work. Results 
are already being achieved here, too.
    As highlighted by Secretary Bodman in earlier testimony, 
the high volume cost of automotive fuel cells was reduced from 
$275 to $200 per kilowatt. Through new strategies for 
fabricating electrodes and improving durability, we believe our 
targets are achievable.
    As you know see, the program is focused on research, 
aligned with the academy's recommendation to shift away from 
some development areas toward exploratory work. But there is a 
value for a few selective demonstration projects.
    We must keep sight of our ultimate goal to transfer 
research to the real world. We have complemented our research 
efforts with a learning demonstration activity. This 50-50 cost 
share activity brings auto and energy companies together to 
validate vehicle infrastructure technologies.
    These are pre-commercial demonstrations and serve a 
specific purpose at this early stage, to gather technical data 
from real world operations and help refocus our research 
efforts and validate progress toward our milestones. In May, 
President Bush participated in the refueling of a GM hydrogen 
vehicle at D.C.'s Benning Road Shell Station, which is involved 
in our learning demonstration effort.
    The department is working with partners on all fronts to 
address the challenges to a hydrogen economy. Under the Freedom 
Car and Fuel Partnership, the Department of Energy is 
collaborating with the U.S. Council for Automotive Research and 
major automotive and energy companies. We conduct research on 
safety codes and standards working with the Department of 
Transportation and globally through the International 
Partnership for a Hydrogen Economy.
    We are working with the Department of Commerce and other 
Federal agencies to create an R&D road map for manufacturing 
technologies. This effort will help attract new business, new 
investment, create new high technology jobs and create a 
competitive U.S. supply base.
    We are also working with State governments to leverage 
resources, coordinate efforts and reduce duplication. Hydrogen 
initiatives exist now in more than 10 States. For instance, 
since we participate in the California Fuel Cell Partnership 
and the California Hydrogen Highway Network, the working group 
sharing information and technology expertise.
    Last year the Hydrogen 101 education workshop was offered 
to interested State and local governments. States can also 
serve a role to education target audiences including safety and 
code officials in local communities and to catalyze the 
research community to focus on R&D needs for a hydrogen 
economy. The realization of the national hydrogen economy will 
eventually require the active and sustained participation of 
State leaders at many levels.
    Mr. Chairman, the DOE hydrogen program is committed to a 
balanced portfolio which integrates basic and applied research, 
engineering development and learning demonstrations. We 
anticipate staying in close touch with State and local 
governments as our Federal partnership matures.
    This completes my prepared statement. I would be happy to 
answer any questions.
    [The prepared statement of Mr. Faulkner follows:]

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    Mr. Issa. Thank you, Mr. Faulkner. We will complete all 
three on the panel and then take questions.
    We have also been joined by the gentlemen from Ohio, Mr. 
Kucinich.
    Mr. Russell.

                STATEMENT OF RICHARD M. RUSSELL

    Mr. Russell. Mr. Chairman, Ms. Watson and members of the 
subcommittee, I appreciate the opportunity to appear before you 
today to discuss the Federal effort in hydrogen research and 
development.
    America's energy challenges must be met with dedicated 
leadership and advanced technologies to improve the production, 
distribution and use of energy. Beginning with his National 
Energy Policy Report in 2001, President Bush has established a 
clear path for our Nation to achieve a clean, secure and 
affordable energy future through advances in technology. The 
President has launched key research and development initiatives 
in hydrogen, clean coal, carbon sequestration, biomass, nuclear 
energy and fusion.
    While this progress is encouraging, additional research is 
needed to make these technologies commercially viable. 
Commercial viability depends upon significant advances in 
protection, storage, distribution and use of hydrogen fuel.
    Because all four areas present complex challenges, the 
overall Federal R&D effort has been engaged. To help ensure all 
pertinent agencies contribute to the President's objective in 
this area, the Office of Science and Technology Policy and OMB 
have identified hydrogen R&D as an interagency priority for the 
past several years.
    To encourage collaboration among Federal agencies OSTP has 
established an interagency task force on hydrogen R&D. While 
DOE provides the leadership and most of the funding for the 
hydrogen fuel initiative and co-chairs the task force with 
OSTP, other Federal agencies also fund hydrogen-related R&D 
projects and demonstrations.
    In fact, the Hydrogen Task Force has identified 22 focused 
R&D priorities for interagency collaboration. In the areas of 
fundamental research these include investigations of high 
performance, low cost catalysts for hydrogen production and 
fuel cells, novel materials for hydrogen storage, robust and 
cost-effective membrane materials and the molecular 
interactions of hydrogen and other materials.
    These topics serve as focal points for collaboration among 
agency funding, basic research, including the Departments of 
Energy and Defense, the National Science Foundation, the 
National Institutes of Standards and Technology at the 
Department of Commerce, and the Research and Innovation 
Technology Administration at DOT.
    Beyond fundamental research, the hydrogen task force 
coordinates activities associated with hydrogen pipeline and 
refueling; hydrogen turbines and internal combustion engines; 
solid oxide fuel cells; safety codes and standards; and several 
exploratory approaches to hydrogen production.
    Additionally, we have recently begun a coordination group 
within the hydrogen task force devoted to work force issues, 
with the expected participation of the Departments of Labor, 
Energy, Defense, Transportation, NASA, National Science 
Foundation and the National Institute of Standards and 
Technology.
    In addition to developing an extensive inventory of 
hydrogen research activities, the hydrogen task force has 
developed a Web site, Hydrogen.gov., organized conferences and 
workshops on funding opportunities provided by the small 
business innovative research program and the small business 
technology transfer program and initiated plans for public 
forums to highlight nanotechnology breakthroughs that could 
enable the hydrogen economy.
    Nanotechnology exemplifies how other interagency efforts 
are contributing to the hydrogen fuel initiative. With its 
ability to yield insight into structures and material at the 
molecular level, nanotechnology holds the key to understanding 
and solving many of these basic challenges.
    To identify specific opportunities in this area, the 
National Nano Scale Science Engineering and Technology 
Subcommittee of the interagency National Science and Technology 
Council organized an interagency workshop in March 2004 on nano 
scale science research for energy needs.
    This workshop and the recently published strategic plan for 
the National Nanotechnology Initiative have highlighted the 
potential for research in nano materials, nano-scale processes 
and next generation instrumentations to enable significant 
advances in hydrogen production, storage and fuel cells.
    Since my time is up, let me quickly say that in addition to 
the task force, we also have a working group on manufacturing 
that is specifically spending time and effort on hydrogen 
manufacturing issues.
    We also have two coordinating mechanisms; one for the 
national nanotechnology initiative and also one for the high 
performance computing initiative. Actually, it's called NITRD, 
Networking Information Technology Research and Development 
Program, to ensure that R&D that is occurring in other areas is 
also coordinated and that there's good interaction between DOE 
that funds the vast majority of R&D in the hydrogen sphere and 
all the other work that is going on throughout the Federal 
Government.
    Thank you so much.
    [The prepared statement of Mr. Russell follows:]

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    Mr. Issa. Thank you. The best part, of course, is what you 
did extemporaneously. Thank you.
    Dr. Lloyd, we look forward to your testimony.

                    STATEMENT OF ALAN LLOYD

    Mr. Lloyd. Good afternoon, Mr. Chairman and members of the 
committee. Mr. Chairman, I would like to thank you very much 
for drawing attention to this issue and your interest in this 
issue of critical importance to the Governor of California and 
also the President himself.
    I will be speaking from this Power Point document. I think 
California is committed to realizing a hydrogen economy. Just 
some background: We formed the California Fuel Cell Partnership 
back in 1999, which I will mention some more.
    The California Hydrogen Highway Network, which was the key 
part of the Governor's environmental action plan when he came 
into office, focusing on the renewal policy, an important 
priority and part of a long term strategy.
    We feel, in fact, that it is going to take a decade or two 
to get to a hydrogen economy and we need to start now. In fact, 
California's drive to a sustainable transportation future is 
based on our need to protect public health.
    We had the Low Emission Vehicle Program in 1990 which 
focused on and continues to focus on super clean cars, 
alternate fuels, hybrids, battery electric vehicles and fuel 
cell vehicles.
    Then we had the zero emission bus program in 2001 which is 
still in existence. Then we have the 2004 motor vehicle 
greenhouse gas regulation. So in California we have adopted an 
approach of regulations, partnerships, and incentives.
    We look to the Hydrogen Highway Initiative. We are 
delighted to have DOE as a major partner as well as DOT and EPA 
at the Federal level, together with eight auto companies, four 
energy companies, two technology developers, State and local 
entities involved with the formation of the California fuel 
cell partnership designed to bring fuel cell vehicles to the 
market faster.
    We have the stationary fuel cell collaborative emphasizing 
the stationary side. I think, again, with the Governor coming 
in exciting we launched as part of his environmental action 
plan the Hydrogen Highway Network. In fact, out of that was a 
charge to come up with a Blueprint Plan for the implementation.
    You have before you, I think, a copy of the Blueprint Plan 
which was a culmination of efforts by over 200 stakeholders 
from all segments to work together to implement this policy, 
basically looking at a phased approach for vehicles and 
stations and in fact starting off with 50 to 100 stations in 
2010 with up to 2,000 vehicles getting up to 20,000 vehicles 
and 250 stations in 2015 and 2016.
    The emphasis is on renewable energies. Renewable is an 
important piece of what we are trying to do there. To show the 
State is committed, we have committed $6.5 million this year to 
kick off that program. That's the first year of a down payment 
which will get us some help toward infrastructure, help toward 
buying vehicles, both fuel cell as well as hydrogen IC engines 
there. That is already in the Blueprint Plan. So, the State is 
committed, working with the Federal Government to move ahead 
and with the stakeholders.
    In terms of the recommendations, you can see my 
recommendations. Fully fund the 2005 Energy Policy Act. Well, 
we didn't expect things to move so quickly. So, 
congratulations, in fact you have already implemented that.
    Another recommendation is to work more closely with 
California in developing an integrated network of third-party 
accessible stations. That is an important piece because in 
order to be part of the California Hydrogen Network they have 
to be publicly accessible.
    On the Governor's objectives by 2010, in fact you will be 
able to drive from D.C. to Baja, CA to British Columbia. 
Working with our partners there, you would be able to drive a 
hydrogen vehicle from D.C. to B.C. Then of course, 2010, 
Whistler, the Canadians have a plan to do that.
    Level the playing field in competing for Federal dollars. I 
think that is another very important piece. Then, I think fully 
fund the programs for advanced renewable technologies in 
particular. I know these are areas we need to work on when the 
benefits of hydrogen can be gotten from a variety of sources.
    Last, I show you the map there, I think for those who say 
that in fact it was too soon, I think the map showing you where 
we have some stations already. On the right hand side it shows 
the Governor kicking off the first station on the Hydrogen 
Highway Network at U.C. Davis with Professor Sperling and Vice 
Chancellor Heer.
    Then we also see on the left hand side Honda turning over a 
fuel cell vehicle to the general public so that they can 
commute. The Spillano family is using it to commute from 
Redondo Beach to Irvine.
    So, for those who say not today, it is here. Other 
companies are doing the same thing. We need that 
infrastructure. So thank you very much. We look forward to 
working with the Federal Government and with you.
    [The prepared statement of Mr. Lloyd follows:]

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    Mr. Issa. Thank you.
    Dr. Lloyd, I'm just going to ask you one question that came 
up during your testimony. I am a little concerned. Your 
definition of a level playing field, I would assume, is those 
States which contribute the most, take their own tax dollars 
and do advanced research should be at an advantage over those 
States who simply would like the money. Is that what you call a 
level playing field?
    Mr. Lloyd. No. What I meant in that, Mr. Chairman, was in 
fact compete for the dollars, that everybody competes for the 
dollars. I recognize there is earmarking going on and I 
recognize we also participate in that because in fact if the 
rules aren't followed--and I know that's a tough issue from my 
colleagues at DOE. That is what I meant in that case.
    Mr. Issa. As a Californian, I always tend to have this 
feeling that since we led the way in clean air technology and 
our universities have done so much and we are contributing our 
own tax dollars that perhaps more of the research and 
development should be done in California than some other State 
that simply earmarks the dollars. I think we are pretty close 
to the same definition.
    Mr. Lloyd. I think some of our neighbors in California seem 
to do very well.
    Mr. Issa. Yes, exactly. Thank you.
    This is a more general question, but it is particularly 
important to the committee. There is a great deal of skepticism 
about whether the Department's time lines are attainable.
    The national academies are calling them unrealistic and 
private industry has said that they should come sooner. 
Generally, somewhere between people who say it's too slow and 
too fast lies the truth.
    But in this case, and Dr. Lloyd did a good job of saying 
so, hydrogen is here now, even if there may be a slower ramp up 
in actual production and delivery.
    Well, Mr. Faulkner, the Department's view is that we have 
this long plan of test and evaluate and so on. There couldn't 
be two more different testimonies than what I saw here today.
    We could do it faster. Now Honda is not ready to do 100 
percent, but they are ready to do a much more similar rollout 
to what they have done in hybrid.
    Well, we, Congress--myself included--and the 
administration, seem to be looking at this as a 2020 program. 
Could you help us reconcile that?
    Mr. Faulkner. Yes, sir. I think we all might not be that 
much different. Yes, there are hydrogen fuel cell cars out 
there, some of them being driven. They are not ready for mass 
production. They are too expensive for the average driver.
    What we are talking about is looking at the longer term so 
that this does have mass market breakout potential. We are 
working in a partnership. I think that is important to 
emphasize because government won't be making these cars.
    We are helping to do the high risk R&D that will help the 
companies that are actually going to be doing the work to make 
the money selling these things make the commercialization 
decision about 2015. That's the date that we and our private 
sector partners have focused on.
    There will be instances of these vehicles being used in the 
marketplace, but they won't be available in showrooms for the 
regular person. I think about 2020 is the timeframe when we 
look at that starting to hit the marketplace. Then, of course, 
because vehicles take so long to turn over, it will take 10, 15 
or 20 years to have that full impact be reached.
    I think another point I'd like to make is that we have a 
lot of technology hurdles we are wrestling with. Research 
doesn't happen overnight. You have to start working on it today 
and that is why the President was so on target to start this 2 
or 3 years ago because it does take years to work through 
these.
    It is a lenghty process unless you have technology 
breakthroughs, but it does take time to work through the 
process.
    Mr. Russell. I would like to echo what Doug just said. I 
think the important point here is that you need something that 
is cost competitive on a commercial basis. Whereas the 
technology currently exists, it is not yet cost competitive.
    There are some major issues that have to be overcome, 
technical issues that need to be overcome. DOE is doing an 
excellent job, as is the private sector, in terms of tackling 
those issues. But until you have a car that has a reasonable 
range and is cost competitive, it is not going to be ready for 
the general market.
    Mr. Issa. I am going to have to do something that I regret. 
I am going to have to recess for about 5 minutes. I hope you 
will give me the indulgence. I will offer an amendment in 
Judiciary and run back as fast as my sneakers can bring me.
    Thank you for your patience.
    [Recess.]
    Mr. Issa. The committee is now back in session. I am a man 
of my word, but I do need to get to the gym a little more 
often.
    Dr. Sperling, who will be testifying in the second panel of 
the hearing, stated in his written testimony that there is no 
overall strategy to guide Federal spending on hydrogen research 
and development.
    Can you respond to what is going to be said? Yes or no or I 
agree is fine.
    Mr. Faulkner. Well, I'm puzzled by that statement. I 
brought some documents here as props. We have the Hydrogen 
Posture Plan. We have the National Hydrogen Energy Roadmap. 
This program is one of the most reviewed and dissected programs 
I have seen in the government. I think it is well run. We have 
a plan that lays out on an integrated basis, not only in DOE, 
but in the government.
    Mr. Russell here has a hand in looking at that. There are 
interagency reviews. Congress reviews these pretty carefully.
    I think I would have to disagree with that statement.
    Mr. Issa. Do you have a different opinion?
    Mr. Russell. No, no, I would echo that. One of the benefits 
of being in the Office of Science and Technology Policy, we 
really do see all the budgets for all the various research 
initiatives that are going on.
    I would say this one in particular is extremely well 
thought out and has been well charted into the future. I think 
the biggest single issue is that we make sure that the funding 
we get maps to the funding we are asking for.
    When I say we, I mean the Federal Government and the 
administration in particular because it has been well 
diagramed. So as long as we stay on track, as long as the 
funding that DOE ends up getting for the Hydrogen Program 
actually maps to the funding they need and the programs they 
need, I think we are going to be in good shape.
    Mr. Issa. Well, these documents, how do they specifically 
address the National Academy's concern for, among other things, 
the question of clear priorities to get you to that date there? 
I appreciate that there are multiple documents, Mr. Faulkner, 
and I really appreciate your saying various people who have a 
hand in it.
    But I will say from my time in the private sector, I never 
could answer that the buck stops with everyone who has a hand 
in it. Where does the buck stop in meeting those timetables and 
coordinating them, assuming, as Richard said, that you have 
funding that matches your scheduled request?
    Mr. Faulkner. Well, when I was referring to people who have 
a hand in, I meant we have a partnership. We have not only the 
government, but we work very closely with our private sector 
partners.
    The buck stops in my office, sir, at my desk. We have been 
put in charge of the initiative. We work through other parts of 
the Department of Energy. This has pretty clear time lines, 
goals and schedules laid out.
    In terms of the National Academy, we have implemented 39 of 
the 43 recommendations in the Academy's report. So, we think we 
are on track with what they were looking at, what they were 
recommending. I should note the academy is getting ready to 
issue another report, next week, probably.
    Mr. Issa. Excellent. I think I will go to a slightly 
different tact which I think is equally important. Dr. Lloyd, 
is California moving too quickly to develop infrastructure 
relative to the time lines of the other two panelists?
    Mr. Lloyd. No, I don't think we are. As a matter of fact, 
compared to the original program that the Governor outlined 
when he first came to office, the Blueprint Plan takes a more 
realistic approach of growing this from clusters and growing it 
outwards.
    Obviously, we are working very closely with the private 
sector as well so we see what the vehicles and what the 
infrastructure is going to be. So, I think we have that about 
right.
    Another aspect I want to indicate, getting back to an 
earlier topic, I think there are tremendous business 
opportunities with this technology, with hydrogen fuels 
technology and related technologies.
    I think the Governor wants to take advantage of those in 
California. So, in fact we see that being driven forward not 
only by the major stakeholder, but also some of the minor ones 
as well.
    Mr. Issa. Following up on that, Dr. Lloyd, has California 
picked a preferred method of hydrogen production at this point?
    Mr. Lloyd. Well at the moment clearly the preferred one 
would be looking at renewable technologies. In fact, in order 
to get the money through the legislature, they were very 
concerned about that. The environmental justice community was 
very concerned about that.
    But clearly we have a menu of options that you can use and 
in the nearer term you can use things like natural gas, but you 
can have electrolysis using renewables, you can look at 
biomass. So there is a variety of options. The preferred one is 
renewable technology, but clearly as we move forward we have to 
look at all of those sources.
    Mr. Faulkner. May I make a comment, sir?
    Mr. Issa. Yes. That is what we brought you here for.
    Mr. Faulkner. Well, I didn't want to interrupt you if you 
were getting ready to ask another question. It's too early to 
make that choice yet. Looking at the time line, 2015, 2020, we 
are looking at a range of different pathways of production.
    As Alan Lloyd at the other end said, our preferred pathway 
at the end would be renewable production of hydrogen, but in 
the interim it would be natural gas that we are looking at.
    Mr. Issa. And following up with both of you, at the present 
time, D.C. to B.C., all likely rollouts will be 100 percent 
local creation of hydrogen from natural gas, is that correct? 
The Governor's filling station right now is natural gas?
    Mr. Lloyd. Yes.
    Mr. Issa. Are there any filling stations in the design of 
D.C. to B.C., as we named it here that would be other than 
natural gas?
    Mr. Lloyd. In fact there would be a variety of sources. 
Clearly, we have to work with our partners in Oregon and 
Washington and get that. I think you might ask Mr. Campbell, 
who is intimately involved with what is happening in Vancouver.
    But no, we are looking at a variety of sources. No, it is 
not just all natural gas.
    Mr. Issa. At least some of them will be water-based 
electrolysis?
    Mr. Lloyd. Will be renewable, exactly. In fact, if you look 
at places like Toyota and Honda, they also already have 
vehicles there are renewables using electrolysis, using solar 
to get the electricity.
    Mr. Issa. Mr. Russell, please describe the activities of 
the Hydrogen Interagency Research and Development Task Force. 
Tell us what this wonderful sounding long name means.
    Mr. Russell. The task force is co-chaired by both the 
Department of Energy and also OSTP. Actually, as it happens we 
also have, and I would like to introduce him, the co-chair of 
the task force, Dr. Kevin Hurst, who is behind me.
    Essentially what we are trying to do is make sure that all 
the other agencies that are involved, everyone from EPA to even 
NASA have coordinated activities associated with their various 
pieces of R&D. So the task force has done everything from set 
up a Web site which I mentioned in my testimony, Hydrogen.gov., 
to hold workshops. Essentially, it is a coordinating mechanism 
which we use. So that is the primary purpose and that is what 
we do with it.
    Mr. Issa. One closing question from me, and this is the 
closing question because I recognize that the Senate is waiting 
for many of our panelists or will be.
    At the present time, particularly in California, but on a 
national basis, we are using 100 percent of our domestic 
production of natural gas. We are importing relatively small 
amounts of liquefied natural gas.
    However, plans are underway to import a fairly substantial 
amount of LNG. Would it be fair--and hopefully this is a yes or 
no--fair to say that any increase in consumption of natural gas 
in hydrogen-based automobiles, you know, any net increase that 
was not offset by some other reduction in the use of natural 
gas in some other area of our economy would leave us as or more 
dependent on an imported hydrocarbon than we are today?
    If I am missing anything in the logic of ``we are using it 
all, we are importing some and we are going to import more even 
if we don't make hydrogen cars,'' please say so. Because if we 
don't find another source for producing hydrogen we will be 
dependent on imported natural gas to fuel our vehicles which, 
oddly enough, comes from many of the same areas of the world as 
our oil does.
    Is there any fallacy in that statement?
    Mr. Lloyd. One of the things I would say for California, 
certainly in the nearer term there are lots of sources where we 
can in fact get the natural gas, and make hydrogen.
    For example, lots of landfills where you can actually 
capture emissions from there, capture methane and turn it into 
hydrogen. There are lots of places where natural gas is clear. 
So, in the nearer term we are not keeping track of all the 
resource we have to tap that natural gas. In the longer term, 
then we have to look at a whole variety of options.
    Mr. Russell. There is an additional point which is slightly 
different than the way you asked the question, which is there's 
an efficiency game associated with fuel cell vehicles.
    So, when you have a fuel cell vehicle, for the same amount 
of energy you have about 2.4 times the efficiency associated 
with that as compared to your standard automobile.
    So, yes, you are right, you still are relying on natural 
gas, but you are relying on less of it than you are relying on 
oil. So, there definitely is an efficiency gain.
    Even if we are using natural gas as our source of hydrogen, 
we are still gaining benefit both from a dependence on foreign 
oil and from an environmental standpoint.
    Mr. Issa. And you are saying 2\1/2\ times more efficient 
than if I simply had a compressed natural gas automobile?
    Mr. Russell. Well, that is actually a standard auto. If you 
are talking about a hybrid electric vehicle, it is 1.6 times as 
efficient. I don't have a natural gas vehicle comparison, but 
maybe DOE does.
    Mr. Faulkner. Just to add a couple of points to what they 
have already said, sir, we mentioned that natural gas was an 
interim fuel for production of hydrogen. It is not a long term 
permanent fix until we develop some of these other pathways to 
hydrogen.
    The second thing is the national security issue of our 
increasing reliance on foreign oil, now it is in the high 50 
percent of our use and climbing over the next two decades or 
more.
    This is the only thing that will completely eliminate that 
dependence on foreign oil, the hydrogen fuel cell car.
    Mr. Issa. Well, I would like to thank all of you. I think 
you have done an excellent job of defending the work that the 
Federal Government is already doing.
    Dr. Lloyd, I would be remiss if I didn't take advantage of 
having a key advisor to the Governor here to mention, when you 
brought up flaring of natural gas in California, just as one 
Californian to another, we flare that gas because the 
legislature prohibits it from being used, transferred for cogen 
and prohibits it from being put into the system if it is not 
natural gas burning automobile compliant.
    Much of that could stop being flared with some small 
legislative changes that you have helped point out here today. 
I very much would love to see that natural gas captured and 
used in one of those two ways.
    With that I would like to thank the panel. I realize that 
you are moving on to other panels on the other side of the 
Capitol.
    Your testimony is very much appreciated. I'll say it again 
after the second panel, but you will have 20 legislative days 
to include any additional thoughts you have.
    Many of the members of the committee will be submitting 
questions you may not have had today. With unanimous consent, 
which I'm sure I'll get right now, we will allow them to 
forward them to you and to revise and extend.
    We will also be forwarding to you their opening statements. 
With that the first panel is dismissed with my compliments.
    Mr. Lloyd. Thank you very much, Mr. Chairman.
    Mr. Issa. Will the second panel please come forward? I 
would like to thank the second panel for their patience. 
Hopefully, you saw that the Federal and State governments were 
not given a free pass here today. I promised them as they left 
that I would do the same back to private industry.
    So you are aware, we are going to have a long series of 
votes at some point. I am going to do everything I can to be as 
expeditious as possible in getting through this. I would ask 
you to do the same.
    There are not a lot of people to ask different questions, 
so you have that going for you, but when we adjourn, which will 
be about 10 minutes after the vote is called, it would be 
unreasonable to hold you through that long series of votes, so 
that will end the panel for today.
    Since you have all been sworn in, and you were all 
mentioned and introduced earlier, we will now start with Dr. 
Burns and we will get through this as quickly as we can so you 
all get your statements in and our Q and A. Thank you.

STATEMENTS OF LAWRENCE D. BURNS, VICE PRESIDENT OF RESEARCH AND 
 DEVELOPMENT AND STRATEGIC PLANNING FOR GENERAL MOTORS; DENNIS 
 CAMPBELL, CEO, BALLARD POWER SYSTEMS; MUJID KAZIMI, DIRECTOR, 
   CENTER FOR ADVANCED NUCLEAR ENERGY SYSTEMS, MASSACHUSETTS 
    INSTITUTE OF TECHNOLOGY; AND DANIEL SPERLING, DIRECTOR, 
 INSTITUTE OF TRANSPORTATION STUDIES, UNIVERSITY OF CALIFORNIA 
                            AT DAVIS

                 STATEMENT OF LAWRENCE D. BURNS

    Mr. Burns. Thank you, Mr. Chairman. I am vice president of 
research, development and strategic planning for GM and I am 
responsible for General Motors Fuel Cell Program.
    We place very high priority on the combination of hydrogen 
and fuel cell technology because we see this combination as the 
best way to simultaneously increase energy independence, remove 
the automobile from the environmental debate, stimulate 
economic and jobs growth and allow automakers to create better 
vehicles that customers will want to buy in high volume.
    I want to emphasize, high volume is crucial. It is the only 
way to meet the growing global demand for automobiles while at 
the same time realizing the energy and environmental benefits 
that we are seeking. So we must get the high volume.
    Our fuel cell program is focused in three areas. We are 
focused on developing a fuel cell propulsion system that can be 
competitive, go head to head with conventional automotive 
propulsion systems, the internal combustion engine.
    Second, we are demonstrating our progress publicly to let 
stakeholders experience first hand the benefits of the 
technology.
    Finally, we are collaborating with energy companies and 
governments to ensure safe, convenience and affordable hydrogen 
available to our customers. This is key to enable a rapid 
transformation.
    We are targeting to design and validate a fuel cell 
propulsion system by 2010 that can compete with the internal 
combustion engine. Let me clarify what that means: It is 
competitive on performance in terms of its power density, its 
speed and its range. It is competitive on durability, 150,000 
mile life and at scale volumes it is competitive on cost.
    That is an important step because without having the 
propulsion system being competitive we are not going to be able 
to get the high volume.
    This is an aggressive timetable. It is clear that because 
of this aggressive timetable we are really signaling that this 
is an industry-led initiative and also we believe that the 
technology has matured to the point where this time it is 
indeed possible.
    We have made significant progress on the technology in the 
last 6 years. We have improved our power density by a factor of 
seven. This means you can make the fuel cell components 
smaller, more efficient, which package in conventional 
automobiles.
    We have significantly increased the durability, the cold 
start capability and reliability of our system. We have 
developed safe hydrogen storage systems that are beginning to 
approach the range that our customers will expect. We have made 
significant progress on cost reduction.
    Now, this progress has convinced us that fuel cell vehicles 
have the potential to be fundamentally better automobiles on 
nearly all the attributes that our customers consider to be 
important. This is really key to enabling high volume.
    With just one-tenth as many moving parts in a fuel cell 
propulsion system versus an internal combustion engine, we have 
also grown in our confidence that our vision design can indeed 
be cost competitive and durable.
    We have also made excellent progress with our vehicle 
demonstrations. We have a fleet of six vehicles here in 
Washington, DC. We have had nearly 3,000 people take a ride or 
a drive in these vehicles so they can experience first-hand the 
technology.
    The D.C. fleet is fueled by a Shell station out on Benning 
Road. Shell is our partner and it really is a small but very 
important step toward a hydrogen infrastructure. We 
collaborated with the U.S. Army in developing the world's first 
Army truck that is based on fuel cell technology.
    We are part of the Department of Energy's program. We will 
be fielding 40 vehicles as part of that program. Very 
importantly, we have demonstrated what concepts, what the new 
automobile of the future can be like.
    There are concepts called AUTOnomy, Hy-wire and Sequel. 
Sequel is the world's first vehicle that will be capable of 
going 300 miles between fill-ups, using a fuel cell.
    Then we are partnering widely with Shell, Sandia, Dow, 
Department of Energy, Quantum, Hydrogenics. We are quite 
connected. We see the biggest challenge being a fast industry 
transformation to hydrogen and fuel cells.
    The biggest challenge to that is the fuel and 
infrastructure. A major advantage of hydrogen is that it can 
come from so many different pathways, including renewables. As 
such it gives us a chance to relieve our 98 percent dependence 
on petroleum.
    This is a big task, the infrastructure, but fortunately we 
are not starting from scratch. There are 50 million tons of 
hydrogen produced each year in the world today. Now if all of 
that was used in automobiles, that could fuel every automobile 
here in the United States, nearly 200 million automobiles.
    Obviously, this hydrogen is being used for other purposes, 
for commercial purposes. The point I am trying to make here is 
that there is a lot of experience making hydrogen. It is 
experience that is safe. It is experience that is cost 
competitive for these commercial applications, which really 
encourages us that the infrastructure can fall into place.
    We also don't have to build this infrastructure 
instantaneously. The entire car park of the Nation would take 
about 20 years to turn over. So, we could evolve the 
infrastructure in kind with that.
    We would like to applaud the Department of Energy and the 
government for the initiatives that are in place on hydrogen. 
However, we think there is more that needs to be done to be 
ready for large scale demonstrations and ultimately mass market 
applications in the next decade.
    We would like to see the Federal Government articulate a 
clear and concise and broadly sanctioned vision that goes 
beyond just what the DOE and the Department of Defense is 
doing, focused both on technology and application. Clear and 
consistent communication to American people of this vision and 
the underlying rationale for it we think is really important to 
help transform the market.
    The energy bill that is being considered we think is 
directionally quite good. But if we are really serious about 
transforming to a hydrogen economy, there is really a lot more 
that can be done in the coming years.
    The auto industry alone is spending about $1 billion a year 
collectively on this technology. So, if the government would 
like to accelerate that, the government funding could be 
greater.
    We welcome in particular the energy bill's increased 
funding of R&D. Yes, we have made dramatic progress on our 
first generation design, the one I referenced for 2010. But the 
real volume and the real benefits will come with second 
generation designs and beyond. So we would like to see the 
continued support of R&D for advanced materials for fuel cells 
as well as for hydrogen storage.
    Market to man for fuel cell vehicles must also be 
encouraged. We think the price of hydrogen will be a critical 
factor and that Congress should act now to exempt hydrogen from 
fuel taxes to try to help hydrogen get on a level playing field 
with gasoline as we introduce it.
    Then looking past 2010, we really have to start thinking 
about going beyond today's small demonstrations. We welcome any 
Federal fleet purchases that could go along to help encourage 
that. We think the energy bill, and we believe Congress should 
consider doing more and this would be an important bridge to 
commercial vehicles.
    So to summarize, GMC sees hydrogen as the long term 
automotive fuel and fuel cell as a long term power source, our 
fuel cell program seeks to create clean, affordable, full 
performance fuel cell vehicles that will excite and delight our 
customers. We believe customers will buy these vehicles in 
large numbers and that society will reap the economic, energy 
and environmental benefits that would be related to that.
    Thank you.
    [The prepared statement of Mr. Burns follows:]

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    Mr. Issa. Thank you, Dr. Burns. If I can paraphrase your 
request, zero emissions, zero tax.
    Mr. Campbell.

                  STATEMENT OF DENNIS CAMPBELL

    Mr. Campbell. Thank you, Mr. Chairman, members of the 
committee. My name is Dennis Campbell. I am the president and 
CEO of Ballard Power Systems. We are the exclusive fuel cell 
supplier to Ford Motor Co. and to Daimler Chrysler. To date, we 
have supplied 8 of the top 10 automotive manufactures.
    Fuel cells offer a game-changing technology that can help 
us overcome some of the most pressing issues of our time, 
energy security, global climate change, urban air quality and 
long term energy supply. As with any disruptive technology, 
there are critics, those who prefer the status quo, those for 
whom the glass is always half empty. Today I would like to 
respond to the skeptics and the naysayers with a factual update 
that suggests the hydrogen economy is closer than many people 
think.
    I will discuss three of the major challenges that must be 
overcome: reducing the cost, increasing the durability, and 
ensuring reliable startup in freezing temperatures.
    Now, earlier this year Ballard released a technology 
roadmap as part of our plan to demonstrate commercially viable 
fuel cells by 2010. Our roadmap is fully aligned with the 
Department of Energy's 2010 automotive fuel cell goals.
    From 1999 to 2003, we reduced the cost of our fuel cell by 
80 percent, while achieving a tenfold increase in lifetime.
    By 2004, we reduced our cost, adjusted for high volume 
production, to $103 per kilowatt. Our goal this year is to get 
down to $85 a kilowatt. We are confident that by 2010 we can 
meet the DOE target of $30.
    The DOE has also set a commercial durability target of 
5,000 hours, roughly the expected life of today's internal 
combustion engines, 150,000 miles. We are on track to meet that 
goal.
    Last year we demonstrated automotive technology with a 
lifetime of 2,200 hours. Ballard-powered fuel cell buses in 
Europe have surpassed more than 2,500 hours of operation and 
our stationery cogeneration fuel cell for Japan has achieved 
more than 25,000 hours of lifetime.
    Now, a third technical challenge is to improve the ability 
of our fuel cells to start in freezing temperatures. Last year 
we demonstrated the ability to start at minus 20 degrees 
Celsius, reaching 50 percent power in 100 seconds. Our goal for 
2010 is to demonstrate startup for minus 30 in 30 seconds.
    Now, a key enabler of this progress is the demonstration of 
fuel cell vehicles in the hands of everyday customers. Since 
2003, Ballard fuel cells have been powering 30 Mercedes-Benz 
transit buses in daily revenue service in 10 cities in Europe. 
More than 3\1/2\ million passengers have already experienced 
the advantages of clean, quiet fuel cell transportation.
    The Department of Energy's fleet validation program takes 
our field experience to the next level. Ballard, through its 
automotive partners, Ford and Daimler-Chrysler, as part of the 
DOE initiative, will be powering approximately 60 vehicles in 
various locations throughout the United States.
    The effective demonstrations are critical, but the more 
important determinant of when fuel cells can be introduced to 
the mass market will be the will and the commitment of 
government. There is no better investment for government to 
make in the health and welfare of its people than an all-out 
Apollo-like commitment to hydrogen and fuel cells.
    The President's hydrogen initiative has galvanized industry 
and government in support of the hydrogen economy and continues 
to facilitate public and private collaboration. The pending 
energy bill's R&D demonstration programs, if fully funded, will 
strengthen the President's initiative and will provide a vital 
boost to fuel cell commercialization.
    Now, it's a great start, but considering the stakes, I urge 
Congress to do more. An effective national strategy to 
accelerate the hydrogen economy must also include a transition 
to market plan. Only government can overcome the classic 
chicken and egg problem and kick-start the transition to fuel 
cell power.
    We applaud the proposed $1,000 per kilowatt tax credit for 
stationary fuel cells. For automotive fuel cells, the framework 
of an effective transition to market program is present in 
legislation sponsored earlier by Senators Dorgan and Graham. It 
is also captured in the energy bill's vehicles and fuels 
provision.
    In closing, I strongly recommend that Congress 
significantly increase funding for the fuel cell vehicle 
procurement program. A vigorous procurement program targeting 
fuel cell vehicles for Federal and State fleets must be in 
place alongside R&D and demonstrations as a third component of 
a national strategy to accelerate the hydrogen economy.
    A clear commitment by Congress to make a specific and 
sizable annual outlay in fiscal years 2010 to 2015 for State 
and Federal fuel cell fleets would support the volume 
production necessary to drive costs down, stimulate the 
buildout of a hydrogen infrastructure, draw additional private 
capital into the sector and provide the American public with a 
large scale introduction to the hydrogen economy.
    There is no doubt the challenges are real, but they can and 
they will be met. Thank you for the opportunity to appear 
before you today. I look forward to any questions that you may 
have.
    [The prepared statement of Mr. Campbell follows:]

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    Mr. Issa. Thank you, Mr. Campbell.
    Mr. Kazimi.

                   STATEMENT OF MUJID KAZIMI

    Mr. Kazimi. Mr. Chairman, it is a pleasure for me to have 
an opportunity to discuss with you the subject of hydrogen 
energy. As noted, I was a member of the National Research 
Council Committee on Alternatives and Strategies for Future 
Hydrogen Production and Use which published a report entitled 
``The Hydrogen Economy: Opportunities, Costs, Barriers and R&D 
Needs.''
    This committee recommended several things, but the main 
ones were as follows: Hydrogen can, with appropriate 
development of technology, fundamentally change the U.S. energy 
outlook, both because of its impact on imported energy sources 
and its impact on the potential climate change.
    Second, there are formidable technical hurdles to overcome, 
including economic, social and political challenges. There are 
many options for the production, distribution, storage and use 
of hydrogen, but none of them satisfies the full combination of 
desired attributes. The R&D program should establish criteria 
to judge the potential technical and economic performance for 
each.
    Finally, the United States must maintain a robust, balanced 
energy program in areas other than hydrogen to maximize the 
likelihood of meeting that national goal. Since the issue of 
the NRC report, several developments took place, you mentioned 
them in your opening statement, which simply added to the 
urgency of addressing the issue.
    So, today we have a higher priority for the development of 
alternative energy that relies on domestic sources and do not 
increase carbon emissions. For the long run, that means clean 
coal, that is coal with sequestration of the carbon dioxide, 
nuclear energy and renewable energy.
    The NRC committee has made recommendations to improve the 
DOE program for hydrogen and by and large the DOE has followed 
with a good number of changes in order to accommodate the NRC 
recommendations.
    However, there are certain areas that are lagging that are 
important to pay attention to. I would like to mention a few. 
First, the recommended system models to assist the evolution 
from near term technology to long term technology is still 
being planned. That leaves us now working on the evolution of 
our clean energy system in a piecemeal as opposed to a 
coordinated fashion.
    Second, we need an assessment of alternative methods to 
produce liquid fuel that might require hydrogen for their 
production but that do not alter the car power train or the 
infrastructure needed for distribution. I mentioned two 
examples that might be competing with the fuel cell approach 
that we have heard good progress reports on.
    One is the use of unconventional oil reserves that we have. 
In North America, we have approximately 1,500 ExaJoules in oil 
and that are sands, in shale and tar sands. Whereas, in the 
entire Middle East they have about 2,500 ExaJoules of that kind 
of resource.
    With that amount of resource available to us, I can't 
imagine that we would not be using it. The heat and hydrogen 
needed to sweeten the shale and tar sand oil could be produced 
from sources other than natural gas that is being used today, 
such as renewables and nuclear sources to avoid the carbon 
emission to the atmosphere. This will not be a total solution 
for the carbon emissions, but it will reduce the overall carbon 
emissions to the atmosphere.
    The second approach that I would like to mention is the 
question of producing synthetic liquid fuels using carbon 
dioxide that is captured from electric power plants. The 
technology exists. It needs some development and I think it 
would be worth it.
    Finally, I would like to say that the issue of production 
of hydrogen has not been given enough attention. I am very 
familiar with the nuclear hydrogen production program and I see 
some hesitation about going forward with a demonstration of the 
appropriate technology today.
    While we know that we need a new type of reactor that can 
produce high temperatures in order to facilitate efficient 
production of hydrogen, we have none in the United States 
today. Meanwhile, Japan already has one that started operation 
in 2001 and has already produced hydrogen using high 
temperatures approaches in the order of 30 meters per hour as 
of last December. Their program is progressing to about 1,000 
times as much, which they would like to accomplish by 2007.
    So, I would like to urge that DOE put a higher priority on 
the development of the high temperature reactors and the 
demonstration of the ability to integrate such reactors with 
the means for production of hydrogen.
    Thank you.
    [The prepared statement of Mr. Kazimi follows:]

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    Mr. Issa. Thank you and thank you for your insightful 
testimony when it came to areas that were slightly on the 
periphery of today, but absolutely within the jurisdiction of 
this subcommittee.
    Dr. Sperling, I do apologize, we are going to be adjourning 
shortly after your testimony. I will try to get one or two 
questions in, but I am going to miss one vote, and that will be 
as much as I can miss.
    Dr. Sperling.

                  STATEMENT OF DANIEL SPERLING

    Mr. Sperling. Thank you, Mr. Chairman. I will try to be 
brief. I do thank you for the opportunity to speak here on 
Federal policy toward hydrogen fuel cells.
    I am a professor of engineering and environmental policy at 
the University of California, Davis. I direct the campus's 
Institute of Transportation Studies and co-direct our Hydrogen 
Pathways Research Program. I also served on that National 
Academy's committee that Dr. Kazimi just referred to, last 
year.
    I am very pleased to provide testimony on this important 
subject. My statement is going to address the Federal portfolio 
of hydrogen research, development and demonstration activities.
    I have one general recommendation and three more specific 
recommendations. First, though, I do want to note that DOE is 
doing, I believe, an excellent job of managing the hydrogen 
program in its Office of Energy Efficiency and Renewable 
Energy, especially given the constraints it operates under.
    They are to be commended for their efforts to coordinate 
and to collaborate. They have developed strong relationships 
with the automotive industry. They have reached out to the oil 
industry, and they do seek outside input in developing their 
research programs and they also seek to coordinate with other 
Federal activities.
    The principal challenges and concerns lie elsewhere. So my 
overarching recommendation and thought is that I do believe, as 
you mentioned earlier, the Federal Government needs to develop 
a strategic clean energy plan including, but not limited, to 
hydrogen. No such plan exists. A plan is needed that addresses 
how much money the Federal Government should spend on clean 
energy R&D relative to other priorities in science, technology 
demonstrations; what it should be spent on and who should 
receive the funding.
    Congress needs to work with DOE, the National Science 
Foundation and others to develop this science and technology 
plan. This plan needs to articulate the priorities regarding 
how funding should be split between short and long term 
challenges; between fossil, nuclear and renewable energy; 
between science, technology and demonstrations; between 
industry, national labs and universities. It would be aimed at 
assuring that the United States continues to be a technology 
leader in the energy area, something very much at risk.
    I have three more specific recommendations of what should 
be in that plan, what I would hope would be. First is a 
dramatic increase in fundamental R&D for clean energy 
production including hydrogen.
    A clean energy revolution is about to get underway. Given 
the huge energy challenges and opportunities and given the huge 
public benefit that will result, one can only judge that 
current levels of Federal funding of energy R&D are far too 
low.
    Note that the energy sector spends far less on R&D than 
most other sectors and that DOE spends far less on energy R&D 
than it did 20 years ago. Congress needs to rethink and expand 
the role of energy R&D. I note that the clean energy revolution 
is going to include some mix of renewable energy on the one 
hand and fossil energy coupled with carbon sequestration on the 
other.
    The energy industries have great motivation to invest in 
carbon sequestration, and they are. But there is no analogous, 
well-funded stakeholder industry with a strong incentive to 
invest in renewable energy. Thus the most important role for 
the Federal Government is to accelerate the development of 
renewable technologies, including those that produce hydrogen.
    Second, in my observation, my reading, the planned hydrogen 
demonstrations are probably about right in scale, but would 
benefit from a more targeted approach. Technology 
demonstrations are designed to meet a variety of goals, 
technology, political, educational, economic.
    No single project can satisfy all these goals. Trying to do 
so almost always will result in failures. The challenge is to 
design small scale projects that each meet different needs. And 
yes, there is value in providing public exposure in different 
regions and beginning the process of educating fire marshals 
and the myriad of other local regulators.
    But at this time the hydrogen demonstration projects should 
be small and directly tied to a goal. DOE needs to become more 
sophisticated about designing and evaluating these 
demonstration programs.
    Third and last is I believe we need to dramatically expand 
clean energy funding for universities. Now, I know this sounds 
self-serving, but I believe it. If I don't say it, who will? 
Although I would hope some of my partners on the panel would 
agree, and I know they do.
    Universities are the source of much of the breakthrough 
science in this country. Universities are also the place where 
scientists and engineers are trained. If energy research 
funding does not go to universities, universities are going to 
shift their attention elsewhere. Indeed that is what has 
happened.
    In the past 20 years almost all the large energy centers 
and energy study programs at universities have disappeared. The 
thinning of energy research at universities is already 
undermining U.S. leadership in clean energy technology.
    The United States will not be at the forefront of the 
coming clean energy revolution. It will not be able to respond 
effectively to energy security and climate change challenges 
without large new investments in university energy research.
    Thank you.
    [The prepared statement of Mr. Sperling follows:]

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    Mr. Issa. Thank you, and you did just about as good a job 
of explaining that as Dr. Rountree did from the University of 
California at Berkeley a couple of weeks earlier.
    You are right. That's why in this subcommittee it does seem 
as though the University of California makes that point at 
every hearing.
    Probably the biggest question I can ask of the private 
sector here today, and it is for everyone, but to be honest, 
Dr. Burns, it is going to fall squarely in your lap, when is 
your best estimate of when the consumer would be able to buy a 
hydrogen automobile without all the frills, but the basic 
automobile, if you will, in the $30,000 range, plus or minus.
    Mr. Burns. My best estimate would be in the 2015 to 2020 
timeframe.
    Mr. Issa. In 2015.
    Mr. Burns. The 2015 to 2020 timeframe.
    Mr. Issa. Is there anyone who thinks that range of 2015 to 
2020 is unreasonable?
    Let me just followup with one additional question, as 
somebody who has had three hybrid automobiles and has a fourth 
on order, and who notices the parking lot of Congress is 
practically a used car lot of hybrids at this point, when would 
you offer the automobile that is 25 to 30 percent more 
expensive than its counterparts but that appeals to early 
adopters--and included in that I believe should be the Federal 
Government.
    When would that occur?
    Mr. Burns. Well, we certainly think we can have the 
propulsion system designed and validated by 2010. So, I would 
put that in that 2010 to 2015 window. It is going to depend in 
part on the availability of the hydrogen. I think Dennis 
referred to this as the chicken and egg dilemma.
    We don't want to put our capital into a capacity to build 
cars if hydrogen isn't conveniently and safely available to our 
customers. We certainly can understand why the energy industry 
wouldn't want to put significant capital into fueling stations 
if the vehicles aren't available.
    That is really the transformation that needs to be managed. 
First you have to get the technology right and proven and it 
has to be cost competitive.
    Mr. Issa. A question I don't know the answer to at all: 
what is the cost of the smallest, least expensive, micro-
producer of hydrogen? Can I buy a hydrogen producer that I hook 
up to my natural gas line and produce hydrogen at home to 
refuel my automobile at a competitive price?
    Mr. Burns. Well, certainly there are a number of companies 
with the vision to do just that. That is the beauty of 
hydrogen. It is as widely distributed today as the water and 
natural gas needed to make it. Most all of our homes and 
businesses have it.
    We like to think of the infrastructure challenges as an 
appliance issue as opposed to pipelines and refinery and ports 
and other things. So, the real question is can you get an 
appliance that either uses the sun, uses electricity from other 
sources, or reforms natural gas at your home that can create 
hydrogen at a competitive price to petroleum.
    Mr. Issa. No, that was my question. I wanted your answer.
    Mr. Burns. My answer is I absolutely believe that can 
happen. I believe that can happen in the 2015 timeframe. I have 
seen studies of companies that claim that is possible.
    Mr. Issa. I was hoping for an earlier date. You will notice 
that.
    Mr. Kazimi. As of today, I think if you are trying to get 
an electrolyzer that gives you substantial quantities, you are 
talking about $50,000 and above. So, it is not yet available 
for the average household.
    Mr. Burns. Let me just make it clear, as we reach our 
target of $50 per kilowatt for our fuel cell propulsion system, 
which is our 2010 target, electrolyzers are fuel cells running 
backward. So they are basically the same technology. They run 
at higher pressure.
    So, we believe the enablers that will allow us to get fuel 
cells cost competitive will do similarly for electrolyzers----
    Mr. Issa. Dr. Sperling.
    Mr. Sperling. Well, you know, the bigger issue is that 
hydrogen, as Dr. Burns said earlier, there is a lot of hydrogen 
being produced. It is produced at a cost of probably under $2 a 
gallon equivalent.
    So, especially from fossil sources we can make it. We need 
to develop ways of sequestering carbon when we make it using 
fossil sources. But it requires in that case a large 
distribution system to efficiently move it from a source where 
it can be produced fairly efficiently to the end users.
    What Dr. Burns is talking about is that until that kind of 
distribution system is set up, perhaps a better way to do it 
is, and perhaps go in parallel with it, is developing very 
small units that can be at the household or local neighborhood 
level.
    You know, this is part of this challenge of the transition, 
how do we get from here to there? How do we get started?
    It is not obvious. It is not straightforward. Parts of it 
need a lot of research.
    Mr. Issa. I am in the business of pushing hard to try to 
get that for people who can produce it. But I will ask each of 
you, to the extent that you have resources, to make this 
committee aware in the following days or weeks or even months, 
if you remember us, if you discover anyone who is, if you will, 
on that track already because I know that my house has natural 
gas, I know my house has water.
    To be candid, if a micro-unit were available today, I think 
there would be lots of early adapters who would be saying, it 
could be $100 a kilowatt and I am still willing to do it, 
particularly if I have a solar cell in the back or something 
else where I want to be zero emissions.
    Let me get to the heart of one of my concerns, though, 
since I have to answer this bell.
    There has been a lot of concern--and I know Dr. Burns and 
Mr. Campbell, you have it, too--about providing data that could 
be further shared from industry that might in fact, as often is 
claimed in Europe, could be shared with competing companies.
    Do you feel that the Federal Government has put in the 
safeguards and if not, what would you suggest that we do to 
make sure that you are able to fully provide us with the kinds 
of information that you cannot risk letting a competitor have?
    Is that firewall in place and if not, can we do more to 
make it be in place so that we can have the kind of data that 
would allow these programs to go forward a lot faster?
    Mr. Campbell. Well, I think we can do more to provide data 
on the actual progress in terms of where we are. We have been 
much more open this year at Ballard than we ever have been in 
the past.
    We felt there was a lot of misinformation out in the 
marketplace about the state-of-the-art with respect to the 
technology. So, we kind of opened our kimono and are sharing 
our cost levels and where we are in durability. This is 
information that in the past we kept private. We think it is 
important to get that news out there so people can really see 
how far the technology has advanced.
    You do have to protect your intellectual property, but I 
think there is a great spirit of collaboration in this industry 
today where automakers are collaborating, technology companies 
are collaborating. There is a realization that by working 
together we can move this thing a lot faster.
    Mr. Issa. Thank you.
    Mr. Burns. Mr. Chairman, I appreciate your sensitivity on 
that issue. We worked very hard with the Department of Energy 
on their hydrogen fuel initiative on that exact issue. It did 
take a little longer than both parties expected to reach 
agreement on protecting the privacy of the data, but we feel we 
have reached a good common ground on that and we appreciate 
DOE's sensitivity.
    I just want to emphasize, it is a very important issue. The 
fundamental reason why General Motors is pursuing this as 
aggressively as we are pursuing it is we see a tremendous 
business growth opportunity here. We see an opportunity to take 
the world's auto ownership from beyond just 12 percent of the 
world's population.
    We see a vehicle that is simpler, that is more exciting to 
own and drive, that emits just water, that can get from 
renewable energies and provides a foundation for a dramatic 
growth of our industry.
    We want to have a competitive advantage as we pursue that, 
so I appreciate your sensitivity on that. I believe we can work 
through the issues as necessary.
    Mr. Issa. Thank you. I would like to thank all the 
panelists here today.
    In closing, the path to realizing the hydrogen economy has 
been described as a moon shot, or an Apollo shot to paraphrase 
the statement made here today, by some skeptics--fraught with 
technical and economic challenges. But the importance of 
getting the economy away from its dependence on foreign oil in 
an environmentally responsible manner justifies such an 
ambitious initiative. We are halfway through the President's 5 
year hydrogen initiative and as today's hearing indicates, we 
have already begun to see results.
    Moreover, Congress is just hours from passing the most 
comprehensive clean energy bill in this country's history. This 
bill will be a further step in moving expressly toward a 
hydrogen economy.
    At the same time, our witnesses noted that the Federal 
investment must be on a par with these challenges, dramatically 
greater. The investment must be dedicated in a strategic way 
and it must be accountable for the dollars spent. That is why 
congressional oversight hearings like this are so important and 
why this one is so timely.
    I am personally a fan of the goals of Kyoto. Although we 
never affirmed it here in the House or in the Senate, the only 
way we get to Kyoto is through, among other things, the 
President's vision for renewables, for nuclear and for 
hydrogen.
    If there is anything that both sides of the aisle should be 
committed to, it is reaching those three goals.
    On that I will hold the record open, contrary to an earlier 
statement, for 2 weeks from this date so that you may put 
forward any additional submissions.
    Beyond that the committee, though, will accept your 
submissions, not as part of the record, but for our continued 
work, at any time.
    With that, this meeting is adjourned with my thanks.
    [Whereupon, at 2:35 p.m., the hearing was adjourned.]
    [The prepared statement of Hon. Diane E. Watson follows:]

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