[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
ENDING OUR ADDICTION TO OIL:
ARE ADVANCED VEHICLES AND FUELS
THE ANSWER?
=======================================================================
FIELD HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY
COMMITTEE ON SCIENCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
JUNE 5, 2006
__________
Serial No. 109-52
__________
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 DANIEL LIPINSKI, Illinois
W. TODD AKIN, Missouri SHEILA JACKSON LEE, Texas
TIMOTHY V. JOHNSON, Illinois BRAD SHERMAN, California
J. RANDY FORBES, Virginia BRIAN BAIRD, Washington
JO BONNER, Alabama JIM MATHESON, Utah
TOM FEENEY, Florida JIM COSTA, California
RANDY NEUGEBAUER, Texas AL GREEN, Texas
BOB INGLIS, South Carolina CHARLIE MELANCON, Louisiana
DAVE G. REICHERT, Washington DENNIS MOORE, Kansas
MICHAEL E. SODREL, Indiana DORIS MATSUI, California
JOHN J.H. ``JOE'' SCHWARZ, Michigan
MICHAEL T. MCCAUL, Texas
MARIO DIAZ-BALART, Florida
------
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
RANDY NEUGEBAUER, Texas JIM MATHESON, Utah
BOB INGLIS, South Carolina SHEILA JACKSON LEE, Texas
DAVE G. REICHERT, Washington BRAD SHERMAN, California
MICHAEL E. SODREL, Indiana AL GREEN, Texas
JOHN J.H. ``JOE'' SCHWARZ, Michigan
SHERWOOD L. BOEHLERT, New York BART GORDON, Tennessee
KEVIN CARROLL Subcommittee Staff Director
DAHLIA SOKOLOV Republican Professional Staff Member
CHARLES COOKE Democratic Professional Staff Member
MIKE HOLLAND Chairman's Designee
COLIN HUBBELL Staff Assistant
C O N T E N T S
June 5, 2006
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. 10
Written Statement............................................ 12
Statement by Representative Michael M. Honda, Ranking Minority
Member, Subcommittee on Energy, Committee on Science, U.S.
House of Representatives....................................... 13
Written Statement............................................ 14
Statement by Representative Daniel Lipinski, Member, Subcommittee
on Energy, Committee on Science, U.S. House of Representatives. 15
Witnesses:
Dr. James F. Miller, Manager, Electrochemical Technology Program,
Argonne National Laboratory
Oral Statement............................................... 17
Written Statement............................................ 18
Biography.................................................... 20
Mr. Alan R. Weverstad, Executive Director, Mobile Emissions and
Fuel Efficiency, General Motors Public Policy Center
Oral Statement............................................... 20
Written Statement............................................ 23
Biography.................................................... 25
Financial Disclosure......................................... 26
Mr. Jerome Hinkle, Vice President, Policy and Government Affairs,
National Hydrogen Association
Oral Statement............................................... 27
Written Statement............................................ 30
Biography.................................................... 52
Dr. Daniel Gibbs, President, General Biomass Company, Evanston,
IL
Oral Statement............................................... 52
Written Statement............................................ 53
Biography.................................................... 68
Mr. Deron Lovaas, Vehicles Campaign Director, Natural Resources
Defense Council
Oral Statement............................................... 68
Written Statement............................................ 70
Biography.................................................... 125
Mr. Philip G. Gott, Director, Automotive Custom Solutions, Global
Insight, Inc.
Oral Statement............................................... 125
Written Statement............................................ 127
Biography.................................................... 135
Financial Disclosure......................................... 136
Discussion....................................................... 137
Appendix: Additional Material for the Record
``The Billion-Ton Biofuels Vision,'' editorial by Chris
Somerville, Science, Vol. 312, June 2, 2006, p. 1277........... 152
``Toward Efficient Hydrogen Production at Surfaces,'' article by
Jens K. Norskov and Claus H. Christensen, Science, Vol. 312,
June 2, 2006, pp. 1322-1323.................................... 153
A Further Assessment of the Effects of Vehicle Weight and Size
Parameters on Fatality Risk in Model Year 1985-98 Passenger
Cars and 1985-97 Light Trucks, Volume 1: Executive Summary,
R.M. Van Auken and J.W. Zellner, Dynamic Research, Inc.,
January 2003................................................... 155
2006 KPMG Global Auto Executive Survey, Momentum, KPMG
International, January 2006.................................... 167
ENDING OUR ADDICTION TO OIL: ARE ADVANCED VEHICLES AND FUELS THE
ANSWER?
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MONDAY, JUNE 5, 2006
House of Representatives,
Subcommittee on Energy,
Committee on Science,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:00 a.m., in
the Main Council Chambers, Naperville Municipal Center, 400
South Eagle Street, Naperville, Illinois 60566, Hon. Judy
Biggert [Chairman of the Subcommittee] presiding.
hearing charter
SUBCOMMITTEE ON ENERGY
COMMITTEE ON SCIENCE
U.S. HOUSE OF REPRESENTATIVES
Ending Our Addiction to Oil:
Are Advanced Vehicles and Fuels
the Answer?
monday, june 5, 2006
10:00 a.m.-12:00 p.m.
naperville municipal center
400 south eagle street
naperville, il 60540
1. Purpose
On June 5, 2006, the Subcommittee on Energy of the House Committee
on Science will hold a field hearing titled Ending Our Addiction to
Oil: Are Advanced Vehicles and Fuels the Answer? The hearing will
examine progress made in the development of advanced on-board vehicle
and fuel technologies for passenger vehicles that can increase fuel
economy or reduce oil consumption through fuel substitution.
2. Witnesses
Dr. Daniel Gibbs is President of the General Biomass
Company in Evanston, IL. His research interests are in enzymes
that digest cellulose, paper waste utilization and cellulosic
ethanol production.
Mr. Philip G. Gott is Director for Automotive Custom
Solutions at Global Insight, a major economic and financial
forecasting firm.
Mr. Deron Lovaas is the Vehicles Campaign Director
for the Natural Resources Defense Council.
Mr. Jerome Hinkle is the Vice President for Policy
and Government Affairs with the National Hydrogen Association.
Dr. James F. Miller is Manager of the Electrochemical
Technology Program at Argonne National Laboratory. He is an
authority on energy storage and energy conversion technologies,
with a particular expertise in fuel cells and batteries.
Mr. Al Weverstad is the Executive Director for Mobile
Emissions and Fuel Efficiency at the General Motors Public
Policy Center. He began his engineering career in 1971 with
General Motors' Pontiac Motor and Marine Engine Divisions.
3. Overarching Questions
The Committee hearing will address the following questions:
1. What progress has been made towards realizing the Hydrogen
Economy since the 2002 field hearing?
2. What new vehicle technologies and fuel choices might be
available in the near future that could increase U.S. energy
independence?
3. What technical and economic obstacles might limit or block
the availability in the marketplace of cars built with new
technologies or using advanced fuels?
4. What should the Federal Government be doing (or not doing)
through research and development spending and through the
implementation of energy policies to encourage the
commercialization of, and demand for new vehicle technologies
and fuels?
4. Brief Overview
Currently, the U.S. consumes roughly 20 million barrels of oil
daily. Of that, 40 percent is used to fuel cars and trucks at a cost to
consumers of more than $250 billion per year. By 2020, oil consumption
is forecast by the Energy Information Administration to grow by nearly
40 percent, and our dependence on imports is projected to rise to more
than 60 percent. A 10 percent reduction in energy use from cars and
light trucks (achieved by introducing an alternative fuel or improving
fuel economy) would result in displacing nearly 750,000 barrels of oil
per day. A similar percentage reduction in petroleum energy use from
heavy-duty trucks and buses would displace around 200,000 and 10,000
barrels per day, respectively. Both the Federal Government and industry
are funding programs designed to create affordable vehicles that would
use less or no gasoline or petroleum-based diesel fuel, including
programs on hydrogen-powered fuel cells, biofuels, and hybrid vehicle
technologies.
The Federal Government will spend over $200 million in fiscal year
(FY) 2006 on such research and development (R&D) programs.
One focus of federal programs to increase fuel economy, and part of
the President's Advanced Energy Initiative announced this year, is R&D
to advance hybrid vehicles. Hybrid vehicles, such as the Toyota Prius
or the Ford Escape, use batteries and an electric motor, along with a
gasoline engine, to improve vehicle performance and to reduce gasoline
consumption, particularly in city driving conditions. Plug-in hybrid
vehicles are a more advanced version of today's hybrid vehicles. Plug-
in hybrid vehicles require larger batteries and the ability to charge
those batteries overnight using an ordinary electric outlet. Such a
change would shift a portion of the automotive energy demand from oil
to the electricity grid. (Little electricity in the U.S. is generated
using oil.) Additional R&D is needed to increase the reliability and
durability of batteries, to significantly extend their lifetimes, and
to reduce their size and weight.
Fuel substitution R&D focuses on two fuel types: hydrogen and
biofuels. Hydrogen gas is considered by many experts to be a promising
fuel in the long-term, particularly in the transportation sector. When
used as a fuel, its only combustion byproduct is water vapor. If
hydrogen can be produced economically from energy sources that do not
release carbon dioxide into the atmosphere--from renewable sources such
as wind power or solar power, from nuclear power, or possibly from coal
with carbon sequestration--then the widespread use of hydrogen as a
fuel could make a major contribution to reducing the greenhouse gas
emissions. On-board hydrogen storage remains a major technical hurdle
to the development of practical hydrogen-powered passenger vehicles.
Biofuels, such as ethanol and biodiesel, are made from plant
material, and therefore can result in decreased greenhouse gas
emissions, since the carbon dioxide emitted when biofuel is burned is
mostly offset by the carbon dioxide absorbed during plant growth.
Biofuel R&D is directed toward developing low-cost methods of
industrial-scale production, which includes advanced biotechnology and
bioengineering of both plants and microbes (to help break down the
plants into usable materials).
On May 24, 2005, the House of Representatives passed H.R. 5427, the
appropriations bill for FY 2007 that includes funding for these
programs. In the bill:
the overall Vehicle Technology sub-account received
$173 million, a reduction of six percent from last year's
level. Within this amount, Hybrid and Electric Propulsion, part
of the President's Advanced Energy Initiative, received $50
million, up 14 percent from last year.
the Hydrogen Technology sub-account received $196
million, an increase of 26 percent from last year's level;
about 42 percent of this is directed to the FreedomCAR program
for hydrogen vehicles.
the Biomass Technology sub-account, part of the
President's Advanced Energy Initiative received $150 million, a
65 percent increase, most of which is directed toward biofuel
development.
Historically, both the Hydrogen sub-account and the Biomass sub-
account have been heavily earmarked, with 27 percent of Hydrogen
funding and 57 percent of biomass funding diverted to Congressionally
directed projects in FY 2006.
5. Background
On June 24, 2002, the Energy Subcommittee of the House Committee on
Science held a field hearing at Northern Illinois University in
Naperville, IL titled Fuel Cells: The Key to Energy Independence?\1\
The hearing focused on developments in hydrogen fuel cell R&D and
provided a broad overview of fuel cells for all applications, not just
transportation. Witnesses at that hearing were unanimous in their
assessment that current technical approaches to on-board storage of
hydrogen gas require too large a volume to be practical in vehicles.
Solving the storage problem was identified as one of the toughest
technical hurdles for the use of hydrogen as a transportation fuel.
Their assessment was echoed subsequently by expert reports from the
American Physical Society and the National Academy of Sciences.
---------------------------------------------------------------------------
\1\ The Science Committee and its Subcommittees have held numerous
hearings on the use of hydrogen since the announcement of the
FreedomCAR Initiative by then-Secretary of Energy Spencer Abraham on
January 9, 2002. The FreedomCAR program was centered on fuel cell
vehicles that use hydrogen as fuel. The Full Committee held the
following hearings:
GFebruary 7, 2002--Full Committee Hearing on The Future of
---------------------------------------------------------------------------
DOE's Automotive Research Programs
GApril 2, 2003--Full Committee Markup of H.R. 238, Energy
Research, Development, Demonstration, and Commercial Application Act of
2003
GMarch 5, 2003--Full Committee Hearing on The Path to a
Hydrogen Economy
GMarch 3, 2004--Full Committee Hearing on Reviewing the
Hydrogen Fuel and FreedomCAR Initiatives
The Energy Subcommittee held the following hearings:
GJune 26, 2002--Subcommittee on Energy Hearing on
FreedomCAR: Getting New Technology into the Marketplace
GJune 24, 2002--Subcommittee on Energy Field Hearing on Fuel
Cells and the Hydrogen Future
GJuly 20, 2005--Joint Hearing--Subcommittee on Energy and
Subcommittee on Research--Fueling the Future: On the Road to the
Hydrogen Economy
Since that 2002 field hearing, the Federal Government has focused
more attention on the development of advanced vehicle and fuel
technologies. In his 2003 State of the Union Address, President Bush
announced a $1.2 billion Hydrogen Fuel Initiative to reverse America's
growing dependence on foreign oil by developing the technology needed
for commercially viable hydrogen-powered fuel cells. From fiscal 2004
to 2006, over $625 million has been allocated to hydrogen research in
Department of Energy (DOE), over 40 percent of which was directed to
the FreedomCAR vehicle program. The White House Office of Science and
Technology Policy established the interagency Hydrogen Research and
Development Task Force to coordinate the eight federal agencies that
fund hydrogen-related research and development. The Energy Policy Act
of 2005 authorized a broad spectrum of research programs related to
advanced on-board vehicle, hydrogen and liquid fuel technologies.
With the release of his FY 2007 budget request, the President
announced his Advanced Energy Initiative. This initiative provides for
a 22 percent increase in funding for clean energy technology research
at DOE. Two major goals of the initiative are to reduce demand through
greater use of technologies that improve efficiency, including plug-in
hybrid technology; and to change the way Americans fuel their vehicles
by expanding use of alternative fuels from domestically-produced
biomass and by continuing development of fuel cells that use hydrogen
from domestic feedstocks.
Hydrogen
The widespread adoption of hydrogen as a transportation fuel has
the potential to reduce or eliminate air pollution generated by cars
and trucks, but the source of the hydrogen is important. Hydrogen must
be produced from hydrogen-bearing compounds, like water or natural gas,
and that requires energy--and, unlike gasoline, more energy is always
required to produce it than is recovered when hydrogen is burned or
used in a fuel cell. Hydrogen has the potential to reduce America's
dependence on foreign oil, but how much it would reduce dependence
depends on what energy source would be used to generate hydrogen gas in
the first place.
If hydrogen can be produced economically from energy sources that
do not release carbon dioxide into the atmosphere--from renewable
sources such as wind power or solar power, from nuclear power, or
possibly from coal with carbon sequestration--then the widespread use
of hydrogen as a fuel could make a major contribution to reducing the
emission of greenhouse gases.
A fuel cell is a device for converting hydrogen and oxygen into
electricity and water. Fuel cells have been used extensively for
electrical power in space missions, including Apollo and Space Shuttle
missions. In cars, the electricity would then be used to run electric
motors to drive the wheels. Technological breakthroughs have reduced
the cost and size of fuel cells, making them promising sources of power
for automobiles, but fuel cells are still far too costly for everyday
use.
Furthermore, there are research challenges with the fuel itself. To
serve as automobile fuel, hydrogen must be stored on-board, but storing
pure hydrogen at room temperature requires a large volume. Researchers
are therefore working on developing complex fuels that can be stored
compactly but can release pure hydrogen as needed. A final obstacle to
widespread use is the need for new fueling infrastructure. To make
hydrogen-fueled automobiles practical, hydrogen must be as easily
available as gasoline, requiring a widespread network of hydrogen fuel
stations.
Virtually all major foreign and domestic automakers have produced
hydrogen-powered concept and demonstration vehicles. For example,
General Motors has produced several fuel cell vehicle prototypes,
including the Hy-wire, Sequel and AUTOnomy concept cars and the
HydroGen3 minivan. The minivan is being used in demonstration fleets,
but at a cost of more than $1 million per vehicle, these vehicles are
far from ready for the market. There are fourteen hydrogen fueling
stations in the U.S., including one that General Motors and Shell
opened in Washington, D.C., as part of a joint demonstration program.
There are nine hydrogen stations in California, which has allowed Honda
to offer one of its fuel cell cars, the Honda FCX, to a family in
Southern California to demonstrate its day-to-day use.
Biofuels
Rising oil prices in recent years have heightened interest in a
variety of alternative sources of liquid fuels. At present, two
biologically-derived fuel forms, ethanol and biodiesel, are used in the
United States to supplement supplies of conventional gasoline and
diesel. Although biofuel combustion releases carbon dioxide, growing
the agricultural products to create ethanol consumes carbon dioxide.
Both ethanol and biodiesel can be readily blended with conventional
gasoline or diesel, respectively, although the fraction of either
biofuel is limited by compatibility with some materials in the fuel
system and engine, or by gelling of the fuel mixture at low
temperatures.
Ethanol is a renewable fuel produced by fermenting sugars from
biological products. Many different sources can provide the
fermentation feedstock, such as trees and grasses and municipal solid
waste, but in the United States, ethanol is now most commonly made from
corn. Research is focused on developing feedstocks other than corn,
particularly feedstocks that are not otherwise used for food. This
requires the development of enzymes to digest what is otherwise waste
plant material--stalks, leaves and husks--into fermentable sugars.
Known as cellulosic ethanol, ethanol produced using both digestion and
fermentation can use more parts of a plant and can expand the variety
of economically viable feedstock for the production of ethanol. This
would allow introduction of a wide variety of other feedstocks,
including woody plants like willow and fast growing switchgrass. As
with all ethanol, compatibility with the current fuel infrastructure is
not perfect: transportation and energy content are two concerns.
Ethanol's detractors argue that because ethanol can absorb water, it
cannot be transported in gasoline pipelines, and use of carriers other
than pipelines may complicate gasoline substitution on a national
scale. Additionally, ethanol is lower in energy per gallon than
gasoline, so consumer expectations about how far they can drive on a
gallon of fuel need to be managed accordingly.
Ethanol, in use for years in the Midwest as a gasoline additive for
improving octane levels, is now finding wider use by replacing an older
octane-boosting additive found to contaminate drinking water. Ethanol
can, however, serve as a primary ingredient in vehicle fuel. One blend
of ethanol and gasoline is E85, 85 percent ethanol and 15 percent
gasoline. Many automobile manufacturers produce Flex-Fuel Vehicles
(FFVs) that can run on either E85 or ordinary gasoline, a capability
that does not significantly add to vehicle price. General Motors,
DaimlerChrysler, Ford, and Nissan all produce FFV cars and trucks.
(Some analysts point out that most of these FFVs were produced by
manufacturers because they get a credit against their corporate fuel
economy requirements, rather than because of any consumer or market
demand for the fuel flexibility option.)
Ethanol fuels are also in widespread use abroad. Brazil instituted
a policy to encourage flexible fuel cars during the energy crisis of
the 1970s, and between 1983 and 1988 more than 88 percent of cars sold
annually were running on a blend of ethanol and gasoline. Flex-fuel car
sales fell after withdrawal of the subsidy, but even today, fuel in
Brazil has a minimum of 25 percent ethanol. Most ethanol in Brazil is
produced from sugar cane, a much more efficient process than producing
ethanol from corn, as is done in the United States.
Biodiesel is a renewable fuel that can be used in diesel engines,
but is produced from vegetable oils and animal fats instead of
petroleum. Using biodiesel instead of petroleum diesel reduces
emissions of pollutants such as carbon monoxide, particulates, and
sulfur. Biodiesel-petroleum diesel blends, with up to 20 percent
biodiesel, can be used in nearly all diesel equipment. Higher biodiesel
percentage blends may require specialized engines, delivery, and
storage technology. Biodiesel is used in the fleets of many school
districts, transit authorities, national parks, public utility
companies, and garbage and recycling companies.
E85 and biodiesel fuel stations are scattered around the country.
There are 637 E85 fuel stations in the U.S., with 102 in Illinois, and
there are 362 biodiesel stations in the U.S., with 11 in Illinois.
Compared to the more than 200,000 standard gasoline stations, these
biofuels are still very difficult to find. The Alternative Fuels Data
Center provides maps indicating the locations of fueling stations with
advanced fuels.\2\
---------------------------------------------------------------------------
\2\ See http://www.eere.energy.gov/afdc.
---------------------------------------------------------------------------
Plug-in Hybrids
Hybrid vehicles combine batteries and an electric motor, along with
a gasoline engine, to improve vehicle performance and to reduce
gasoline consumption. Conventional hybrid electric vehicles recharge
their batteries by capturing the energy released during braking or
through a generator attached to the combustion engine. These energy
management techniques mean that these cars dissipate less of the energy
contained in their fuel as waste heat. Nearly 200,000 hybrid passenger
vehicles, such as the Toyota Prius or the Ford Escape, were sold in the
U.S. from 2000 to 2004. Over 40 transit agencies in North America use
hybrid buses. There are approximately 700 hybrid buses in regular
service in North America, with another 400 planned deliveries through
2006.
Plug-in hybrid vehicles are a more advanced version of today's
hybrid vehicles. They involve larger batteries and the ability to
charge those batteries when parked using an ordinary electric outlet.
Unlike today's hybrids, plug-in hybrids are able to drive for extended
periods solely on battery power, thus moving some of the energy
consumption from the gasoline tank to the electric grid (batteries are
typically charged overnight) and moving some of the emissions from the
tailpipe to the power plant (where, in theory, they are more easily
controlled).
Because most Americans commute less than 40 miles a day, plug-in
hybrids operable for 40 miles on an overnight charge from the electric
grid could reduce U.S. gasoline consumption significantly. The
potential for oil savings is related to how far a plug-in hybrid can
travel solely on battery power. The electricity used to charge the
batteries overnight would be generated from domestic sources (only
three percent of the electricity used in the United States is generated
from oil) and that electricity would primarily be consumed at night
when demand is low.
President Bush, as part of his Advanced Energy Initiative, has
established the goal of developing technology that would enable plug-in
hybrids to travel up to 40 miles on battery power alone. Plug-in
hybrids could benefit consumers because of their greater fuel economy
and the relatively low cost of energy from the electric grid. Some
proponents of plug-in hybrids claim that consumers will be able to
recharge their batteries overnight at gasoline-equivalent cost of $1
per gallon.
While plug-in hybrid vehicles offer many advantages, high initial
costs prevent widespread commercial application. Specialty conversion
kits are available to upgrade an ordinary hybrid to a plug-in hybrid--
although in very limited quantities and at high cost (about $10,000 per
kit). Many component technologies, particularly the batteries, will
need to achieve significant cost reductions and improvements in
reliability before plug-in hybrids are truly attractive to consumers at
mass-market scale. Car companies are reluctant to invest in these
technologies without demonstrable consumer demand. R&D is needed to
increase the reliability and durability of batteries, to significantly
extend their lifetimes, and to reduce their size and weight.
Because batteries on board a plug-in hybrids are recharged by
plugging the vehicle into an outlet, these vehicles do not need new
types of fuel stations. The large batteries used in plug-in hybrids
might also be used to provide power back to the electric power grid. A
fleet of plug-in hybrids could offer regulatory services (keeping
voltages steady, etc.) to a modernized grid. Advocates say that such
vehicle-to-grid transmissions could benefit individual car owners by
allowing them to sell the use of their energy storage capacity to grid
operators.
The development and widespread use of plug-in hybrid vehicles could
act as a stepping stone toward hydrogen-based transportation and fuel
cell vehicles, because the electric motors and power control
technologies that are required for plug-in hybrid cars would also be
useful in fuel cell vehicles.
The first plug-in hybrid produced by a major automaker, the
DaimlerChrysler Sprinter van, has been delivered to U.S. customers for
test purposes. Many other plug-in hybrids are being tested in prototype
form by small firms and individuals.
6. Witness Questions
Dr. Daniel Gibbs
1. How widely available is ethanol today, and how many cars
can use it?
2. What are the obstacles to expanding the variety of
feedstocks available for conversion to ethanol? Are these
hurdles mainly market failures and other economic barriers or
are they technical in nature?
3. What is the largest technical hurdle for each of the
following fuels: Corn ethanol, biodiesel, cellulosic ethanol?
Does the current federal research agenda adequately address
these technical barriers? What actions would most rapidly
overcome these technical barriers?
4. Some advocates suggest that biofuels should substitute for
25 percent or more of the Nation's transportation fuel use. Are
there market or other barriers that policy might overcome to
accelerate realization of the 25 percent biofuels goal?
Mr. Philip Gott and Mr. Deron Lovaas
1. The auto industry in recent years has generally used
technological improvements to increase performance instead of
fuel efficiency. What would be required to lead automakers to
apply technology advancements to improving fuel economy?
2. What hurdles must hybrids, flex-fuel, and hydrogen-powered
vehicles clear before the automobile industry, industry
analysts, and the automotive press accept these technologies
and consumers buy them? How more or less likely is it that
these radically new technologies--fuel cells, electric drive
trains, or significant battery storage capabilities, for
example--will be incorporated into cars rather than incremental
innovations to internal combustion engines?
Mr. Jerome Hinkle
1. Many experts indicate that on-board hydrogen storage is the
major bottleneck facing realization of the hydrogen economy.
What research paths look the most promising for solving the on-
board storage problem?
2. What technical barriers in the production and distribution
need to be overcome to permit hydrogen to fuel a quarter of the
cars on the highway?
3. What are the tradeoffs between centralized and distributed
hydrogen production for fueling the transportation
infrastructure?
Dr. James Miller
1. What are the two most significant technical obstacles to
making hydrogen-powered fuel cell vehicles affordable and
practical to use? What are those obstacles for plug-in hybrids?
How soon is significant progress likely to be made on removing
each of the obstacles you mention? Can either hydrogen fuel
cell vehicles or plug-in hybrids advance rapidly enough to be a
more practical alternative to reducing energy consumption and
pollution than making continuing improvements in the internal
combustion engine would be?
2. Batteries need to be more durable, more rapidly chargeable,
have longer lifetimes, and reduced size and weight if plug-in
hybrids are to become practical. How are those traits related
to one another and are there trade-offs between these
performance parameters? Which are the easiest to address? Which
of these contribute most significantly to cost?
Mr. Al Weverstad
1. What are the significant cost and technical differences
between a flex-fuel engine and a conventional engine? Are there
specific challenges to incorporating flex-fuel technologies in
plug-in hybrid electric vehicles? Why aren't these technologies
incorporated in every car sold?
2. What technologies would automakers adopt first to enable
passenger vehicle to have a fuel economy significantly higher
than available today, say 60 miles per gallon? What
technologies would be used to hit a 45 mile per gallon target?
What technologies would be used to hit a 35 mile per gallon
target?
3. Are there gaps in the government's advanced vehicles and
fuels research and development portfolio that could help with
the more rapid adoption of new technologies? Do the Department
of Energy programs have the correct balance between research
and technology demonstration?
Chairwoman Biggert. Good morning.
I would like to call this meeting to order. Welcome to
today's hearing entitled ``Ending Our Addiction to Oil: Are
Advanced Vehciles and Fuels the Answer?''
I would now recognize myself for an opening statement.
I want to welcome everyone here to this Energy Subcommittee
hearing. Today we're going to examine how new technologies and
advanced fuels for passenger vehicles could help our nation's
addiction to oil.
I want to thank my Ranking Member Mr. Honda for traveling
here from his home in the Silicon Valley of California. I
greatly appreciate the time he has taken to come to my favorite
part of Illinois.
I also want to welcome my fellow Member of the Illinois
Delegation and the Science Committee, Mr. Lipinski, and thank
him for joining us today. He didn't have to come quite so far.
I also want to thank our host, Mayor Pradel, and the
citizens of Naperville for opening their Municipal Center for
us today.
Finally, I hope you all got a chance to look at the
advanced vehicles parked outside, many of which run on
alternative fuels. And that's why I'm afraid we started a
little bit late because I got involved in driving a scooter and
sitting in all the cars. So if you didn't have a chance to do
that, they will still be out there after this hearing is over.
We wouldn't be able to peek under the hood or kick the
tires of these hybrid, plug-in hybrid and flex-fuel vehicles
today if it weren't for the good people at General Motors,
Argonne National Laboratory, the Illinois Institute of
Technology and Northern Illinois University. So, we thank them
very much.
Transportation is always a major issue for suburban
communities whether they are in my District, Mr. Honda's or Mr.
Lipinski's. As a matter of fact, it was better roads,
inexpensive vehicles and cheap gasoline that allowed these
suburbs to flourish.
We see that transportation and oil are becoming
increasingly important to the growing populations in China and
India as well. In addition, various studies suggest that we
have reached the peak of production, or will very soon, meaning
the gap between supply and demand will only grow larger. This
will give countries with sizeable oil resources, many of which
are hostile to the United States, and their cartels even more
opportunities to manipulate the global market for oil.
The bad news is that this confluence of factors already is
hitting the pocketbooks of American families with oil and gas
at more than $70 per gallon. The good news--oh, I'm sorry. Per
barrel. Thank goodness it's not gallon yet.
The good news is that there's nothing like a $3 a gallon of
gasoline to get everyone thinking about new and creative ways
to make transportation more affordable, less polluting and less
susceptible to the verges of the world oil market. More than
anything else Americans just want to be able to hop into their
cars and go. Very few care what makes their car go, they just
want it to be inexpensive and easy to get.
Our interest today is in retaining that convenience and
minimizing the cost to our national security, to our economic
security and to our environment, not to mention to the family
budget through the use of research and technology. We need to
work towards cars that can run on whatever energy source is
available at the lowest cost be it electricity, gasoline,
biofuel, hydrogen or some combination of these.
In addition, we need to find ways to make these diverse
fuels readily available across the country.
It is clear that both technical and market obstacles remain
to realizing the potential benefits of all of the advanced
vehicle technologies or alternative fuels that we will be
discussing. What are the technical or cost competitiveness
issues related to the important components such as batteries,
fuel cells or power electronics? What are major hurdles that
stand in the way of the production or distribution of advanced
biofuels? What technology challenges have not received
sufficient attention? Or, are the hurdles not technical? Do
consumer preferences or auto industry inertia present the
highest hurdles? What about the infrastructure costs?
I want to give the city Naperville credit for focusing on
the demand side of this equation. As a founding member of the
Plug-In Partnership Campaign, Naperville is one of 132 public
power utilities in 43 cities, counties and local governments
that have made soft purchase orders indicating a strong
interest in buying flexible fuel, plug-in hybrid vehicles if
they are manufactured. In one of these vehicles the average
American who drives between 25 and 30 miles a day could
complete his or her commute and run some errands without
burning a drop of gasoline. That's good for energy security ,
not to mention the pocketbook.
As I see it, one of the most significant potential benefits
of the plug-in hybrid is that it does not require a whole new
refueling infrastructure. You can just pull into your garage at
the end of the day and fill her up by plugging your car into a
regular 120 volt socket in the garage. Imagine the convenience
of recharging your car just as you recharge your cell phone,
Blackberry or laptop every evening by simply plugging it in.
The next morning unplug and you're ready to go.
The city of Naperville realizes that the best way to hasten
the arrival of plug-in hybrids was to commit to buying one. You
can do the same thing simply by going to
wwww.pluginpartners.com, click on ``What you can do'' tab and
fill-in the plug-in partner's petition. Let the automakers know
that you'd be willing to pay a few thousand dollars more up
front to buy a vehicle that would be much cheaper to operate,
cleaner and could run on domestically produced electricity.
We are looking to our witnesses today to help us identify
the most significant technical and market obstacles facing the
widespread availability of the advanced fuel--advanced vehicle
technologies and alternative fuels that will make our cars less
dependent on imported oil. We need your help in determining
what steps the Federal Government can take to remove those
barriers, whether it's through focused research or tax
incentives. Your input at this hearing is greatly appreciated
and we look forward to your expert advice.
But, first, I would like to recognize the Ranking Member
Mr. Honda for his opening statement.
Mr. Honda.
[The prepared statement of Chairwoman Biggert follows:]
Prepared Statement of Chairman Judy Biggert
Good morning. I want to welcome everyone to this Energy
Subcommittee hearing. Today we are going to examine how new
technologies and advanced fuels for passenger vehicles could help end
our nation's addiction to oil.
I want to thank my Ranking Member, Mr. Honda, for traveling here
from his home in the Silicon Valley of California. I greatly appreciate
the time he has taken to come visit my favorite part of Illinois. I
also want to welcome my fellow member of the Illinois delegation, Dr.
Lipinski, and thank him for joining us today.
I also want to thank our hosts, Mayor Pradel and the citizens of
Naperville, for opening their Municipal Center to us today.
Finally, I hope you all got a chance to look at the advanced
vehicles parked outside, many of which run on alternative fuels. If you
didn't, not to worry; they will still be there after this hearing is
over. We wouldn't be able to peek under the hood or kick the tires of
these hybrid, plug-in hybrid, and flex fuel vehicles today if it
weren't for the good people at General Motors, Argonne National
Laboratory, the Illinois Institute of Technology, and Northern Illinois
University.
Transportation is always a major issue for suburban communities,
whether they are in my district, Mr. Honda's, or Mr. Lipinski's. As a
matter of fact, it was better roads, inexpensive vehicles, and cheap
gasoline that allowed the suburbs to flourish.
We see that transportation and oil are becoming increasingly
important to the growing populations in China and India. In addition,
various studies suggest that we have reached peak oil production, or
will very soon, meaning the gap between supply and demand will only
grow larger. This will give countries with sizable oil reserves, many
of which are hostile to the United States, and their cartels even more
opportunities to manipulate the global market for oil.
The bad news is that this confluence of factors already is hitting
the pocketbooks of American families, with oil over $70 per barrel. The
good news is that there is nothing like a $3 gallon of gasoline to get
everyone thinking about new and creative ways to make transportation
more affordable, less polluting, and less susceptible to the vagaries
of the world oil market.
More than anything else, Americans want to be able to hop into
their cars and go. Very few care what makes their car go. They just
want it to be inexpensive and easy to get. Our interest today is in
retaining that convenience and minimizing its cost--to our national
security, to our economic security, and to our environment, not to
mention to the family budget--through the use of research and
technology.
We need to be working towards cars that can run on whatever energy
source is available at the lowest cost: be it electricity, gasoline,
biofuel, hydrogen, or some combination of these. In addition, we need
to find ways to make these diverse fuels readily available across the
country.
Plug-in hybrids or hydrogen-powered fuel cells would allow us to
run our cars using renewable sources such as solar and wind, other
clean and abundant sources like nuclear and even coal preferably from
power plants employing advanced clean coal technologies that I hope
will soon be the norm. Flex fuel vehicles running on renewable
biofuels, such as ethanol and biodiesel made from all kinds of plant
material--not just corn--can significantly decrease greenhouse gas
emissions. And as demand for biofuels increases, we can simply grow
more of the feedstock, whether that's corn, sugar cane, or switchgrass.
And the benefit of these advanced vehicle technologies and alternative
fuels will reduce our dependence upon imported sources of oil.
It is clear that both technical and market obstacles remain to
realizing the potential benefits of all of the advanced vehicle
technologies or alternative fuels we will be discussing. What are the
technical or cost-competitiveness issues with important components,
such as batteries fuel cells or power electronics? What major hurdles
stand in the way of the production or distribution of advanced
biofuels? What technical challenges have not received sufficient
attention?
Or are the hurdles non-technical? Do consumer preferences or auto
industry inertia present the highest hurdles? What about infrastructure
costs?
I want to give the City of Naperville credit for focusing on this
market or demand side of the equation. As a founding member of the
Plug-In Partner Campaign, Naperville is one of 132 public power
utilities and 43 cities, counties, and local governments that have made
``soft'' purchase orders indicating a strong interest in buying
flexible fuel plug-in hybrid vehicles--if they are manufactured. In one
of these vehicles, the average American, who drives between 25 and 30
miles a day, could complete his or her commute and run some errands
without burning drop of gasoline. That's good for energy security, not
to mention the pocketbook.
As I see it, one of the most significant potential benefits of the
plug-in hybrid is that they do not require a whole new ``refueling''
infrastructure. To think that you could pull into your garage at the
end of the day and ``fill 'er up'' just by plugging your car into a
regular, 120-volt socket in the garage is very appealing. Imagine the
convenience of recharging your car just as you recharge your cell
phone, blackberry, or laptop every evening--by simply plugging it in.
The next morning, unplug it and you are ready to go.
The City of Naperville realized that the best way to hasten the
arrival of plug-in hybrids was to commit to buying one. You can do the
same thing. Simply go to www.pluginpartners.com, click on the ``What
You Can Do'' tab, and fill in the Plug-In Partners petition. Let the
automakers know that you'd be willing to pay a few thousand more
dollars to buy a vehicle that would be cheaper to operate, cleaner, and
could run on domestically produced electricity.
We are looking to you, our witnesses here today, to help us
identify the most significant technical and market obstacles facing the
widespread availability of advanced vehicle technologies and
alternative fuels that will make our cars less dependent upon imported
oil. In addition, we need your help determining what steps the Federal
Government can take to remove those barriers, whether it's through
focused research or tax incentives.
Your input at this hearing is greatly appreciated and we look
forward to your expert advice, but first I would like to recognize the
Ranking Member, Mr. Honda, for his opening statement. Mr. Honda.
Mr. Honda. Thank you, Madam Chair. And I'm very, very glad
to be here in the great prairie State of Illinois. Having grown
up in the south side and north side Chicago, I feel close to
home.
And this podium is beautiful. So the city really ought to
be very proud of their facility. But this bench up here makes
me feel like I'm in a sushi bar. So if anybody wants to, you
can just step right up.
So I want to also thank all the witnesses for being here
today to testify, and to all of you who have come here to hear
more about this very important subject.
I'm especially glad that we've got a panel that can talk
about a wide range of vehicle and fuel options for the future.
Because I suspect it is going to take some combination of a
number of different approaches to truly end our addiction to
oil. We will probably need to use different solutions at
different points of time, and we will probably want to use
multiple technologies at the same time depending on the
application. And what do I mean by that? Well, I have a hybrid,
a Toyota Prius. I recently had the opportunity also to drive a
Honda hydrogen fuel cell car. And while I wasn't able to
participate, there was a plug-in hybrid test drive near the
Capitol. These are three different technologies at different
states of commercial readiness. One is here today, the hybrid;
one will be available fairly soon, the plug-in hybrid as our
Chairperson said, and some really would say that it's ready to
go and all you have to do is put the money, and; one still
requires the development of technology and infrastructure to be
viable.
At different points in time different technologies will
make the most sense economically. When you think about
applications, passenger car use in the city is very different
than freight hauling over long distances. Different
technologies are likely to prove most appropriate for the
different uses, and so a single solution probably isn't the
best way to go.
That can be a good thing. Even if a traditional hybrid in
use today gets bumped aside by plug-in hybrids for urban
passenger use, we will still be able to use hybrids for other
purposes.
Back in Washington we have had a few hearings over the last
couple of years about particular aspects of this subject. Plug-
in hybrids, prizes for development of hydrogen technology,
hydrogen and the progress that is being made in addressing
technical barriers to the use of hydrogen in vehicles, but
because of the time constraints we have to work with there, we
aren't able to get a broad group of people together in this
time.
I'm glad that today we'll get to hear about many different
technologies all in one hearing and we will have the
opportunity to compare them to each other and see where they
compliment each other. I know that in many cases there's still
much basic R&D that needs to be done to overcome technical
barriers, and I certainly want to hear about those so we can
learn where we need to focus our efforts on the Subcommittee.
And the barriers are both economical and technical. And perhaps
if you have the will, you might want to also share with us some
of the political barriers you may see in the development of
these kinds of technologies.
But I also hope that we will hear about the value of
demonstration projects which can serve to help identify some of
the very technical barriers that an increased emphasis on
research will aim to overcome. I fear that we might miss more
obstacles until after we have made significant investments and
time and resources if we stop working on demonstration
projects. Back in my own District we are fortunate to have some
projects such as the Santa Clara Valley Transportation
Authority's Zero Emission Bus program and the use of natural
gas vehicles at the Norm Mineta San Jose Airport, that have
helped to demonstrate the feasibility of alternative fuel
vehicles.
Chairman Biggert, thank you for putting together an
interesting and technologically diverse panel from whom I look
forward to learning a lot today.
I yield back.
[The prepared statement of Mr. Honda follows:]
Prepared Statement of Representative Michael M. Honda
I'm glad to be here in the Prairie State today, and I thank
Chairwoman Judy Biggert for inviting me to participate in this hearing.
Thanks to all of the witnesses for being here to testify and to all
of you who have come to hear more about this very important subject.
I'm especially glad that we've got a panel that can talk about a
wide range of vehicle and fuel options for the future, because I
suspect it is going to take some combination of a number of different
approaches to truly end our addiction to oil.
We will probably need to use different solutions at different
points in time, and we will probably want to use multiple technologies
at the same time depending on the application.
What do I mean? Well, I have a hybrid Toyota Prius, I recently had
the opportunity to drive a Honda hydrogen fuel cell car, and while I
wasn't able to participate, there was a plug-in hybrid test drive near
the Capitol.
These are three different technologies at different states of
commercial readiness--one is here today (hybrid), one will be available
fairly soon (plug-in hybrid, some would say it is here today!) and one
still requires the development of technology and infrastructure to be
viable. At different points in time, different technologies will make
the most sense economically.
When you think about applications, passenger car use in the city is
very different from freight hauling over long distances. Different
technologies are likely to prove most appropriate for the different
uses, and so a single solution probably isn't the best way to go.
That can be a good thing--even if a traditional hybrid in use today
gets ``bumped aside'' by plug-in hybrids for urban passenger use, we
will still be able to use hybrids for other purposes.
Back in Washington, we have had a few hearings over the last couple
of years about particular aspects of this subject--plug-in hybrids,
prizes for developments of hydrogen technology, hydrogen and the
progress that is being made in addressing technical barriers to the use
of hydrogen in vehicles--but because of the time constraints we have to
work within there, we aren't able to get a broad group of people
together at the same time.
I'm glad that today we will get to hear about many different
technologies all in one hearing and we will have the opportunity to
compare them to each other and see where they complement each other.
I know that in many cases there is still much basic R&D that needs
to be done to overcome technical barriers, and I certainly want to hear
about those so we can learn where we need to focus our efforts on the
Subcommittee.
But I also hope that we will hear about the value of demonstration
projects, which can serve 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.
Back in my own district, we are fortunate to have some projects,
such as the Santa Clara Valley Transportation Authority' Zero Emission
Bus program and the use of natural gas vehicles at the Norm Mineta San
Jose Airport, that have helped to demonstrate the feasibility of
alternative fuel vehicles.
Chairwoman Biggert, thank you for putting together an interesting
and technologically diverse panel from whom I look forward to learning
a lot today. I yield back the balance of my time.
Chairwoman Biggert. Thank you, Mr. Honda.
We don't normally have opening statements from the Members,
but since this is a field hearing I will recognize Mr. Lipinski
for three minutes.
Mr. Lipinski. Thank you, Chairwoman Biggert.
I appreciate the opportunity to speak here today, and I
appreciate you putting this together. It's certainly a critical
problem that we're facing right now. Not just with the high gas
prices, but all the other problems that are caused by our
current energy situation. And I appreciate the work that you've
done in terms of helping us in terms of research and
development, and especially your work with Argonne Lab here. So
you've done a lot of important work in the energy area.
So right now we're all being effected by high energy
prices. But as I said, it's not just our pocketbooks that are
hit by our current energy paradigm. Also our national security
is threatened and our environment and public health are also
threatened by the current burning of fossil fuels which we use
now to fuel our vehicles. We really need to develop a new
energy model and find solutions here at home, solutions that
will strengthen our national security, boost our economy, and
help protect our environment.
Now there are may possible alternatives, you know, ranging
from the short-term such as conservation and increasing
efficiency to long-term approaches such as the use of hydrogen,
bottled fuels and batteries as well as other ideas that we'll
hear about from our witnesses today.
I'm especially interested as a former mechanical engineer
to hear ideas and suggestions that our witnesses have today for
where they think we should go, what they think the
possibilities are.
Now some of these tools are already at use on our highways.
I have a Ford Escape hybrid, which has served me very well, and
this technology certainly has proven valuable. But it's not the
solution to all of our problems. We really need to find and
work, do the R&D on all these different areas.
One area that I'm particularly interested in is hydrogen,
which has a great potential to provide much of our
transportation energy needs and be environmentally friendly
when the hydrogen is produced from renewable fuels.
I'm very pleased that a couple of weeks ago the House of
Representatives passed legislation that I introduced along with
Representative Bob Inglis to create the H-Prize. Now the H-
Prize Act of 2006 creates different prizes for different
advances in the use of hydrogen as a fuel since there are
problems with creation, storage, transportation; all these must
be overcome so that we can use hydrogen as a fuel, we could put
a hydrogen car in everyone's driveway.
I drove a hydrogen car a couple of weeks ago. It drove
fantastic. The only problem is the price tag, it's about $1.5
million. It's a little too high right now. So we need to do
more work to bring down the price of this, but it's available,
it's possible. And as we saw the cars out front, these
technologies are there. The problem is making them efficient
enough so that we can use this to give everybody a vehicle such
as these in order to wean ourselves off of oil, which we use
right now to move our vehicles.
Americans over the years have consistently faced monumental
challenges, consistently have overcome them. And we did this
with air travel, space exploration, just to name a couple, and
now we have to do this with energy. We need to use our greatest
resource, which is our ingenuity and creativity, which is on
display right now from our witnesses. So I look forward to
hearing from our witnesses and hear the testimony today.
Thank you.
Chairwoman Biggert. Thank you, Mr. Lipinski.
I'd like now to introduce our witnesses.
If Members wish to submit further additions to their
opening statements, your statements will be added to the record
without objection.
First of all we have Dr. James Miller, who is the Manager
of the Electrochemical Technology Program at Argonne National
Laboratory, right here in the 13th District. Welcome.
Mr. Alan Weverstad, who is the Executive Director for
Mobile Emissions and Fuel Efficiency at the General Motors
Public Policy Center. Thank you for being here.
Mr. Jerome Hinkle, Vice President, Policy and Government
Affairs, the National Hydrogen Association.
Dr. Daniel Gibbs, President of the General Biomass Company,
which is located in Evanston.
Mr. Deron Lovaas, Vehicles Campaign Director for the
Natural Resources Defense Council.
And then Mr. Philip G. Gott, Director for Automotive Custom
Solutions at Global Insight.
Welcome all of you.
As our witnesses probably know, the spoken testimony is
limited to five minutes. After each witness, Members will
have--after all of the witnesses, Members will have five
minutes each for questions.
And with that, we will begin with Dr. Miller. You're
recognized for five minutes, or about.
STATEMENT OF DR. JAMES F. MILLER, MANAGER, ELECTROCHEMICAL
TECHNOLOGY PROGRAM, ARGONNE NATIONAL LABORATORY
Mr. Miller. Chairman Biggert and Members of the Energy
Subcommittee. Thank you for the opportunity to testify today
and share my thoughts on the role that fuel cell vehicles and
plug-in hybrids can play in reducing our nation's petroleum
consumption. Let me start my testimony by recalling the
benefits that fuel cell vehicles can provide to our nation.
Fuel cell vehicles offer the potential to provide operation
on petroleum free fuel with a fuel economy significantly
exceeding today's internal combustion engine vehicles while
omitting only water vapor at the tailpipe. However, in order
for fuel celled vehicles to achieve widespread market
penetration, key technical problems must be solved. Cost and
durability are the major challenges to fuel cell
commercialization. Size, weight and thermal management are also
key barriers.
In order to have widespread market penetration, the cost of
fuel cells needs to be reduced from their current cost, about
$3,000 per kilowatt in small volume fabrication to a target
cost of about $30 per kilowatt in mass production.
Independent studies have analyzed the cost of automotive
fuel cell systems if manufactured in mass production levels of
500,000 units per year. The results show that the cost
projections for mass produced fuel cells have been reduced by
more than a factor of 50 percent since 2002. Further work at
Argonne National Laboratory is directed toward reducing or
eliminating the platinum content in the fuel cells, which if
successful would have a direct effect on further reducing fuel
cell costs.
Similar gains have been made in operating life. An
operating life of at least 5,000 hours is required for
automotive applications. During the last four years the
durability of fuel cell systems has been extended from 1,000
hour or less to greater than 2,000 hours under real world
cycling conditions. Much progress has been made, but additional
research is needed.
The key to enhancing longevity is to understand performance
degradation and failure mechanism so that new materials or
engineering solutions may be devised to overcome them. This is
another line of research at Argonne.
Let me now turn to plug-in hybrid vehicles. Nickel metal
hydride batteries are used in conventional hybrid vehicles
today. However, lithium-ion batteries are the most promising
technology for use in this application due to their high energy
density and high power density. It is only a matter of time
before they replace nickel metal hydride batteries in hybrid
vehicles.
For the same amount of stored energy and power, lithium-ion
batteries will be about two-thirds the size of a comparable
nickel metal hydride battery. The current state of the art
lithium-ion battery already possesses suitable power, energy,
weight and volume for use in plug-in hybrids that could provide
at least a 20 miles range capability on batteries only. The
issues of ruggedness, by that I mean ability to withstand
overcharging and extreme temperatures as well as long lifetimes
and cost, remain barriers for this technology.
There exists numerous opportunities for reducing cost,
extending life and further increasing the energy density
lithium-ion battery technology. Currently there are worldwide
R&D efforts focused on the development of advanced electrode
materials that are less expensive and inherently more stable
than those used in current state of the art lithium-ion
batteries. And Argonne is one of the world leader in this area.
Several of the these advanced electrode materials offer the
promise for: Simultaneously extending electric range through
increased battery energy density; extending battery life
through enhanced stability of materials, and; reducing battery
cost via two mechanisms, lower battery materials cost and
reduced complexity of the battery management and control
system.
In conclusion, in my opinion there is no single solution.
The future will include a mix of technologies that includes:
Improved internal combustion engines; alternative fuels;
hybrids; plug-in hybrids; electric vehicles and fuel cell
vehicles. A range of technologies that will be needed to make
fuel cell vehicles viable are the subject of ongoing research.
These include light weight materials, advanced batteries, power
electronics and electric motors.
The vision of fuel cell vehicles and plug-in hybrids as
solutions to foreign energy dependency, environmental pollution
and greenhouse gas emissions is a compelling vision. We at
Argonne are excited about the prospect of helping our nation in
its transition to environmentally friendly, domestically
produced sources of energy.
Thank you. And I will be happy to answer questions.
[The prepared statement of Dr. Miller follows:]
Prepared Statement of James F. Miller
Chairman Biggert and Members of the Energy Subcommittee, thank you
for the opportunity to testify today and share my thoughts on advanced
automotive technologies. I will address the role that fuel cell
vehicles and plug-in hybrids can play in reducing our nation's
petroleum consumption and automotive emissions. I will discuss the
major technical problems and research opportunities for each of these
technologies, and provide an update on the recent progress that has
been achieved.
Fuel Cell Vehicles
Let me start my testimony by recalling the benefits that fuel cell
powered vehicles can provide to our nation. Fuel cell vehicles offer
the potential to provide operation on petroleum-free fuel, with a fuel
economy significantly exceeding today's internal combustion engine
vehicles, while emitting only water vapor at the tailpipe. The
Department of Energy (DOE) estimates that, if hydrogen reaches its full
potential, the Hydrogen Fuel Initiative and FreedomCAR program could
reduce our oil demand by over 11 million barrels per day by 2040--
approximately the same amount of crude oil America imports today.
However, in order for fuel cell vehicles to achieve widespread
market penetration, key technical problems must be solved Cost and
durability are the major challenges to fuel cell commercialization.
Size, weight, and thermal and water management are also key barriers.
Under the FreedomCAR and Fuel Partnership, a model of public/private
collaboration, the Department of Energy is working closely with its
national laboratories, universities, and industry partners to overcome
critical technical barriers to fuel cell commercialization. The
research program continues to focus on materials, components, and
enabling technologies that will contribute to the development of low-
cost, reliable fuel cell systems.
For automotive fuel cells, the two greatest problems are the cost
and durability of fuel cells. In addition, on-board hydrogen storage
and a viable supporting infrastructure of hydrogen production and
distribution will also have to be established, but these issues have
been addressed by previous witnesses today.
In order to have widespread market penetration, the cost of fuel
cells needs to be reduced from their current cost (about $3,000/kW in
small volume fabrication) to a target cost of $30/kW (in mass
production). Independent studies, conducted by industry for the
Department of Energy, have analyzed the cost of automotive fuel cell
systems, if manufactured at mass production levels of 500,000 units per
year. The results show that the cost projections for mass-produced fuel
cells have been reduced by more than 50 percent since 2002 (from $275/
kW to $110/kW) under the Hydrogen Fuel Initiative. This cost reduction
was the result of increased power density; advancements in membrane
materials; reductions in both membrane material cost and amount of
membrane material required in the fuel cell; enhancement of specific
activity of platinum catalysts; and innovative processes for depositing
platinum alloys. Further work at Argonne National Laboratory (and
elsewhere) is directed towards reducing or eliminating the platinum
content in the fuel cells, which, if successful, would have a direct
effect on reducing fuel cell costs. Similarly, other components of the
fuel cell and system (e.g., polymer electrolytes, hydrogen storage)
stand to achieve higher performance at lower cost by the development of
new materials.
Similar gains have been made in operating life. An operating life
of at least 5,000 hours is required for automotive applications. During
the last four years, the durability of fuel cell systems has been
extended from 1,000 hours or less, to greater than 2,000 hours under
real-world cycling conditions. Much progress has been made, but
additional research is needed. The key to enhancing longevity is to
understand performance degradation and failure mechanisms so that
materials or engineering solutions may be devised to overcome them.
This is another line of research sponsored by DOE at Argonne and other
research organizations.
Plug-In Hybrid Electric Vehicles
``Plug-in'' hybrids (i.e., those that can be plugged in and
recharged from the electric grid and which provide some driving range
on battery power only) offer the potential to provide significant fuel
savings benefits, particularly for commuter and local driving.
Additional research and development is needed for cost-effective plug-
in hydrids. Specifically, improved batteries and corresponding
improvements to the electric drive systems (motors, power electronics,
and electric controls) will be required. Needed battery improvements
include reduced size and weight, greater durability and lifetime, and
lower cost. Since 2002, however, the projected cost of a 25-kW battery
system for hybrid vehicles, estimated for a mass production level of
100,000 battery systems per year, has dropped by more than 35 percent.
The plug-in hybrid vehicle is a demanding application for the on-
board energy storage device (battery). Nickel metal hydride batteries
are used in conventional hybrid vehicles today. However, lithium-ion
batteries are the most promising technology for use in this
application, due to their high energy density and high power density.
It is only a matter of time before they replace nickel metal hydride
batteries in conventional hybrid electric vehicles. For the same amount
of stored energy and power, lithium-ion batteries will be about two-
thirds the size of a comparable nickel metal-hydride battery. The
current state-of-the-art lithium-ion batteries already possess suitable
power, energy, weight, and volume for use in plug-in hybrids that could
provide at least a 20-mile range capability on batteries only. The
issues of ruggedness (e.g., ability to withstand overcharging and
extreme temperatures), long lifetimes, and cost remain barriers for
this technology.
Various tradeoffs can exist in battery technology. For example,
batteries with thick electrodes tend to have high stored energy but low
power capability. On the other hand, batteries with thin electrodes
tend to have high power density but lower energy density. This allows
the battery developer the flexibility to design a battery with high
power for a hybrid vehicle application, or one with high energy (and
therefore high range) for an electric vehicle, or some intermediate
combination that may be required for a plug-in hybrid. Similar
tradeoffs between cost and life are also sometimes possible. However,
in order for a battery to be successful, it must meet all the
application requirements simultaneously. This can only be achieved
through the development of new materials, components, and enabling
technologies.
There exist numerous opportunities for reducing cost, extending
life, and further increasing the energy density of lithium-ion battery
technology. Currently, there are worldwide R&D efforts focused on the
development of advanced anode and cathode materials that are less
expensive and inherently more stable than those used in current state-
of-the-art lithium-ion batteries (and Argonne is one of the world
leaders in this area, via its DOE-funded R&D programs). Several of
these advanced electrode materials offer the promise for simultaneously
extending electric range (via increased battery energy density),
extending battery life (via enhanced stability of materials), and
reducing battery costs via two mechanisms--lower battery material costs
and reduced complexity of the battery management and control system
(due to use of these more inherently stable materials).
The issue of rapid recharge for plug-in hybrids is much more an
infrastructure issue than it is a battery issue. With 220-volt, 20-
ampere electrical service available in households, it will take more
than two hours to charge a 10-kWh battery (the approximate size battery
needed for a electric range of 20-40 miles). Even current state-of-the-
art lithium-ion batteries are capable of accepting a one-hour recharge.
Conclusion
In my opinion, there is no single solution--the future will include
a mix of technologies that includes improved internal combustion
engines, alternative fuels, hybrids, plug-in hydrids, electric
vehicles, and fuel cell vehicles. A range of technologies that will be
needed to make fuel cell vehicles viable are the subject of ongoing
research. These include lightweight materials, advanced batteries,
power electronics and electric motors. Considerable progress to
overcoming the barriers associated with each of these advanced
technologies has been achieved during the last four years. The rate of
continued progress will certainly depend on future levels of public and
private investment.
The vision of fuel cell vehicles and plug-in hybrids as a solution
to foreign energy dependence, environmental pollution and greenhouse
gas emission, is compelling. The challenges on the road to achieving
this vision can be addressed with innovative high-risk/high-payoff
research. Argonne National Laboratory, together with other national
laboratories, has a number of significant programs that will contribute
to these future automotive technologies. We are working with the DOE
Offices of Science, Energy Efficiency and Renewable Energy, Fossil
Energy, and Nuclear Energy to create useful processes for building a
hydrogen economy. We at Argonne are excited at the prospect of helping
our nation in its transition to environmentally friendly, domestically
produced sources of power.
Thank you, and I will be happy to answer questions.
Biography for James F. Miller
Dr. James Miller is currently the Director of the Electrochemical
Technology Program at the U.S. Department of Energy's Argonne National
Laboratory. He has over 33 years of research experience in developing
advanced batteries for electric and hybrid vehicles, hydrogen storage
materials, and fuel cells for automotive applications and distributed
power. He has served on numerous review panels for the National
Research Council and for the Department of Energy. He was the recipient
of the 1998 Department of Energy Fuel Cell Program Award. He holds a
Ph.D. degree in Physics from the University of Illinois, and an MBA
degree from the University of Chicago.
Chairwoman Biggert. Thank you, Dr. Miller.
Next we have Mr. Weverstad. You're recognized for five
minutes.
STATEMENT OF ALAN R. WEVERSTAD, EXECUTIVE DIRECTOR, MOBILE
EMISSIONS AND FUEL EFFICIENCY, GENERAL MOTORS PUBLIC POLICY
CENTER
Mr. Weverstad. Good morning. My name is Alan Weverstad and
I'm Executive Director for the Environment and Energy Staff at
the GM Public Policy Center.
I'm pleased to speak to you today regarding GM's plans for
development and implementation of advanced technologies into
our future vehicles. This plan includes near-term steps such as
continuing to make improvements to today's internal combustion
engines and transmissions with increased E85 flex-fuel
availability.
Mid-term steps, which are beginning right now such as more
affordable and flexible hybridization of vehicles and long-term
steps such as fuel cell powered vehicles with hydrogen. The
answer to today's energy issues are not simple, and we believe
that all of these technology will play an important role in
America's energy future.
GM is leading the effort on flex-fuel vehicles capable of
running on gasoline or E85 ethanol. These vehicles offer a
choice to consumers, a choice that has significant energy and
economic benefits. Ethanol is renewable and in high
concentration blends helps reduce greenhouse gas emissions. As
E85 it helps reduce United States' dependency on petroleum,
diversifies our sources of transportation fuel and reduces smog
forming emissions. Ethanol usage provides great opportunities
for the domestic agriculture industry and should help spur new
job growth in other areas.
When gasoline prices spiked in the aftermath of the
hurricanes that devastated the Gulf Coast, ethanol become more
visible and GM recognized an opportunity to become part of this
growing movement. Earlier this year General Motors launched a
national advertising campaign to promote the benefits of this
fuel and the fact that we have today vehicles capable of using
E85. We followed up with the launch of our Live Green Go Yellow
website to make this information even more widely available.
Traffic to that website quickly rose to the millions as
consumers wanted to know about E85, GM flex-fuel vehicles and
station locations.
With nearly two million E85 capable vehicles already on the
road at General Motors and a plan to offer 14 separate E85
capable models in 2007 we wanted to make sure our consumers
knew when they were getting this flexible capability. So GM
launched a labeling effort that included an external badge on
the vehicle noting its flex-fuel capability and a yellow gas
cap to remind customers that their vehicle is capable of
running on E85.
We have also embarked on--upon several significant
partnerships to increase the availability of the ethanol
fueling infrastructure. We have partnered with ethanol
producers, fuel suppliers, State governments and others in
Michigan, Indiana, California, Illinois, Minnesota and Texas
with more to come.
For the United States, the growth of the ethanol industry
raises enormous potential for displacing gasoline consumption
in the transportation sector. If all of the five to six million
flex-fueled vehicles on the road by the end of this year were
fueled using E85, the United States could offset the need for
3.6 billion--that's with a B, billion gallons of gasoline
annually. And for the individual consumer regularly filling a
2007 Tahoe with E85 would displace the use of over 600 gallons
of gasoline each year.
These are impressive numbers so we need to find ways to
increase availability of E85 in the marketplace.
Although E85 technology is generally well known, it is not
costless to the manufacturers. E85 flexible-fuel capable
vehicle requires fuel system materials with improved corrosion
resistance. The fuel system parts involve include the fuel
tank, the fuel pump and the fuel level sender, on board
diagnostic pressure sensors and fuel injectors. Both the fuel
pump and the injectors must be sized for significantly higher
flow rates to compensate for E85's lower energy density. The
cylinder heads and valve materials within the engines need to
be able to withstand E85's different chemical properties. And
finally, the fuel system software and calibrations must be
tailored to recognized E85 or gasoline and adjust the fueling
and spark timing accordingly.
Effecting all of these changes across a range of vehicles
will take time. Effecting all of these--especially for full
line automakers like GM which have a variety of engines and
fuel systems that will need to be modified. In some cases for
low volume products the new--or the new direct injection
technologies it may not be cost effective to add this
technology, especially since ethanol will not be displacing
gasoline across the board like unleaded gasoline did in
replacing leaded gasoline.
On the hybrid technology front later this year we will
introduce the 2007 Saturn View Green Line Hybrid powered by a
new more affordable hybrid system with a fuel economy
improvement of approximately 20 percent over the conventional
engine. The Saturn View Green Line is expected to deliver an
estimated 27 miles per gallon in the city and 32 miles per
gallon on the highway, the best highway milage of any SUV. This
new more affordable hybrid system is leading the way for GM to
offer the all new two mode full hybrid Chevy Tahoe and GMC
Yukon in 2007.
In addition, GM is evaluating the potential for and cost
effectiveness of plug-in hybrid vehicles. Essential to make
this technology a success are lower costs, lighter faster
charging batteries that can be used to propel the vehicle in
most local commuting and other trips of up 20 miles without
needing to use the internal combustion engine. While extensive
battery research is being done, we are still not at the point
where this technology is ready for widespread implementation.
Looking to the long-term, General Motors has placed a very
high priority on fuel cells and hydrogen as a power source and
an energy carrier for automobiles. To accomplish this GM's fuel
cell program is focused on lowering costs and increasing
reliability of the fuel cell stack demonstrating the promise of
technology through validation programs and collaborating with
other parties on the infrastructure issues that need to be
addressed. We have made significant progress in several of
these areas, including fuel cell power density by a factor of
seven while enhancing the efficiency and reducing the size of
our fuel cell stack. It's now half the size it was before
significantly increasing fuel cell durability, reliability,
reliability and cold start capability developing a safe
hydrogen storage system that approaches the range of today's
vehicles and reducing costs through technology improvements and
system simplification.
With respect to collaboration, we are working with key
partners on virtually every aspect of fuel cell and
infrastructure technology. The FeedomCAR and the California
Fuel Cell Partnership, and the Fuel Cell Partnership managed
through the United States Department of Energy has proven to be
an important forum for developing these issues and challenges.
Clearly huge challenges remain. Reliability of fuel cell
stacks and storage of the hydrogen on board the vehicle must be
resolved to draw American consumers to these vehicles. And the
fueling infrastructure must be available so that owners of
these vehicles have no concerns about where to get the
hydrogen.
In conclusion, there is no one single solution to the
challenges we face. We are concentrating our energies on a
number of different fronts and believe that many of these
technologies will coexist in the marketplace. General Motors
has a rational advance technology plan that goes from the near-
term focused on alternative fuels like E85 ethanol to the long-
term hydrogen powered fuel cells. We are executing that plan.
All of these will help to simultaneously reduce United States'
energy dependence, remove the automobile from the environmental
debate and stimulate economic and jobs growth.
Thank you.
[The prepared statement of Mr. Weverstad follows:]
Prepared Statement of Alan R. Weverstad
Good morning. My name is Alan Weverstad and I am Executive Director
for Environment and Energy in the GM Public Policy Center. I am pleased
to be able to speak to you today regarding GM's near- and longer-term
plans for development and implementation of advanced technologies into
our future vehicles.
GM has always been a leader in the development and use of
technologies in vehicles. From the move away from hand-cranked
starters--to the highly successful catalytic control technology for
vehicle emissions--to efforts to produce an innovative electric vehicle
in the 1990s, GM has been instrumental in the implementation of
advanced technologies.
Today, we are continuing to focus on ways to advance vehicle fuel
economy, safety and emissions. And GM is actively engaged in all of
these activities. We have a plan to address both the needs of our
customers and the critical public policy issues facing us. This plan
includes near-term steps, such as continuing to make improvements to
today's internal combustion engines and transmissions and increased E85
flex-fuel capability; mid-term steps, such as more affordable and
flexible hybridization of vehicles; and long-term steps, such as fuel
cells powered by hydrogen. The answer to today's energy issues is not
simple, and we believe that all of these technologies will play an
important role in America's energy future.
Today, I am here to speak about our work in these areas.
GM is leading the effort on flex-fueled vehicles capable of running
on gasoline or E85 ethanol. These vehicles offer a choice to
consumers--a choice that has significant energy and economic benefits.
Ethanol is renewable and, in high concentration blends, helps reduce
greenhouse gas emissions; as E85 it helps reduce U.S. dependence on
petroleum, diversifies our sources of transportation fuel, and reduces
smog-forming emissions. Ethanol usage provides great opportunities for
the domestic agriculture industry and should help spur new job growth
in other areas.
Until last fall there was limited interest in the development of
ethanol as an alternative fuel. But when gasoline prices spiked in the
aftermath of the hurricanes that devastated the Gulf Coast, ethanol
became more visible and GM recognized an opportunity to become part of
the solution. Earlier this year, General Motors launched a national
advertising campaign, beginning with the very visible 2006 Super Bowl,
hosted in our own home city of Detroit. After the Super Bowl, we
continued through the 2006 Winter Olympics, including launching our
``Live Green, Go Yellow'' website. Traffic to that website quickly rose
to the millions--as consumers wanted to know more about E85, GM flex-
fuel vehicles and station locations.
But that was just the beginning. With nearly two million E85
capable vehicles already on the road and a plan to offer 14 separate
E85 capable models in 2007, we wanted to make sure our customers knew
when they were getting this flex-fuel capability. So, GM launched a
labeling effort that included an external badge on the vehicle noting
its flex-fuel capability and a yellow gas cap to remind customers that
their vehicle is capable of running on E85.
We have also embarked upon several significant partnerships to
increase the availability of the ethanol fueling infrastructure. Most
recently, GM partnered with Meijer, CleanFuelUSA, the State of Michigan
and the State of Indiana to work toward approximately forty new retail
outlets. We have previously announced similar partnerships in
California, Illinois, Minnesota and Texas--working with a variety of
energy companies, State agencies, and distribution outlets.
For the U.S., the growth of the ethanol industry raises enormous
potential for displacing gasoline consumption in the transportation
sector. If all of the five million flex-fueled vehicles on the road
today were fueled using E85, the U.S. could offset the need for 3.6
billion gallons of gasoline annually. And for the individual consumer,
regularly filling a 2007 Chevrolet Tahoe with E85 would displace the
use of over 600 gallons of gasoline each year. These are impressive
numbers, so we need to find ways to increase availability of E85 in the
marketplace.
Although E85 technology is generally well known, it is not costless
to the manufacturers. Each E85 flex-fuel capable vehicle requires fuel
system materials with improved corrosion resistance. The fuel system
parts involved include the fuel tank, fuel pump, the fuel level sender,
the on-board diagnostic pressure sensor and the fuel injectors. Both
the fuel pump and the injectors must be sized for significantly higher
flow rates to compensate for E85's lower energy density. The cylinder
heads and valve materials within the engine need to be able to
withstand E85's different chemical properties. And finally, the fuel
system software and calibrations must be tailored to recognize E85 or
gasoline and adjust the fueling and spark timing accordingly. Effecting
all of these changes across a range of vehicles will take time--
especially for full-line automakers like GM, which have a variety of
engines and fuel systems that will need to be modified. In some cases--
for low volume products or new direct injection technologies--it may
well not be cost effective to add this technology--especially since
ethanol will not be displacing gasoline across the board, like unleaded
gasoline did in replacing leaded gasoline.
On the hybrid technology front, later this year, we will introduce
the 2007 Saturn Vue Green Line Hybrid, the first GM vehicle powered by
a new, more affordable hybrid system. With a fuel economy improvement
of approximately 20 percent over the Vue's conventional engine, the
Saturn Vue Green Line is expected to deliver an estimate 27 mpg in the
city and 32 mpg on the highway, the best highway mileage of any SUV.
This new, more affordable hybrid system reduces fuel consumption in
five ways. First, the system shuts off the engine when the vehicle is
stopped, to minimize idling. Second, the system restarts the engine
promptly when the brake pedal is released. Third, fuel is shut-off
early while the vehicle is decelerating. Fourth, vehicle kinetic energy
is captured during deceleration (regenerative braking) to charge an
advanced nickel metal hydride battery. And finally, the battery is
charged when it is most efficient to do so. This new and more
affordable hybrid technology is leading the way for GM to offer the all
new two-mode full hybrid Chevy Tahoe and GMC Yukon in 2007.
In addition, GM is evaluating the potential for and cost
effectiveness of plug-in hybrid electric vehicles (PIHEVs). Essential
to make this technology a success are lower cost, lighter, faster
charging batteries that can be used to propel the vehicle in most local
commuting and other trips (up to 20 miles or more) without needing to
use the internal combustion engine. While extensive battery research is
being done, we are still not at the point where this technology is
ready for widespread implementation From GM's prior work on pure
electric vehicle technology (especially production of the EV1) and
through the company's broad work in hybrid technology, GM sees several
challenges automakers will need to overcome to get this technology into
the market.
The first is the significant cost challenge that is already present
with hybrid vehicles, but then is amplified with the addition of plug-
in capability. The increase in battery size is the most significant
contributor to this additional cost.
Secondly, the additional battery mass and volume present
considerable technical challenges to the vehicle design. With the
pressure today to reduce vehicle mass and packaging space already at a
premium for hybrid vehicles, this is a challenge that requires
significant advances in battery mass and volume to accommodate.
Thirdly, the PIHEV will require advances in battery technology,
specifically the development of a battery that has long life with high
charge/discharge capabilities needed to propel the vehicle during EV
operation. Promising results have been seen with next generation
lithium ion battery technology, but this still requires study to know
that the full range of vehicle performance characteristics can still be
met.
Looking to the long-term, General Motors has placed very high
priority on fuel cells and hydrogen as the power source and energy
carrier for automobiles. To accomplish this, GM's fuel cell program is
focused on lowering cost and increasing reliability of the fuel cell
stacks, demonstrating the promise of the technology through validation
programs and collaborating with other parties on the infrastructure
issues that need to be addressed. We have made significant progress in
several of these areas:
In the last six years, we have improved fuel cell
power density by a factor of seven, while enhancing the
efficiency and reducing the size of our fuel cell stack.
We have significantly increased fuel cell durability,
reliability, and cold start capability.
We have developed safe hydrogen storage systems that
approach the range of today's vehicles.
We have made significant progress on cost reduction
through technology improvements and system simplification.
With respect to collaboration, we are working with key partners on
virtually every aspect of fuel cell and infrastructure technology. The
FreedomCAR and Fuel Partnership, managed through the U.S. Department of
Energy, has proven to be an important forum for addressing these issues
and challenges.
Clearly huge challenges remain. Reliability of the fuel cell stacks
and storage of the hydrogen on board the vehicle must be resolved to
draw American consumers to these vehicles. And the fueling
infrastructure must be available so that owners of these vehicles have
no concerns about where to get the hydrogen.
In conclusion, there is no one single solution to the challenges we
face. We are concentrating our energies on a number of different
fronts, and believe that many of these technologies will coexist in the
marketplace. General Motors has a rational advanced technology plan
that goes from near-term, focused on alternative fuels like E85
ethanol, to the long-term hydrogen-powered fuel cells. We are executing
that plan. All of these will help to simultaneously reduce U.S. energy
dependence, remove the automobile from the environmental debate, and
stimulate economic and jobs growth.
Biography for Alan R. Weverstad
ALAN R. WEVERSTAD, Executive Director Mobile Emissions and Fuel
Efficiency, Public Policy Center, General Motors Corporation. Mr.
Weverstad began his career in 1971 in the engineering area with Pontiac
Motor Division where he worked as a design release & development
engineer in the chassis and engine development sections. In 1985 he
became a part of the Chevrolet-Pontiac-GM of Canada team where he was
involved in the emission certification of 77 engine families. He then
joined the Marine Engine Division and in 1991 moved to the
Environmental Activities Staff and GM Research working on vehicle
emissions issues. He is now the Executive Director of the Environment &
Energy Staff of the Public Policy Center.
Mr. Weverstad is the immediate Past Chairman of the California Fuel
Cell Partnership and Vice President of the Engine Manufacturers
Association. He is also on the Board of Directors for the Electric
Drive Transportation Association and on the Board of Advisors for UC
Riverside and California H2 Highway.
Mr. Weverstad is a graduate of General Motors Institute and holds a
Bachelor of Science degree in Engineering from Oakland University.
Chairwoman Biggert. Thank you very much.
Mr. Hinkle, you're recognized for five minutes.
STATEMENT OF JEROME HINKLE, VICE PRESIDENT, POLICY AND
GOVERNMENT AFFAIRS, THE NATIONAL HYDROGEN ASSOCIATION
Mr. Hinkle. Chairman Biggert, Ranking Member Honda and
Representative Lipinski and guests, good morning. The National
Hydrogen Association welcomes the opportunity to discuss
progress toward building the hydrogen economy. We would like to
focus on those technical and policy challenges that will be
most important to transforming our energy systems. Under your
leadership, the Energy Subcommittee continues to help guide our
country's search for critical energy alternative. We hopes--
excuse me. We hope today's hearing will provide some insight
gain in several key areas.
I notice that I'm slightly to the left of GM here, so I
need to pick up my act.
For 17 years, the National Hydrogen Association has
promoted transition to a hydrogen economy. Its 103 members
represent considerable diversity; large energy and automobile
firms, utilities, equipment manufacturers, small businesses,
transportation agencies, national laboratories, universities
and research institutions. In partnership with the United
States Government and each other, we are a key part of the wave
front of technical and economic action on hydrogen in the
United States and abroad.
Hydrogen is our nation's premier energy destination. We'll
need an army of dedicated and talented people to solve all the
technical and market-building challenges along the way. The
stakes are high, and we've got a lot of tough homework to do.
I note here that the Energy Policy Act of 2005, which is an
important document here that needs to be completely realized in
the appropriations process, intends with the regard to the
hydrogen title in particular, to accelerate the research,
development and demonstration programs in DOE, make government
a more durable partner in its industrial relationships, give
permanent authorization to the hydrogen programs in DOE and
broaden the Secretary of Energy's authorities and provide the
Secretary more than triple the resources to accomplish this. It
builds on the strong foundation of DOE's prior work on hydrogen
and the President's Hydrogen Fuel Initiative.
Recently the House passed H.R. 5427 where they fully funded
DOE's request for $246 million for these programs, but there's
a policy lag in the hydrogen program. Less than half, 47.5
percent of the Energy Policy Act's authorized funding level of
$518 million has been requested by DOE for fiscal year 2007. We
don't want to see the many opportunities for enhancing DOE
hydrogen technology programs slip away at a crucial time in
their history. For FY 2008 we would urge their program
managers, perhaps with the support of the Committee, to utilize
a much higher share of their budget authority which grows from
$517/518 million in FY '07 to $740 million in FY '08. These are
all in the authorization levels.
Nearly 53 percent of this funding is for R&D, including
basic science which also needs to be expanded beyond its--
beyond its $50 million in the current energy and water
appropriation.
Adequate on-board storage is widely agreed to be a
fundamental necessity for a successful light duty vehicle. Much
progress has been made in resolving many of those technical
issues since the Committee's last field hearing in 2002. As Mr.
Weverstad mentioned GM and then Ballard also have made great
strides in improving costs and energy density. And there's a--
there's a--in the handout there is a combined set of graphs
from the Department of Energy that shows how some of this
improvement has transpired.
And I just want to note that this work, there's still lots
to do but their work continues at an urgent pace.
And benefits have come with more orderly program planning
that identifies a wide range of alternative approaches. And
improving the program management in DOE has led to manageable
gains in storage performance. So you can see how important that
is.
We see real progress in storage but believe that smart full
use of the increased resources for fuel cell technologies,
Section 805 of the Energy Bill, could definitely improve
program performance. We urge DOE to request full funding for
that in their FY 2008 budget.
A systems view of storage--it takes on a different
personality in a whole vehicle context. It's important to
remember that a modern gasoline fueled automobile only utilizes
less than 1.5 percent of the fuel's energy to propel the
vehicle's payload. This leaves a lot of room for improvement.
Extra mass is just ballast. With more intensive application
of modern aerospace composite materials and high strength,
lightweight steels and alloys, coupled to the new flexibility
in vehicle design that fuel cells and electric drive subsystems
offer, a much more efficient vehicle package can be designed.
GM in particular has--has worked on this and looked at the
flexibility in purpose built composite vehicle design. And
Section 808 of the Energy Policy Act, Systems Demonstrations,
encourage combined--combined learning demonstrations with
optimized advance composite vehicle design. We'd like to see
DOE fund some of that activity.
And as Amory Lovins once remarked ``Why waste a fuel cell
on a primitive platform.''
To storage and distribution. There are technical barriers
in production and distribution that need to be overcome. With
about 220 millions cars registered in the United States, and
that number will grow and about 17 million sold per year, the
National Academy of Science estimates that 25 percent of the
fleet would be replaced within 12 years while GM sees about 20
years to replace the entire fleet with good superior products
in the market. This makes it possible to evolve hydrogen supply
infrastructure along with vehicle production. Shell and Ballard
and GM, all in a Senate hearing on hydrogen R&D last summer,
late last summer, concurred that we could see a manufacturable
fuel cell vehicle by 2010-2012 that would be competitive with
those cars then for sale. And GM, of course, has made it fairly
plain what their targets are with regard to this in 2010.
We've got in the handout packet there's some slides from
Shell Hydrogen that you might find interesting with regard to
where hydrogen production is right now. On a satellite picture
of the United States at night, for instance, overlaid by a 100
kilometer circle surrounding today's refinery production sites
for hydrogen, this covers over 100 of these cities and in urban
areas and which puts about 60 percent of the U.S. population
today within a 100 kilometers of a major source of hydrogen.
And these are the places where the introduction of hydrogen
fuel cell vehicles would likely to be focused starting with
fleets of municipal and commercial buses and delivery vehicles
and then evolving to fleets of cars and light trucks and
finally to consumers
And we don't want to ignore the rule of stationary and
portable fuel cells, and leading these transitions to providing
high quality supplemental and distributed power to businesses
and municipalities, and the early establishment of hydrogen
supply networks.
New job growth and retention of existing jobs during a
transformation to a hydrogen economy is going to be important.
We'll see altered refinery and utility operations in producing
hydrogen. In addition, we'd likely see considerable expansion
in renewable energy production both for electricity and
biofuels in widely dispersed agricultural regions of the United
States some distance from the urban demand centers.
Also much of the hydrogen in the early years will likely be
produced from widely distributed sources using electricity off
the existing grid or natural gas in the existing pipeline
system. These distribution networks, this infrastructure is
large, it's reliable and it reaches all urban areas. In some
places as the Hydrogen Utility Group says for decades we
brought electrons to every home and business in the United
States, why not protons? Well, that's a little different
technical challenge, but the operations of these--this
infrastructure is well understood and key investments have
already been made. The smoothest stage of the supply transition
will be made in this way.
These are valuable and essential assets, but they will need
to be adapted to new business models. Depending on the highly
varied and unique regional mix of generating capacity, the
relative production efficiencies and carbon footprint of the
possible hydrogen fuel cycles will all be quite different. As
has been said here and has been--and needs to be said often, no
single production strategy will work for the United States and
all feasible techniques and sources for making hydrogen will
likely be needed.
Chairwoman Biggert. Mr. Hinkle, could you sum up?
Mr. Hinkle. Yes, ma'am.
Chairwoman Biggert. Thank you.
Mr. Hinkle. Well, we have in the written package a number
of suggestions for public investments in this area. And as Dan
Quayle once observed: ``the future will be better tomorrow.''
Thank you.
[The prepared statement of Mr. Hinkle follows:]
Prepared Statement of Jerome Hinkle
Chairman Biggert, Ranking Member Honda, Representative Lipinski and
guests, good morning. The National Hydrogen Association welcomes the
opportunity to discuss progress toward building the Hydrogen Economy.
We would like to focus on those technical and policy challenges that
will be most important to transforming our energy systems. Under your
leadership, the Science Committee continues to help guide our country's
search for critical energy alternatives--we hope today's hearing will
provide some insight gain in several key areas.
For 17 years, the National Hydrogen Association has promoted a
transition to a hydrogen economy through its extensive work in codes
and standards, education and outreach, and policy advocacy. Its 103
members represent considerable diversity: large energy and automobile
firms, utilities, equipment manufacturers, small businesses,
transportation agencies, national laboratories, universities and
research institutions. In partnership with the U.S. Government and each
other, we are the wave front of technical and economic action on
hydrogen in the U.S. and abroad--these are the people and organizations
that are making great progress along a broad technical front, and will
have a key role in implementing these technologies (please see the
attached slides about the NHA).
Hydrogen is our nation's premier energy destination. We'll need an
army of dedicated and talented people to solve all the technical and
market-building challenges along the way. The stakes are high, and
we've got a lot of tough homework to do.
The Committee has requested our views in several areas. We will
comment on some of the key technical and deployment issues, and relate
these to important provisions of the Energy Policy Act of 2005.
Energy Policy Act of 2005 (P.L. 109-58) and Fiscal Year 2007, 2008
Budget Action
Many of the provisions in EPAct 05 originated in S. 665, the
Hydrogen and Fuel Cell Technology Act of 2005, introduced on March 17,
2005. Written in concert with industry and the Senate's Hydrogen and
Fuel Cell Caucus, it became the heart of the Hydrogen Title (VIII) in
the Senate's Energy Bill, S. 10, and subsequently a substantial part of
the hydrogen language negotiated in the Conference Committee. It was
signed into law by the President on August 8, 2005. Significant
sections of the Act's Vehicle and Fuels Title (VII) also deal with
early market transition for hydrogen and fuel cells.
Section 802 of the Act establishes the purposes of the Hydrogen
Title:
Enable and promote comprehensive development,
demonstration and commercialization in partnership with
industry
Make critical public investments that build links to
industry and the research community
Build a mature hydrogen economy that creates fuel
diversity in the massive U.S. transportation sector
Create, strengthen and protect a sustainable energy
economy.
In Titles VII and VIII, the Act clearly intends to accelerate the
research, development and demonstration programs in DOE, makes the
government a more durable partner in its industry relationships, gives
permanent authorization to the hydrogen programs in DOE, broadens the
Secretary of Energy's authorities and provides more than triple the
resources to accomplish this. It builds on the strong foundations of
DOE's prior work on hydrogen and the President's Hydrogen Fuel
Initiative, which has planned to devote $1.2 billion to this work from
2004 through 2008. The EPAct 05 authorizes $3.73 billion over Fiscal
Years 2006 through 2011, and ``such sums as are necessary'' through
2020 (please see the attached slides about the EPAct 05).
The House recently passed H.R. 5427, the Energy and Water
Development Appropriations Act for Fiscal Year 2007. It mirrors DOE's
Budget Request for hydrogen--$246 million for those programs included
in Titles VII and VIII (under the Energy Efficiency and Renewable
Energy and Science offices of DOE).
RD&D activity in the Government is fueled by these public
investments. The level of funding requested by DOE is on a path
established by the Hydrogen Fuel Initiative in early 2003. Much has
changed since--by February 2003, we had already seen energy prices
beginning their rise--the average world oil price was about $28/barrel,
but by the end of May 2006 that price was nearly $64/b. The President
and Congress have anticipated the need to seriously search for
transportation fuel alternatives, but there is a policy lag in the
hydrogen program--less than half (47.5 percent--$246 million) of the
EPAct 05's authorized funding level of $518 million has been requested
by DOE for FY 2007.
Action We don't want to see the many opportunities for enhancing
DOE hydrogen technology programs to slip away at a crucial time in
their history. Built on program success, Congress has given the
Secretary extensive authority in the EPAct 05 to enhance Section 8o8
demonstration programs, particularly with respect to learning
demonstrations, broader vehicle/fuel supply systems (including
community systems), and the ability to have results from demonstrations
revise the direction of R&D projects. DOE is well into planning for the
FY 2008 budget cycle--we would urge their program managers, with the
support of the Committee, to utilize a much higher share of their
budget authority, which grows from $517.5M in FY07 to $739.5M in FY08.
Nearly 53 percent of this funding is for R&D, including basic science,
which also needs to be expanded beyond its $50M in the current Energy
and Water appropriation. There are also significant opportunities in
Title VII (Vehicles and Fuels) to have federal and State agencies take
a leadership role in purchasing stationary and portable fuel cells and
hydrogen supply systems as early adopters. This could be coupled, for
instance, with DOE's Clean Cities program to demonstrate real systems
in the urban areas where the first commercial deployments of vehicle
fleets is most likely.
Critical Technical and Economic Challenges
In its pacesetting report, The Hydrogen Economy: Opportunities,
Costs, Barriers and R&D Needs (April 2004), the National Academy of
Sciences summarized their four most fundamental technological and
economic challenges:
Develop and introduce cost-effective, durable, safe
and environmentally desirable fuel cell systems and hydrogen
storage systems
Develop the infrastructure to provide hydrogen for
the light duty vehicle user
Reduce sharply the costs of hydrogen production from
renewable energy sources, over a time frame of decades
Capture and store the carbon dioxide byproduct of
hydrogen production from coal.
Storage As the Committee has noted, adequate on-board storage is
widely agreed to be a fundamental necessity for a successful light duty
vehicle. Stationary storage can be just as important for the fueling
stations supplying the vehicles. Much progress has been made on
defining and resolving some of the storage issues since the Committee's
last field hearing in 2002. Both on-board and stationary storage have
seen considerable improvement, especially in concert with the industry/
DOE Technology Validation program.
GM and Ballard, for instance, have greatly improved fuel cell power
density--GM by a factor of seven in the last six years, while enhancing
efficiency and durability and reducing the stack size. Ballard reduced
the cost in four years by 80 percent to $103/kW, still about three
times the DOE's 2010 goal of $30/kW to be competitive with current ICE
powered cars, but on a path to achieve that goal. Durability increased
ten-fold. Their work continues at an urgent pace.
DOE and Department of Defense work, the President's Hydrogen Fuel
Initiative of February 2003, and its support by industry and the
Congress--all have led to more orderly program planning that identifies
a wide range of alternative approaches to the materials and methods
that could be used to store hydrogen. Improving the program management
has led to measurable gains in storage performance (a summary
description of the progress for 2005 is available on DOE's web site,
www.hydrogen.energy.gov--the Annual Progress Report, pp. 459-462; see,
also www.er.doe.gov for the DOE Science program, which has considerable
work underway on fundamental science with regard to hydrogen storage).
(Note: please see the attached slide from DOE comparing the
relative performance of several storage methods: Hydrogen Storage
Technologies, which shows storage capacity and costs.)
From the graphs, it is clear that by the end of 2005, volumetric
capacity (volume storage effectiveness) and gravimetric capacity
(storage by weight) do not yet match the goals DOE has set for 2010 and
2015. Neither has system cost reached the targets, but all the 2010
goals are being approached in steady fashion. Can progress toward these
goals be reached more quickly? We see real progress in storage, but
believe that smart, full use of the increased resources for Fuel Cell
Technologies (Sec. 805) included in the EPAct 05 could definitely
improve program performance. We urge DOE to request full funding in
their FY 2008 budget.
Associated graphs show how the cost curve for proton exchange
membrane fuel cells is dropping with steady research effort, and also
how hydrogen cost goals for fuel cell vehicles relate to gasoline/
electric hybrids and gasoline/internal combustion engines, taking into
account their relative efficiencies.
Something missing from DOE's planning is direct combustion of
hydrogen in advanced piston engines. This is a conscious program
resources decision to focus on what they see as the highest payoff
efforts. Two NHA members, BMW and Ford, have done considerable work
with a variety of engines running on hydrogen. BMW plans to introduce a
7 Series with a V-12 bi-fuel engine, perhaps before the end of the
year. It has remarkable emissions, and excellent performance. We would
like to see DOE devote some funding to direct combustion, as it offers
much earlier market introduction and a bridge to the hydrogen economy
through the establishment of hydrogen supply stations for a wider
variety of vehicles and collocated stationary fuel cells for electrical
power.
A systems view Focusing on storage and achieving a 300 mile range
as if they were separate from other vehicle design parameters may limit
the search for solutions within a whole vehicle context. It is
important to remember that a modern gasoline-fueled automobile only
utilizes less than 1.5 percent of the fuel's energy to propel the
vehicle's payload. This leaves considerable room for improvement.
Extra mass is just ballast. With more intensive application of
modern aerospace composite materials and high strength, lightweight
steels and alloys, coupled to the new flexibility in vehicle design
that fuel cells and electric drive subsystems offer, a much more
efficient vehicle package can be designed. Aircraft designers have been
coping with these problems for a hundred years. A personal vehicle,
however must be much cheaper and simpler.
There is a significant interaction between mass and the size of the
fuel cell, the amount of hydrogen stored on board, and range. Although
DOE has advanced materials, vehicles and manufacturing projects, it is
unclear whether these have achieved a high level of integration. Hence
Section 808 (b) of the EPAct 05, Systems Demonstrations, that
specifically combine learning demonstrations with optimized advanced
composite vehicle design. DOE already plans for second generation
vehicles in their Technology Validation learning demonstrations. Again,
this is a real opportunity for DOE to utilize some of their new
authority and resources in advancing the art of whole vehicle design.
General Motors, for instance, has built several vehicles that
incorporate not only advanced hydrogen fuel cell electric drive
systems, but totally different platforms. As Amory Lovins has remarked,
``Why waste a fuel cell on a primitive platform?''
(Note: please see the attached charts from General Motors, which
highlight what they see as the key goals and challenges.)
Of some note is the GM chart encouraging DOE to strengthen their
hydrogen program, a ``bold new approach.'' By simply ratcheting up
Corporate Average Fuel Economy standards, and achieving this through
the use of hybrids of various types we do save oil, but only delay
solving the critical transportation fuel diversity/security problem.
The conclusion here is that we already know enough about the potential
of a hydrogen economy, and the stakes are so high that we need to focus
on total solutions rather than partial ones.
Technical barriers in production and distribution--where will the H2
Economy get built?
The Committee is concerned about the technical barriers in
production and distribution that would need to be overcome to permit
hydrogen to fuel a quarter of the cars on the highway. With about 220
million cars registered in the U.S., and about 17 million sold per
year, it would take several years after a competitive vehicle was
available for 25 percent of the existing fleet to be replaced. Since
many owners have more than one registered vehicle, and there are
somewhat fewer drivers than the entire vehicle stock, significant
operational oil savings would occur well before 25 percent replacement.
The National Academy study ``upper bound'' market penetration case
assumes that competitive fuel cell vehicles enter the market in 2015 as
part of the mix of hybrids and conventional internal combustion engine
(ICE) powered vehicles. They estimate that 25 percent of the fleet
would be replaced within 12 years, or by 2027.
GM and others see that within 20 years the entire fleet could turn
over with a superior group of products, which makes it possible to
evolve hydrogen supply infrastructure along with vehicle production. In
testimony before the Senate last July, GM, Shell and Ballard all
concurred that we could see a manufacturable fuel cell vehicle by 2010-
2012 that would be competitive with those cars then for sale. GM's
urgent target is to validate a fuel cell propulsion system by 2010 that
has the cost, durability and performance of a mass produced internal
combustion system.
GM and others have estimated that an infrastructure for the first
million vehicles could be created in the U.S. for $10-$15 billion,
making hydrogen available within two miles for 70 percent of the U.S.
population, and connecting the 100 largest U.S. cities with a fueling
station every 25 miles. Others see broader deployment costing nearer
$20 billion, not appreciably more than what the industry reportedly
spends each year to simply maintain its current gasoline supply system.
Substantial oil savings would result when 25 percent of the fleet
is replaced, resulting in lessening peak refinery capacity needs, as
gasoline demand begins to shrink. Since much of the current industrial
hydrogen production is utilized by oil refineries in making modern
gasolines, some of this could now become merchant hydrogen supply. The
attached Shell Hydrogen slides are suggestive.
The first of these shows a satellite picture of the U.S. at night,
overlaid by 100 km circles surrounding today's refinery production
sites for hydrogen. These are also the major urban, higher density
gasoline demand areas--over 100 of them--meaning that at some 60
percent of the U.S. population is within 100 km of a major source of
hydrogen today. And these are where the introduction of hydrogen fuel
cell vehicles would likely be focused--starting with fleets of
municipal and commercial buses and delivery vehicles, and then evolving
to fleets of cars and light trucks, and finally to consumers. We would
expect stationary and portable fuel cells to lead these transitions in
providing high quality supplemental and distributed power to businesses
and municipalities, and the early establishment of hydrogen supply
networks.
Shell's next few slides discuss how a transition needs to be
managed--in terms of key ``Lighthouse'' projects--those sized correctly
and smart enough to provide a beacon to lead the way to something
larger. A critical component is the quality of public/private
partnerships--something the EPAct 05 stresses. The coordination of
``Infrastructure Rollout'' is a critical aspect--if it is
uncoordinated, excess retail and manufacturing capacity outruns demand,
leading to high costs for hydrogen that further dampen demand and
shrink profitability. They see that an excellent match between the
rates of demand and supply growth optimizes investment in capacity, and
a more orderly and rapid transition. Lighthouse Projects are the
harbingers of commercial success, and primary showcases for how well
public and private institutions cooperate in establishing the climate
for growth--whether it be in North America, Europe or Asia.
It is interesting to speculate on how the industrial base for a
hydrogen economy might evolve. As a result of a study called for in
Section 1821 of the EPAct 05, Overall Employment in a Hydrogen Economy,
DOE will soon have underway an economic development analysis that looks
at different transitions to varied forms of a hydrogen economy, to
accompany other such work on market and technology transitions. It is
expected that both new job growth and retention of existing jobs during
a transformation like this would center on the supply chain for new
vehicles, and much altered refinery and utility operations producing
hydrogen. In addition, we would likely see considerable expansion in
renewable energy production--both electricity and biofuels--in widely
dispersed agricultural regions of the U.S. some distance from urban
demand centers.
Also, much of the hydrogen in the early years will likely be
produced from widely distributed sources, using electricity off the
existing grid or natural gas from the existing pipeline system. These
distribution networks are large, reliable and reach all urban areas.
The combined electrical grid is connected everywhere--as the Hydrogen
Utility Group suggests, ``For decades, we have brought electrons to
every home and business in the U.S.; why not protons?'' Their
operations are well understood, and key investments already made. The
smoothest stage of the supply transition will be made in this way.
And since hydrogen does not lend itself to worldwide transport like
oil and liquefied natural gas, it will not be as fungible
internationally as oil--yielding domestic and regional markets where
value can be based largely on market fundamentals and cost of
production and transportation, unhooked from global volatility. This
could also make the tools of government incentives--investment,
production and use tax credits, loan guarantees, etc., more effective
and predictable. Domestic production of hydrogen is the next wave of
products for the energy industry, and promises considerable economic
growth opportunities.
Depending upon how existing manufacturing capacity is converted and
preserved in traditional areas, the automobile supply chain might have
more inherent flexibility in locating new and old operations. The
advanced fuel cell vehicle could have only one-tenth as many moving
parts as today's cars, SUVs and pickups, and much of the rest of the
vehicle would be different. Transformation would happen everywhere.
True worldwide markets will evolve for components and vehicles, and
manufacturing capacity is more mobile than hydrogen production.
Large export markets are expected to evolve for vehicles and
components, and also for the technology surrounding hydrogen production
and storage. Due to its particular appeal in improving the efficiency
and shrinking the carbon footprint of conventional fuel cycles,
hydrogen-related technologies will help create an even wider range of
new export opportunities. International competition could be fierce.
Centralized and Distributed Hydrogen Production
As noted above, the U.S. has some of the basic infrastructure
already in place that could be utilized in transitioning to a hydrogen
economy--plants near oil refineries that manufacture hydrogen from
natural gas and some byproduct plant fuel, and the nationwide electric
power grid. These are valuable and essential assets, but they will need
to be adapted to new business models. Depending upon the highly varied
and unique regional mix of generating capacity (coal, hydroelectric,
nuclear, renewable), and how effectively they can grow, the relative
production efficiencies and carbon footprint of the possible hydrogen
fuel cycles will be quite different.
No single production strategy will work for the U.S., and all
feasible techniques and sources for making hydrogen will likely be
needed--but more uniform emissions, costs and oil savings criteria can
be applied. There may be an important new role for the Federal Energy
Regulatory Commission (FERC), especially with regard to enabling rule-
makings for producing more renewable electricity if a national
Renewable Portfolio Standard were to be adopted (in the Senate's Energy
Bill, but defeated in the EPAct 05 Conference). Investment decisions
selecting between alternative sources of hydrogen could vary
considerably, and the Committee needs to encourage R&D investment that
can make these distinctions.
In shaping possible regulations for greenhouse gas management in
the U.S., emission allowances and credit valuations could be designed
to favor system design and technology deployment that minimize carbon
emissions across the entire fuel cycle, not just for a particular
energy sector. Proposals for investing in advanced low carbon
technologies, funded by the sale and trade of carbon credits, might be
structured to assist the most promising hydrogen supply and use
technologies. The EPAct 05 Hydrogen and Incentives Titles are
reasonably clear on the intent to select those public investments in
technologies that optimize their carbon footprint. The carbon
characteristics of particular projects funded through the Indian Energy
Title are likewise important system performance criteria.
Action So, where does the key technical work need to be done, and
what is government's role? The above discussion of the EPAct 05
advocates fuller funding in FY08 of all the key components of the Act
with regard to hydrogen and fuel cells for vehicles. The Act attempts
to reach forward to give DOE the authorities it needs to be more
aggressive in creating more technical solutions more quickly. Besides
making the vehicle and drive package lighter, cheaper and more
efficient, the supply infrastructure needs equivalent attention, and
new legislation might be needed to help.
Multiple sources of H2--the U.S. has enormous coal
reserves, but some reluctance to move quickly on solving its
fundamental problems at an equivalent scale. The EPAct 05 has
an excellent Coal Title, but little of it has been funded.
There needs to be some agreement forged on the scale of public
investment, including projects like that in Section 411, which
is a regional 200 mW Integrated Gasification Combined Cycle
(IGCC) facility that would make hydrogen and electricity, used
in a power park setting. Many unused opportunities exist in
Title XVII, Incentives for Innovative Technologies, (loan
guarantees) which could be applied very fruitfully in
combination with Title V, Indian Energy (which has its own loan
guarantee program), and Title VIII, Hydrogen. We need to build
flexibly sized, innovative commercial scale plants that match
the pace of the hydrogen technology program's accomplishments
with vehicles. Additionally, Title XVI, Subtitle A, National
Climate Change Technology Deployment, could readily be combined
with the Coal, Indian Energy, Incentives and Hydrogen Titles to
put some key projects in place that would provide substantial
learning and commercial possibilities.
Although there is a uniform strategic plan for the
climate program in DOE and other agencies, there are a very
wide variety of projects across the government whose
effectiveness in actually solving critical problems with coal,
for instance, may be unlikely. It is unclear that the degree of
fragmenting allows critical focus on solving key public
problems, especially since they are located in so many separate
agencies. A critical review and redeployment could be useful.
Very useful R&D can be planned at the front end of a
small commercial scale demonstration, encouraging an iterative
R&D evolution much like the Learning Demonstrations are
employed to revise R&D agendas in the H2 programs. Full scale
tests of new materials and processes could speed eventual
commercial deployment. We would include consideration of how
Title VI, Subtitle C, Next Generation Nuclear Plant Project,
could be enhanced.
There are significant opportunities, for instance,
for advanced ceramic materials to be used in higher temperature
applications for carbon capture from advanced coal gasification
processes, and in nuclear hydrogen production. The American
Competitiveness Initiative in the DOE Science program has an
advanced materials program that could contribute fundamental
knowledge in these areas.
DOE has been working to improve the efficiency and
durability of electrolyzers, which are a critical component of
early distributed generation strategies. More needs to be done
in the area of materials, processes, manufacturing and
validation.
Renewable H2--again, less innovative use of the EPAct
05 authority shrinks our horizons. The public investment in
wind, biomass and solar production of hydrogen needs to grow,
both with regard to fundamental science and learning
demonstrations. For those technologies that have true
commercial appeal, the suite of authorities in the Incentives,
Climate Change, Indian Energy, and Electricity Titles offer
some intriguing possibilities for R&D focused on solving real
public problems. More exploratory work in the DOE Science
program could speed the availability of direct biological and
solar hydrogen production, perhaps teamed in their advanced
stages in Learning Demonstrations in specific regions and
cities.
Electrical grid--sizable renewable resources are
often far away from urban load centers, but the Western Area
Power Administration (WAPA) could be a key factor in bringing
renewable electricity to high growth population centers in the
Southwest and California. Significant planning studies have
already been done on how to get more wind on the wires so
renewable electricity from the Northern Great Plains--where the
richest wind resources are--could be moved to high demand areas
for hydrogen.
Important work needs to be done on much more
sophisticated control systems, composite materials and
processes for enhancing transmission efficiency and high
throughputs in corridors where there are significant siting
problems. Much could be done to improve the potential for
transmitting renewable energy to market.
Management organization--The Committee is considering
versions of an ARPA-E bill, based on the quick and flexible
management often used in the Department of Defense by the
Advanced Research Projects Agency, and placing such an
organization within DOE. Working directly under the Secretary
of Energy, an ARPA-E would be able to identify promising
technologies in an R&D stage, and nurture them through
demonstrations and early market acceptance. They would have
expedited personnel and procurement authorities, and be able to
integrate all their necessary technical authorities into a
single management structure. For instance, in the above
examples of combining multiple authorities from the EPAct 05,
it is unlikely that a traditional federal agency structure
could accomplish blending the necessary functions, because they
are often assigned to completely separate programs whose
cooperation is incidental.
Some have described the quest for a hydrogen economy
as needing an Apollo or Manhattan Project's urgency--symbolic
models for sustained high levels of funding and commitment to
results. An ARPA-E for DOE could do that--placing all hydrogen
and carbon reduction enabling work under single directorates,
and holding them to high standards of performance until
critical results are achieved.
We greatly appreciate the opportunity to contribute to a discussion
that is critical to our collective future. The National Hydrogen
Association looks forward to working with the Committee in shaping and
achieving our common goals.
Biography for Jerome Hinkle
Vice President for Policy and Government Affairs, National Hydrogen
Association. During 2003 to early 2006, Mr. Hinkle was a senior advisor
to U. S. Senator Byron Dorgan on a Brookings Fellowship from the
Department of Energy. His work focused on energy and environmental
policy, especially with regard to the various energy bills considered
by the Congress from 2003-2005. He was responsible for helping form and
manage the Senate's Hydrogen and Fuel Cell Caucus, a hydrogen industry
working group and drafting and negotiating much of the hydrogen
legislation in the Energy Policy Act of 2005. Besides hydrogen, he
worked extensively on other titles of the Act, including Energy
Efficiency, Coal, Indian Energy, and Vehicles and Fuels.
He served for 28 years at DOE and EPA in various capacities,
including prototype engines and alternative fuels, environmental
policy, international energy security and most recently as the senior
economist for the U.S. Naval Petroleum Reserves. His interests include
carbon management and renewable energy. His career also includes
aerospace engineering and research physics, with a varied education--
degrees in mathematics and physics from Miami University and public
policy from the University of Michigan, with extensive graduate work in
international politics and sociology.
Chairwoman Biggert. Thank you. And I'm sure we'll get to
some of the other things in the questions.
STATEMENT OF DR. DANIEL GIBBS, PRESIDENT, GENERAL BIOMASS
COMPANY
Dr. Gibbs. Chairman Biggert and Mr. Honda and Mr. Lipinski
thanks for inviting me today.
Ethanol's here today and it fits our current
infrastructure. The United States ethanol industry today
produces about four billion gallons of fuel ethanol per year
from corn grain. About 20 new plants will come on line this
year adding another one billion gallons of capacity, and
another billion is planned. Current ethanol production is about
300,000 barrels per day.
All United States' automobiles and light trucks can use
ethanol today at 10 percent or E10 without any modification. In
addition, about five million flex-fuel vehicles can use E85 or
85 percent ethanol gasoline or any mixture in between. So the
infrastructure is there.
Flex-fuel technology is cheap. My figures of about $200 per
car. Eight major auto manufacturers currently offer E85
vehicles.
To date the flex-fuel technology has been offered primarily
in larger vehicles, I believe in order to obtain Clean Air
credits. What we need to do is to put that technology together
with hybrid technology, in my view, to give us E85 hybrids
which could in principle get hundreds of miles per gallon of
gasoline with the rest coming from ethanol.
The central problem then becomes how do we make enough
ethanol and other biofuels to fill the demand. The national
necessity and desirability of a large cellulosic ethanol
industry is not yet widely recognized. I believe there's a lack
of national urgency to make it happen in the time frame needed.
To be clear, we need to make not only ethanol as a
substitute for gasoline, but we need to make all the other
hydrocarbons for diesel fuel, jet fuel and for industrial
chemicals and plastics. The only realistic nonfossil source for
these materials is biomass in all its forms. These include
energy crops like switchgrass, agricultural waste, paper from
municipal solid waste, which is about 40 percent paper, forest
and wood waste. If we use these sources, we'll provide a more
diversified fuel and chemical base and create thousands of
jobs.
The United States has substantial cellulosic resources, as
does Canada, which can be developed if determination resources
are there.
Let me just say a quick word about carbon. Carbon is not a
bad thing. Carbon enables us to make large molecules for liquid
fuels like gasoline, jet fuel and diesel which have a high
power density. That's why we use them, that's why we make them.
The question is where does that carbon come from? Does it come
from beneath the ground from Saudi Arabia at high cost or does
it come from domestic biomass? And that's a choice that is
before us. So carbon is not a bad thing. Carbon from the air is
a good thing. Carbon from beneath the ground is going to cause
us problems in the future.
We're asked about the barriers to the cellulosic ethanol
industry. Ironically, the great success of the corn ethanol
industry constitutes a barrier to the development of the next
phase for the cellulosic industry. And I hoped to show a slide,
by the way, in the question and answer period.
The corn is cheap right now. Ethanol plants cost only a
$1.50 per annual gallon of capacity. In contrast cellulosic
ethanol plants with current technology cost about six times
that much, and that is a severe barrier to the introduction of
that technology.
In limited time, I won't go into the technology and
logistical hurdles that are listed in the testimony, again just
to give a couple of overview numbers here. The current corn
crop is about 10 or 11 billion bushels a year, which is divided
among ethanol, food products, animal feed, exports and
carryover. Our probable limit for cellulosic ethanol or, I'm
sorry, corn ethanol is about 11 billion gallons, which would be
six percent of our 140 billion gallon gasoline supply. So we
must go to cellulosic ethanol.
Biodiesel is a great fuel. This year it's only going to
produce about 150 million gallons verses four billion for
ethanol.
Let me just conclude by suggesting that there are a number
of challenges. I think we need to collaborate with other
countries. More than half the knowledge base is developed
outside the United States. We need to collaborate with Canada.
They've got a quarter of the boreal forest in the world. We
need to have much more support for small business. And as
indicated in the testimony, the support--federal support right
now is very small.
We need to train people for this new industry.
And thank you.
[The prepared statement of Dr. Gibbs follows:]
Prepared Statement of Daniel Gibbs
1. How widely available is ethanol today, and how many cars can use
it?
The United States ethanol industry produces about four billion
gallons of fuel ethanol per year from corn grain. About 20 new ethanol
plants will come online in 2006, adding another one billion gallons of
capacity. Current ethanol production is about 300,000 barrels/day.
All U.S. automobiles and light trucks can use ethanol at 10 percent
(E-10) without modification. In addition, about five million flex-fuel
vehicles (FFVs) can use 85 percent ethanol (E85), gasoline or any
mixture in between.
Flexfuel technology is cheap, about $200 per car, consisting of
improvements to the fuel injector, gas line and gas tank. Eight major
auto manufacturers currently offer E85 vehicles. Ethanol has about two-
thirds the energy per gallon (76,100 Btu/gal) as compared to gasoline
(113,537 Btu/gal), but a much higher octane (100-105). To date, flex-
fuel technology has been offered primarily in larger vehicles to obtain
Clean Air credits. If flex-fuel technology and E85 were combined with
hybrid technology, all available today, it would be possible to make
E85 hybrids which could get hundreds of miles per gallon of gasoline,
the rest coming from ethanol.
2. What are the obstacles to expanding the variety of feedstocks
available for conversion to ethanol? Are these hurdles mainly market
failures and other economic barriers or are they technical in nature?
The national necessity for a large cellulosic ethanol industry is
not yet widely recognized. There is a lack of national urgency to make
it happen in the time frame needed. High oil prices and global warming
have come upon us rather suddenly, and both markets and government
institutions are slow to react.
Commercialization of any new technology, and building new
industries takes time and investment. Many different technical elements
must be discovered, tried and perfected in a context which results in
profitable businesses. As an example, it has taken the corn ethanol
industry about 30 years to develop from small experimental plants to
today's situation of 25-50 percent growth over the next year or so from
the current four billion gallons/year.
Ironically, the current success of the corn ethanol industry and
the low price of corn are barriers to the investment and risk-taking
needed to jump-start the new cellulosic ethanol industry. Corn is
currently cheap ($2.50/bushel), and the engineering technology for corn
ethanol plants is so good that new plants cost only $1.50 per annual
gallon of capacity. In contrast, cellulosic ethanol plants using
current technology cost about six times that much for the same ethanol
capacity (Iogen estimates).
Specific technical and logistical hurdles include:
(1) transportation of large volumes of low density biomass,
e.g., 27 truckloads of switchgrass to make one truckload of
ethanol;
(2) the need for safe, rapid pretreatments to process large
volumes of raw biomass into cellulose and other components;
(3) large quantities of cellulase and other enzymes to convert
cellulose to glucose for making ethanol. For example, a single
25 million gal/yr. ethanol plant would require 2,750 tons of
cellulase enzymes. Adding just one billion gallons of
cellulosic ethanol would require 40 such plants, with a total
annual cellulase protein requirement of 110,000 tons/yr. For
comparison, all U.S. industrial enzymes in 1994 amounted to
about half that, 60,000 tons/year.
(4) new ways to solve the conflict between the need to build
large plants for economies of scale, and the opposing need to
transport low-density biomass over short (<30-40 mile)
distances. Developing technology to enable smaller, cheaper
cellulosic ethanol plants would have a large impact on lowering
ethanol costs and promoting the widespread local development of
biomass resources.
3. What is the largest technical hurdle for each of the following
fuels: Corn ethanol, biodiesel, cellulosic ethanol? Does the current
federal research agenda adequately address these technical barriers?
What actions would most rapidly overcome these technical barriers?
Corn ethanol can be considered a fairly mature industry, in that
there is good technology, reliable and experienced engineering firms
and plant operators, and plenty of available capital for expansion. The
problem for corn ethanol will be that its success will eventually raise
the price of corn, and reach the limits of available corn supply. A
typical U.S. annual corn crop is 10-11 billion bushels/year, divided
among ethanol, food products, animal feed, exports and carryover. A
probable limit for the ethanol fraction from corn is about four billion
bu/yr., which would produce (2.8 gal/bu) about 11 billion gallons of
ethanol, or about six percent of our current 140 billion gal gasoline
supply.
Biodiesel is a good fuel with standards, great customer acceptance
and a small but growing production industry. That industry will double
production in 2006 to 150 million gallons. The main problem for
biodiesel is limited feedstock. Biodiesel is made from animal fat or
vegetable oil feedstocks including soybean oil, rapeseed (Canola) oil,
and waste cooking grease. The fats or triglycerides are combined with
an alcohol, usually methanol or ethanol, to make biodiesel and
glycerol. Because the feedstocks come from food products, they are
usually expensive or in limited supply. Given the demand for biodiesel,
it would make sense to support federal and private research to greatly
expand the production of plant oils, probably through biotechnology.
Cellulosic ethanol is more difficult to make than corn ethanol,
because cellulose and biomass are structural materials, unlike corn
starch which is a food material. The components of biomass: cellulose,
hemicellulose and lignin, have evolved to resist breakdown for many
years. However, the abundance of plant matter has driven the evolution
of many microorganisms and genes dedicated to breaking down cellulose
and extracting the glucose and other sugars. We can harness these genes
and organisms to make a variety of petroleum substitutes from biomass,
as part of the growing field of industrial biotechnology.
The chemistry, engineering and biotechnology needed to build this
industry are complex.
Some specific technical hurdles were listed in response to question
2. Researchers at federal labs, notably NREL, ORNL and NCAUR, and at
U.S. universities have addressed many of these issues over the years.
Much work has been done outside the U.S., in Canada, Sweden and
Japan among other countries. More than half of the necessary knowledge
base for biofuels has been and continues to be developed outside the
United States. We need to find ways to use the best available
technology from around the world, and not assume that our federal labs
can provide all the answers, capable and dedicated as they are. We also
need to foster training and international collaboration in developing
alternatives to oil. Non-OPEC countries including the United States
have a common need to develop cheap domestic fuel sources, or else face
increasing economic costs and competition for scarce oil, as well as
the effects of global warming.
Building a large and successful biofuels industry in the United
States will require a sustained long-term commitment and adequate
funding on the federal side. We need to leverage federal funds by
making more federal support available to small business and
commercialization efforts which can then attract venture capital and
other nonfederal investment. In this way, we will build a healthy
competitive industry with many players and different approaches.
DOE has wisely supported a number of important areas, including
pretreatment research, enzyme development, and genomics, but still has
a top-down central planning approach which needs to be augmented by
more support of other innovative approaches developed outside the
central plan. As an example, in 2005 the USDA/DOE Biomass Research and
Development Initiative (BRDI) program received over 600 applications
for $15 million of funding, or about 12 grants. The DOE SBIR program
likewise offers minimal support for innovative projects in cellulosic
ethanol and is inadequately funded. Outside grants in the range of
$300,000 to $3 million would fill an important gap in enabling startups
to demonstrate new technological approaches, and thereby attract the
investment necessary for commercialization.
4. Some advocates suggest that biofuels should substitute for 25
percent or more of the Nation's transportation fuel use. Are there
market or other barriers that policy might overcome to accelerate
realization of the 25 percent biofuels goal?
As indicated above, we need to make this a national priority. The
U.S. has achieved economic success in part by using large amounts of
fossil fuels per capita. The downside is that we are now particularly
vulnerable to price increases and supply disruptions, as well as
incurring an increasing energy trade deficit.
To be clear, we need to make not only ethanol as a substitute for
gasoline, but all the other hydrocarbons for diesel fuel and jet fuel
(Rostrup-Nielsen, 2005), and for industrial chemicals and plastics. The
only realistic non-fossil source for these materials is biomass in all
its forms. These include energy crops like switchgrass (Gibbs, 1998;
Greene et al., 2004), agricultural wastes, paper from municipal solid
waste, and forest and wood wastes. Using all of these sources will
provide a more diversified fuel and chemical base, and create many
thousands of jobs. The United States has substantial cellulosic
resources which can be developed if the determination and resources are
there (Perlack et al., 2005).
Federal support for university and private R&D is vital, as
indicated above. Commercialization, pilot, and demonstration plant
subsidies are needed to move toward the goal of smaller and cheaper
cellulosic ethanol plants. The level of public and private funding
should over time reflect its importance to the United States, which is
on a par with curing cancer and the Apollo program. In this case, there
will be substantial private funding, once initial efforts begin to show
some success. This is part of the ``cleantech'' investment sector which
is growing rapidly.
Another barrier not discussed yet is developing trained people.
Biomass research has heretofore been an arcane area pursued by a small
number of scientists and engineers in academic and government labs. As
with the biotechnology industry, growth brings the need for many people
with specialized knowledge in the areas of biomass and biofuels. Dr.
Lee Lynd et al. (1999) have recommended graduate programs in
biocommodity engineering, including biotechnology, process engineering,
and resource and environmental systems. Their paper provides a good
overview of this emerging industrial area. Graduate and postdoctoral
fellowships for study abroad in these areas would also be helpful in
accessing the knowledge resources of other countries.
References:
Gibbs, D., 1998. Global Warming and the Need for Liquid Fuels from
Biomass. BioEnergy '98, Madison, WI, pp. 1344-1353.
Greene, N. et al., 2004. Growing Energy: How Biofuels Can Help End
America's Oil Dependence. Natural Resources Defense Council.
www.nrdc.org/air/energy/biofuels/contents.asp
Lynd, L.R., Wyman, C.E., and Gerngross, T.U., 1999. Biocommodity
Engineering. Biotechnol. Prog. 15:777-793.
Perlack, R.D. et al., 2005. Biomass as Feedstock for a Bioenergy and
Bioproducts Industry: The Technical Feasibility of a Billion-
Ton Annual Supply. ORNL/USDA. feedstockreview.ornl.gov/pdf/
billion-ton-vision.pdf
Rostrup-Nielsen, J.R., 2005. Making Fuels from Biomass. Science
308:1421-1422.
General Biomass Company
General Biomass Company is an Illinois corporation founded in 1998
to develop and commercialize biomass technologies. We develop
biotechnology for renewable fuels, with a focus on cellulase enzymes
which are essential for the conversion of abundant cellulose wastes and
biomass crops to low-cost glucose for the production of cellulosic
ethanol, other biobased chemicals, and plastics.
General Biomass Company is a member of the American Coalition for
Ethanol and the Illinois Biotechnology Industry Organization.
Biography for Daniel Gibbs
Daniel Gibbs is President of General Biomass Company. His research
interests are in cellulase enzymes, paper waste utilization and
cellulosic ethanol production. He has over 20 years of experience in
basic research in biological sciences at Stanford, the University of
Washington, and DePaul University, and five years of experience in
pharmaceutical and diagnostic R&D at Abbott Laboratories, including new
technology development and evaluation, patent analysis and evaluation,
bioinformatics and software development. He is the author of nine
scientific papers including ``Global Warming and the Need for Liquid
Fuels from Biomass,'' presented at BioEnergy '98, a paper on ethanol
from switchgrass, a renewable energy crop. He was an invited speaker on
biomass ethanol at the American Coalition for Ethanol annual meeting.
At Abbott Labs, he worked in Pharmaceutical Division R&D on
bioinformatics, genomics and gene sequence databases, and in
Diagnostics Division R&D on software and patent support for process
control of fluidic and chemical systems. He was previously Associate
Professor of Biological Sciences at DePaul University and received an
NIH grant for research on insect neuroendocrinology. He was an NIH
Postdoctoral Fellow at the University of Washington and an NIH
Predoctoral Fellow at Stanford. Dr. Gibbs received a B.A. in Biology
from Wesleyan University and an M.A. and Ph.D. in Biological Sciences
from Stanford University.
Chairwoman Biggert. Thank you very much, Dr. Gibbs. Mr.
Lovaas.
STATEMENT OF MR. DERON LOVAAS, VEHICLES CAMPAIGN DIRECTOR,
NATURAL RESOURCES DEFENSE COUNCIL
Mr. Lovaas. Thank you. Chairman Biggert, Ranking Member
Honda, thanks for the opportunity to testify today.
America's addicted to oil, the President said in his State
of the Union. Transportation drives this fact, accounting for
more than two-thirds of U.S. oil demand. Our cars and trucks
specifically account for 40 percent of total demand. If trends
continue, our thirst for 21 million barrels a day of oil will
grow by a third by 2030. Consequences include dependence on
hostile regimes, a huge transfer of wealth overseas and global
warming pollution.
Drivers and consumers on a roll price roller coaster. Not
since marketplace turmoil in the '70s have prices increased as
much as the early 2000's. Prices at the pump are approaching
all time highs.
The EIA confirmed that high prices are here to stay in
their 2006 Outlook. Their reference case projects that oil
prices will drop from $70 levels of recent months to $47 in
2014 only to increase to $54 per barrel, $21 higher than their
2005 Outlook by 2025.
The last time prices spiked like this the effect was
profound as described in a recent report by auto analyst Walter
McMannis. Drivers began shunning large gas guzzling cars made
by American automakers in favor of fuel efficient cars built in
Japan and Germany. Between 1978 and '81 U.S. automaker sales
dropped by 40 percent to a decline of about 5.2 million units.
The second oil shock came six years after the first shock which
prompted Congress in 1975 to adopt fuel economy standards. This
law required a doubling in passenger car efficiency to 27.5 mpg
between 1975 and '85. Some argue that the United States' big
three share loss in this period would have been even worse had
they not been forced to begin building at least some more fuel
efficient cars to comply with the new law.
History is beginning to repeat itself, unfortunately.
Domestic automakers are suffering due to over reliance on fuel
inefficient vehicle offerings. GM sales slide 12 percent in May
compared to a year ago. The collective Detroit automakers share
drooped to 52.9 percent. Meanwhile, they may only account for
one to two percent of total United States' sales, but hybrid
sales have doubled or nearly so for every year since the turn
of the century. A variety of such technologies can break our
old addiction.
First, off-the-shelf improvements to conventional vehicles
such as four valve cylinders, variable valve timing, automatic
engine shutoff, slicker materials for reduced drag, better
tires and five and six-speed transmissions. The cumulative
effect in an average SUV would yield at least a one-third
improvement in fuel economy performance. So that's conventional
technologies.
Hybrid electric vehicles, hybrids fueled by electricity and
gasoline. They run the gambit from mild hybrids to full ones.
Although costs of the technology have come down since the first
one was unveiled in 1999, there is still a costly proposition.
However, a recent analysis found that $3 per gallon changes
everything. Opting for more efficiency is nearing cash flow
neutrality for consumers. That's good news.
Three. Flex-fuel vehicles. They ran on alcohol fuel and/or
gasoline. Alcohol fuel being a fuel like ethanol. This adds
modest expense to manufacture of automobiles. One estimates
places per vehicle cost at a modest $100 to $200. Draw backs
include the fact that blending ethanol in low proportions to
gasoline increases smog forming pollution. Ethanol also has
lower energy content so for it to be a cost effective
alternative, it must be at least 25 percent cheaper than
gasoline.
Also, less than 2.6 percent of American autos are flex-
fueled and there is a infrastructure lag that's even great.
Since 700 stations offer ethanol, less than one-half of one
percent of gas stations.
Four, plug-in hybrids. Rely more heavily on electricity as
a fuel, although they can also run on gasoline or both alcohol
fuel and gasoline if they're flex-fueled, too. Batteries remain
expensive and have limited ranges. A hybrid might cost as much
as $4,000 more than a similar conventional vehicle. A plug-in
with a range of 20 miles could cost $6,000 more. And one with a
range of--20 that's 20 miles actually. One with a range of 60
miles could cost $10,000 more. Now the limited range itself may
not be an issue since 31 to 39 percent of annual miles driven
are for the first 20 miles of daily driving.
Plug-ins don't suffer from the chicken and egg problem that
plagues hydrogen. They are powered by the existing electrical
grid. So there are advantages. And if they use surplus power or
the grid is powered by clean renewables, pollution would drop.
So, in summary, to set America free of oil we must invest
in all of these technologies, a message you've heard before.
Consumers appreciate choices and the cumulative effects are
likely to be great. For example, as Dan mentioned, the
combination of an E85 FFV and a hybrid vehicle like the new
Ford Escape E85 FFV.
Two of the best ways to make sure that these choices are
available to consumers are to:
1. LEnact H.R. 4409, the Fuel Choices for American
Security Act, sponsored by Representative Kingston,
Engel and Saxton; and
2. LTo enact the Boehlert Markey Amendment to increase
fuel economy performance.
These bills boost new technologies like the ones I
described and they're effective policy responses to oil
addiction.
Thank you.
[The prepared statement of Mr. Lovaas follows:]
Prepared Statement of Deron Lovaas
``America is addicted to oil,'' the President said in his State of
the Union. He was right. We're hooked. Why is that the case?
Transportation drives our addiction. For starters, we're taking
more trips. More Americans rode trains and buses 80 years ago, and
transit use spiked during World War II. Then it plummeted, leveling off
at less than half of its peak level. Meanwhile vehicle miles traveled
climbed steadily, and are at the three trillion per year mark.\1\
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\1\ Based on Federal Highway Administration and American Public
Transportation Association figures.
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Increasing travel by private vehicle is exacerbated by two other
trends: An increasingly wasteful fleet of cars and trucks and pitifully
small use of alternatives to fuels made from oil.
Thanks largely to the proliferation of larger vehicles--
particularly SUVs--improvements in fuel economy of the fleet stalled in
1988. The largest recent jump in performance happened in the late 70s,
driven by policy and consumer choices in reaction to embargoes and
price runups.\2\
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\2\ U.S. EPA, ``Light-Duty Automobile Technology and Fuel Economy
Trends: 1975 Through 2003.''
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The third factor is alternative fuel use, or rather non-use, in
transportation. We fill our tanks with fuel, and 97 percent of the time
it's a petroleum-derived liquid, mostly gasoline.
Meanwhile, domestic production peaked and has been declining
steadily since 1970. Currently, we produce about 8.9 million barrels a
day but that's only enough to meet about 40 percent of America's daily
consumption of 21 million barrels daily.\3\
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\3\ Energy Information Administration (EIA), Department of Energy.
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The Oil Price Roller Coaster
Not since the embargo and marketplace turmoil in the 1970s have
prices increased as much as in the early 2000s. In fact, gasoline
prices are approaching all-time highs (see graph below).
Underpinning soaring prices are the oil markets, as shown in the
graph below.
The fundamentals underpinning the oil price trends are described in
a recent report by NRDC, the Office for the Study of Automotive
Transportation and the University of Michigan Transportation Research
Institute:\4\
---------------------------------------------------------------------------
\4\ ``In the Tank: How Oil Prices Threaten Automakers' Profits and
Jobs,'' July 2005.
Most analysts agree that market fundamentals of high demand
and limited supply, and not speculation or market hysteria, are
the primary reason for today's high oil prices. These prices
can be explained, in part, by explosive growth in oil demand,
especially from China. Oil demand has grown a robust five
percent since 2003, despite a doubling of oil prices during
that period. It appears likely that increased global oil demand
and tight global oil supplies will keep fuel prices high for
---------------------------------------------------------------------------
the next several years.
There is little spare oil production capacity to cushion a
sudden loss in supply and the mix of easily extractable crude
oil is moving away from ``light, sweet'' toward more ``sour''
grades that fewer refineries can handle. Considering these
factors, oil prices may abruptly jump even higher, as happened
during the first two oil crises of 1973-75 and 1979-81. But
unlike these last two oil crises, important oil market
fundamentals could favor a higher price lasting for much
longer--and perhaps becoming a permanent feature of the
environment.
One reason we can expect sustained high oil prices is that we
have limited spare capacity. Historically, producers were
accused of holding back supplies when prices rose. But most
industry experts agree that the Organization of the Petroleum-
Exporting Countries (OPEC) and other suppliers are now pumping
at or near the upper limits of their capability. Indeed, there
are concerns that rapid exploitation degrades the long-term
viability of some oil fields.\5\ Spare capacity, often used to
cushion oil price spikes, is essentially gone.
---------------------------------------------------------------------------
\5\ Simmons, Matt. Twilight in the Desert: The Coming Saudi Oil
Shock and the World Economy, John Wiley & Sons (2005).
The Energy Information Administration (EIA) confirmed that high
prices are here to stay in the Annual Energy Outlook 2006 (AEO 2006).
The reference case projects that oil prices will drop from the $60-$70
levels of recent months to $47 in 2014, only to increase to $54 per
barrel--$21 higher than the 2005 outlook--in 2025. And the high price
case actually flirts with the $100 per barrel level in 2030.\6\
---------------------------------------------------------------------------
\6\ EIA, AEO 2006.
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Deja vu All Over Again: Prices Affecting Auto Sales
Of course, price fluctuations are not a new thing. The last time
oil prices leapt to this level the effect was profound, as described
again in the ``In the Tank'' report:
[D]rivers also began shunning large, gas guzzling cars made by
American automakers in favor of fuel-efficient cars built in
Japan and Germany. Between 1978 and 1981, U.S. automaker sales
dropped by 40 percent, a decline of about 5.2 million units.\7\
The second oil shock came six years after the first shock,
which Congress in 1975 to adopt fuel economy standards (under
the Energy Policy and Conservation Act of 1975, known as
``EPCA''). This law required a doubling in passenger car
efficiency to 27.5 mpg between and 1985. Some argue that the
U.S. Big Three's share loss in this period would have been even
worse had they not been forced to begin building least some
more fuel-efficient cars to comply with the new law.
---------------------------------------------------------------------------
\7\ The second oil shock came six years after the first shock,
which Congress in 1975 to adopt fuel economy standards (under the
Energy Policy and Conservation Act of 1975, known as ``EPCA''). This
law required a doubling in passenger car efficiency to 27.5 mpg between
and 1985. Some argue that the U.S. Big Three's share loss in this
period would have been even worse had they not been forced to begin
building least some more fuel-efficient cars to comply with the new
law.
Employment plunged along with automobile sales. It dropped 30
percent from 1978 to 1982, for a total loss of more than
300,000 jobs in direct auto and part manufacturing jobs--and
even more jobs were lost if auto-related jobs are considered.
And the Detroit Big Three suffered record losses. In 1980, GM
lost $762 million, Ford lost $1.7 billion, and Chrysler lost
the most, $1.8 billion. Chrysler's situation was so bad that in
1979 Congress agreed to bail out the company with $1 billion in
loan guarantees.\8\
---------------------------------------------------------------------------
\8\ Doyle, J., Taken for a Ride, the Tides Center, 2000, p. 173-4.
Worse, when gasoline prices returned to pre-shock levels, U.S.
automakers failed to regain their lost market share in
passenger cars. Indeed, the three periods of sharpest growth in
import market share, 1973-75, 1979-81, and 2003-present,
coincide precisely with the largest increases in per gallon
---------------------------------------------------------------------------
gasoline prices.
History is beginning to repeat itself. On the one hand, sales of
larger vehicles, like the overall economy, have been remarkably
resilient in the face of high prices: In 2003, the share of sales for
large light-duty vehicles was 73.3 percent and it edged down slightly
to 73.1 percent in 2005.\9\
---------------------------------------------------------------------------
\9\ Ward's Automotive Reports, 2003-2006, monthly.
---------------------------------------------------------------------------
But slicing the data more finely yields a fundamental shift in auto
sales. Based on data from the Planning Edge, the graph below shows
tremendous growth in the crossover utility vehicle segment, while large
SUV sales took a hit in 2005.
And while they only account for one to two percent of total U.S.
sales, the other trend that has received a great deal of press
attention is soaring sales of hybrid-electric vehicles. In fact, hybrid
sales have doubled or nearly so every year since the turn of the
century:
Biofuels
Biofuels are liquid, alcohol fuels derived from plant matter. The
U.S. primarily uses ethanol using corn as a feedshock. While our
transportation sector is 97 percent dependent on petroleum-derived
fuels--especially gasoline--ethanol makes up for the remainder.
And it has been growing rapidly, as shown by the chart below (in
millions of gallons per year of corn ethanol):
Beyond corn, the next generation of biofuels is being developed.
Specifically, ethanol derived from the cellulose of plants offers
promise. The President referred to this emerging technology in his 2006
State of the Union speech when he talked of making ethanol from
switchgrass. As explained in the NRDC report ``Growing Energy'':
Cellulosic biomass is basically all the parts of a plant that
are above ground except for the fruit and seeds, such as corn,
wheat, soybeans, and rapeseed. Technically, cellulosic biomass
is the photosynthetic and structural parts of plant matter.
Other examples of cellulosic biomass include grass, wood, and
residues from agriculture or the forest products industry. Most
forms of cellulosic biomass are composed of carbohydrates, or
sugars, and lignin, with lesser amounts of protein, ash, and
minor organic components. The carbohydrates, usually about two-
thirds of the mass of the plant, are present as cellulose and
hemicellulose--thus the term cellulosic biomass.\10\
---------------------------------------------------------------------------
\10\ Greene, et al., ``Growing Energy: How Biofuels Can Help End
America's Oil Dependence,'' December 2004.
Advantage of this process and its reliance on feedstocks besides
corn include dramatic increases in energy and environmental benefits,
including big reductions in carbon dioxide emissions.
Heartening Trends, But Slow Progress Overall
In percentage terms trends in hybrids and biofuels are impressive.
But in absolute terms they barely make a dent in our oil addiction. A
higher price plateau notwithstanding, current demand of about 21
million barrels per day is projected to increase by more than a third
by 2030.\11\
---------------------------------------------------------------------------
\11\ EIA AEO 2006.
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This has serious economic consequences. First, we're already
transferring a huge amount of wealth overseas thanks to a ballooning
trade deficit. The economic costs would be steeper, if not for the fact
that our policy response to the energy crisis in the '70s helped to
drive the oil intensity (a measure of barrels used to produce GDP) of
our economy down by about one-third, providing better insulation from
today's high prices. This is why demand has barely slackened and the
economy hasn't slipped into recession.
However, these gains have slowed dramatically in recent years. It's
clear why this is so in transportation--stagnating fuel economy and
increasing travel. For electricity, it's due to the fact that there's
just not much left to shift--we have pretty much weaned that sector off
oil. This means that our economic shock absorbers are wearing thin once
more.
Spiky, high prices have been a hardship for U.S. consumers, but the
pain is more deeply felt in the developing world. According to the
World Bank, a sustained oil price increase of $10 per barrel will
reduce GDP by an average of about 1.5 percent in countries with per-
capita income of less than $300, compared to a loss of less than .5
percent for developed countries.
And of course the consequences for national security are alarming
too, as described a joint NRDC-Institute for the Analysis of Global
Security report ``Securing America: Solving Our Oil Dependence Through
Innovation'' (attached).
Breaking the Oil Addiction Requires New Policies
Policy-makers must provide frustrated consumers with a means to
react to persistent price signals. Thankfully, this doesn't require a
12-step program. It does require significant policy reforms.
Many of the necessary reforms are included in a bill supported by
the Set America Free coalition. H.R. 4409, the Fuel Choices for
American Security Act, currently has 75 co-sponsors and has four
components:
A national oil savings requirement starting at 2.5
million barrels of oil per day within ten years and increasing
over time, achieved through a menu of existing and new
authorities and incentives;
federal manufacturer retooling incentives for
production of efficient vehicles and authority to set
efficiency standards for tires and heavy duty trucks;
programs that increase fuel choice in the
transportation sector; and
a national energy security media campaign to educate
the public about oil dependence.
The targets can be achieved via oil savings from any sector, any
technology. Much of the savings will come from transportation, which is
responsible for about two-thirds of our oil consumption and is utterly
dependent on petroleum.
Overview of Technologies
There are a variety of options available to reduce our oil
dependence. Some of the advantages and challenges posed by each one are
summarized below.
Off-the-shelf improvements to conventional vehicles:
As summarized in the graphic below from NRDC's web site, these
include improvements such as four-valve cylinders, variable
valve timing, automatic engine shut-off, slicker materials for
reduced drag, better tires and five- and six-speed
transmissions. The Union of Concerned Scientists has calculated
that making similar improvements to an average SUV yields at
least a 31 percent improvement in fuel economy performance.\12\
---------------------------------------------------------------------------
\12\ Union of Concerned Scientists, ``Building a Better SUV,''
http://www.ucsusa.org/clean-vehicles/
cars-pickups-suvs/building-a-better-suv.html
Hybrid-Electric Vehicles (HEVs): These increasingly
popular cars and trucks are fueled by electricity and/or
gasoline. They run the gamut from mild hybrid models (for
example, Chevrolet Silverado comes in a hybrid version) to full
ones (Toyota Prius). Although costs of the technology have come
down since the first hybrid was introduced in 1999 by Honda
(the Insight, now discontinued), and prices of gasoline have
come up, these fuel-sippers are still a relatively costly
---------------------------------------------------------------------------
proposition for consumers.
Consumer Reports recently analyzed five-year costs
(purchase, sales tax, insurance, maintenance, financing) and
benefits (federal tax credits, lower fuel costs, higher resale
value) of five hybrids and found that only two penciled out,
barely: The Toyota Prius and the Honda Civic. Their analysis
assumed gas prices rising over time to $4 per gallon.\13\
---------------------------------------------------------------------------
\13\ Consumer Reports, April 2006, ``The Dollars and Sense of
Hybrids.''
On the other hand, a recent Consumer Federation of America
report found that a threshold has been crossed with $3 per
gallon gasoline. Their analysis shows that consumers no longer
pay a premium for efficiency. Opting for a more efficient
technologies including hybrid-electric engines should be
``cash-flow neutral'' for consumers, according to this
analysis.\14\
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\14\ Cooper, Mark, ``50 by 2030: Why $3.00 Gasoline Makes the 50
Mile per Gallon Car Feasible, Affordable and Economic,'' May 2006.
Flexibly-Fueled Vehicles (FFVs): These vehicles are
capable of running on a mixture mixture of alcohol fuels such
as ethanol and gasoline. This adds some expense to the
manufacture of automobiles, specifically to ensure that tanks
and fuel hoses are able to tolerate alcohol. One estimate
places per-vehicle cost at a modest $100-$200.\15\ There are
other challenges with displacement of gasoline with ethanol.
When blended in low proportions to gasoline, smog-forming
pollution (oxides of nitrogen and volatile organic compounds)
increases compared to gasoline. Higher blends such as E85 (85
percent ethanol, 15 percent gasoline) yield a cleaner-burning
fuel.
---------------------------------------------------------------------------
\15\ ``Ethanol Fact Sheet,'' American Petroleum Institute, March
23, 2006.
Another drawback of ethanol is its lower energy content
compared to gasoline. Due to the difference, for ethanol to be
a cost effective alternative it must be at least 25 percent
---------------------------------------------------------------------------
cheaper than gasoline.
Last but not least is the chicken-and-egg problem with this
fuel: Precious few stations feature ethanol pumps. This is
changing rapidly (see graph below) and resources for locating
pumps are readily available (see http://afdcmap2.nrel.gov/
locator/FindPane.asp). But the 710 stations currently offering
this choice adds up to less than .5 percent of the total number
of retail outlets.\16\
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\16\ According to the National Petroleum News (May 2005) as quoted
by EIA there are 168,987 gas stations in the U.S.
Plug-In Hybrid Electric Vehicles (PHEVs): These are
vehicles which rely more heavily on electricity as a fuel,
although they can also run on gasoline, or a blend of alcohol
fuel and gasoline. Although Honda and Toyota remain skeptical
due to marketing concerns (awareness has only recently become
widespread that hybrids DON'T have to be plugged in), there is
growing interest in these vehicles as a tool for breaking the
---------------------------------------------------------------------------
oil habit. Significant challenges remain, however.
First among these is battery technology. Batteries remain
expensive and have limited ranges. So in spite of cost savings
due to a smaller internal combustion engine and electrification
of other vehicle components too, while an HEV might cost
$2,500-$4,000 more than a similar conventional vehicle, a PHEV
with a range of 20 miles would cost $4,000-$6,000 and one with
a range of 60 miles would cost $7,400-$10,000.\17\
---------------------------------------------------------------------------
\17\ EPRI, 2001 as quoted in Plotkin, Steven, ``Grid-Connected
Hybrids: Another Option in the Search to Replace Gasoline,'' TRB 2006
Annual Meeting.
Range may not be a troubling issue, since 31-39 percent of
annual miles driven are the ``first 20 miles'' of daily
driving.\18\ Therefore, the daily needs of many drivers would
be satisfied with this range.
---------------------------------------------------------------------------
\18\ 1997 Nationwide Personal Transportation Survey, U.S. DOT, as
quoted in Plotkin, Steven, ``Grid-Connected Hybrids: Another Option in
the Search to Replace Gasoline,'' TRB 2006 Annual Meeting.
PHEVs would also save a great deal of fuel. One estimate
found that while a conventional vehicle uses 523 gallons per
year and a HEV uses 378, a PHEV with a 20 mile range would use
219. And a PHEV with a 60 mile range would use a miniscule 83
gallons annually.\19\
---------------------------------------------------------------------------
\19\ Plotkin, Steven, ``Grid-Connected Hybrids: Another Option in
the Search to Replace Gasoline,'' TRB 2006 Annual Meeting.
There are other advantages to PHEVs. They don't suffer from
the chicken-and-egg problems that plague biofuels and hydrogen,
since an electrical grid already exists.\20\ If charged at
homes at night, they would make use of surplus, off-peak
electricity. And so long as the grid is powered by relatively
clean fuels--such as natural gas, hydroelectric, wind or
solar--air pollution would also be reduced.\21\
---------------------------------------------------------------------------
\20\ Luft, Gal, ``Plug in for America: California should encourage
electric cars,'' San Francisco Chronicle, May 26, 2006.
\21\ Plotkin, Steven, ``Grid-Connected Hybrids: Another Option in
the Search to Replace Gasoline,'' TRB 2006 Annual Meeting.
Transit Use: In urban areas, providing alternatives
to driving is another viable tool for curbing oil use.
According to the American Public Transportation Association,
public transportation now saves us almost 125,000 barrels of
oil a day. But if we increased reliance on public
transportation to, say, the level of our neighbors in Canada,
we would save more oil than we import from Saudi Arabia every
---------------------------------------------------------------------------
six months.
Conclusion
Breaking our addiction, as the President called it, is a tremendous
challenge. The costs to our security, our economy and our environment
are terribly high. We meet this threat head-on, with similar
determination that drove us to win World War II and to put a man on the
Moon.
Fortunately we don't have to invent the key to our oil-soaked
shackles. The technology exists, and the costs are coming down,
especially in relation to the price of fuel.
To set America free, all of the technologies described above
deserve greater investment and deployment. Consumers will appreciate
the choice, and cumulative effects are likely to be great. For example,
envision a more efficient car--whether a conventional vehicle with off-
the-shelf improvements, an HEV, or a PHEV--that is also capable of
running on E85. This could yield hundreds of miles per gallon of
gasoline, as some have claimed.\22\
---------------------------------------------------------------------------
\22\ Zakaria, Fareed, ``Imagine: 500 miles per gallon,'' Newsweek,
March 7, 2005.
---------------------------------------------------------------------------
One of the best ways to put us on the path to energy security is to
enact H.R. 4409, the ``Fuel Choices for American Security Act''
sponsored by Representatives Kingston, Engel and Saxton. This bill
specifies specific ends--oil savings of 2.5 million barrels per day in
2015 and five million barrels per day in 2025--and provides a host of
means to achieve them. It doesn't pick winners, but gives a boost to
the various technologies described above. I urge you to support it.
Thank you for your time and interest.
Biography for Deron Lovaas
Deron Lovaas is Vehicles Campaign Director at the NRDC. He
currently directs the ``Break the Chain'' oil security campaign and was
the chief lobbyist on the federal Transportation Equity Act for the
21st Century (TEA-21) reauthorization bill. A graduate of the
University of Virginia, he has worked in the field of environmental
policy and advocacy for more than a decade, in positions such as
director of Sierra Club's Challenge to Sprawl campaign and specialist
in transportation and air-quality planning at Maryland's Department of
the Environment. He has authored or co-authored numerous articles and
publications, most recently ``Taking the High Road to Energy Security''
in In Business magazine, ``From Gas Crisis to Cure'' on tompaine.com
and NRDC's ``Securing America: Solving Oil Dependence Through
Innovation.''
Chairwoman Biggert. Thank you very much, Mr. Lovaas.
Mr. Gott, you're recognized for five minutes.
STATEMENT OF PHILIP G. GOTT, DIRECTOR FOR AUTOMOTIVE CUSTOM
SOLUTIONS, GLOBAL INSIGHT, INC.
Mr. Gott. Thank you, Chairman Biggert, Mr. Honda, Mr.
Lipinski and others Members of the Subcommittee.
What would be required to lead automakers to apply
technology advancements to improving fuel economy? The
automotive industry will respond to increased demands for fuel
economy from the consumer: Changes in consumer behavior that
place a higher priority on fuel economy will result in the
increased deployment of presently available technology such as
hybrids, down size and turbo charged gasoline engines,
displacement on demand, et cetera. A clear regulatory position
on the future of emission standards beyond tier two will enable
manufacturers to make an assessment of the likely future
prospects for regulatory acceptance of the diesel, the one
technology that meets all consumer expectations for performance
while delivering a 20 to 30 percent improvement in fuel
economy.
Changes in consumer behavior can be expected if and when
the need for fuel consumption reduction better resonates with
the core values of the consumers. The bulk of today's car
buying public places high priority on the need for economic,
physical and social survival. With current fuel prices and
availability, fuel consumption on a lower priority than other
vehicle attributes such as a high seating position which
increases aerodynamic drag, faster acceleration which usually
results in a engine that operates at off peak efficiency most
of the time, and high perceived levels of mobility and safety
that result in vehicles heavier than might normally be
necessary.
Policies in the United States have lacked from the very
beginning any component that attempts to change consumer
behavior. Emphasis has been placed instead on maintaining
mobility and lifestyle in a business as usual consumer
environment. What is needed is a series of coordinated efforts
all aimed at conservation. Programs that sponsor the
development of high risk technologies need to be continued
simultaneously with public education programs that increase
public awareness of the need to conserve and to make it in
their best interests to do so.
It is likely that the high risk technologies will have some
limitations or will change to some extent the normal
expectations of today's vehicles with respect to range,
refueling, convenience or performance. The core values of
future consumer generations can be influenced by including in
the education of current school age children the need to
conserve in all forms so that they embrace the new technologies
and their differences from vehicles of today.
Education programs need to be re-enforced with fiscal
programs that are in alignment with conservation goals.
Programs. Programs that tax excessive consumption and reward
conservation for new vehicles as well as those in use will
provide additional incentives to conserve.
What hurdles must hybrids, FlexFuel and hydrogen powered
vehicles clear before the automobile industry analysts and the
press accept these technologies and consumers buy them? Without
a change in consumer values, transparency is the primary
condition that must be met for the consumer to adopt a new
technology in today's marketplace. Cost, reliability,
durability, range, refuel time and convenience all need to be
equal or better than the technology we seek to replace. Hybrids
suffer from higher costs, both initial and life cycle as their
fuel economy is generally insufficient to give a payback, at
least with today's fuel prices, to the original purchaser
during the first ownership period, and battery life issues
cloud the resale value.
Hydrogen vehicles present a host of range, refueling and
access challenges in addition to the technical issues and
uncertainty of a net benefit when well to wheel issues are
considered.
Of these three technologies mentioned, Flex-fuel vehicles
offer the one technologically transparent solution but only
because ethanol-containing fuel is not required to run them. To
make a difference in energy consumption, the six million FFVs
produced to date must have accessed the E85 at competitive
costs. At the moment there are less than 700 E85 stations
nationwide versus 175,000 refueling sites for conventional
fuels.
How more or less likely is it that these radically new
technologies, fuel cells, electric drive trains or significant
battery storage capabilities, for example, will be incorporated
into cars rather than incremental innovations to internal
combustion engines? Historically radical technologies like
these have not been incorporated into the vehicle fleet
primarily because they are not transparent to the consumer when
assessed on the basis of one or more of their criteria of cost,
utility or convenience. Incremental changes and innovations
have been the experience; evolution rather than revolution.
This will be changed by the marketplace if and when they can
meet the expectations of the core values of the consumers.
Concurrent achievement of competitive cost, initial and/or life
cycle, range, refueling time, all weather performance, well to
wheel efficiency and greening house gas emissions remain
significant challenges. Demonstration and other education
programs can help consumers understand the benefits and the
trade offs. Because it appears likely that these technologies
will be accompanied by changes in these characteristics, the
likelihood that these technologies can be incorporated into
cars can be increased by also working through public education
programs to influence the formation of core values of future
generations, thus changing the willingness of the consumer to
accept the changes.
In sum, regardless of how the end results are achieved, we
forecast that increases in efficiency of the vehicles through
available nondistruptive power train technologies will reach
the point of diminishing returns once an improvement of
approximately 30 percent has been achieved when compared to the
baseline gasoline engine. In the absence of radical new
technologies to obtain improvements greater than this will
require the use of either alternative fuels or a move by the
consumer to inherently more efficient and lighter vehciles.
Thank you very much.
[The prepared statement of Mr. Gott follows:]
Prepared Statement of Philip G. Gott
The following are the written answers to two questions posed by the
Honorable Judy Biggert, Chairman, Subcommittee on Energy of the
Committee on Science.
Question 1:
The auto industry in recent years has generally used technological
improvements to increase performance instead of fuel efficiency. What
would be required to lead automakers to apply technology advancements
to improving fuel economy?
Commercially successful manufacturers design, develop, build and
sell vehicles that resonate with the core values of the consumer and
that meet the needs of their life stage in the current and expected
future business and economic environment. The automakers will design,
develop, produce and sell whatever vehicles the consumer will buy.
Advanced technologies have been applied to date to hold the CAFE
performance of the U.S. light vehicle fleet at or close to regulatory
levels while providing increased acceleration, levels of safety and
interior feature content. If large numbers of consumers were to demand
instead, or in addition, greater levels of fuel economy, the
manufacturers would be able to respond with a broader range of hybrids,
diesels, downsized and turbocharged gasoline engines, displacement on
demand, etc. At this point in time, however, it is our view that while
fuel economy is increasingly important to many consumers, most still
place a higher priority on other vehicle features and attributes. If
and when fuel economy becomes a higher priority for the consumer, the
vehicle manufacturers can and will respond.
What will increase the consumer's demand for fuel economy?
Demand for fuel-saving technologies will increase when fuel
conservation creates a greater resonance with the consumer's core
values. Our research indicates that the Baby Boomers, the bulk of
today's new car buying public, have core values that center around the
need for economic, physical and social survival. They have an inherent
need to prepare themselves to deal with any and all foreseeable
adversities. The need for mobility itself is a key aspect of survival,
and viewed as an unalienable right by virtually all Americans. The need
to travel in perceived security under any adverse driving conditions
gives rise to demand for four wheel drive. The need to command and
control their driving environment gives rise to demand for a high
seating position. The need to be better than the next person gives rise
to demand for fast accelerating vehicles. The desire for perceived
safety gives rise to demand for massive vehicles. Hence the demand for
large, truck-based SUVs.
However, fuel prices are currently very high, at least when
compared to historical levels. For the moment, the high fuel costs have
not been assimilated into the family budgets of most consumers, and
demand is shifting to vehicles with attributes similar to the SUV, but
on more fuel efficient front-wheel drive-based passenger car platforms
(so-called ``crossover utility vehicles'' or ``CUVs''). (It is
interesting to note that small car sales are NOT increasing at the same
time due to their lack of appeal to the core values of the consumer.)
This momentum towards more efficient vehicles could be sustained if
consumers cannot adjust to higher gasoline prices. It is our view, that
if prices stay at these current levels and don't go higher, some of the
momentum will diminish and consumers will go back to older buying
patterns.
It must be recognized that the consumer has so far had an amazing
capability, over the longer-term, to assimilate high fuel prices into
the family budget. On the policy side, artificially high fuel prices
due to taxation have not been acceptable due to the repressive nature
of such taxation and the negative impact on the popularity amongst the
voters of those who support them. (In this area, Americans are unique
compared to consumers in many other major consuming countries.)
Therefore, we need to find other, lasting solutions. Let's take a look
at some of the consumer core values and how they can be reached by
advanced technologies.
The Baby Boomer consumer, as part of his/her value for survival,
has a strong competitive ethic embodied in the need to be better than
the next person. Hybrids, which do not provide a financial payback due
to their inherently high cost and sensitivity to duty-cycles, are being
re-engineered to return some fuel economy benefits while also offering
high levels of acceleration. The diesel engine, which offers much
higher levels of acceleration-producing torque as well as fuel economy
when compared to a gasoline engine, can offer equal if not better
acceleration than a gasoline hybrid while more reliably providing the
fuel economy benefits desired by society.
The need for survival also causes a person to seek a safe and
secure environment. Conventional wisdom supports the notion that a safe
vehicle is a heavy vehicle. Parents who want to ensure the safety of
their children prefer to carry them around in a heavy vehicle such as
an SUV. There is a current Country and Western song that even states
``I'm not going to sacrifice the safety of my family just to save a
gallon of gas.'' The relationship between safe and heavy needs to be
discredited before one can expect a large shift away from heavy
vehicles.
Another aspect of survival is to ensure the safety and security of
one's self and one's children. This includes preparation of a safe and
secure future. A fact-based public education program about the need to
conserve all forms of energy, including but not limited to the energy
consumed for mobility, would be expected to increase demand for fuel-
saving technologies. Education programs have been successful in
reducing smoking, seat belt utilization and reductions in drunk
driving. Why not similar programs in the schools, on television and
other media in support of energy conservation?
Successful education programs can include:
Fact-based propositions as to the net benefits to the
individuals and society
Fact-based education as to the full costs of less
efficient practices and preferences
Model behavior by role models, including movie stars,
pop idols, politicians, corporate fleets
``Placement'' of strategic messages within popular
culture and media: TV, movies, newspapers, etc.
Requirements for obvious energy saving measures in
all aspects of life can provide a constant reinforcement of the
need to conserve in everything we do. In Europe and China, the
lights in hotel hallways are off unless the presence of a
person is detected. When you walk down the hall, the lights
follow you, turning on ahead of you and turning off a few
minutes after you pass. In America, lights burn brightly, often
24 hours per day.
Classroom instruction during the formative childhood
years.
Each of these channels of influence should work to embed the
message that the core value of ``survival'' in adverse conditions
(whatever they may be) is enhanced through energy-conserving solutions.
That is, the core value of survival needs to encompass reduced
dependency on a single source of energy. Survival also needs to be
linked to minimization of greenhouse gases just as people came to
accept the need to reduce toxic and smog-forming emissions in the
1960s.
Such educational programs should be enhanced with feebate and
registration-tax programs. Under a feebate program, fees on less fuel-
efficient programs would be used to subsidize the purchase of more fuel
efficient vehicles in a manner similar to what is done now in some
states to reward safe drivers with a discount on insurance, the
discount being funded by higher rates for unsafe drivers. Recurring
carbon- or fuel-consumption based registration or ``circulation''
taxes, paid every year by the car owner, based on the fuel consumption
rating of the vehicle, can also encourage the purchase of more fuel
efficient new as well as used cars. Education programs coupled with
cost savings through government managed stick and carrot programs can
be effective.
Another way to reach the core values of the consumer is to change
the perception of mobility itself. It will be futile to try to reduce
the consumer demand for mobility. A successful strategy could be
instead to offer virtual mobility as an alternative. High speed
communications provided through fiber optic networks into every home
will reduce the waiting time for Internet-based communications
exchanges. Telecommuting and video conferencing can become an even more
viable alternative to physical commuting and shopping with higher
upload and download speeds. Perhaps even a system of rewarding
corporations (as opposed to the individual) for establishing satellite
offices or encouraging ``working from home'' would go a long way to
reducing fuel consumption. What is required is to make the consumer
realize that this is a convenient and effective alternative form of
mobility.
Question 2a:
What hurdles must hybrids, flex-fuel, and hydrogen-powered vehicles
clear before the automobile industry, industry analysts, and the
automotive press accept these technologies and consumers buy them?
The primary caveat associated with the adoption of any new
technology is that any negative attributes should be totally
transparent to the consumer. That is, there should be:
No cost penalty over the life of the vehicle
No reliability/durability penalty
No range penalty
No functional penalty
No convenience penalty.
Flex-fuel (FFV) vehicles have been accepted by the public for many
years, and they are cost competitive and `transparent' to the consumer
in all aspects except range when fueled with the lower energy content
E85. Since 1995, over six million have been produced and sold in North
America. The incremental cost for their production is very small, and
is largely associated with the use of a low-cost sensor and selection
of fuel and intake system materials that are compatible with the fuel.
The incentive has primarily been the CAFE credit given the vehicle
manufacturer for selling such vehicles.
In order for these FFV vehicles to make a difference in our
national petroleum demand, the ethanol-based fuel E85 must be more
widely available at a cost competitive with that of gasoline.
There is less energy per gallon of ethanol than gasoline or diesel,
so the cost must be adjusted to give the consumer a cost-per-mile that
is equal or less than gasoline in order to gain widespread acceptance
of the fuel. It is well-known within the government that of the
approximately 175,000 refueling stations in the U.S., there are only
4,992 alternative fuels stations reported by DOE, and of those, only
637 offer E85.\1\
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\1\ http://www.eere.energy.gov/afdc/infrastructure/
station-counts.html
Hydrogen has greater challenges than FFV, although some are similar
in nature. Ford and BMW have demonstrated that it is possible to offer
hydrogen powered vehicles today, burning the fuel in an internal
combustion engine. However, hydrogen fuel requires new fuel production,
distribution and vehicle fueling systems. In addition, as hydrogen is
currently understood, it would require some changes in consumer
behavior to operate. On-board storage issues result in reduced range
and some restrictions on the access of these vehicles to all public
places. In addition to these challenges, the major hurdle to creating
demand for them is the almost total lack of a hydrogen refueling
infrastructure.
Technologically, there are a number of challenges to the
production, distribution and storage of hydrogen so that there is a net
benefit to society. Briefly stated, they are:
Production: By most methods, the production and
compression of hydrogen will create more greenhouse gas and use
more energy than is saved by burning it in an engine. The
theoretically high efficiencies of the fuel cell are needed to
make a net gain possible with hydrogen fuel. Achievement of
these high efficiencies at commercially viable cost levels is
one of the major goals of fuel cell developers.
Distribution: Hydrogen is the smallest natural
molecule known to man. It can therefore leak out of the
smallest holes, even finding its way through the very small
crevices and cracks that exist in many metals and joints that
contain other liquids and larger gas molecules very well. The
cost and technical challenges of setting up a distribution
system that can hold such a molecule has led many to consider
the deployment of decentralized refueling stations that
generate hydrogen on-site. These are not cheap either, and
without any vehicles on the road to use the fuel, there is no
incentive to make the investment. The classic chicken-and-egg
dilemma.
Storage: The energy density of hydrogen is very low.
To give a vehicle a competitive range (distance between
refueling stops) it is necessary to store it at very high
pressures or other means of densification. Development of cost-
effective tanks to provide such storage is underway, but making
certain that they are safe in all foreseeable accidents is a
major challenge. Also, most parking garages and many bridges
prohibit vehicles with compressed flammable gases. The access
of vehicles fueled by hydrogen and other gasses to these
structures needs to be addressed before full acceptance of
these vehicles can be expected.
Refueling practices associated with the various
alternatives being explored for on-board storage would likely
be different and more complex than those currently accepted for
gasoline and diesel fuel. Standards for refueling systems and
associated safe practices will need to be developed. With the
current level of consumer expectations for self-service
gasoline or diesel, refueling with hydrogen is likely to be
anything but transparent to the consumer.
Increasing emphasis should be placed on the solutions to these
challenges: low-impact production of hydrogen, creation of a hydrogen
refueling infrastructure and solving the on-board fuel storage and
refueling challenges. If these issues are addressed and the
manufacturers incented to produce, and the consumer incented to buy,
hydrogen-fueled vehicles using internal combustion engine technology, a
fueling infrastructure will evolve that will cause basic market forces
to bring more efficient fuel cell technologies to market when their
major hurdles have been overcome.
Hybrids are transparent to the consumer and offer significant fuel
savings to a limited number of vehicle owner/drivers. There are three
major ``rules'' that govern where hybrids can offer financial payback
to those who buy them:
1. The duty cycle must be highly transient. In other words,
there must be a lot of stop and start to really maximize the
savings of the hybrid powertrain. Hybrids work by capturing
energy normally expended in the brakes and recycling it to
assist the engine as it accelerates the vehicle. If there is
very little opportunity for energy capture, there is very
little opportunity for energy savings with the hybrid.
2. Fuel use must be high. That is, the distance traveled in a
year must be large so that there exists an opportunity for
financial payback.
3. An opportunity should exist to offset high brake
maintenance costs with the hybrid, adding to the financial
incentives to adopt the technology.
For most consumers, fuel prices will have to be much higher before
there is payback for the extra cost of the hybrid technology. Indeed,
it is generally accepted that hybrids present a poor financial case for
the average consumer.\2\ As the cost of batteries declines with
advances in technology and market volumes, we expect that this payback
period will be reduced. However, used vehicle residual values due to
questions about battery condition and the still high cost of mature
replacement batteries (we estimate about $1,500 based on discussions
with battery chemists) will curtail widespread adoption of hybrids.
Moves by the manufacturers to alter the image of hybrids from purely
``green'' technologies to the position of a performance option
(performance without guilt) are, in our view, attempts to put forth a
more favorable value proposition, focusing on the competitive core
value of the Baby Boomer population.
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\2\ Peter Valdes-Dapena, Best cars with great gas mileage,
CNNMoney.com, May 8, 2006: ``We've selected five--a luxury car, family
sedan, sports car, crossover SUV and a subcompact--that are smart buys
and easy on fuel. For each category, we've also mentioned two
alternatives. None of the top cars are hybrids. That's because, with
their added cost, hybrids aren't really a good value from a purely
economic standpoint. But we've provided a hybrid choice in some
categories for those who are willing to pay more to burn less fuel.''
---------------------------------------------------------------------------
Plug-in hybrids alter these rules somewhat, but are still duty-
cycle sensitive. Those who drive out of range of the charge provided
from the grid will experience a penalty associated with the added
weight of the additional batteries needed to store the grid power.
Those who drive on pure-electric power close to the point of recharge
are also driving less efficiently than possible because they are
carrying around the unused internal combustion engine and related
systems during the battery-only portion of the duty cycle. Questions of
residual value due to battery issues are apt to be at least as acute as
with non-plug-in hybrids. While most consumers may actually drive in
duty cycles within the range afforded by the plug-in hybrid, their
mindset is that they need a vehicle with a full 300 mile range, and
have no good reason to give up or exchange this expectation with
something else.
There are some arguments that hybrids offer fuel savings on the
highway due to their downsized engine, and that the extra power needed
for acceleration can be obtained from the batteries. This is indeed the
case. However, those who actually drive on the highways most of the
time, or those who think they do and hence evaluate their car
accordingly, can receive an equal or larger fuel economy boost at much
lower initial cost with a downsized and turbocharged gasoline engine,
which is also of significant benefit in the city.\3\
---------------------------------------------------------------------------
\3\ Global Insight Inc. and TIAX LLC, Future Powertrain
Technologies, 2008 to 2020, published 2001. Downsized and turbocharged
gasoline engines yield about a 20 percent reduction in fuel
consumption, or about the same benefit as a mild hybrid, when modeled
over the FTP-75 test cycle.
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In sum, hybrids make the most sense in urban commercial
applications where many miles are accumulated each year in stop and go
traffic. The most attractive application are on heavy vehicles such as
refuse trucks and urban buses where the financial savings due to a
reduction in brake maintenance costs can help provide a payback to the
hybrid.
Their exists a viable alternative to the hybrid technology that is
far less sensitive to the way it is driven, and that has much less of a
residual value risk, yet offers an equal if not greater fuel economy
and performance benefit: the diesel engine. The diesel has been
challenged to meet the emission regulations. However, technology is
advancing and we believe that there exists a high probability that
further reductions in emissions beyond the current Tier 2 standards are
possible.
There remains a great deal of uncertainty over the future of
emissions regulations beyond Tier 2. We believe that the vehicle
manufacturers are reluctant to invest in manufacturing facilities for
these engines based on a business case for the U.S. market due to this
uncertainty. Policy-makers could move the situation forward by giving a
clear signal to the automakers as to the level of post-Tier 2 emission
standards. Technology developments and investments could then be made
based on calculable risks rather than a very uncertain future governed
by the unknown future of emissions regulation.
Recent market acceptance of diesel-powered cars and light trucks
suggests that the historic U.S. market reluctance towards the diesel no
longer exists. The remarkable acceptance of diesel technology in
Europe, where the diesel market share exceeds 50 percent of the new car
fleet, further supports this view.
Question 2b:
How more or less likely is it that these radically new technologies--
fuel cells, electric drive trains, or significant battery storage
capabilities, for example--will be incorporated into cars rather than
incremental innovations to internal combustion engines?
Historically, `radical' technologies like these have not been
incorporated in the vehicle fleet, primarily because they are not
transparent to the consumer when assessed on the basis of one or more
of the criteria of cost, utility and/or convenience. Incremental
changes and innovations have been the experience--evolutionary rather
than revolutionary
These and other advanced technologies offer further incremental
improvements in fuel consumption. They will be adopted by the
marketplace if and when they can meet the expectations of the core
values of the consumers. Each of these, and indeed other innovations,
are challenged to equal the current end expected evolution of the
performance of the internal combustion engine. Concurrent achievement
of competitive cost (initial and/or life cycle), range, refueling time,
all-weather performance, well-to-wheels efficiency and greenhouse gas
emissions etc. remain significant challenges.
The likelihood that these technologies can be incorporated into
cars can be increased by also working through public education programs
to influence the formation of core values of future generations, as
discussed above. The best chance of this happening long-term is via
Generation Z and their Gen X parents (who tend to have a more
altruistic bent than other generations). By definition, it is
impossible to change the core values of the current generations of
consumers, but one can possibly modify consumer behavior by putting the
benefits and shortcomings, if any, of these technologies into proper
juxtaposition with current consumer core values, again through
education. Incorporation of the technologies into cars will occur as
both the technology and consumer perceptions evolve towards each other.
Regardless of how the end-result is achieved, we forecast that
increases in efficiency of the vehicle through available or non-
disruptive powertrain technologies will reach the point of diminishing
returns once an improvement of approximately 30 percent has been
achieved when compared to a baseline gasoline engine. To obtain
improvements greater than this will require the use either alternative
fuels or inherently more efficient lighter vehicles.
Summary:
What would be required to lead automakers to apply technology
advancements to improving fuel economy?
The automotive industry will respond to increased demands for fuel
economy from the consumer. Changes in consumer behavior that place a
higher priority on fuel economy will result in the increased deployment
of presently-available technologies such as hybrids, downsized and
turbocharged gasoline engines, displacement on demand, etc.
A clear regulatory position on the future of emissions standards
beyond Tier 2 will enable manufacturers to make an assessment of the
likely future prospects for regulatory acceptance of the Diesel--the
one technology that meets all current consumer expectations for
performance while delivering a 20 to 30 percent improvement in fuel
economy.
Changes in consumer behavior can be expected if and when the need
for fuel consumption reduction resonates better with the core values of
the consumer. The bulk of today's car buying public places high
priority on the need for economic, physical and social survival. With
current fuel prices and availability, fuel consumption has a lower
priority than other vehicle attributes such as a high seating position
(which increases aerodynamic drag), faster acceleration (that usually
results in an engine that operates at off-peak efficiency most of the
time) and high perceived levels of mobility and safety (that result in
vehicles heavier than might normally be necessary).
Policies in the U.S. have lacked from the very beginning any
component that attempts to change consumer behavior. Emphasis has been
placed instead on maintaining mobility and lifestyle in a business-as-
usual consumer environment.
What is needed is a series of coordinated efforts, all aimed at
conservation. Programs that sponsor the development of high-risk
technologies need to be continued simultaneously with public education
programs that increase public awareness of the need to conserve, and to
make it in their best interests to do so. It is likely that the high-
risk technologies will have some limitations, or will change to some
extent the normal expectations of today's vehicles with respect to
range, refueling, convenience and performance. The core values of
future consumer generations can be influenced by including in the
education of current school-age children the need to conserve energy in
all forms so that they embrace the new technologies and their
differences from the vehicles of today.
Education programs need to be reinforced with fiscal programs that
are in alignment with conservation goals. Programs that tax excessive
consumption and reward conservation for new vehicles as well as those
in-use will provide additional incentives to conserve.
What hurdles must hybrids, flex-fuel, and hydrogen-powered vehicles
clear before the automobile industry, industry analysts, and the
automotive press accept these technologies and consumers buy them?
Without a change in consumer values, transparency is the primary
condition that must be met for the consumer to adopt a new technology
in today's marketplace. Cost, reliability, durability, range, refuel
time and convenience all need to be equal or better than the technology
we seek to replace.
Hybrids suffer from higher costs, both initial and life cycle, as
their fuel economy is generally insufficient to give a payback to the
original purchaser during the first ownership period, and battery life
issues cloud the resale value.
Hydrogen vehicles present a host of range, refueling and access
challenges in addition to the technical issues and uncertainty of a net
benefit when well-to-wheels issues are considered.
Of the three technologies mentioned, Flex-fuel vehicles offer the
one technologically transparent solution, but only because the ethanol-
containing fuel is not required. To make a difference in energy
consumption, the six million FFVs on the road must have access to E85
at competitive costs. At the moment, there are less than 700 E85
stations nationwide, versus 175,000 refueling sites for conventional
fuels.
How more or less likely is it that these radically new technologies--
fuel cells, electric drive trains, or significant battery storage
capabilities, for example--will be incorporated into cars rather than
incremental innovations to internal combustion engines?
Historically, `radical' technologies like these have not been
incorporated in the vehicle fleet, primarily because they are not
transparent to the consumer when assessed on the basis of one or more
of the criteria of cost, utility and/or convenience. Incremental
changes and innovations have been the experience--evolutionary rather
than revolutionary.
They will be adopted by the marketplace if and when they can meet
the expectations of the core values of the consumers. Concurrent
achievement of competitive cost (initial and/or life cycle), range,
refueling time, all-weather performance, well-to-wheels efficiency and
greenhouse gas emissions, etc., remain significant challenges.
Because it appears likely that these technologies will be
accompanied by changes in these characteristics, the likelihood that
these technologies can be incorporated into cars can be increased by
also working through public education programs to influence the
formation of core values of future generations, thus changing the
willingness of the consumer to accept changes.
Regardless of how the end-result is achieved, we forecast that
increases in efficiency of the vehicle through available, non-
disruptive powertrain technologies will reach the point of diminishing
returns once an improvement of approximately 30 percent has been
achieved when compared to a baseline gasoline engine. To obtain
improvements greater than this will require the use either alternative
fuels or inherently more efficient lighter vehicles.
Biography for Philip G. Gott
Phil Gott is a Director for Automotive Consulting within the
Automotive Group of Global Insight, Inc. He specializes in identifying
technical/competitive advantages, and creating and implementing
technical, business and/or market entry strategies to exploit them and
achieve targeted business results. He has served the automotive
industry since 1975 and has conducted a number of technology and market
assessments or developed market entry strategies for many light vehicle
technologies, including powertrain, electronic and mechanical systems
as well as advanced materials.
Phil has primarily helped automotive vehicle manufacturers and
component suppliers deal with the continuing changes in the automotive
industry, whether the changes have been driven by regulatory,
competitive or market forces. He both manages and participates in
market research projects in which he has identified new product and
market opportunities for component suppliers in the powertrain,
driveline, chassis and suspension areas. He has managed major programs
for vehicle manufacturers, providing the foundation for their long-term
powertrain strategy. His work has also provided input to EPA, DOT and
NASA on programs that support the development of regulatory standards,
or assessing their impact. He has identified the need for, and led
major multi-client studies assessing the likely changes in vehicle
powertrain and electrical systems. To accomplish these, Phil draws upon
his quarter century of industry experience, his mechanical engineering
training (BS from Lafayette College) and his hands-on experience which
includes building and testing experimental vehicles; designing,
managing the construction and operation of one of North America's most
advanced engine development laboratories; and preparing and developing
five race cars, four of which are national or regional champions. He is
a member of the Society of Automotive Engineers and the honorary
engineering fraternity, Pi Tau Sigma. He also holds an SCCA National
Competition license, campaigning an Acura Integra in the Northeastern
U.S.
Phil has authored a number of industry publications including the
award winning Changing Gears, a 400+ page history of the automotive
transmission and how the industry responded to different market,
societal and business forces to develop new transmission technologies.
This hardbound book was published by the Society of Automotive
Engineers in 1991.
Discussion
Chairwoman Biggert. Thank you very much.
Now it's our turn, so each Member will have five minutes
for questions. So the Chair recognizes herself for five
minutes.
And this question, really, is for all of you and brief
answers, please, so we can get through this. But which comes
first, advanced fuels or advanced vehicles? It's the classic
chicken or the egg question, I think.
How do we ensure that development and deployment of
vehicles and fuels proceed in a coordinated fashion?
We'll start with you, Dr. Miller.
Mr. Miller. In my view I think you're going to see advanced
fuels before you see many of the long-term advanced
technologies such as fuel cells or electric vehicles or even
plug-in hybrid vehicles.
Clearly we have to have a national strategy and a national
plan to do this coordination. But I think that has been put
forth in the President's Advance Energy Initiative how we would
do that. So I think there is a plan for doing so.
Chairwoman Biggert. Thank you.
Mr. Weverstad.
Mr. Weverstad. I believe that it depends upon the advanced
technology what comes first the fuel or the vehicle.
Clearly E85, an alternative fuel, we've got an industry
nearly six millions chickens on the road, we're just looking
for some eggs. So that one we've got.
When it comes to hydrogen we'll probably have to work at
centrally fueled locations first and then develop the
infrastructure.
Chairwoman Biggert. Thank you.
Mr. Hinkle.
Mr. Hinkle. I think that the cooperation--this is an area,
particularly with hydrogen, where the cooperation between
government and industry is really critical. And I think that
the--what the Department of Energy is learning with their
learning demonstration, their fleet validation programs that
hooks--that hooks fuel companies to auto companies and develops
not only a consciousness but the technologies that will enable
these things to happen. And that's a fundamental change, I
believe.
Chairwoman Biggert. Thank you.
Dr. Gibbs.
Dr. Gibbs. My view is that we simply need to make more of
the fuels that we already know how to make. We need to make 50
billion gallons of ethanol and to make that a national
priority, as I've indicated in my testimony. That does not
exclude, of course, developing all these other technologies.
But the demand certainly the beginnings of the infrastructure
is already there for ethanol. We simply need to make more of
it.
Chairwoman Biggert. Thank you.
Mr. Lovaas.
Mr. Lovaas. Well, the first step that we can take actually
before looking at the two fuels that we think offer a lot of
promise, biofuels and electricity, is to improve the efficiency
of conventional vehicles. So there's plenty of technology that
can come right off the shelf and become a standard part of cars
and trucks. And it will drive up efficiency. And then with
biofuels you're probably going to have, since there are already
substantial number of them out on the road, production of
vehicles ramp up further before you have a ramping of the fuel.
Because it's going to take a while for the ethanol industry to
even make a dent in our transportation sector, which is 97
percent dependent on oil.
We all hear about ethanol and the substantial growth in
ethanol in recent years. And it is impressive in percentage
terms. In absolute terms it is a minuscule fraction of overall
transportation fuel demand.
So on electricity, I'm not sure which is going to come
first. I mean, we already have the grid in place if you're
talking plug-ins, and we need to drive down the costs and drive
up the range of batteries for plug-ins.
Chairwoman Biggert. Thank you.
Mr. Gott.
Mr. Gott. Thank you.
For most technologies I would think the fuel has to be in
place to give the public the confidence that it--that it exists
that the vehicles that they might be in the future or consider
buying can be driven and conveniently refueled. The diesel is a
good case in point.
With a growing diesel fuel refueling network, Jeep expected
to sell 5,000 diesel Liberties in the first year. They actually
sold 10,000. Mercedes-Benz expected 3,000 E320s to be sold in
diesel, 4,100 were sold. Volkswagen expected in--to sell about
2,200 diesel vehicles and 4,500 had been sold.
So clearly if you have a fueling infrastructure in place,
you can certainly give the public the confidence needed to go
ahead and buy the vehicles.
Chairwoman Biggert. Thank you.
Then, Dr. Gibbs and Mr. Weverstad, talking about there's
about six million E85 fuel--flex-fuel vehicles on the road now
and yet there's very few fueling stations for them. Why--why
would the oil companies want to install facilities to encourage
their customers to shift away from a product in which they have
huge investments? And at one point I've heard that there's
actually a contract with the distribution centers that
prohibits some of them from putting in these stations. But why
when they have these huge investment from the reserves in the
ground all over the world to the refining and shipping capacity
and even the standard gasoline pumps in the stations, why would
they encourage that shift?
Dr. Gibbs. I can't speak to the oil company's motivation. I
can only tell you that it costs about $30,000 to $50,000 to put
a new ethanol pump. So it's not expensive. I think there might
even be a subsidy in the Energy Bill.
Right now we have a temporary situation where there's a
shortage of ethanol because of the switch to MTBE. The spot
price of ethanol today is $3.50 a gallon. A year ago it was
$1.30 a gallon. So we have enormous volatility in that market
because of basically the lack of ethanol production capability.
And I'm not defending the oil companies here. I'm just trying
to describe the market.
Virtually all of the 90 some ethanol plants are
concentrated here in the midwest. There are virtually none in
California, none in central and east coast. That's the
importance of cellulosic ethanol because we could begin to make
it in other places.
But the answer is it's not that hard or expensive to put in
an ethanol infrastructure. And there's an intermediate level of
blenders, some of whom belong to the oil companies and some of
whom are independent.
Chairwoman Biggert. Mr. Weverstad.
Mr. Weverstad. I think that, you know, the oil companies
would have to answer clearly for themselves. But from our
perspective we are--we understand a company wouldn't want to
make a large investment in an alternative fuel. They did it
with methanol and it didn't work out well for them. So we were
trying to create some customer pull. That's what our Live Green
Go Yellow campaign was about.
We've actually worked with Shell and Chevron here in
Illinois and in California. And a remarkable number of
independents like Kroger and Meijer and many others to do
demonstration projects to show them there really is a market
for their fuels. We've had great results in the Chicago area at
the--at the Shell stations and the Gas City stations actually
selling more than they had anticipated.
It isn't while $30,000 may be higher than converting a
pump, if they have to dig a new hole to put a new pump in, it
can be quite expensive. So I think what--what the Congress can
do to help them is to help provide some tax incentives for them
to, indeed----
Chairwoman Biggert. I believe that there was one for the
installation.
Mr. Weverstad. Yes.
Chairwoman Biggert. It was in the Energy Bill to pass it
on.
Mr. Weverstad. And we need to continue that. That's--that's
really what we need. We will try to create some customer pull.
And if they can get some incentives, I think we can make it
happen.
Chairwoman Biggert. Okay.
Then just a follow-up to Mr. Hinkle, the refueling
infrastructure problem is even greater for hydrogen. What
lessons from ethanol from E85 can we apply to the potential
shift to hydrogen?
Mr. Hinkle. Well, you want to make sure you've got the
molecules. That's--that's essential. But you need--you need a
great deal of cooperation in advance, and that's--that's what I
mentioned earlier. There's--the way that these things are--are
rolled out is extremely important so that you don't build--so
you don't build over capacity and don't build in prices with
low demand over a long period of time.
So--and--and part of the earlier question that oil
companies, certainly the oil companies that we work with most
closely, I mean there's a simple and complex survival aspect of
this. What business do you want to be in in 15 or 20 years? And
so the--and you don't have to believe in peak oil to see that
the constant development of new products is really important.
So I think that cooperation with--with the needs of the--of the
using device with--with a vehicle and the cooperation between
the--the producer of the fuel is exceedingly important.
Chairwoman Biggert. Thank you.
And I have exceeded my time. So I will apologize and now
yield to Mr. Honda.
Mr. Honda. You're the Chair, Madam, and you don't have to
apologize to anybody, especially in your home. And thank you
very much for this opportunity.
Let me just make a real quick reaction or statement from
what I heard this morning.
I heard that folks need to hear, the consumers need to have
been challenged in terms of their core values. I think that's
already been done at $3 plus per gallon.
The comment about having to exceed 30 percent efficiency in
future cars in order for the consumers to consider alternative
vehicles, that's been reached. My hybrid went from what I had
in the car before is 20 miles to the gallon, which is a foreign
car, to a hybrid, it went up to 42 miles on the highway and 50
in the city. So we've exceeded that.
The size of the vehicle was described to mean high seated
and all the other stuff, which is nice. I had that in my van.
But the hybrid technology has the ability to couple gasoline
engines and hybrid engines together to be--to be put on a
larger platform of a car. That is--that can be accomplished. So
I think that what the consumer is looking at is when you all
going to get started on this and what are we going to be doing
in terms of providing that leadership in forcing--or having not
the automobile industry to move forward, which is usually
driven by consumers as we saw back in the '70s, but also I
believe that the oil companies need to be put to task in terms
of them providing the infrastructure. They have done that in
the past and they can do it in the future because the amount of
money they've earned over these past couple of years with the
increase in gas is phenomenal. I think they can reinvest that
money back into infrastructure that will provide the kind of
services that consumers want.
Having said all of that, I believe we're on the right track
and I think that a hearing like this is good because the
community needs to hear what it is that we're talking about and
what the experts are saying, and what's really available. The
automobiles already available you say six million. That's six
million here against over 220 plus million available vehicles
in this country. What people don't know is the conversion kits
cost between $200 to $500. I'd be willing to spend that because
I spent that much in two months with the increase in gas.
Brazil has almost their entire fleet of cars out there are
on flexibility fuel, E85. Most of those cars come from this
country. And so the technology and the ability to do all that
is ready. So the question really is what's our obstacle. And I
ask the question that there are technological--there are
barriers of economics and the barriers of political barriers.
And so my question back to you is I would like a candid
response in terms of the barriers that you do see. And coupled
with that question let me ask the other question: With hybrid
plug-ins, I think it's great everybody's going to be able to do
that if you have a garage. You have a lot of urban dwellers who
park in the streets. How do you--how do you perceive how we
deal with and provide that kind of service using plug-ins for
those who are city dwellers who have to park their cars out in
the streets?
I would appreciate a quick answer. It was a long question.
Mr. Gott and Mr. Lovaas?
Mr. Gott. In all due respect, Mr. Honda, while the numbers
you quote are--are accurate for particular vehicles, the vast
majority of the public isn't as forward thinking as you are.
The most recent report from the EPA on trends in light duty
motor technology suggests that the minimum weight of vehicles
was around 1982. It's been getting heavier ever since. We show
no--this is a sales weighted average. We show no change in that
trend.
Acceleration time was minimal at about the same time, 1980.
It's interesting we had minimum weight and minimum acceleration
time or maximum acceleration time at the same point. It's gone
from about 15 seconds down to 10 on a sales weighted average.
So the consumer hasn't gotten the message. And I don't
think policy based on the assumption that the consumer has
gotten the message is going to work. Yes, you can buy vehicles
that are more efficient that have the advanced technologies.
But the vast majority of the consumers are not yet buying them.
And I think, you know, we need to address that issue.
Mr. Lovaas. I would agree with my colleague if I hadn't
read about the May sales figures for the automakers and seen
just how much Toyota and Honda have jumped in terms of their
market share, much to GM's mostly but also to Ford's costs. So
I think consumers are getting it. Prices have not just spiked,
but stayed high on a sustained basis. And EIA, even EIA which
is very conservative in its Outlook traditionally, forecasts
high prices as far as the eye can see. And I think consumers
are realizing that.
Now in terms of what's needed, you have the price signals.
But in terms of consumers being able to respond to those price
signals, you have a lack of choices in terms of fuel and
vehicles because our oil dependencies are hard wired into the
county, so to speak. And we need to look back at two responses
in the 1970s. You mentioned Brazil. There's another response in
the 1970s that was successful. We adopted fuel economy
standards here doubling the fuel economy of cars, driving down
the oil intensity of the economy by about a third, which is
part of the reason it's so resilient and in spite of the pain
at the pump the consumers are feeling, the economy has not
slipped into recession partly because oil intensity has
dropped. And if we hadn't adopted those fuel economy standards,
gasoline consumption--this is according to the National Academy
of Sciences in a 2002 report, would be about 40 percent higher.
And we would be all the more dependent on foreign sources of
oil.
So we did--we did something then and we can do something
similar now.
We can also look at Brazil. Right now, as you referred to,
70 percent of the vehicles sold in Brazil are flex-fuel
vehicles. There's a mandate that ethanol be blended with
gasoline at 20 to 25 percent. So that's about a quarter of the
transportation demand fueled by ethanol derived from sugar cane
in Brazil's specific case. Here it's just under three percent.
Brazil prodded things along with policy in the 1970s in
reaction to the last turmoil we faced in the marketplace
because of oil embargoes and we adopted higher fuel economy
standards in response to the same thing.
Both approaches have been pretty successful. And
legislation that we consider to address this problem, policy
responses that we consider should learn from those lessons.
Mr. Honda. Thank you.
Dr. Gibbs. Did I hear in there that you'd like to hear
about the hurdles to things like--let me just go over that from
the testimony.
If you think about something like oil or gasoline, what you
have is a liquid that has a very high energy density. So if
there's an accident or something, if you see an oil fire or a
gas fire you see a lot of energy being released. In contrast,
biomass is very low density matter. So think big diesel trucks
full of hay or corn stalks.
And the challenges in turning that material into a higher
density fuel like ethanol involve solving this density problem.
For example, in building ethanol plants we would like to
build them as large as possible to achieve economies of scale,
but that would mean hauling all this low density biomass a
large distance with diesel trucks and having the trucks come
back empty. So we need new technology to resolve that conflict,
that inherent conflict between the need to build larger plants
and the need to deal with low density biomass.
The low density problem is a good thing in the sense that
it creates lots of local jobs because you essentially have to
build your plant wherever the biomass is.
We need critical components for converting that biomass.
One of those is cellulase, the enzymes. Just one billion
gallons of cellulosic ethanol would require an amount of enzyme
that is about twice the annual production for all industrial
enzymes in 1994. And that's just one billion gallons. And I am
advocating that we produce 50 billion or more.
So we need to find ways to solve those problems.
There's another problem known as pretreatment. Essentially
we've got to--to process very large amounts of low density
material into the higher density fuel. And that's the hurdle
and the expense.
Mr. Honda. Thank you.
Mr. Miller. I'd like to address the issue raised about
plug-in hybrids and what do people who do not have a garage and
must park their car on the street do for recharging those plug-
in batteries.
I think there's a perception out there that plug-in hybrid
batteries would require overnight charging, a period of six to
eight hours. That simply is not the case. Hybrid batteries are
much different than the old electric vehicle batteries in a
sense that they can be charged much, much quickly, as little as
one hour. So I think the solution to the problem that you
raised is to install, for example, public charging stations at
places where you may, for example, go to a restaurant and be
there for an hour, you could plug in or charge. Or in parking
lots, that would be another example. Presumably it would be
much lower in cost to install an electric charging station than
it would a fuel gas refueling station for alcohol or hydrogen,
whatever. So I think that's one potential solution.
Mr. Honda. If you have a suburban model in terms of how we
think about recharging these kinds of cars?
Mr. Hinkle. I think there's many--many approaches to this.
Mr. Honda. Okay.
Mr. Hinkle. And we realize that the decisional calculus of
the consumer is not like that of fleet operators. And, after
all, we're sort of a bunch of noble savages with regard to
this. So who knows what--how much gasoline--how much the
gasoline prices have to rise. And that's why fleets are so
important, not only with respect to demonstrating the viability
of these things, and this is true for any fuel not just--not
just hydrogen.
Another thing with hydrogen, and it's also true with some
of the biofuels, not so much with alcohols, but if you--if you
don't have--and hydrogen is one of these things that's going to
have even isolated national markets and regional markets for
these things where the pricing is going to be a function of--
it's going to be cost based and it's going to be a function of
transparent market fundamentals. So the likelihood that
government incentives, the tools that government has to deal
with both the demand and supply side could actually--you could
actually experiment with them and see--see how they work.
Because hydrogen is not going to fungible worldwide, but it
might be from region to region. It's like the electricity grid.
I mean there--actually there is not one grid, as we know. There
are several of them. So electricity prices vary considerably.
And I would expect for a while hydrogen would do that, but it
gives you the opportunity in combination, say, with things like
with individual states and regions with a renewable portfolio
standard, you would see some interesting phenomena there. So
that's a speculation about what the markets might do.
Mr. Weverstad. I'd like to answer many of the questions
that I heard there. And if I've missed something, poke me and
I'll try to come up with something.
But I'd like to start out by letting you know that actually
GM has the most models of vehicles that get over 30 miles per
gallon. And we lead in most of the categories in which we
compete. Unfortunately, the world doesn't necessarily know that
and that's a shame on us. We need to do a better job of
explaining that.
I would also point out that the Toyota Prius that you speak
of is a wonderfully engineered vehicle. But if you wanted to
save gallons of gasoline, you could drive a new Chevrolet
Impala with E85 and you'd actually save nearly 200 gallons more
gasoline gallons in a year of operation. And you could drive a
four-wheel drive Yukon and compare that to your Prius, you'd
save 133 gallons of gasoline.
Mr. Honda. I'd agree with you, except that the
infrastructure is not there yet.
Mr. Weverstad. That's--yes. That's our challenge and we
need----
Mr. Honda. Well, that's the point of my comment
Mr. Weverstad. Right. We need--we need--we need to develop
that and we--and we're doing what we can to make that happen.
As far as plug-in hybrids go, we don't want to throw away
any technology. We need to look at all of them. But I will tell
you as an engineer simple is better. Plug-in hybrids are the
most complex. It has a complete electric system plus a complete
gasoline system which makes it more complex and more difficult
to engineer.
I would also point out that the lithium-ion batteries that
we talk about today as the most promising, if you had a volume
of the same size as a 20 gallon fuel tank, which is what most
of our vehicles are, that would be equivalent to one quart of
gasoline.
So there are some challenges and we're working on them.
Our problem with E85 is clearly engineers to calibrate and
validate in more models; that's what's happened in Brazil. They
don't have nearly as stringent emission standards or onboard
diagnostic requirements. We don't want to give that up. E85 is
cleaner and we want to keep--we want to keep that. And we need
to develop the infrastructure.
Mr. Honda. Could I just ask a real question that somebody
in my District asked me, I didn't know my answer. Butanol
versus ethanol, what's the distinction? Is there an advantage?
Is that more dense or what?
Dr. Gibbs. Butanol is a four carbon alcohol and it is
denser. It smells pretty awful. You can make it from biomass,
but ethanol is a commodity today. We have futures being traded
here in the Chicago Commodity Exchange. And I think that
although Butanol could be an additive, ethanol really is going
to be the central fuel in the infrastructure.
Mr. Honda. Thank you, Madam Chair.
Chairwoman Biggert. Mr. Lipinski, the gentleman from
Illinois is recognized.
Mr. Lipinski. Thank you, Madam Chairman. I'd again like to
thank you for putting this hearing together. One of the most
interesting hearings I've actually been to, not just because of
the topic but also because of the quality of the witnesses. So
I appreciate all the wisdom that you've shared with us today.
There's a couple of things. Well, one problem I was going
to say, is I could go on forever, which none of us want to do
here. Can go on forever with questions tapping into your
knowledge here. But let me start here and let the Chair stop me
when--when she's tired of hearing me. Hopefully, not right now.
Dr. Gibbs, I'm--I've been a big supporter of ethanol. And I
think the Chairwoman has also been a big supporter of ethanol.
The critics and I personally have come under attack, I think
the Chairwoman has also, for supporting ethanol. The critics
are--say that well it is really useless because you use more--
you consume more energy the more fossil fuels, usually, in
creating ethanol than you would if you were just using the oil
to run the cars. So ethanol is really worthless. I want to put
that to you and explain to me why ethanol is worthwhile.
Dr. Gibbs. That argument has been refuted. I'm blanking on
the name of the professor who put that forward. Professor
Pimentel's.
There are probably three different recent studies which are
compendiums or studies combining, let's say, six or eight other
studies to examine them on an equal bases, the most recent of
which Professor Kammen from Berkeley. And what they've done is
to simply plot the results from all these different studies.
Pimental's which was negative, and all the others which were
positive for ethanol. And show that in fact that is basically
sort of an urban myth. Those early studies did not account for
all the energy value that you get from ethanol and then made
assumptions like we have to include the value of the lunch that
the farmer eats, and things like this.
At any rate, and I could provide to the Committee if you'd
like, the papers of Professor Kammen. On our website there's a
link to Michael Wang, Dr. Wang at Argonne which essentially
makes the case that there is a positive value.
Let me just very quickly----
Mr. Lipinski. How much of an increase?
Dr. Gibbs. You get about--about 25 percent more with--
energy with corn. With cellulosic ethanol you get absolutely
the best performance. And the reason for that is that you're
able to use the other parts of the wood. The brown here and the
brown in the wood is something called lignin. And so when you
separate that out you can burn that. You get an additional
process of energy instead of burning coal or natural gas. And
then use the sugar to make ethanol. And the grams of CO2
per mile and the energy balance are excellent for cellulosic
ethanol.
Mr. Lipinski. Okay. It would be very good for you to
provide us with that. Because, as I said, there's been--there's
one particular media outlet who has an editorial saying that we
were wrong because ethanol just is worthless. So it's important
to have good information when making any of these public policy
arguments.
I want to move on to Mr. Hinkle. I'm--certainly as I've--as
I've talked about I was one of the individuals who introduced
the H-Prize Act. I'm a big supporter of hydrogen.
The first question I have is our hydrogen internal
combustion engines, has basic--have they been put aside? I've
actually heard BMW, I believe, has a car coming out that is
supposed to be hydrogen internal combustion engine. I'm not
sure that's true. But from most of what I hear that technology
has been abandoned. Has it?
Mr. Hinkle. Well it's been abandoned by the Department of
Energy, which is different than being abandoned by industry.
BMW certainly is ready. They've made--they've had some
announcements here recently that they may have a seven series
V12 that's a biofueled vehicle that will--that will be able to
use hydrogen and some others. And the emissions are remarkable
and there's no loss in performance. I mean, it's the control
system.
I mean, you can make these. You could--with hydrogen
because of the enormous range of--of mixtures with air that it
will tolerate, you could tune with the proper control system.
You could tune one of these engines to do almost anything you
wanted. It gives you--there's no other fuel that--that gives
you that possibility. And, of course, you still have to have
the supply. But BMW has done some pretty remarkable technical
things, and they've also perfected a high pressure direct
injection in the combustion chamber, which is a bit of a trick
here. And people worked on that--they worked on that with the
Formula 1 engines. Cosworth worked on that 30 years ago for
Formula 1 cars and it wouldn't have fit into the rules. But
they got some pretty dramatic horsepower increases. So--and
Ford has done some--some good work on this.
So it's--you know, for the Department of Energy it's a
resource constraint. You know, you got to work on the things
that have the highest strategic value and you--without large
amounts of money. And--and--but BMW, there's some--there's some
smart people that have not abandoned this.
Mr. Lipinski. Do you think it's a mistake that DOE has
abandoned it?
Mr. Hinkle. Well, given the resource limitations and--and
their--their devotion to the--to the President's Initiative
rather than what the expansive authorities allow in the--in the
Energy Policy Act, there's a transition here. Perhaps there
will be some--some thoughts about that. I don't know how much
of a strategic mistake that is, but certainly the--a hydrogen
fuel combustion--you know direct burn car offers a bunch of
bridge opportunities just like hybrids do because of the drive
system.
Mr. Weverstad. Could I offer one of the reasons that we at
GM have reduced our effort in internal combustion hydrogen
engines is primarily due to the lack of energy density in
hydrogen and the--the--you have all of the infrastructure
problems that you needed with a fuel cell vehicle. And a fuel
cell is twice as efficient to start with. So we wanted to take
advantage of that efficiency. In order to get a--the BMW to
operate like a regular car, they put a much larger engine and
super charge it, which adds to the cost considerably. So we
went for simple is better, and the fuel cell itself, the
efficiency improvements help.
Mr. Lipinski. Okay.
Dr. Miller.
Mr. Miller. Let me--let me clarify the record here. DOE has
not abandoned hydrogen and internal combustion engines. And in
fact, we are currently today doing research in our labs with
hydrogen and internal combustion engines that is sponsored by
the Department of Energy.
Mr. Hinkle is correct that it is a much smaller program
than that for the fuel cell program. But as he correctly
pointed out the Department does view hydrogen and internal
combustion engines a transition technology, one that will allow
us to get experience with hydrogen refueling stations, hydrogen
in the marketplace and eventually be ready when the time that
fuel cell vehicles are ready.
Mr. Lipinski. Thank you.
And one more question, the big question for Mr. Hinkle. I
mean there are--in the H-Prize Act we give a prize for advances
made in the production, distribution and storage and
utilization of hydrogen. That's because there are major hurdles
in all four of those areas.
Why do you believe that hydrogen has the potential--has
such a great potential to be the fuel for--for vehicles in the
future?
Mr. Hinkle. Well, the combination of strategic values at a
30,000 foot level are very important. The carbon aspects, the--
the import, the wealth transfers from the imported oil bill.
And then--and the efficiency gains. And so--and is it worth the
complexity to--to evolve in this--in this fashion. It's an end
point that combines, that essentially attempts to achieve the
optimization of all those kind of features. And we're going
to--as prices rise with gasoline and we're looking for
alternatives and we--and--and the market mix evolves, we're
going to have to from a policy standpoint make a lot of
compromises with regard to how valuable is energy security? How
valuable is a low carbon footprint and how valuable is--is high
efficiency in--in achieving those things?
The H-Prize is--is--had a remarkable vote and just the--the
political aspects of that are pretty--are pretty amazing. We'll
see what it does in the Senate. And we were--we participated
quite a bit with Representative Inglis's staff on--on inputs to
that. It's a good bill. It's got some--and we're helping out
Senator Dorgan and Senator Graham with that in the Senate.
But as--as the--and sorry, as the guys assured you in your
hearing on this, it's not about the technology, it's about the
human drama associated with this. And it lifts the--it tends
to--these contests tend to lift the--the picture and the view
and--and the--and the spirit of these--of these--of the
technology and bring it into the--into focus for a lot of
people who would otherwise not--not understand what this is.
Hydrogen is a very complex business, and it's--but it can't
afford to be a geek's paradise. It's--it's got to be--it's got
to get--it's got to be practical.
Mr. Lipinski. Well, since we're at the high note right
there, I think I'll--I'll give my time.
Chairwoman Biggert. Thank you, Mr. Lipinski.
I wanted to--since this is a field hearing, I wanted to
divert a little bit from what we normally do in the hearing. I
would like to know, since we have all these people out in this
audience, how many of you have hybrid cars raise your hands.
High. Okay. How many of you would like to have a hybrid car?
Ah. Okay. How many of you have the FlexFuel car? And there's
some here. Great. And how many of you would like to have a
hybrid plug-in when they become available? Okay. And how many
would like to have a hydrogen car, which we have driven? Great.
Well, I think we have a great audience here and it's
probably why you're here because you really believe in--in what
we're trying to do here, and that is to, you know, cut down on
the use of fossil fuels and really find alternatives.
I just wanted to say a couple of things. First of all, I
don't know if you can answer, but I've talked to a lot of
people that say they want a hybrid and they go to the car
dealers and they're not available. There's a long waiting list,
it's a lot more expensive than a regular car even though
there's a tax credit. And you must know that there is a tax
credit now. Some of you bought your hybrids probably before--
before the last Energy Bill, but there is a tax incentive for
you to buy a hybrid car. And then--but still it's more
expensive.
And--and I also had received something from--from a member,
I think a member of the audience that--that says that they
noticed that the price for E85 at a local retail gas station
fluctuates in direct proportion with the price of gasoline. It
says if gasolines increases 20 cents, then E85 increases 20
cents. And he's saying that it should--the only commonality
between these two products is 15 percent gasoline, which then
should represent only a three percent increase for the 20-cent
example.
So this is the cost of--and right now has been talked
about, we only have--or we're really using mostly ethanol and
the price seems to have gone up when suddenly ethanol has been
very popular for use in ethanol--or the price of corn, I should
say. The bushel of corn has gone up so much.
So why, if you can give me an answer, why the price of
ethanol goes in direct proportion to the gasoline? I would like
to hear that.
And also do you know, and particularly Dr. Gibbs and maybe
Mr. Weverstad, with the cars--one other thing about the car,
too, I'd like you to come back to is you talk about you have 14
models that all feature good gas mileage. But are these cars--
you know, we--we in the United States have a love affair with
the SUV. And I think what has happened is cars--manufacturers
have tried to take that into account in making cars that have
low--lower gas mileage and are hybrids. And that's a good
thing. But are the models of your car the kind that, you know,
the car that has all the bells and whistles on it and has as
well as the good gas mileage? So if we want to start with maybe
Dr. Gibbs?
Dr. Gibbs. The price of ethanol is--should be tied to the
price of gas and the current value normally would be that
whatever the price of--of wholesale unleaded is plus the
federal subsidy, which is about 51 cents. Right now that
premium is running probably $1.50. As I mentioned, spot ethanol
is $3.50, which is of course out of sight. A year ago it was a
$1.30.
I think the answer is as we make more ethanol, the price
will come down. But in the short-term ethanol is more expensive
that gasoline on a--on an energy basis. And so the hope is as
we make more and more of it. And right now we're in a crunch
because the eastern states have had to drop MTBE. So they're
actually probably taking ethanol out of our gas in the midwest
and sending it to the east coast.
Chairwoman Biggert. So how soon do you think that that will
happen? You talked about ethanol now is a product on the
exchange, which I think is going to change the way that we
think about ethanol.
Dr. Gibbs. Well, again, it's production capacity. I mean
our total capacity is only about five billion gallons out of,
you know, versus 140 billion gallons of gas. When we get up to
tens of billions of gallons, and just as a benchmark if we were
just to go to E10, that is forget E85 and just go to E10, we
need 14 to 21 billion gallons of ethanol to do that. We cannot
do that from corn.
Chairwoman Biggert. So it's back to the old supply and
demand?
Dr. Gibbs. Right. So supply and demand. And I think that
the cellulosic, the cheaper technology is hoped for, DOE has
always projected it, but it's always five years away. So we
have to get there.
Chairwoman Biggert. Thank you.
Mr. Lovaas. Well, one of the more interesting components or
experimental provisions, shall we say, of H.R. 4409, the Fuel
Choices for American Security Act, is removing the tariff on
imported ethanol. We do not apply a tariff to oil imports and
yet we----
Chairwoman Biggert. That's Dr.--or Representative
Kingston's Bill?
Mr. Lovaas. Kingston's Bill, exactly. So--and this would--
if this were enacted, it would provide an immediate spike in
supply and help to remedy the fact that, you know, you do have
this price problem, that is it's a product of economics, supply
versus demands. So----
Chairwoman Biggert. Even those in Illinois where the corn
producer will have to look at that bill.
Mr. Weverstad.
Mr. Weverstad. To answer your question on our over 30 mile
per gallon vehicles, they're not just small stripped down
vehicles. You can buy a full size Chevrolet Impala that gets
over 30 miles a gallon on the highway. It's--and what we're
maybe most proud of is our full size sports utilities that are
brand new this year. The combined average 55 city/45 highway on
that full sized sport utility vehicle now exceeds 20 miles a
gallon, which is a first in the industry for a vehicle that
size to give that much utility and that much--people need those
vehicles if they pull trailers or there are plenty of uses for
those vehicles and they need good fuel economy as well.
With regard to why the ethanol prices are--are--follow
gasoline, I can't answer that. I don't--I don't know how they
set prices on gasoline. I just know they seem awfully high.
Chairwoman Biggert. Thank you.
Mr. Honda.
Mr. Honda. Thank you, Madam Chair.
I was just going to make another comment. If the--if the
goal is to be more independent of fossil fuel, what we haven't
talked about is the utilization of solar on individual homes
where individual homes will have what we call smart meters or
net metering where you can use the static position of homes all
across this country. And it'll vary based upon our climate. But
it seems to me that coupling another technology with the
technologies we're talking about relative to vehicles should be
something that we should be including in our conversation. And
so I was wondering in terms of electricity and plug-ins and all
that sort of stuff, I think we depend upon two percent of our
electricity is from petroleum, eliminate that. And we're trying
to move away from carbons, even though carbons are our good
friend that come from water and air rather than from petroleum
or from the ground, it makes good sense.
I was curious what other ideas you might have in
conjunction with the mix and matching of our technologies? You
may have to be brief because we only have a few minutes.
Mr. Lovaas. Oh, we don't.
I'm--I'm not that much of an expert on electricity. But as
you said, two percent of our electricity comes from oil. So
whatever we do in this sector with solar renewables, such as
wind, isn't going to have much of an impact on our oil
dependence. But shifting to those technologies will help and it
will also help to displace the use of coal which is, frankly, a
concern of NRDCs if we do using electricity more and more as a
fuel in transportation. Unless we use surplus capacity, which
is possible because a lot of people are going to be fueling up
at night at their homes using off peak surplus capacity, and we
don't have to build new plants, you know, that's okay. But if
we have to build new plants, if we're concerned about the
environment and about climate, then we have to make sure that
we're cleaning up the grid and shifting away from coal to
renewables.
Chairwoman Biggert. The gentleman yields back.
Mr. Lipinski for a quick question.
Mr. Lipinski. Following up on that--on that use of
renewables, I want to ask Mr. Hinkle about the use of
renewables to produce hydrogen and how--how far you think that
is a way to have maybe where you can produce hydrogen at your
own home through a--maybe a solar? Because--I mean, this is
something that's seen. There is a future of hydrogen, use solar
energy at home, produce electricity with the solar, produce the
hydrogen and how far away do you think something like that is?
Mr. Hinkle. Well, Honda of course makes--makes a device
now, it's not based upon solar, but it's--and it's a--but it's
a bite size piece, it's a home sized piece that generates
hydrogen.
There needs to be just like on a very large scale with
electrolyzers, there's a bunch of work still needs to be done
on those even those there's been a commercial--a commercial
technology for a long time. But the thing about hydrogen, it's
scalable from very small to very large. And there still needs
to be plenty of thinking and engineering and science that goes
into that. But renewables, we did a lot of work when I worked
for Senator Dorgan on wind on the wires in the Northern Great
Plains. And wind on the wires for hydrogen could be very
important, especially with the Western Area Power
Administration, which is part of DOE. And that goes from the
northern great plains into the great southwest and into
California.
Hydrogen in those high growth urban areas from renewable
sources is going to be important, but you've got to do a bunch
of stuff with the grid, you've got to invent some different
control mechanisms and management for those and you've got to
build things and you've got to do some things with extra
materials to increase the throughput, the power throughput in
the corridors where siting is a problem.
So there's a big system problem associated with lots of
renewables for hydrogen. But for solar, there's some
interesting things and I hope California is able to--and
Arizona are able to do things like that.
Mr. Lipinski. Thank you.
Chairwoman Biggert. Thank you very much.
Thank you all. We've great panel of witnesses today. Thank
you for your expert testimony and I think that we've all
learned a lot and appreciate you being here.
If there's no objection, the record will remain open for
additional statements from the Members and answers to any
follow up questions from the Committee. Without objection, so
ordered.
With that, this hearing is now adjourned.
[Whereupon, at 12:02 p.m. the Subcommittee was adjourned.]
Appendix:
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Additional Material for the Record