|
Mr. Chairman and members of the Subcommittee, I appreciate this opportunity
to testify today.
The President's National Energy Plan, entitled "Reliable, Affordable and
Environmentally Sound Energy for America's Future," is the blueprint for
the energy future we seek, and it makes several recommendations with regard to
hydrogen.
Specifically, it directs the Secretary to develop next generation energy
technology, including hydrogen; it recommends that our research and development
(R&D) programs related to hydrogen and fuel cells be integrated; and it
recommends that legislation reauthorizing the Hydrogen Energy Act enjoy the
support of the Administration.
Since the release of the President's energy plan in May 2001, the President
and Secretary Abraham have unveiled several exciting new initiatives related to
hydrogen. Most notable are: · The FreedomCAR partnership announced in January
2002; · The President's Hydrogen Fuel Initiative announced during the State of
the Union address in January 2003; and · The "FutureGEN"
zero-emission coal-fired electricity and hydrogen power plant initiative
announced in February 2003.
Each of these initiatives plays a particularly important role in a hydrogen
energy future. Each will help make possible a future in which the principal
"energy carriers" are hydrogen and electricity, eventually generated
using technologies that do not emit any pollutants or carbon dioxide.
Today, we are highly dependent on coal, natural gas and nuclear energy for
the majority of our electricity. We depend on oil, a growing percentage of which
is imported, to power our transportation needs. Through the FreedomCAR and
Hydrogen Fuel Initiative we can eventually build a light duty transportation
system that requires no petroleum, and is comprised of vehicles that emit
nothing other than water vapor. As illustrated in my first chart (Figure One)
the "gap" between domestic production and transportation demand is
growing-and is projected to keep growing. The current gap between total U.S.
consumption and net production of oil is roughly 11 million barrels per day.
Promoting efficiency in the use of oil, and finding new domestic sources of oil,
are both important short-term undertakings. But over the long-term, a
petroleum-free option is eventually required.
Our energy challenge is further complicated by another important factor-the
pollutants and carbon dioxide emissions resulting from our use of energy. We
have made tremendous progress in reducing pollutant emissions from our cars and
trucks as well as our stationary power sources, and we will continue to make
incremental gains through regulatory approaches such as the Tier II standards.
But for true efficiency gains, we must reach to develop a wholly new approach to
energy.
In his recent State of the Union address, President Bush announced a
groundbreaking plan to transform our Nation's energy future from one dependent
on foreign petroleum, to one that utilizes the most abundant element in the
universe-hydrogen.
Hydrogen can be produced from diverse domestic sources, freeing us from a
reliance on foreign imports for the energy we use at home. Hydrogen can fuel
ultra-clean internal combustion engines, which would reduce auto emissions by
more than 99 percent. And when hydrogen is used to power fuel cell vehicles, it
will do so with more than twice the efficiency of today's gasoline engines-and
with none of the harmful air emissions. In fact, fuel cells' only byproducts are
pure water and some waste heat.
But ultimate success in the mass-market penetration of hydrogen fuel cell
vehicles requires a hydrogen-based infrastructure that performs as well as the
petroleum-based infrastructure we now have.
Our current gasoline/hydrocarbon infrastructure has been forged in a
competitive market. It is ubiquitous and remarkably efficient. It can deliver
refined petroleum products that began as crude oil half a world away to your
neighborhood for less than the cost of milk, drinking water, or many other
liquid products you can buy at the supermarket. We are currently bound to that
infrastructure. Eventually replacing it with something different will be
extremely challenging. But that is what we must do if we expect to achieve
success with the FreedomCAR partnership. Drivers must be able to go anywhere in
America and to refuel their hydrogen-powered vehicle before they will be
comfortable purchasing one.
That is why the President, in his State of the Union address, proposed that
we in the federal government significantly increase our spending on hydrogen
infrastructure R&D, including hydrogen production, storage, and delivery
technologies, as well as fuel cells. Over the next five years, we plan to spend
an estimated $1.7 billion on the FreedomCAR partnership and Hydrogen Fuel
Initiative, $1.2 billion of which is for the Hydrogen Fuel Initiative, which
includes resources for work on hydrogen and fuel cells. Of the $1.2 billion
figure, $720 million is "new money."
We will not build the infrastructure. The private sector will do that as the
business case becomes clear. But as we develop the technologies needed by the
vehicles, we will also develop the technologies required by the infrastructure.
In cooperation with the U.S. Department of Transportation (DOT), we will convene
the parties needed for technology partnerships, we will collaborate on the
needed codes and standards, and we will promote international cooperation in
this effort. On April 28, during a presentation to the International Energy
Agency, Secretary Abraham called for an "International Partnership for the
Hydrogen Economy" to collaborate on research and deployment of hydrogen
technologies.
Benefits
Energy Diversity
Hydrogen can be supplied in large quantities from domestic fossil, nuclear
and renewable resources. This mix of currently available and developing
technology could provide a transition from traditional to next generation energy
technologies benefiting society with reliable and affordable energy in the near
and long terms. Hydrogen and fuel cells can catalyze the establishment and
utilization of a viable transportation market for nuclear energy, domestic coal
supplies, and renewables. Carbon capture and sequestration will be needed,
however, for all carbon-based sources of hydrogen such as coal. The fact
remains, though, that our Nation possesses the necessary resources to produce
large quantities of hydrogen.
Transportation
Every day, eight million barrels of oil are required to fuel the over 200
million vehicles that constitute our light duty transportation fleet. By 2025,
the Nation's light vehicle energy consumption is projected to grow to as much as
14 million barrels per day of petroleum or its energy equivalent. Fuel cell
vehicles could provide more than twice the efficiency of conventional vehicles.
Hydrogen fueled fuel cell vehicles could make dramatic reductions in petroleum
use possibly resulting in 11 million barrels per day savings by 2040.
I would like to point out that the government does not have vehicle market
penetration goals. The manufacture and marketing of hybrid, fuel cell or other
advanced vehicles will be industry's responsibility. Instead, our plan lays out
the activities that will accelerate hydrogen and fuel cell development to enable
industry to make a commercialization decision by 2015. The government's role,
however, can be broader than the removal of technical barriers and the reduction
of technology costs. The government can also contribute to the pace of both
industry and market acceptance by overcoming institutional barriers, such as
those associated with achieving common codes and standards necessary for safe
use of hydrogen and fuel cell technologies.
Fuel Cells for Stationary Power
Hydrogen can also be used in stationary fuel cells, engines and turbines to
produce power and heat. In order to meet our growing electrical demands, it is
estimated that electricity generation will have to increase by two percent per
year (reference: DOE, Energy Information Administration, Annual Energy Outlook
2002). At this rate, 1.5 trillion kWh of additional electricity generation
capacity will be needed by 2020. Along with aging infrastructure, requirements
for reliable premium power, and market deregulation, this increasing demand
opens the door for hydrogen power systems and potential societal benefits. For
example, using ten million tons of hydrogen per year to provide 150 billion kWh
of the Nation's electricity (just ten percent of the added generation) could
avoid 20 million tons per year of carbon dioxide emissions. DOE will also
support work in the area of fuel cells for portable power. While not important
to overall petroleum reduction, these units will provide early operating and
manufacturing experience, and should contribute to the reduction of fuel cell
cost for polymer electrolyte membrane (PEM) fuel cells.
Technology Challenges
Achieving the Hydrogen Economy will require a combination of technological
breakthroughs, market acceptance, and large investments in a national hydrogen
energy infrastructure. Success will not happen overnight, or even over years,
but rather over decades; it will require an evolutionary process that phases
hydrogen in as the technologies and their markets are ready. Success will also
require that the technologies to utilize hydrogen fuel and the availability of
hydrogen occur simultaneously.
Some of the significant hurdles to be cleared include:
· Lower by a factor of four the cost of producing and delivering hydrogen;
· Develop more compact, light weight, lower cost, safe, and efficient hydrogen
storage systems that will enable a greater than 300 mile vehicle range; · Lower
by a factor of ten the cost of materials for advanced conversion technologies,
especially fuel cells; · More effective and lower cost (by a factor of at least
ten) carbon-capture and sequestration processes (a separate program critical to
fossil-based production of hydrogen); · Designs and materials that maximize the
safety of hydrogen use; and, · Finally, we must solve the overarching
infrastructure challenges to develop a hydrogen-based delivery and refueling
infrastructure comparable to the petroleum-based one we have today. The
development of needed codes and standards as well as the education of consumers
relative to the use of hydrogen can help safely establish this hydrogen
infrastructure.
The Department has drafted a work breakdown structure associated with each of
the critical areas (production, delivery, storage, conversion, and end-use)
identified in the National Hydrogen Energy Roadmap unveiled by the Secretary
last November. We have developed critical milestones and decision points that
will help us gauge technology progress. Examples of key program milestones that
support FreedomCAR and achievement of a hydrogen economy include the following:
· On-board hydrogen storage systems with a six percent capacity by weight by
2010; more aggressive goals are being established for 2015; · Hydrogen
production at an untaxed price equivalent to $1.50 per gallon of gasoline at the
pump by 2010; and · Polymer electrolyte-membrane automotive fuel cells that
cost $45 per kilowatt by 2010 and $30 per kilowatt by 2015 and meet 100,000
miles of service life.
We are beginning to partner with energy companies to establish more specific
goals related to technology and components needed to produce and distribute
hydrogen using various fossil, nuclear and renewable pathways. In this exercise,
we will be looking at the full range of hydrogen technology areas covered in the
Roadmap.
In the near- to mid-term, most hydrogen will likely be produced by
technologies that do not require a complete hydrogen distribution infrastructure
(i.e., using existing distributed natural gas infrastructure). As RD&D
progresses along renewable, nuclear, and clean coal and natural gas production
pathways (including techniques for carbon sequestration) a suite of technologies
will become available in the mid- and long-term to produce hydrogen from a
diverse array of domestic resources. The economic viability of these different
production pathways will be strongly affected by regional factors, such as
feedstock availability and cost, delivery approaches, and regulatory
environment.
Detailed analysis of life-cycle costs and benefits for alternative hydrogen
production pathways, carbon sequestration, and other elements will continue.
"Well-to-Wheels" analyses conclude that the energy and environmental
benefits depend greatly on how hydrogen is manufactured, delivered and stored,
and on the economic feasibility of sequestration for fossil feed stocks. The
results of these studies will help in making down-select decisions and to ensure
that the relative merits of specific hydrogen pathways are evaluated properly
and in comparison with other energy alternatives. In fact, we are now following
up on a National Academy of Sciences recommendation to establish a more robust
systems analyses effort so that we can optimally prioritize areas for R&D,
as well as understand the ramifications of future R&D successes and
disappointments. Out-year planning will identify needs for RD&D on
production and storage technologies, delivery infrastructure, and education and
safety/codes and standards. Public education of consumers and local code
officials must also be pursued concurrently with the RD&D.
Finally, industry must develop and construct the infrastructure to deliver
hydrogen where it is needed. We will work with the DOT to help industry develop
a safe, efficient, nation-wide hydrogen infrastructure. The hydrogen
distribution infrastructure can evolve along with the conversion and production
technologies, since much of the infrastructure that is developed for
fossil-based hydrogen will also be applicable to renewable- and nuclear-based
hydrogen. We will partner with industry to develop infrastructure in pilot
projects, and industry will expand locally, regionally, and ultimately
nationally.
Interim Strategies
As important as we believe hydrogen is for the long term, we are still
working, in cooperation with other federal agencies, to maintain a robust, and
in some areas growing, research and development program in non-hydrogen
transportation technologies.
Under the FreedomCAR partnership we have proposed a funding increase in
fiscal year 2004 for our hybrid technology, as well as increases in materials
technology. We believe many of these technologies will deliver fuel savings both
prior to and after the introduction of fuel cell vehicles, since lightweight
materials and hybrid technologies are expected to be incorporated into fuel cell
vehicle designs. Therefore, these investments are expected to pay off in the
interim, as well as over the long term.
In addition, we had a number of interim strategies in mind as we established
specific, measurable performance goals for our program. And our FY 2004 budget
is aligned with these goals. For example:
· We are working to develop technologies for heavy vehicles by 2006 that
will enable reduction of parasitic energy losses, including losses from
aerodynamic drag, from 39 percent of total engine output in 1998 to 24 percent;
· The 2006 goal for Transportation Materials Technologies R&D activities is
to reduce the production cost of carbon fiber from $12 per pound in 1998, to $3
per pound; and, · The 2010 goal for Hybrid and Electric Propulsion R&D
activities is to reduce the production cost of a high power 25kW battery for use
in light vehicles from $3,000 in 1998 to $500, with an intermediate goal of $750
in 2006, enabling more cost competitive market penetration of hybrid vehicles.
Automakers are introducing technologies that have resulted in part from DOE's
work in this area. At the recent North American International Auto Show in
Detroit, the major U.S. automakers announced that they will have a variety of
new hybrid gasoline-electric models entering the market in the 2004-2008
timeframe.
Of course, hybrid vehicles are more expensive compared to conventional
vehicles, which is why the President proposed a tax credit for hybrid vehicles
in his National Energy Plan, and subsequent to that in his 2004 budget
submission. We urge that Congress adopt this important incentive for more
efficient vehicles.
And we will continue support for our Clean Cities program, a unique,
voluntary approach supporting more than eighty local coalitions that deploy
alternative fuel vehicles (AFVs) and promote supporting infrastructure.
The Administration strongly supports a renewable fuels standard (RFS) that
will increase the use of clean, domestically produced renewable fuels,
especially ethanol, which will improve the Nation's energy security, farm
economy, and environment.
As important as the RFS and the Clean Cities program are, their goals
illustrate the daunting challenges we face. Taken together, the RFS and Clean
Cities are expected to offset about four billion gallons of petroleum use per
year by 2010. That sounds impressive until it is compared to the demand for
petroleum for transportation uses. In the year 2000, we used approximately 130
billion gallons of gasoline and over 33 billion gallons of diesel (highway use
only). With that realization, the critical importance of the FreedomCAR
partnership and Hydrogen Fuel Initiative as a long-term strategy becomes clear.
And, if we are to achieve real progress in the near term and our ultimate
vision in the long term, we must continue to nurture productive partnerships
with the private sector. It is the private sector that will make the major
investments necessary for the transition to a radically different transportation
future. Those investments will not be made in the absence of a clear-cut
business case.
Transition to a Hydrogen Economy
We consider the transition to the hydrogen economy as occurring in four
phases, each of which requires and builds on the success of its predecessor, as
depicted in Chart 2. The transition to a hydrogen-based energy system is
expected to take several decades, and to require strong public and private
partnership. In Phase I, government and private organizations will research,
develop, and demonstrate "critical path" technologies and safety
assurance prior to investing heavily in infrastructure. This Phase is now
underway and will enable industry to make a decision on commercialization in
2015.
The FY 2004 budget currently before Congress is consistent with completion of
the technology RD&D phase by 2015.
Phase II, Transition to the Marketplace, could begin as early as 2010 for
applications such as portable power and some stationary applications, and as
hydrogen-related technologies meet or exceed customer requirements. If an
industry decision to commercialize hydrogen fuel cell vehicles is made in 2015,
mass-market penetration can begin to occur around 2020. Consumers need
compelling reasons to purchase new products; public benefits such as high fuel
use efficiency and low emissions are not enough to overcome the market
advantages of the incumbent technology and infrastructure. The all-electronic
car powered by hydrogen fuel cells is one example of an approach to greater
value delivery; it could offer the consumer greater amenities, improved
performance through elimination of mechanical parts and greater design
flexibility.
As these markets become established, government can foster their further
growth by playing the role of "early adopter," and by creating
policies that stimulate the market. As markets are established this leads to
Phase III, Expansion of Markets and Infrastructure. The start of Phase III is
consistent with a positive commercial decision for vehicles in 2015. A positive
decision will attract investment in infrastructure for fuel cell manufacturing,
and for hydrogen production and delivery. Government policies still may be
required to nurture this infrastructure expansion phase.
Phase IV, which should begin about 2025, is Realization of the Hydrogen
Vision, when consumer requirements will be met or exceeded; national benefits in
terms of energy security and improved environmental quality are being achieved;
and industry can receive adequate return on investment and compete globally.
Phase IV provides the transition to a full hydrogen economy by 2040.
Conclusion
Mr. Chairman, it will take a great deal to achieve this vision of a hydrogen
energy future we are all talking about this morning. It will require careful
planning and coordination, public education, technology development, and
substantial public and private investments. It will require a broad political
consensus and a bipartisan approach. Most of all, it will take leadership and
resolve.
The President has demonstrated his leadership and resolve. "With a new
national commitment," said the President during his State of the Union
address, "our scientists and engineers will overcome obstacles to taking
these cars from laboratory to showroom, so that the first car driven by a child
born today could be powered by hydrogen and pollution free."
A few days later at an event on energy independence featuring new uses for
fuel cells including automobiles, the President reiterated his commitment to his
new Hydrogen Fuel Initiative stating, "The technology we have just seen is
going to be seen on the roads of America. And it's important for our country to
understand that by being bold and innovative, we can change the way we do
business here in America; we can change our dependence upon foreign sources of
energy; we can help with the quality of the air; and we can make a fundamental
difference for the future of our children."
We believe that the benefits the President envisions are attainable within
our lifetimes and will accrue to posterity, but they will require sustained work
and investment of public and private financial resources. We at the Department
of Energy welcome the challenge and opportunity to play a vital role in this
Nation's energy future and to support our national security in such a
fundamental way.
This completes my prepared statement. I would be happy to answer any
questions you may have, either now or in the future. Figure 1: Oil Use in Transportation Plotted against
Domestic Production
Figure 2: The
Transition to the Hydrogen Economy
|
