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Hydrogen - Is it the Answer for Clean Cars?

The auto industry has begun delivering hydrogen fuel cell powered vehicles to test markets in very limited quantities. While the vehicles will not be commercially available for several more years, they do work and work well. President Bush's goal for hydrogen powered vehicles to be commonly available by 2018. This raises the question whether these vehicles are "THE" future (as General Motors emphasizes in their literature) or a just one of many future possibilities. This article explores the current status of hydrogen as a fuel for vehicles and concludes that other technologies will deliver the low pollution promised by hydrogen, sooner, and with significantly less business risk.
Above: The Honda FCX is one of several hydrogen fuel cell vehicles currently being tested in California.


E2 recently attended an invitation-only conference organized by the U.C. Davis Institute of Transportation Studies on the topic of The Hydrogen Transition. Attendance was 30% industry, 20% government and 50% a mixture of universities, national labs, environmental groups (including NRDC) and consultants. The individual facts contained in this article come from the presentations and from conversations with the attendees. The conclusions are our own and we are happy to be proven right or wrong. As Yogi Berra said, "It is difficult to make predictions - especially about the future."

If Hydrogen is the answer, what is the question?

There are three primary social problems caused by today's vehicles:

1. Air pollution;
2. Climate change caused by greenhouse gas pollution; and
3. Political issues caused by our dependency on imported oil used to power the vehicles.

Taken in this light, the question should be:

"What is the fastest path with the least economic risk to a fleet of vehicles which is energy efficient, near zero emissions and runs on fuel that is near "carbon neutral"?

(Carbon neutral means that there is no net increase in greenhouse gases emitted either from the manufacturing of the fuel or by its use in powering the vehicle.)

Hydrogen is attractive because it can be produced from almost any energy source and can be converted to electricity on the vehicle with zero pollution. However, depending on the source of the hydrogen (i.e. using solar power to create electricity, to split water creating hydrogen gas; reforming natural gas into hydrogen; or gasifying coal and converting it to hydrogen with CO2 sequestration) the emissions generated during production and distribution may be less than, equal to, or greater than those produced by gasoline.

To be successful, hydrogen would have to:

1. Be price competitive with gasoline;
2. Produce lower levels of greenhouse gases compared to gasoline or renewable fuels; and
3. Be used in vehicles similarly priced to conventional vehicles, and/or offer some compelling advantage to conventional vehicles.

Fuel Cell Vehicles

Currently Honda, Mercedes, Toyota, Ford and GM have fuel cell vehicles in field tests with real users. Positive driver feedback includes the acceleration, quietness and comfort of the cars. However, the main barriers to acceptance are: (1) short range - 100 to 150 miles, (2) price, and (3) availability of fuel. Currently the power system is about ten times more expensive to manufacture than a gasoline equivalent. Gradual technological changes will help to improve range, fuel availability and cost of fuel cell vehicles.

Arguably, the most tireless and vocal champion of the hydrogen car is Larry Burns, Vice President of Research, Development and Planning for General Motors (see February newsletter). Mr. Burns points out that a fuel cell vehicle will have one tenth the moving parts of a gasoline vehicle and the vehicle system (engine, fuel, axles, etc.) can be packaged into a "flat pancake", 6 inches thick, allowing the design of radically different vehicles. GM expects the first commercial sales of fuel cell vehicles in 2010 and believes it is possible to profitably sell 1 million vehicles by 2015 if the fuel infrastructure is in place. The federal government's goal is commercial availability by 2017. There was no agreement at the conference concerning when or if hydrogen passenger vehicles will be a commercial success. The answer will depend on three main factors:

1. Vehicle range. Roughly speaking, one kilogram of hydrogen is equivalent to one gallon of gasoline. The fuel is currently stored in high-pressure tanks that are expensive and heavy. Space constraints limit current vehicles to 100 to 150 miles per tank. It is very unlikely that the efficiency of fuel cells can be improved enough to get vehicles to a 300-mile range; which is considered the minimum for market acceptance. Other hydrogen storage techniques currently have problems due to higher costs or energy lost in the transfer of the fuel.

2. Safety. As long as the public believes there is a safety problem associated with driving around with a tank of hydrogen, they will not buy the vehicles. One public accident will affect the market view even though it is not uncommon to see a gasoline vehicles burning with black smoke on the side of the road. There are no technical barriers to making hydrogen as "safe as gasoline". Yet, because of the increased scrutiny and the possibility that people may be making hydrogen from electricity or natural gas in their garages, hydrogen needs to be safer than gasoline.

3. Cost & Availability. Hydrogen fuel will need to cost about the same as gasoline and be available in 25% to 50% of the same locations as gasoline. Market research done by Synovate has shown that fuel availability is how consumers will know if the market is committed to hydrogen. With less than 25% availability, the consumers simply won't believe that hydrogen isn't just the next "8 track tape." Hydrogen powered vehicles will also need to be in the same price range as today's cars. The fuel cell is a major barrier to getting the cost down. Some people propose that hydrogen just be burned as a fuel in a modified internal combustion engine. It is likely that today's vehicles could be readily modified to burn hydrogen instead of gasoline. While this would produce some air pollutants that otherwise would not occur with fuel cells, it does substantially reduce the cost and complexity of using hydrogen and is an attractive alternative.

While fuel-cell passenger vehicles would require a large, nation-wide hydrogen fuel infrastructure, heavy trucks, ships and trains would not have the same need. They have more room to accommodate the fuel storage and they require a limited fueling system. If such transportation vehicles were located near inexpensive sources of hydrogen this could be an early, viable market.

Producing and Delivering Hydrogen

The commercial market for hydrogen power already exists. For example, BP produces 5000 tons of hydrogen per day worldwide. Their production cost for hydrogen is similar to gasoline. Much of the hydrogen is a by-product of oil refineries and is consumed locally in the region where it is produced. A great example of this is a recent announcement between Dow Chemical and General Motors. Dow will use up to 500 GM fuel cell systems, generating up to 35 Megawatts of electricity for Dow.

The problem is that hydrogen is very expensive to transport and to store. While it costs the average consumer about $1.50 per gallon to buy gasoline, just transmitting hydrogen gas in a pipeline costs $1.00 per gallon equivalent (kilogram). While gasoline is easy to store, hydrogen is expensive to store since using either high-pressure tanks or liquid hydrogen expends large amounts of energy to be expended to compress the gas.

The average gas station today does not have enough space to store a comparable amount of hydrogen. This leads many people to assume that the answer to hydrogen distribution will be to distribute natural gas or electricity to a distribution point and then convert it to hydrogen on site. Converting natural gas to hydrogen produces greenhouse gas pollution and air pollution. Electricity can convert water to hydrogen but is only cost effective if electricity can be purchased for about 7 cents per kilowatt hour (this would be similar to gasoline at $1.50 per gallon). While it might be possible to buy cheap electricity late at night, the problem of storing the hydrogen gas persists.

Gasoline/Electric Hybrids - Establishing a new standard

An average vehicle sold in 1975 produced 4,000 pounds of air pollutants during its lifetime. By comparison, the 2004 Toyota Prius hybrid is projected to produce only 20 pounds of air pollutants. The California Air Resources Board (CARB) refers to this category of vehicles as "Partial Zero Emission Vehicles (PZEV)". Rather than focus on Zero Emission Vehicles, CARB changed its regulations this year providing incentives for industry to produce more PZEVs with a goal of 50% of new vehicles sold in California being PZEVs by 2010. In part, this is the reason GM and Daimler/Chrysler dropped their law suit (see DaimlerChrysler, GM drop suit) against CARB this month.

Hybrid vehicles are currently available from Toyota and Honda. Their sales peaked to 5,000 vehicles in the month of February, partly because of gas price increases and the Iraq war. The 2004 Prius is impressive because for the same price as the original model, it is better in every way (disclosure - the author owns a 2001 Prius and has a 2004 on order):

* 20% more power
* better fuel economy (55 combined mpg based on manufacturer's data)
* lower emissions
* 10% larger interior (qualifies as a mid-sized car)
* heavier

With 55 combined miles per gallon, the Prius has more than twice the fuel efficiency of the avergae vehicle in its class. There is a price premium of about $2,500 to $4,000 over cars with similar size and amenities (less any tax incentives which vary from $300 to $1000). Toyota's marketing approach is featuring the increased power of the Prius. They observe that customers commonly will pay extra for more engine power while giving up some fuel efficiency. Consequently, Toyota will feature the performance of the vehicle, with no sacrifice in fuel economy, while providing nearly zero emissions. (To see and drive the vehicle come to our September 17 event in San Francisco).

This marketing approach is consistent with research presented at the conference. Customers are interested in environmentally friendly cars and fuel efficiency but only if all other attributes (size, power, price, etc) are equal to the alternatives.

Toyota claims that the 2004 Prius has environmental performance (including greenhouse gas pollution) equal to current hydrogen fuel cell vehicles. This is because hydrogen is typically produced from natural gas with greenhouse gas output produced as a byproduct and because both the Prius and fuel-cell vehicles get similar fuel economy.

A Solution

NRDC proposes a scenario depicted to the left which shows US oil consumption based on business as usual. If nothing changes, we will increase from our current 8 million barrels per day to 15 million barrels per day by 2030 (top line on chart). If we increase fuel efficiency standards (CAFE) to 40 mpg beginning in 2012, we will see the reduction shown in yellow. Similarly, improving fuel efficiency to 55 mpg by 2020, starting to use renewable fuels and introducing fuel-cell vehicles and smart growth initiatives, we can reduce our use of oil to 4 million barrels per day by 2030.

Oil Use and Savings (million barrels per day)
(graph from NRDC Dangerous Addiction report).

Summary

No one should underestimate the urgent need to solve the problems caused by our current vehicles: air pollution, greenhouse gas pollution and foreign oil dependency. Our most effective tools to date have been (1) regulations establishing air quality standards, (2) fuel efficiency standards and (3) innovation. When government imposes a technology-specific solution (i.e. MTBE in gasoline) it has generally not been successful. Such a move does not provide an incentive for the market to innovate or for the private sector to find the optimal combination of technology and energy sources, according to their business needs. On the other hand, standards that are not technology-specific, but rather set an emissions limit, have been effective in stimulating technology needed to meet the goal. Well-designed regulations can both reduce the cost of compliance over time (i.e. Low Emission Vehicle standards), and offer additional efficiencies and consumer benefits.

While hydrogen will play an important role (for example where the fuel is inexpensive and can be used locally, possibly in truck fleets or specialized vehicles), we think the public is best served by considering hydrogen as one of many possible fuels and fuel cells as one of many possible alternative vehicle technologies which can lead us to our emission reduction and petroleum dependence reduction goals. In addition, today's vehicles stay on the roads an average of 15 years, so waiting 10 to 15 years for hydrogen fuel cell or other alternative fuel technologies would mean locking ourselves into a path of increased oil dependence and environmental problems for the next 20 to 30 years. For now, investment in hybrid vehicles can mitigate the risk of delays in hydrogen fuel cell development and market success. They'll also help ensure the success of fuel cell vehicles by bringing down the costs of the technologies - motors, batteries, and power electronics - that the two share.

Our strategy to ensure we meet our goals should be to:

1. Use regulations to continue to reduce the amount of air pollution and greenhouse gas pollution from vehicles
2. Ramp-up fuel efficiency standards
3. Invest in carbon-neutral fuels produced in environmentally sound ways, with air quality benefits.


World Clock