[Senate Hearing 109-179]
[From the U.S. Government Publishing Office]
S. Hrg. 109-179
HYDROGEN AND FUEL CELL RESEARCH
=======================================================================
HEARING
before the
SUBCOMMITTEE ON ENERGY
of the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
TO
RECEIVE TESTIMONY ON RECENT PROGRESS IN HYDROGEN AND FUEL CELL RESEARCH
SPONSORED BY THE DEPARTMENT OF ENERGY AND BY PRIVATE INDUSTRY
__________
JULY 27, 2005
Printed for the use of the
Committee on Energy and Natural Resources
_____
U.S. GOVERNMENT PRINTING OFFICE
24-547 WASHINGTON : 2005
_________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government
Printing Office Internet: bookstore.gpo.gov Phone: toll free
(866) 512-1800; DC area (202) 512-1800 Fax: (202) 512-2250 Mail:
Stop SSOP, Washington, DC 20402-0001
COMMITTEE ON ENERGY AND NATURAL RESOURCES
PETE V. DOMENICI, New Mexico, Chairman
LARRY E. CRAIG, Idaho JEFF BINGAMAN, New Mexico
CRAIG THOMAS, Wyoming DANIEL K. AKAKA, Hawaii
LAMAR ALEXANDER, Tennessee BYRON L. DORGAN, North Dakota
LISA MURKOWSKI, Alaska RON WYDEN, Oregon
RICHARD M. BURR, North Carolina, TIM JOHNSON, South Dakota
MEL MARTINEZ, Florida MARY L. LANDRIEU, Louisiana
JAMES M. TALENT, Missouri DIANNE FEINSTEIN, California
CONRAD BURNS, Montana MARIA CANTWELL, Washington
GEORGE ALLEN, Virginia JON S. CORZINE, New Jersey
GORDON SMITH, Oregon KEN SALAZAR, Colorado
JIM BUNNING, Kentucky
Alex Flint, Staff Director
Judith K. Pensabene, Chief Counsel
Robert M. Simon, Democratic Staff Director
Sam E. Fowler, Democratic Chief Counsel
------
Subcommittee on Energy
LAMAR ALEXANDER, Tennessee, Chairman
RICHARD M. BURR, North Carolina, Vice Chairman
MEL MARTINEZ, Florida BYRON L. DORGAN, North Dakota
JAMES M. TALENT, Missouri DANIEL K. AKAKA, Hawaii
GEORGE ALLEN, Virginia TIM JOHNSON, South Dakota
JIM BUNNING, Kentucky MARY L. LANDRIEU, Louisiana
LISA MURKOWSKI, Alaska DIANNE FEINSTEIN, California
LARRY E. CRAIG, Idaho MARIA CANTWELL, Washington
CRAIG THOMAS, Wyoming JON S. CORZINE, New Jersey
CONRAD BURNS, Montana KEN SALAZAR, Colorado
Pete V. Domenici and Jeff Bingaman are Ex Officio Members of the
Subcommittee
Kathryn Clay, Professional Staff Member
Jonathan Epstein, Legislative Fellow
C O N T E N T S
----------
STATEMENTS
Page
Alexander, Hon. Lamar, U.S. Senator from Tennessee............... 1
Bentham, Jeremy, Vice President, Royal Dutch Shell and Chief
Executive Officer, Shell Hydrogen B.V.......................... 11
Burns, Dr. Lawrence D., Ph.D., Vice President, Research &
Development and Strategic Planning, General Motors Corporation. 18
Campbell, Dennis, President and CEO, Ballard Power Systems....... 23
Dorgan, Hon. Byron L., U.S. Senator from North Dakota............ 3
Faulkner, Douglas L., Acting Assistant Secretary for Energy
Efficiency and Renewable Energy, Department of Energy.......... 4
APPENDIX
Responses to additional questions................................ 41
HYDROGEN AND FUEL CELL RESEARCH
----------
WEDNESDAY, JULY 27, 2005
U.S. Senate,
Subcommittee on Energy,
Committee on Energy and Natural Resources,
Washington, DC.
The subcommittee met, pursuant to notice, at 3 p.m. in room
SD-366, Dirksen Senate Office Building, Hon. Lamar Alexander
presiding.
OPENING STATEMENT OF HON. LAMAR ALEXANDER,
U.S. SENATOR FROM TENNESSEE
Senator Alexander. Good afternoon, the Subcommittee on
Energy will come to order. The purpose of this hearing today is
to receive testimony on the progress that has been made
recently in hydrogen and fuel cell research sponsored by the
Department of Energy and by private industry.
We have four excellent witnesses. This is a subject that
Senator Byron Dorgan has championed for a number of years in
the U.S. Senate, and which I and many other Senators, are
greatly interested.
I think what we'll do is I'll introduce our witnesses, and
then we'll ask Mr. Faulkner to go first. And then Senator
Dorgan and I will ask questions. Mr. Faulkner, will you be able
to stay for a few minutes?
Mr. Faulkner. Sure, whatever you want.
Senator Alexander. Well, then, I think we may invite the
other three, if they're here, to come up. Are the other three
witnesses here? I believe they are. Then we'll ask questions of
the four of you all at once. That might be a better use of our,
of everyone's, time.
The genesis for this hearing came out of a conversation
Senator Dorgan and I had a few weeks ago when we were talking
about the energy bill. Let me put it this way, we stayed up
late this week, the Senators on the Energy Committee,
completing legislation that we hope the full Congress will
enact this week, that sets an energy policy for the United
States for the next several years. Congress has worked on that
for 5 or 6 years. There are many different opinions on it, it
wasn't easy to do, but it's fundamentally important to our
country's future.
The way I look at the energy bill, there are really two
main directions that it seems to go. One is to transform the
way we produce electricity. We do that by largely shifting our
emphasis over the long term toward low carbon and no carbon
electricity, conservation and efficiency, through support for
advanced nuclear technology, through coal gasification and
carbon sequestration, new supplies of natural gas and other new
technologies. And we hope that that will, among other things,
help stabilize the high price of natural gas in the United
States, and eventually bring it down, which is very important
for homeowners, and blue-collar workers and farmers in our
country.
The second thing that we seek to do is transform our
dependence on oil, especially overseas oil. And we make a few
short-term steps in the legislation that we're able to agree
on--support for alternative fuels helps to do that. The Senate
passed a provision requiring reduction of a million barrels of
oil a day, but the House didn't agree to that, so that's not in
there.
We also have support for hybrid and advanced diesel
vehicles, which are at least an interim step, and we'll see how
promising they may be in helping us conserve oil. There is a
significant provision for a long-term fix for the oil
addiction--to borrow some of Senator Dorgan's words--and that
is hydrogen fuel cells. There's support for about a $3.7
billion program over 5 years for research and development and
for demonstration.
I was in Yokohama, Japan about a year ago, and I visited a
hydrogen fuel cell vehicle filling station. I saw seven SUVs
parked there. There was a Nissan, a Toyota, a General Motors, a
Chrysler--all the major car manufacturers had their hydrogen
fuel cell vehicles at this hydrogen filling station in
Yokohama. And I filled one up, and in my conversation with the
chief executive of Nissan, he said they're spending $700
million a year of their own money on hydrogen fuel cells. The
chief executive of Toyota indicated that they're investing a
lot of money in hydrogen fuel cells. The president of General
Motors just last week made it clear to me that General Motors
considers it to be the transforming technology for vehicles,
hydrogen fuel cells. So, we know very well that U.S. Senators
and other politicians, and even bureaucrats in the Government
can't create the technology to solve the myriad of issues that
have to do with hydrogen fuel cell vehicles that emits only
water vapor, instead of the various pollutants that gasoline
does. But we do know that the Government can help to create an
environment in which the private sector can succeed.
So, our purpose today is to get an update both from the
Government, itself--and the programs we have in the Federal
Government--and from industry and outsiders on how we are doing
in helping to create an environment in which we are likely to
succeed in the United States in terms of production of hydrogen
fuel cell vehicles.
Our witnesses today are Mr. Doug Faulkner, who's the acting
Assistant Secretary of the Office of Energy Efficiency and
Renewable Energy in the Department of Energy--and we'll hear
from Mr. Faulkner in just a moment--and then we have three
other witnesses: Mr. Jeremy Bentham, the chief executive
officer of Shell Hydrogen B.V., Dr. Larry Burns, the vice
president of General Motors, and Mr. Dennis Campbell, president
and chief executive officer of Ballard Power Systems. I'm going
to ask each of the witnesses to summarize their testimony, in
about 5 minutes. That would give Senator Dorgan and me--and any
of the other Senators who came--more time to ask questions. Mr.
Faulkner, if you need to take a little bit longer than that to
give us your update, you're welcome to do that.
So now I'll call on Senator Dorgan for whatever comments
he'd like to make, then we'll go to Mr. Faulkner for his
testimony. Thank you.
STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR
FROM NORTH DAKOTA
Senator Dorgan. Thank you very much, Senator. I appreciate
the work that we've done together, and the work of the entire
Energy Committee on an energy bill. I share with you my hope
that by the end of this week, we will have passed a Conference
Committee Report through the House and the Senate, and that
it's on the President's desk for signature.
One of my former colleagues said, ``The future will be
better tomorrow.'' I won't identify the colleague, but you
know, the reaction to that is, ``One would hope so.'' But, with
respect to energy, it's not all that certain, unless we start
making some good decisions. And my colleagues have heard me say
that we are hopelessly addicted to foreign oil to run this
American economy. With 60 percent of our oil coming from off
our shores, it means that our economy is held hostage to the
ability to find that oil, and import that oil into our country.
Now, with respect to energy policy, I think there are two
approaches that we use. The first, every 25 years when we
debate energy policy, that approach is staring at your shoes.
You still stand erect, but you're not doing much more than
staring at your shoes. And the other approach is looking ahead,
to look ahead and search for new alternatives and new
opportunities. I'm really pleased to say that in this energy
bill--as my colleague, Senator Alexander, just described--we
have $3.73 billion in both the hydrogen title and the vehicle
title, that attempts to move us in a different direction, move
us ahead. We've been putting gasoline through carburetors, and
now fuel injectors, for 100 years, in our vehicles. And unless
we decide we want to change that, we will continue to do that
for the next 100 years. It makes a lot of sense to me because
the line on increased usage of energy goes up like this on
transportation.
It makes sense to me that we would look for alternatives,
look for sources of energy that are ubiquitous, that are
everywhere, that we can develop and use, and so I have been
pushing hard in recent years, working on this issue of hydrogen
in fuel cells. It's not just in our country, the Europeans and
others are moving in the same direction, in an attempt to pole
vault to the future. It's my fervent hope that my grandchildren
and their grandchildren will be driving vehicles that aren't
dependent on someone digging oil out of the sand halfway around
the world. We can do that, but you've got to decide where
you're going. If you're going to get someplace, you've got to
figure out what your destination is, and what the route is to
get there, and that's the purpose of what we have done in this
energy bill.
There's plenty to criticize in this energy bill, and
there's plenty that's good. But the one really bright spot, the
spot that glows in this energy bill, in my judgment, is the
hydrogen title. And I say that not just because I had a
significant part of the work with my colleagues to help write
that title, but because we also did a lot of work, as my
colleague knows, with the U.S. Fuel Cell Council, the National
Hydrogen Association, and a lot of interests involved in
looking ahead, looking to the future, to new technologies, and
how we might produce, store and transport hydrogen. And I'm
really excited about all that.
The other night I said, ``There's an old saying, if you
don't care where you're going, you're never ever going to be
lost.'' Well, that's true. If you just meander around, you'll
always be where you intend to go, if you don't care. But if we
can set benchmarks, and waypoints, and decide, ``Here's where
we want to be as a country,'' down the road with new technology
by the year 2010 and 2020, then we can make things happen. John
F. Kennedy said, ``We're going to go to the moon in a decade,''
and we did. And that's exactly what we ought to do to try to
escape this addiction we have, for our economy to be held
hostage to foreign oil. We can do this, we will do this, as a
country.
This hearing, Mr. Chairman, is a refreshing opportunity to
review with Mr. Faulkner, with the Department of Energy and
three very well-respected folks from the industry who are
working on these new technologies--I really appreciate this
hearing and think it will, once again, advance the ball--but
also augment and supplement that which we did late the other
night, or early in the morning I should say, in this energy
bill. We have a lot to celebrate today, those of us who think
about hydrogen and fuel cells as part of the constructive
future of this country's energy supply. So, Mr. Chairman, thank
you. I look forward to hearing the witnesses.
Senator Alexander. Thank you, Senator Dorgan.
Mr. Faulkner, why don't you begin? And then we'll invite
the other witnesses to come to the table.
STATEMENT OF DOUGLAS L. FAULKNER, ACTING ASSISTANT SECRETARY
FOR ENERGY EFFICIENCY AND RENEWABLE
ENERGY, DEPARTMENT OF ENERGY
Mr. Faulkner. Yes, sir. Thank you. I thank you for your
offer of more time for my remarks, but I believe that they'll
come in 5 minutes or less.
Mr. Chairman, and Senator Dorgan, I appreciate the
opportunity to testify on the Department of Energy's hydrogen
program. Since President Bush launched the Hydrogen Fuel
Initiative over 2 years ago, we've made tremendous progress. We
implemented valuable feedback from the National Academy of
Sciences, and we're already seeing results. In fact, the
Academy is currently completing its biannual review of the
Program, and I think we'll see the results of that next week.
The Academy called for us to improve integration and
balance of activities within the relevant offices of the
Department of Energy, establishing milestones and go/no-go
decisions. We have done this. The DOE Hydrogen Posture Plan
identifies strategies and milestones to enable a 2015 industry
commercialization decision, and each office at DOE has
developed a detailed research plan.
We are now implementing those research plans, and making
tangible progress. The Department competitively awarded over
$510 million in Federal funding, subject to appropriations, for
projects to address critical challenges. The DOE Office of
Science announced 70 new projects addressing basic science
issues in hydrogen. We've created a national hydrogen storage
project, including three Centers of Excellence, with
universities, industries, and Federal laboratories focusing on
hydrogen storage materials, a critical technology for the
hydrogen economy.
These activities address the Academy's recommendation to
shift toward more exploratory work. We have identified
materials with higher hydrogen storage capacities; however, we
still need both fundamental understanding and engineering
solutions to address issues like charging and discharging
hydrogen and the practical temperatures and pressures. We
initiated 65 projects on hydrogen production and delivery, and
the results are already promising.
We believe we can meet our goal of $2 to $3 a gallon of
gasoline equivalent. Our ultimate goal is carbon-neutral
hydrogen production that emphasizes resource diversity. To
address fuel cell costs and durability, we will have a new $75
million solicitation, complementing existing materials research
efforts, and results are already being achieved here, too.
As highlighted by Secretary Bodman in earlier testimony,
the high-volume cost of automotive fuel cells was reduced from
$275 to $200 per kilowatt. Through new materials and
fabrication technologies to further reduce fuel cell costs and
improve durability, we believe we can meet our targets.
We must keep sight of the ultimate goal, the transfer of
research to the real world, and we've complemented our research
with what we call a ``learning demonstration.'' This 50/50
cost-shared activity, bringing auto and energy companies
together to validate infrastructure technologies, will enable
us to test laboratory concepts, major systems-level progress,
collect data and provide valuable feedback for our research. In
May, President Bush participated in the refueling of a GM
hydrogen fuel cell vehicle at DC's Benning Road station; that's
a part of our learning demonstration effort.
We also conduct research on safety codes and standards,
working with the Department of Transportation, and globally,
through the International Partnership for the Hydrogen Economy.
And we're working with the Department of Commerce and other
Federal agencies to create a roadmap for research and
development for manufacturing technologies, to bridge that
continuum from basic research to commercialization. This effort
will help to track new business investment, create new high-
technology jobs, and build a competitive U.S. supply base.
The Department is working with partners on all fronts to
address the challenges to a hydrogen economy. Under the
FreedomCAR and Fuel Partnership, DOE is collaborating with the
U.S. Council for Automotive Research (DaimlerChrysler, Ford and
GM) and five major energy companies (BP, Chevron,
ConocoPhillips, ExxonMobil and Shell). The program's technical
targets--created using input from teams of DOE, automotive and
energy company experts--represent customer requirements and the
business case necessary for widespread commercial success.
Ultimately, it is industry that will build the automotive
and energy infrastructure for the country. However, developing
hydrogen technologies that are economically competitive with
marketplace alternatives entails significant risk. Therefore,
Federal investment and high-risk R&D is necessary to overcome
technology barriers and to reduce this risk.
Mr. Chairman, Senator Dorgan, the DOE Hydrogen Program is
committed to a balanced portfolio which integrates basic and
applied research, engineering development and learning
demonstrations. This committee has provided valuable guidance.
This completes my prepared statement, I'll be happy to
answer any questions.
[The statement of Mr. Faulkner follows:]
Prepared Statement of Douglas L. Faulkner, Acting Assistant Secretary
for Energy Efficiency and Renewable Energy
Mr. Chairman and Members of the Subcommittee, I appreciate the
opportunity to testify on the Department of Energy's (DOE or
Department) Hydrogen Program. Today, I will provide an overview of the
program, summarize progress in implementing the recommendations of the
National Academies' hydrogen report, discuss support for state
initiatives and demonstration projects, as well as provide a status of
the Hydrogen Program's accomplishments and plans.
Over two years ago, in his 2003 State of the Union address,
President Bush announced the Hydrogen Fuel Initiative to reverse
America's growing dependence on foreign oil by developing the hydrogen
technologies needed for commercially-viable fuel cells--a way to power
cars, trucks, homes, and businesses that could also significantly
reduce criteria pollutants and greenhouse gas emissions. Since the
launch of the five-year, $1.2-billion research initiative, we have had
many accomplishments on the path to taking hydrogen and fuel cell
technologies from the laboratory to the showroom in 2020, following an
industry commercialization decision in 2015.
Our Hydrogen Program emphasizes the research and development (R&D)
activities necessary to achieve the President's vision of a hydrogen
economy and to address foreign oil dependence and greenhouse gas
emissions. Our R&D efforts address the critical path barriers to the
hydrogen economy. As an extension of these research activities, we have
also established a 50-50 cost-shared partnership with industry to
create a ``learning'' demonstration. These demonstration projects
ensure that the automotive and energy industries will work together to
integrate vehicle and infrastructure technologies prior to market
introduction.
drivers for hydrogen research: energy and environment
As a Nation, we must work to ensure that we have access to energy
that does not require us to compromise our economic security or our
environment. Hydrogen offers the opportunity to end petroleum
dependence and virtually eliminate transportation-related criteria and
greenhouse gas emissions by addressing the root causes of these issues.
Imported petroleum already supplies more than 55 percent of U.S.
domestic needs and those imports are projected to increase to more than
68 percent by 2025 with business-as-usual. Transportation accounts for
two-thirds of the oil use in the United States and vehicles contribute
to the Nation's air quality problems and greenhouse gas emissions
because they release criteria pollutants and carbon dioxide.
At the G8 Summit earlier this month, President Bush reiterated his
policy of promoting technological innovation, like the development of
hydrogen and fuel cell technologies, to address climate change, reduce
air pollution and improve energy security in the United States and
throughout the world. The Department's R&D in high-efficiency vehicle
technologies, such as gasoline hybrid-electric vehicles, will help
improve energy efficiency and reduce the growth of petroleum
consumption in the nearer term. Under DOE's FreedomCAR Program, the
President's FY 2006 budget request is $100.4 million. This funding will
make hybrid-vehicle components, like batteries, power electronics,
electric motors and advanced materials, more affordable. But, in the
longer term, higher efficiency alone will not reduce our petroleum
consumption; we ultimately need a substitute to replace petroleum.
Hydrogen and fuel cells, when combined, have the potential to provide
domestically-based, virtually carbon-and pollution-free power for
transportation.
Hydrogen can be produced from diverse domestic energy resources,
which include fossil fuels, nuclear energy, biomass, solar, wind and
other renewables. We have planned and are executing a balanced research
portfolio for developing hydrogen production and delivery technologies.
Hydrogen from coal will be produced directly by gasification--not coal-
based electricity. For hydrogen from coal to be viable, research in
carbon capture and sequestration technologies must also be successful.
The ultimate outcome we are seeking is hydrogen from carbon-neutral
fossil, nuclear and renewable energy resources.
In the transition to the hydrogen economy, the Department
recognizes that hydrogen will be produced by technologies that do not
require a large, up-front investment in hydrogen delivery
infrastructure. Instead, hydrogen can be produced at the refueling
station by reforming natural gas and renewable fuels like ethanol
utilizing existing delivery infrastructure. A fuel cell vehicle running
on hydrogen produced from natural gas would produce 25 percent less net
carbon emissions than a gasoline hybrid electric vehicle and 50 percent
less than conventional internal combustion engine vehicles on a well-
to-wheels basis. However, natural gas is not a long-term strategy
because of concerns of limited supply and the demands of other sectors.
As vehicle market penetration increases and research targets for the
diverse hydrogen production and delivery technologies are met, these
will help establish the business case for industry investment in large-
scale hydrogen production and delivery infrastructure.
major challenges to the hydrogen economy
The President's FY 2006 request to Congress for the Hydrogen Fuel
Initiative is $259.5 million. This funding is necessary to conduct the
research to overcome the barriers to the hydrogen economy:
The technology must be developed to store enough hydrogen
on-board a vehicle to enable greater than 300-mile driving
range without reducing cargo or passenger space.
The high-volume cost of the fuel cell system must be reduced
by a factor of seven in order to be competitive with today's
internal combustion engines, and durability needs to be
improved by a factor of five.
The cost of producing hydrogen must be reduced to be
competitive with the cost of gasoline. Hydrogen from natural
gas reforming is currently about two times as costly as
gasoline (untaxed) and hydrogen from other sources (renewables,
nuclear energy and coal combined with sequestration) is even
more costly.
Improved materials and system designs must be developed to
ensure the safe use of hydrogen. Codes and standards need to be
developed to enable implementation of hydrogen technologies,
and international standards are needed to eliminate trade
barriers.
Educational materials must be developed and available for
key target audiences (e.g. first responders, etc.) to
understand hydrogen and fuel cell technologies and their uses.
progress and accomplishments
Mr. Chairman, the Department has made significant progress in
planning and setting the stage to achieve the research breakthroughs
necessary for a future hydrogen economy. The Department has
competitively selected over $510 million in projects to address
critical challenges such as hydrogen storage, fuel cell cost and
durability, and hydrogen production and delivery cost. In addition, we
have established a national ``learning'' demonstration and new projects
in safety, codes and standards, and education. All of the multi-year
projects discussed below were competitively selected and are subject to
congressional appropriations. The continuum of research, from basic
science to technology demonstration, will be closely coordinated.
In May 2005, 70 new projects were selected at $64 million
over three years to focus on fundamental science and to enable
revolutionary breakthroughs in hydrogen production, storage and
fuel cells. Topics of this basic research include novel
materials for hydrogen storage, membranes for hydrogen
separation and purification, designs of catalysts at the
nanoscale, solar hydrogen production, and bio-inspired
materials and processes.
Three Centers of Excellence and 15 independent projects were
initiated in Hydrogen Storage at $150 million over five years
to develop the most promising low-pressure storage approaches.
The Centers include 20 universities, 9 federal laboratories and
eight industry partners, representing a concerted, multi-
disciplinary effort to address on-board vehicular hydrogen
storage.
To address fuel cell cost and durability, five new projects
were initiated at $13 million over three years. A $17.5 million
solicitation is currently open to research new membrane
materials in fuel cells. And, a new $75 million solicitation
will be released this fall to address cost and durability of
fuel cell systems.
A total of 65 projects were awarded for applied research in
hydrogen production and delivery, funded at $107 million over
four years. These include hydrogen production from renewables,
distributed natural gas, coal and nuclear energy.
A national vehicle and infrastructure ``learning
demonstration'' project, a six-year effort with $170 million in
DOE funding, was launched to take research from the laboratory
to the real world, critically measuring progress and providing
feedback to our R&D efforts.
Approximately $7 million over four years for hydrogen
education development was awarded to serve the needs of
multiple target audiences, including state and local government
officials, safety and code officials and local communities
where hydrogen demonstrations are located.
With these new competitively selected awards, the best scientists
and engineers from around the Nation are actively engaged. The stage is
now set for results.
Our ongoing research has already led to important technical
progress.
As highlighted by Secretary Bodman in earlier Congressional
testimony, the high-volume cost of automotive fuel cells was
reduced from $275 per kilowatt to $200 per kilowatt in two
years. This cost reduction was the result of increased power
density; advancements in membrane materials; reductions in both
membrane material cost as well as amount of membrane material
required in the fuel cell; enhancement of specific activity of
platinum catalysts; and innovative processes for depositing
platinum and reducing the overall amount of catalysts.
In hydrogen production, we have demonstrated our ability to
produce hydrogen at a cost of $3.60 per gallon of gasoline
equivalent at an integrated fueling station that generates both
electricity and hydrogen. This is down from about $5.00 per
gallon of gasoline equivalent prior to the Initiative.
implementation of national academies' recommendations
We have implemented the valuable feedback from the National Academy
of Sciences (NAS) review in March 2004 and are already seeing results.
The NAS called for us ``to improve integration and balance of
activities'' within the relevant DOE Offices (which include Energy
Efficiency and Renewable Energy; Fossil Energy; Nuclear Energy, Science
and Technology; and Science). We have done this by developing and
publishing an integrated research, development and demonstration plan,
called the ``Hydrogen Posture Plan,'' which covers all Department
hydrogen activities. The Plan identifies the major milestones which
need to be achieved to enable industry to make a 2015 commercialization
decision. Each of the four offices has, in turn developed a detailed
research plan which outlines how the high-level milestones will be
supported. Lower-level, time-phased, performance-based milestones form
the basis for measuring research progress.
In response to another National Academies' recommendation, we
established a systems analysis activity to examine the impact of
different components or subsystems of hydrogen technology on the
complete system, as well as establish the time frames needed for
transition to a hydrogen economy. ``Well-to-wheels'' analyses assessing
the energy, economic and environmental impacts of various hydrogen
production and delivery pathways, as well as other systems analysis
activities, will be valuable in technology decision-making and planning
for a transition to the hydrogen economy.
The Hydrogen Program has increased emphasis on exploratory research
in response to the NAS recommendation that ``there should be a shift .
. . away from some development areas towards exploratory work'' and
that ``the probability of success [will be] greatly increased by
partnering with a broader range of academic and industrial
organizations.'' In accordance with this recommendation, we have moved
away from subsystem hardware development, such as fuel cell stack
systems and conventional high-pressure storage tanks, to put greater
emphasis on materials research.
Starting in FY 2005, DOE's Office of Science has been included in
the Hydrogen Fuel Initiative in order to focus basic research on
overcoming key technology hurdles in hydrogen production, storage and
conversion. The Office of Science-funded research seeks fundamental
understanding in areas such as novel materials for hydrogen storage
with an emphasis on nanoscale structures and new storage concepts, non-
precious-metal catalysts, membranes for fuel cells and hydrogen
separation, multifunctional nanoscale structures, photocatalytic
(including biological and bio-inspired approaches) and
photoelectrochemical hydrogen production, and modeling and analytical
tools. The three Centers of Excellence established through the
Department's ``Grand Challenge'' solicitation are utilizing recent
progress in materials discovery and technology which allows hydrogen to
be stored at low pressures and modest temperatures. Rather than ``stand
alone'' test tube research, we have an integrated effort to address
basic, applied, and engineering sciences to develop materials and
systems for storing hydrogen.
Through the hydrogen production solicitations, we have increased
emphasis on long-term research. Last October, DOE announced industry
and university grants of $25 million over three years, contingent upon
appropriations, for solar-driven photoelectrochemical, thermochemical
and photobiological technology. The NAS also recommended changes in
other hydrogen production technology areas and advised DOE to
``increase development of breakthrough approaches for small-scale
reformers[,] . . . research novel renewable liquid distributed
reforming [and] . . . emphasize electrolyzer development.'' Our
transition strategy emphasizes small-scale reformers and electrolyzers
for refueling stations and distributed electricity generation sites.
Through our solicitation, we have added new projects totaling $30
million over 3 years, contingent upon appropriations, in these areas.
We have worked with our energy industry partners to develop technology
roadmaps that emphasize distributed technologies.
collaboration through partnerships
We are working with partners on all fronts to address the
challenges to a hydrogen economy. Under the FreedomCAR and Fuel
Partnership, DOE is collaborating with the U.S. Council for Automotive
Research (DaimlerChrysler, Ford and General Motors) and five major
energy companies (BP, Chevron, ConocoPhillips, ExxonMobil and Shell) to
help identify and evaluate technologies that will meet customer
requirements and establish the business case. Technical teams of
research managers from the automotive and energy industries and DOE are
meeting regularly to establish and update technology roadmaps in each
technology area.
An Interagency Hydrogen R&D Task Force has been established by the
White House Office of Science and Technology Policy (OSTP) to leverage
resources and coordinate interrelated and complementary research across
the entire Federal Government. This year, the Task Force initiated a
plan to coordinate a number of key research activities among the eight
major agencies that fund hydrogen and fuel cell research. Coordination
topics include novel materials for fuel cells and hydrogen storage,
inexpensive and durable catalysts, hydrogen production from alternative
sources, stationary fuel cells, and fuel-cell vehicle demonstrations.
The Task Force has launched a website, Hydrogen.gov, and in the coming
year plans to sponsor an expert panel on contributions that nanoscale
research can make to realizing a hydrogen economy.
Last year, we announced the establishment of the International
Partnership for the Hydrogen Economy (IPHE). The IPHE, which now
includes 16 nations and the European Commission, establishes world-wide
collaboration on hydrogen technology. The members have agreed to work
cooperatively toward a unifying goal: practical, affordable,
competitively-priced hydrogen vehicles and refueling by 2020. Projects
involving collaboration between different countries are being proposed
and reviewed for selection.
state initiatives and demonstration projects
The Department supports the growing number of state hydrogen
initiatives by providing accurate and objective information about
hydrogen and fuel cell technologies. Hydrogen initiatives exist in more
than ten states, including California. The Department is a member of
the California Fuel Cell Partnership and has participated on planning
committees for the California Hydrogen Highway Network. Today, 21 full
members and ten associate members representing eight automakers, four
fuel providers, the supplier industry, as well as state and Federal
Government agencies (including DOE, DOT, and EPA), are working together
through the Partnership to share their experiences operating first-of-
their-kind research vehicles throughout California. The objective of
the new Hydrogen Highway Network initiative, championed by Governor
Schwarzenegger, is to ensure that hydrogen fuel availability will match
fuel cell vehicle demand.
As mentioned earlier, the Department's partnership with the
automotive and energy industries to conduct a national ``learning''
demonstration project will expand the Program's research while
leveraging industry investments in hydrogen and fuel cell technologies;
subject to appropriations, the first phase of the project will total
over $350 million, with more than 50 percent coming from industry. The
project includes four automotive and energy teams made up of General
Motors and Shell; Ford and BP; DaimlerChrysler and BP; and Chevron and
Hyundai-Kia.
The goals of the project are:
to obtain detailed component and performance data to guide
the Department's hydrogen and fuel cell research, and
to validate industry's progress toward meeting the
milestones leading up to the 2015 commercialization decision.
Three major milestones for 2009, when phase one ends, are: 2,000-
hours fuel cell durability; 250-mile vehicle range; and $3.00 per
gallon gasoline equivalent hydrogen fuel.
While hydrogen fuel infrastructure and fuel cell vehicle
technologies are not ready for widespread deployment or
commercialization, DOE believes there is tremendous benefit in energy
and auto companies working together before the market introduction
phase to ensure that there is seamless integration. Transitioning to a
hydrogen-based infrastructure from today's petroleum infrastructure
will require coordination between stakeholders. For example, standards
for hydrogen purity must be addressed before commercialization can
happen. Fuel cell manufacturers would like the purest hydrogen
available to ensure the best performance and longest durability;
however, it will not be cost-effective for energy suppliers to produce
and deliver perfectly pure, laboratory-grade hydrogen. Therefore, some
compromise must occur and the demonstration program will provide the
data necessary to facilitate development of hydrogen fuel quality
standards prior to commercialization and infrastructure investment.
toward the hydrogen future
DOE is looking to the future as well. Just as we have already made
progress, we plan to have significant progress next year. The progress
will be tracked using performance-based technical and cost milestones
that provide clear and quantifiable measures. We will report this
progress annually to Congress and to the Office of Management and
Budget.
For our critical targets, it is important that we verify our
progress in a way that is independent and transparent. In Fiscal Year
2006, three major technical milestones will be assessed using
independent review:
In hydrogen storage, we will determine the potential of
cryogenic-compressed hydrogen tanks to meet DOE's 2010 targets.
In fuel cells, we will evaluate high-volume fuel cell cost
per kilowatt against our 2006 target of $110 per kilowatt and
towards meeting the 2010 target of $45 per kilowatt.
In hydrogen production, we will determine if the laboratory
research is complete for $3.00 per gallon gasoline equivalent
with distributed natural gas reforming technology. This
technology will need to be validated later at full-scale.
In addition, high-volume manufacturing processes must be developed
to lower the costs of hydrogen and fuel cells. Manufacturing R&D
challenges for a hydrogen economy include developing innovative, low-
cost fabrication processes for new materials and applications as well
as adapting laboratory fabrication techniques to enable high-volume
manufacturing. The Hydrogen Program is working with the Department of
Commerce and other Federal agencies to create a roadmap for developing
manufacturing technologies for hydrogen and fuel cell systems as part
of the President's Manufacturing Initiative. The roadmap will help to
guide budget requests in Fiscal Year 2007 and beyond. This work is part
of the Interagency Working Group on Manufacturing R&D, which is chaired
by the Department of Commerce and includes 14 Federal agencies. The
Working Group has identified three focus areas for the future: nano-
manufacturing, manufacturing R&D for the hydrogen economy, and
intelligent and integrated manufacturing systems. Manufacturing R&D for
the hydrogen economy will be critical in formulating a strategy to
transfer technology successes in the laboratory to new jobs, new
investments and a competitive U.S. supplier base in a global economy.
Successful commercialization of hydrogen technologies requires a
comprehensive database on component reliability and safety, published
performance-based domestic standards, and international standards or
regulations that will allow the technologies to compete in a global
market. Initial codes and standards for the commercial use of hydrogen
are only now starting to be published. Research will be conducted in
Fiscal Year 2006 to determine flammability limits under real-world
conditions and the dispersion properties of hydrogen under various
conditions and also to quantify risk. Through such efforts, critical
data will be generated to help write and adopt standards and to develop
improved safety systems and criteria. DOE is also working closely with
the Department of Transportation in hydrogen codes and standards.
conclusion
Mr. Chairman, the Department of Energy welcomes the challenge and
opportunity to play a vital role in this Nation's energy future and to
help address our energy security challenges in such a fundamental way.
This completes my prepared statement. I would be happy to answer any
questions you may have.
Senator Alexander. Thanks, Mr. Faulkner. How long does your
schedule permits you to stay?
Mr. Faulkner. As long as you want.
Senator Alexander. That's terrific. Well, why don't I
invite the other three witnesses to come forward, and we'll ask
them to present their testimony. Mr. Bentham, why don't you go
first, and then Dr. Burns, and then Mr. Campbell. Thank you
very much for being here today.
STATEMENT OF JEREMY BENTHAM, VICE PRESIDENT, ROYAL DUTCH SHELL,
AND CHIEF EXECUTIVE, SHELL HYDROGEN
Mr. Bentham. Thank you very much, indeed, Mr. Chairman and
Senator Dorgan. I really appreciate the invitation to testify
before this committee.
My name is Jeremy Bentham. I'm the vice president of Royal
Dutch Shell responsible for the hydrogen business and the chief
executive of Shell Hydrogen. I'll provide the oral summation
here, and ask that my written testimony be submitted for the
record.
Senator Alexander. It will be.
Mr. Bentham. I thoroughly agree with you that what we're
discussing here is a real opportunity to take action today that
will have a significant impact on building the kind of future
that we want for our children, for our grandchildren. Clearly,
we mustn't underestimate the scale or the durability or the
seriousness of the commitment that's required to face
challenges that are related across the fields of energy,
security, environment, and the economy. However, alongside the
efficient use of ever-cleaner and advanced familiar fuels, we
are convinced that a national portfolio that includes a
significant use of hydrogen-powered fuel cell applications will
make an important contribution to addressing the fundamental
issues we collectively face. Hence, we do believe that the U.S.
Senate is showing responsible leadership in helping to develop
the hydrogen as a transportation fuel, as we've seen in the
Senate's version of the energy bill.
We must recognize that the goal of introducing hydrogen on
a significant scale requires an unprecedented joint undertaking
by government, by the automotive industry, and by energy
companies. My remarks will cover three areas: First, the
technical and operational challenges that we face; second, the
importance of public/private partnership; and third, what I
believe it will take to accelerate the commercialization of
hydrogen-powered fuel cell technology.
First of all, the technical and the operational challenges.
The real key to this undertaking is the promise of attractive,
affordable and commercially successful fuel cell vehicles.
While there are other areas of interest, such as station re-
power, we believe that the transport market must be the primary
focus of attention. It's the vehicles themselves that are
currently the furthest away from commercial readiness. So
substantial R&D attention must be directed to inexpensive, on-
board hydrogen storage solutions, to the fuel cell power plant
itself, and to low-cost manufacturing systems. However, while
we know that technological challenges remain in all these
areas, we believe there is increasing confidence that vehicles
with the necessary operational performance will be introduced
within the next few years.
The core challenge to making these affordable will be
achieving sufficient levels of mass production to drive down
the costs. That will require a period of market-based
government incentives to build up vehicle demand and supply, to
build up the necessary component-supply businesses, and we need
to start building these supply chains and the frameworks for
these incentives right now.
Moving to a fuel supply perspective, it shouldn't be
forgotten that there already is, and has been, a hydrogen
economy and hydrogen infrastructure in place for decades.
Currently, 50 million tons of hydrogen are produced and
consumed globally every year, mainly in industrial settings,
such as in our own refineries, for producing clean traditional
fuels.
Now, just to put that number in perspective, that amount of
hydrogen could power all of the family cars in the United
States, if they were fuel cell vehicles. Also, most areas of
significant population are close to significant hydrogen
production. I hope you can see back here a beautiful satellite
photograph of the United States, showing the areas of
population as the light areas, and it's overlaid with the areas
within 60 miles of current production sites. Most areas of high
population are already close to hydrogen production, so really,
the only new factor is to bring hydrogen out of its industrial
setting and into the everyday life of customers, in convenient
locations.
This can be done in an attractive way, as has already been
demonstrated, for example, with a combined hydrogen and
gasoline station at Benning Road, here in Washington, DC. As
you may know, and has been mentioned, President Bush and a
number of people from congressional and regulatory staffs have
visited Benning Road, and we are pleased to host any and all of
you, if you would like to visit that as well.
We're also confident that we already understand how to
supply hydrogen fuel at an attractive price, in a commercially
sustainable way, into a reasonably established market. That's
an important statement to make. The main challenge to fuel
suppliers will come during the earliest phases of market
growth, when the utilization rate of individual facilities will
be low. To get the ball rolling will take both ingenuity from
companies like my own, and some time-limited, market-based
incentives from governments.
Looking to the public policy standpoint, one of the
attractions of hydrogen fuel is that it can be produced from a
wide range of primary energy sources, whether that's natural
gas, coal, or renewable sources such as wind and solar energy.
We anticipate that the bulk of hydrogen will initially be
produced, as it is now, from natural gas, with increasing use
of coal over the course of time, and eventually renewable
resources as they become abundant in themselves. We also
believe that there must be a goal over the longer term of not
adding to the carbon-loading of the atmosphere as we produce
hydrogen. Whether that will be through carbon dioxide
geological sequestration, and in the longer term, through the
use of the renewable energies, we believe that none of these
challenges are unsolvable.
Second, if I can move to some comments on public/private
partnership and Federal Government programs. Strong government
support and structures are required to shape what I would call
a coordinated and geographically-concentrated introduction of
vehicles and infrastructure. Government action can be very
helpful in orchestrating the dance that needs to take place
among the different partners. Government action is also
critical in addressing potential roadblocks on the way, such as
consistent codes and standards, insurance and liability, and
intellectual property rights.
Now, there's clearly a definite need, as you are doing, to
continue to promote public awareness and understanding. That's
an educational effort that can be effectively fostered by
government. As you've recognized, it's also critical that we
begin to establish the framework of economic incentives that
will give all parties the confidence to invest in the new
technologies, establish the supply chains whilst those
economies of scale, large-scale production, and reasonable
facility utilization are building up.
The current Department of Energy Vehicle and Fuel
Validation program, and the other Department of Energy
programs, are a useful platform for the future. We support them
as far as they go. However, we do believe that to take the next
steps in moving from research to reality requires further
attention to the bridge that needs to be built over the next 10
years from small-scale demonstration units toward
commercialization and commercial operation.
Finally, a few views on what it will take to accelerate
commercialization.
Senator Alexander. Mr. Bentham, what we were trying to do
is keep each of the testimonies to about 5 minutes so we could
have more back and forth. So if you could go ahead and
summarize your remaining remarks, we'll come back.
Mr. Bentham. I'll summarize in 1 minute, if I may. Less
than a minute.
We believe that the establishment of some large-scale,
integrated projects that we call ``Lighthouse Projects'',
because they light the way to the future, will be critical. And
we believe that these will require the use of many vehicles so
that we get operational validation not only of the vehicles,
but also a mini-network that shows supply and refueling
operations in considerable loading.
So, for us, the next question is which public authorities
and which governments will provide the environment to enable
these to take place? We think that where there are these
conditions and where these Lighthouse Projects are first
established will determine whether North America, Europe or
Asia will take the lead in building these industries, and
through that lead, generate the greatest benefits to the
economies and the environments.
In summary, therefore, I think the final, the primary
challenges we face in the area are the vehicle technology and
mass production, with the effective utilization of facilities
being an important secondary consideration, and that the
public/private lighthouse projects will be an important bridge
toward commercialization.
I'll conclude with my comments there and, of course, will
respond to any questions that you have.
[The statement of Mr. Bentham follows:]
Prepared Statement of Jeremy Bentham, Vice President, Royal Dutch
Shell, and Chief Executive, Shell Hydrogen
Good afternoon, Senators. My name is Jeremy Bentham. I am the Vice
President of Royal Dutch Shell responsible for the hydrogen business
and the chief executive of Shell Hydrogen. Thank you for the invitation
to testify before this committee and share my views on how the hydrogen
& fuel cell industry could--and should--develop over the coming years.
Clearly, we must not underestimate the scale, durability and
seriousness of commitment required to grasp the related energy,
security, environmental, and economic challenges we collectively face.
Alongside the efficient use of ever-cleaner and more advanced familiar
fuels, we are convinced that a national energy portfolio that includes
significant use of hydrogen fuel and fuel-cell applications will make
important contributions to addressing these fundamental issues. The
U.S. Senate has shown leadership in helping develop hydrogen as a
transportation fuel as we've seen in the Senate's version of the energy
bill, but we should not underestimate the scale of developments
required.
First of all, I think we should all acknowledge that the goal' of
moving to hydrogen is an unprecedented undertaking by government, auto
industry, and energy companies and just importantly, such an effort is
needed to address the long term energy needs of the U.S. and the world.
Even a brief look at a simplified overview of the current energy
picture of the United States highlights key features such as the almost
complete dependence of transport on a single, primary, imported energy
source--oil, and also the high amount of energy which goes to waste
rather than useful service, which is an environmental as well as an
economic burden.
Hydrogen fuel and fuel-cell applications can make important
contributions to addressing these fundamental issues, such as providing
a transport fuel that can be derived from a wide range of present and
future primary energy sources, to be used in vehicles with high
efficiency, low emissions, and high customer attractiveness. Also, this
technology enables electricity generation in widely distributed
locations where much of the currently wasted heat generation can be
usefully applied. Such a portfolio can provide much-needed options for
national policy-makers, and attractive choices for customers.
That's a positive outlook. But we have to be realistic. It comes at
a cost. It requires long-term investment, and it requires long-term
commitment from both industry and government. Everyday incremental
developments and ongoing market influences will bring everyday
incremental changes, but I think most people are looking for more than
this. Governments want those bigger challenges to be met as quickly as
possible.
As businessmen and industrialists we need to get down to the
practicalities of how to invest private and public resources wisely to
making this happen. And to begin with, that means looking at what we've
achieved so far; what we've learnt from it; and what we need to do next
to make that positive outlook a reality.
shell: a wealth of experience in hydrogen
For an energy company like Shell, dealing with hydrogen is, of
course, nothing new. We have many decades of experience using hydrogen
in our refineries, where we handle over 7,000 tons a day as part of the
production of ever-cleaner and better traditional fuels.
From a fuel supply perspective, it should not be forgotten that
there is already a hydrogen economy and hydrogen infrastructure.
Globally, 50 million tonnes are produced and consumed every year. Just
to put this number into perspective, this amount of hydrogen could
power all the family cars in the U.S.A. if they were fuel cell
vehicles. Also, most areas of significant population are already close
to significant hydrogen production (as shown in this satellite
photograph of the U.S.A. at night overlaid with the areas within 100km
of current production sites). Industrial hydrogen production is already
widespread and close to those who would want to use it. We only have to
compare the locations of major cities with those of facilities where
hydrogen is produced to see how significant these nodes are. Indeed, in
the U.S., and throughout the industrialized world, few people are more
than 60 miles away from major hydrogen production site. This deserves
exclamation points because I'm sure many us had not come to realize
this until recently.
So we already have an initial hydrogen platform. The challenge now
is to bring it out of its industrial setting and into convenient,
consumer-friendly locations. That this can be done in an attractive way
has already been demonstrated, for example, with our Benning Road
station here in Washington DC.
We are also confident that we already understand how to supply
hydrogen fuel at an attractive price in a commercially sustainable way
into a reasonably established market. The main challenge to fuel
suppliers will come during the earliest phases of demand growth when
the utilisation rate of individual facilities will be low. To get the
ball rolling will take both ingenuity from companies such as my own and
some limited market-based incentives from governments.
From a public policy standpoint, one of the attractions of hydrogen
fuel is that it can be produced from a wide range of primary energy
sources, including natural gas, coal and renewable sources such as
solar and wind energy. We anticipate that the bulk of hydrogen will
initially be produced, as now, from natural gas, with increasing use of
coal over the course of time. We also believe that there must be a goal
over the longer term of not adding to the carbon loading of the
atmosphere; whether through CO2 geological sequestration or
through the use of renewable energies such as wind and solar--but we
believe that none of these are challenges are unsolvable.
Shell Hydrogen was established six years ago to bring a focus on
hydrogen as an ordinary fuel in itself, in transport and distributed
power applications. And from what we have learned since, we believe
that it can indeed become an important element in the future energy
mix, along with the cleaner, traditional fuels, and important advances
such as modern bio-fuels and gas-to-liquids components.
To get there, however, a number of factors need to be in place,
such as inexpensive and compact hydrogen storage and purification, and
cheap large-scale production. Hence our active role in a range of
technology ventures in these areas. For example, Shell is proactively
involved in unconventional solutions to the storage issues. If more
familiar methods--such as ultra high pressure storage--remain too
expensive, then we already have an advanced role in seeking
alternatives.
We've also established Venture Capital enterprises and partnerships
within and across industries; and worked with government organizations
at local, regional and national levels worldwide. And finally--and most
conspicuously--we've been involved in demonstration projects that span
Europe, North America and Asia.
My main message for today is that we now need to move beyond the
small isolated demonstration projects we've seen so far, but before
addressing this central topic let's remind ourselves how far we have
come with the demonstrations.to date.
demonstrating in all the major hydrogen markets
An important step for us, of course, was opening the very first
publicly accessible Shell-branded hydrogen refuelling station in the
world in Reykjavik, just 2 years ago. In Europe, since then, we've
helped set up hydrogen stations for fuel cell buses in Amsterdam and
Luxembourg, as part of the Clean Urban Transport for Europe initiative
On another continent, the Japan Hydrogen and Fuel Cell
Demonstration Project--or JHFC--is progressing well, with 10 refuelling
stations around the Tokyo metropolitan area serving more than 50 FCVs.
The Ariake station that Shell operates is the most highly used of these
stations, which means it's probably the most utilised hydrogen station
in the world. Indeed, when I last visited Japan, I actually saw a queue
of FCVs waiting to be refuelled! And these from as many as eight
different auto manufacturers.
In North America, we are active in California and we have launched
our plans to build an `East Coast Corridor'--starting with our station
on Benning Road here in Washington DC, to be extended with a station in
New York and a station connecting these important cities in 2006. These
form part of our infrastructure validation project with our partners
General Motors and the Department of Energy. I would like to emphasise
the importance of our station here in Washington. This station
showcases the first hydrogen dispenser fully integrated at a regular
retail gasoline station in the United States, servicing a fleet of six
FCVs from General Motors. It's well worth a visit to sample the
customer experience of the future.
making the most of lessons learnt and technical challenges
So . . . we've been very busy and we've learnt a great deal; and,
I'm pleased to say, the results continue to be positive. True, we see
the technological hurdles still to be overcome--in particular, the
development of inexpensive, on-board hydrogen storage systems; and
affordable, mass-produced fuel cell systems. But we believe that none
of these are unsolvable.
The real key to this undertaking is the promise of attractive,
affordable, and commercially successful hydrogen-powered fuel cell
vehicles. This must be the primary focus of attention, and it is the
vehicles themselves that are the farthest from commercial readiness.
R&D attention should be directed to inexpensive on-board hydrogen
storage solutions, to the fuel cell powerplant itself, and to low-cost
manufacturing systems. While technological challenges remain in these
areas, however, there is increasing confidence that vehicles with the
necessary performance will be introduced in the next few years. The
core challenge to making these affordable will be achieving sufficient
levels of mass production to drive down costs. This will require a
period of market-based government incentives to build up vehicle demand
and supply and the necessary component supply businesses, in a rapid
and timely fashion. We need to start building these supply chains and
designing these incentives now.
Our experience indicates that there is every likelihood that our
industries will be able to bring hydrogen-powered FCVs to the point
where both vehicle and fuel are attractive and affordable. The trick
will be achieving mass production to drive down costs, as indicated in
this estimate of the impact of production volume on drive-train
affordability. We also believe that the public benefits resulting from
this justify the considerable government interest and investment
required to reach this point.
And, of course, we see that public response to the introduction of
hydrogen-powered technology developments still varies enormously--from
enthusiastic to fearful, depending on how effectively public engagement
has been conducted locally, or how politicised the subject has become.
We've certainly noticed a difference between working in communities
like Iceland--where support and desire have really been built up over
several years--and here in Washington DC, where our project was
initially greeted with both community and regulatory suspicion.
Building public confidence as early as possible is important, so
that we have the fertile ground of public support and regulatory
experience when take-off does, eventually, becomes possible. Otherwise,
progress will suffer long and unnecessary delays. There is a most
definite need to promote public awareness and understanding--an
educational effort that can be effectively fostered by government.
So where do we go from here? Let me return to the central theme I
mentioned earlier. While we have made tremendous progress, it's clear
we can't rest on our laurels. And instructive though our demonstration
projects have been, continuing to serve a handful of vehicles from
single sites doesn't move us forwards.
So our thoughts on the next move are very clear--we need to
replicate more realistic scenarios. Hence Shell's proposal last year
for the establishment of a small number of large-scale, integrated
demonstration activities, which we call Lighthouse Projects.
lighthouse projects bridge the gap
Strong government support and structures are required to shape a
coordinated and geographically concentrated introduction of vehicles
and deployment of fueling infrastructure.
Government action is also critical in addressing potential early
roadblocks such as codes and standards, insurance and liability, and
intellectual property rights.
It is also critical that we begin to establish a framework of
economic incentives that will give all parties the confidence to invest
in these new technologies, and establish supply chains, while the
economies of large-scale production and reasonable facility utilisation
build up
The current Department of Energy vehicle and fuel validation
programme, and other DOE programmes, are a useful platform for the
future, as far as they go. However, to move from Research to Reality,
now requires further attention to the bridge that needs to be built in
the next ten years from small-scale demonstrations towards commercial
operation.
As mini-networks of consumer-friendly retail sites, we believe that
Lighthouse Projects will play a crucial role in bridging the gap
between the current demonstration projects and commercialisation. In
our view, they will act as the stepping stone to a commercial
infrastructure roll-out.
We recommend focusing on a limited number of large-scale projects,
mainly focused on transport applications involving hundreds of vehicles
and several combined hydrogen and gasoline refuelling stations
operating on a semi-commercial basis. Other relevant applications may
also be included to maximise synergy.
Involving several different companies--in partnership with
government authorities--Lighthouse Projects will not only significantly
increase coverage and mobility, they will provide us with the real-
world operational and economic data we desperately need. As such, they
will enable us to address the biggest barriers that face the
development of this industry.
Why so many vehicles? Well one reason is that an effective
component supply chain is going to be essential for vehicles and other
applications to move down the cost curve towards mass production. And
this means giving component suppliers a realistic outlook on activity
and investment levels over the next few years, while applications
achieve the necessary performance and attractiveness criteria.
And from a fuel provider's position, we need to build experience in
conditions where facilities are utilised at levels much closer to
future realities. And last, but certainly not least, we need to
demonstrate these facilities on a scale that will really inform and
interest the public--our future customers.
In short, we believe that if we don't take the step to full
Lighthouse Projects, we cannot build and test the strategies,
disciplines and incentive mechanisms we need to coordinate our
activities for the next phase of development and allow the industry to
grow.
While the current United States Department of Energy infrastructure
validation projects and other U.S. initiatives are very positive and
valuable developments, the JHFC project in Japan is probably the
closest current example to our proposal, and we're watching it closely
to see how it develops; and particularly the growth in the number of
vehicles involved.
We believe that failure to take the next step to full Lighthouse
Projects could have serious consequences.
keeping the focus
First, there is a real danger that we don't focus our efforts,
government funding and industry attention will become hopelessly
fragmented; with valuable time being lost through duplication and re-
inventing the wheel.
This is entirely possible--we've already experienced the issue of
infrastructure ``earmarks'' in the U.S.; and in Europe, there will be a
strong push from all 25 individual member states to site activities in
their own country. But if our next move sees five or six vehicles
scattered in each of 100 places throughout the world, we'll end up
going nowhere fast.
utilisation hurdles
The second danger is that even if we get over the technology and
mass production hurdles for fuel cell vehicles, we will run into a huge
infrastructure `utilisation hurdle' that significantly increases
hydrogen supply costs.
For example, we have results from a series of scenarios from a
study of the roll-out of vehicles and fuel infrastructure in a major
metropolitan area. In one set of scenarios retail stations are located
in areas and sites where they do not stimulate good additional demand
for fuel cell vehicles, and experience low facility utilisation. In
other scenarios, however, there is closer coordination with vehicle
manufacturers on their anticipated customer needs, and with local
authorities on effective site development, and this is built on better
experience with effective utilisation of facilities through realistic
Lighthouse Projects. This leads to much better alignment of capacity
with anticipated demand, and more cost-effective matching of customer
interests.
From our analysis of these scenarios, it is clear that a
coordinated infrastructure roll-out, making good use of existing
manufacturing and retail assets, realises much lower full supply
costs--up to a factor of two lower! The alternative is higher hydrogen
fuel prices, but that will simply discourage vehicle purchase.
Looking forwards, therefore, there is a great need for mechanisms
like larger scale Lighthouse Projects that encourage coordination
between vehicle and fuel suppliers--with suitable investment
incentives--to enable the industry to grow from its pre-commercial
beginnings, to the next phase of early commercial development.
This means having fiscal and other economic incentives that give
manufacturers, infrastructure providers and users the confidence to
invest in these new technologies and establish supply chains while the
economies of large-scale production build up. It also means having more
flexible, dynamic financial instruments aimed at fostering industry
growth.
It means establishing regulations, codes and standards, and
intellectual property rights, to encourage new technology and protect
investment in R&D. It also means building up human capital--trained
scientists and engineers. And it most definitely means promoting public
awareness and education.
And to achieve all of this requires very substantial public-private
partnerships.
conclusion
Lighthouse Projects as we have defined them are the catalyst to
fulfilling all these conditions, for overcoming fragmentation, and for
realising the next step towards commercialisation of the industry.
Building on our experience and valuable lessons so far, the next
question is simply which governments and public authorities will
provide the environment for this step, and which businesses will
respond. Where these lighthouse projects are established will determine
whether North America, Europe or Asia will build a lead in these
industries and, through that lead, secure the greatest benefits to
their economies and environments. I look to our current industry and
government partners, and other serious parties, to join with us in
developing innovative partnerships to realise these lighthouse
projects.
In summary, therefore, I believe the primary challenges to
developing the hydrogen opportunity are fuel cell vehicle technology
and mass production, with the effective utilisation of refuelling
facilities being an important secondary consideration, and that public-
private Lighthouse Projects will be an important bridge towards
commercialisation.
Thank you.
Senator Alexander. Thank you very much.
Dr. Burns.
STATEMENT OF LAWRENCE D. BURNS, PH.D., VICE PRESIDENT, RESEARCH
& DEVELOPMENT AND STRATEGIC PLANNING, GENERAL MOTORS
CORPORATION
Dr. Burns. Mr. Chairman and Senator Dorgan, I'm responsible
for leading General Motors' fuel cell program. We place very
high priority on fuel cells and hydrogen as the long-term power
and energy carrier for automobiles. We see this combination as
the best way to ensure energy independence, remove the
automobile from the environmental debate, to grow our economy,
to grow jobs, and very importantly, the best way to allow
automakers to create better vehicles for our customers and the
kinds of vehicles that they really want to buy in high volume.
Now, high volume is absolutely critical. It's the only way we
could meet the growing global demand for automobiles while at
the same time realize the energy and environmental benefits
that we're all seeking.
Our fuel cell program is focused in three areas. First,
we're developing a fuel cell propulsion system that can compete
head-to-head with an internal combustion engine system. Second,
we're demonstrating our progress publicly to let key
stakeholders know the potential of this technology. And
finally, we're collaborating with energy companies and with
governments to ensure the safe, convenient and affordable
availability of hydrogen in a way that can lead to rapid
transformation of the industry.
We're targeting to design and validate a fuel cell
propulsion system by 2010 that has the cost, durability and
performance of an internal combustion engine system. Now that's
at an assumed volume on the cost side, consistent with the
scale of our industry. This is an aggressive timetable, and
it's clear that it's being industry-led. It's also clear that
we believe these technologies have matured to the point where
such a timetable is possible. We've made significant progress
on the technology--in the last 6 years, we've improved fuel
cell power density by a factor of seven. This helps us enhance
the efficiency and reduce the size of the components for the
car. We significantly increased the durability, reliability and
cold start performance of our fuel cells. We are developing
safe hydrogen storage systems that are beginning to approach
the capability to deliver the range that our customers will
expect between fill-ups. And we've made significant progress on
cost reduction through technology improvements and systems
simplification.
Our progress has convinced us that fuel cell vehicles have
the potential to be fundamentally better automobiles on nearly
all attributes that are important to our customers. This is a
key to enabling high-volume sales. And with just one-tenth as
many moving parts as internal combustion engine systems, we're
confident that our vision to make this technology cost-
competitive and durability-competitive is indeed possible.
We've made excellent progress with respect to
demonstrations. We have a fleet of six hydrogen vehicles here
in Washington, DC. It's now in its third year. We've had nearly
3,000 people take a ride or drive our hydrogen fuel cell
vehicle. The FC vehicle fleet is actually fueled at the fuel
station that Jeremy mentioned earlier, on Benning Road. This is
a very important, albeit small, step toward demonstrating the
infrastructure. We've collaborated with the U.S. Army in
building the first fuel cell-powered military truck, and it's
being evaluated now at Fort Belvoir. We also will field 40 fuel
cell vehicles as part of the Department of Energy program, and
these vehicles will span two generations of technology. And
finally, we've made visible the vision for a totally re-
invented automobile around fuel cells and advanced electronics,
they go by the names of AUTOnomy, Hy-wire, and most recently,
Sequel. Sequel was revealed at this year's North American
International Auto Show in Detroit, and it will have a
capability of a range of 300 miles between fill-ups. It's a
sport utility vehicle aimed right at the sweet spot of our
market, with acceleration from zero to 60 miles per hour in
less than 10 seconds. And by the way, it was designed to meet
Federal Motor Vehicle Safety Standards.
Now, with respect to collaboration, we're working closely
with Shell, with Sandia, with Dow, with Hydrogenics, with
QUANTUM, with the Department of Energy, and then part of the
FreedomCAR fuel cell partnership with other auto companies and
energy companies. We see the biggest challenge to vast industry
transformation to hydrogen and fuel cells as being the fueling
infrastructure. A major advantage of hydrogen is that it can be
obtained from numerous pathways, including renewable sources.
We think it's the key to relieving our 98 percent dependence on
petroleum as energy for our cars and trucks.
Building a new infrastructure is a formidable task, but as
Jeremy mentioned, 50 million tons per year of hydrogen are
already being used globally, and that equates to 200 million
vehicles worth of hydrogen, if it was used for those purposes.
I think the important point here is that the world has a lot of
experience producing hydrogen in large volumes, doing it
safely, and doing it at commercially competitive costs for
those applications. We also do not have to build the
infrastructure overnight. The entire U.S. fleet would turn over
in about 20 years, and as such, we would be able to pace the
infrastructure with the growth of that fleet.
Now, we applaud the Department of Energy and Federal
Government initiatives on hydrogen infrastructure; however we
believe more needs to be done if we're going to be ready for
large-scale demonstrations, and ultimately mark our growth in
the next decade. We'd like to see the Federal Government
articulate a clear and broadly sanctioned vision that requires
more than just the Department of Energy and Department of
Transportation to make hydrogen and fuel cell technology
development and application a high priority. Clear, consistent
communication to the American people of this vision and the
underlying rationale for hydrogen and fuel cells are also
vitally important to building public acceptance of fuel cell
vehicles.
The energy bill is directionally quite good, in our
judgment, but if we are really serious about transforming to a
hydrogen economy, we're going to have to do more in the coming
years. The auto industry alone is spending about a billion
dollars a year to develop this technology, so if the Government
sees a need to accelerate progress, we believe that government
funding at greater levels is warranted.
We welcome, in particular, the energy bill's increased R&D
funding. Now, as I mentioned, we're targeting a first-
generation system by 2010 that can compete with the internal
combustion engine system, but the real volume--and the real
benefits--will come from second-generation technology and
beyond. So, continued R&D on advanced materials for fuel cell
components and for hydrogen storage is very much welcome.
Market demand for fuel cell vehicles must also be encouraged.
The price of hydrogen will be a critical factor in doing that,
so one consideration would be, perhaps, to not tax hydrogen
with fuel taxes, maybe, perhaps until we have up to 5 million
vehicles on the road. And since availability will also be an
issue, a generous tax credit would ensure the investments
necessary for developing hydrogen filling stations and
mitigating the risks of these investments.
Looking past 2010, we must start thinking about moving
beyond today's small scale demonstrations. We welcome the
Federal fleet purchase program of the energy bill, and believe
Congress should consider doing more in this area. This would be
an important bridge to commercially competitive vehicles and
high-volume production.
To summarize, General Motors sees hydrogen as the long-term
automotive fuel and the fuel cell as the long-term power
source. Our fuel cell program seeks to create clean,
affordable, full-performance fuel cell vehicles that really
excite and delight our customers, and that's really the key to
getting to high-volume sales in these vehicles. We believe
customers will really want to buy these vehicles in large
numbers, and that society will reap the economic energy and
environmental benefits. Thank you.
[The statement of Dr. Burns follows:]
Prepared Statement of Lawrence D. Burns, Ph.D., Vice President,
Research & Development and Strategic Planning, General Motors
Corporation
Mr. Chairman and members of the Committee, thank you for the
opportunity to testify today on behalf of General Motors. I am Larry
Bums, GM's Vice President of Research & Development and Strategic
Planning, and I am leading GM's effort to develop hydrogen-powered fuel
cell vehicles.
GM has placed very high priority on fuel cells and hydrogen as the
long-term power source and energy carrier for automobiles. We see this
combination as the best way to simultaneously increase energy
independence, remove the automobile from the environmental debate,
stimulate economic and jobs growth, and allow automakers to create
better vehicles that customers will want to buy in high volumes.
High volume is critical. It is the only way to meet the growing
global demand for automobiles while realizing the large-scale energy
and environmental benefits we are seeking.
GM's R&D program is focused on three areas:
Developing a fuel cell propulsion system that can compete
head-to-head with internal combustion engine systems.
Demonstrating our progress publicly to let key stakeholders
experience firsthand the promise of this technology.
Collaborating with energy companies and governments to
ensure that safe, convenient, and affordable hydrogen is
available to our customers, enabling rapid industry
transformation to fuel cell vehicles.
We are targeting to design and validate an automotive-competitive
fuel cell propulsion system by 2010. By automotive competitive, we mean
a system that has the performance, durability, and cost (at scale
volumes) of today's internal combustion engine systems.
This aggressive timetable is a clear indication that fuel cell
technology for automotive applications is industry driven (rather than
government driven) and that this technology has matured to a point
where such timing is indeed possible.
We have made significant progress on the technology:
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, and we have begun to
explore very promising concepts for a new generation of storage
technology.
We have made significant progress on cost reduction through
technology improvements and system simplification.
Our progress has convinced us that fuel cell vehicles have the
potential to be fundamentally better automobiles on nearly all
attributes important to our customers, a key to enabling high-volume
sales. And with just 1/10th as many moving propulsion parts as
conventional systems, our vision design has the potential to meet our
cost and durability targets.
We have also made excellent progress with respect to vehicle
demonstrations:
Our six-vehicle fleet demonstration here in Washington, D.C.
is now in its third year, with almost 3,000 people
participating in a ride or drive. We also have other
demonstration programs in California, Japan, Germany, and soon
in China.
The D.C. fleet is fueled at a Shell station equipped with a
hydrogen pump. This is the first retail outlet dispensing
hydrogen fuel in the U.S. and a significant, albeit small, step
toward a hydrogen infrastructure.
We collaborated with the U.S. Army on the development of the
world's first fuel cell-powered military truck; it is currently
being evaluated and maintained by military personnel at Fort
Belvoir.
We also will field 40 fuel cell vehicles, spanning two
technology generations, as part of the Department of Energy's
Controlled Hydrogen Fleet and Infrastructure Demonstration and
Validation Project. We are pleased to see that the Energy Bill
affirms this demonstration. This is the right size program at
the right time. It is large enough to generate real learnings
about operating fuel cell vehicles, without being so large that
it diverts the resources of automakers from our central focus
on automotive-competitive technology.
GM has also created the AUTOnomy, Hy-wire, and Sequel
concepts, which demonstrate how new automotive DNA can
transform our vehicles. Sequel, a five-passenger crossover SUV,
is the first fuel cell vehicle capable of driving 300 miles
between fill ups.
With respect to collaboration, we are working with key partners on
virtually every aspect of fuel cell and infrastructure technology.
Among our partners are Shell Hydrogen, Sandia National Lab, Dow
Chemical, Hydrogenics, and QUANTUM Technologies as well as the
Department of Energy, which includes the FreedomCar and Fuel
Partnership involving Ford, Chrysler, and five energy companies.
The biggest challenge to a fast industry transformation to hydrogen
and fuel cells is the fueling infrastructure. A major advantage of
hydrogen is that it can be obtained from numerous diverse pathways,
including renewable sources. As such, it promises to relieve our 98-
percent dependence on petroleum as an energy source for cars and
trucks.
Building a new fueling infrastructure is a formidable task.
Fortunately, we are not starting from scratch. A global hydrogen
infrastructure already exists today that produces 50 million tons of
hydrogen per year--which equals the amount of hydrogen needed to fuel
200 million fuel cell vehicles! While this hydrogen is currently
allocated to industrial uses, it shows that hydrogen can be produced
and used economically and safely on a huge scale in commerce.
We also do not have to build the infrastructure overnight. It takes
about 20 years to turn over the entire vehicle fleet, so it is possible
to evolve infrastructure development in line with vehicle production.
GM has calculated that an infrastructure for the first million fuel
cell vehicles could be created in the United States at a cost of $10-15
billion--about half the cost of the Alaskan oil pipeline (when its $8
billion price tag is converted into today's dollars). This
infrastructure would make hydrogen available within two miles for 70
percent of the U.S. population and connect the 100 largest U.S. cities
with a fueling station every 25 miles.
While this is a somewhat oversimplified calculation, it
demonstrates that an initial hydrogen infrastructure would not be cost
prohibitive. In fact, the cost is only a small fraction of the capital
the oil industry says it will need to keep up with increasing demand
for petroleum.
GM applauds the Department of Energy and the federal government for
its hydrogen infrastructure initiatives. However, in our view, much
more needs to be done if we are to be ready for the large-scale fuel
cell demonstration programs and market growth that we envision for the
next decade.
We would like to see the federal government articulate a clear,
concise, broadly sanctioned vision that requires agencies beyond DOE
and DOD to make hydrogen and fuel cell technology development and
application priority areas of engagement.
Clear, consistent, ongoing communication to the American people of
this vision and the underlying rationale for hydrogen and fuels cells
is also vitally important to building public acceptance of fuel cell
vehicles.
The Energy Bill now under consideration by Congress is
directionally quite good, but if we are really serious about
transforming to a hydrogen economy, there will be more to do in the
coming years. The automotive industry alone is probably spending close
to $1 billion per year on fuel cell technology. If government wants to
accelerate progress, a greater investment is warranted.
We welcome in particular the Energy Bill's increased funding for
R&D. Fuel cells energized by hydrogen fundamentally change the DNA of
the automobile. While we have made dramatic progress toward a first-
generation automotive-competitive system, like with any new technology,
the real volume and benefits will be realized in second-generation
designs and beyond. As such, we would like to see a significantly
expanded national R&D initiative on breakthrough fuel cell materials,
hydrogen storage, and hydrogen generation--leveraging the creative
capabilities of our government labs, universities, and industrial
research facilities--to help us move quickly to later-generation
designs.
Market demand for hydrogen fuel cell vehicles must also be
encouraged. The price of hydrogen will be a critical factor and
Congress should act now to exempt hydrogen from fuel taxes until,
perhaps, at least five million fuel cell vehicles are on the road.
Since availability will also be an issue, a generous tax credit would
ensure the investments necessary for development of hydrogen filling
stations by mitigating the risks of these investments.
Looking past 2010, we must start thinking about moving beyond
today's small-scale demonstrations. We welcome the federal fleet
purchase program in the Energy Bill and believe Congress should
consider doing more in this area. This would be an important bridge to
commercially competitive vehicles and high-volume production.
To summarize, General Motors sees hydrogen as the long-term
automotive fuel and the fuel cell as the long-term power source. Our
fuel cell program seeks to create clean, affordable, full-performance
fuel cell vehicles that will excite and delight our customers. We
believe customers will buy these vehicles in large numbers and that
society will reap the economic, energy, and environmental benefits.
I want to emphasize, however, that this is not just about car
companies wanting to sell vehicles. In a very real sense, this is about
nation building:
In the 19th century, the construction of the transcontinental
railway gave rise to new industries and changed our country's economic
destiny. In the 20th century, the development of the interstate highway
system achieved similar dramatic results. The creation of a hydrogen-
based economy is the 21st century's exercise in nation building.
Leadership in hydrogen and fuel cell technology will underscore our
pre-eminence in innovation and is absolutely vital to our future. It
will ensure our ability to compete on a global basis, enable
sustainable economic growth, and spur the creation of exciting new job
opportunities for future generations of Americans.
GM is ready and eager to work collaboratively with government,
energy companies, and suppliers to drive the hydrogen economy to
reality.
Thank you.
Senator Alexander. Thank you very much, Dr. Burns.
Mr. Campbell.
STATEMENT OF DENNIS CAMPBELL, PRESIDENT AND CEO, BALLARD POWER
SYSTEMS
Mr. Campbell. Senator Dorgan, and Senator Salazar.
Senator Alexander. I should welcome Senator Salazar from
Colorado, who has joined us. Thank you very much for being
here. We're going to--we're finishing the testimony of each of
the four witnesses and then we'll turn to questions, if that's
all right.
Mr. Campbell. My name is Dennis Campbell, and I'm the
president and CEO of Ballard Power Systems. We are the
exclusive fuel cell supplier to Ford Motor Company and to
DaimlerChrysler, and we also have supplied product to eight of
the top ten automotive manufacturers.
Fuel cells offer a game-changing technology that can help
us overcome some of the most pressing problems of our time:
energy security, global climate change, urban air quality and
long-term energy supply. In addition to the obvious benefits, a
fuel cell-powered car is also simpler to build, inherently more
reliable, with fewer moving parts, and can be more versatile,
feature-rich, and more fun to drive.
As with any disruptive technology, though, there are
critics, those who prefer the status quo, those for whom the
glass is always half empty. Well, today I'd like to respond to
the skeptics and the naysayers with a factual update that
suggests the hydrogen economy is closer than many people think.
I'll discuss three of the major challenges that must be
overcome--reducing the cost, increasing the durability and
ensuring reliable start-up in freezing temperatures.
Earlier this year, Ballard released a technology road map,
as part of our plan to demonstrate commercially viable
automotive fuel cells by 2010. Our road map is fully aligned
with the Department of Energy's 2010 automotive fuel cell
goals.
From 1999 to 2003, we reduced the cost of our fuel cells by
80 percent, while achieving a ten-fold increase in durability.
By 2004, we reduced our costs, adjusted for high-volume
production, to $103 per kilowatt. Our goal this year is to get
that down to $85, and we're confident that by 2010, we can
achieve the DOE's target of $30 per kilowatt.
The DOE has also set a commercial durability target of
5,000 hours--roughly the expected life of today's piston
engines, or 150,000 miles. We are on track to meet that goal.
Last year, we demonstrated automotive technology with a
lifetime of 2,200 hours. Our Ballard Power fuel cell buses in
Europe have surpassed more than 2,500 hours of operation, and
our stationary co-generation fuel cell system for Japan has
achieved more than 25,000 hours of lifetime.
A third technical challenge is to improve the ability of
our fuel cells to start in freezing temperatures. Last year, we
demonstrated an ability to start at minus 20 degrees Celsius,
reaching 50 percent of the rated power within 100 seconds. Our
goal for 2010 is to demonstrate start-up from minus 30 degrees
Celsius in 30 seconds.
Now, the technical challenges that we face are significant,
but our confidence in meeting them is bolstered each day by the
tremendous progress that we're making--progress in fundamental
understanding, in the development of advanced design tools,
simulation models and accelerated test methods, and in our
manufacturing process capabilities. A key enabler of this
progress is the demonstration of fuel cell vehicles in the
hands of everyday customers. Since 2003, Ballard fuel cells
have been powering 30 Mercedes-Benz transit buses in daily
revenue service in 10 cities throughout Europe. More than 3.5
million passengers have already experienced the advantages of
clean, quiet fuel cell transportation.
The Department of Energy's Fleet Validation Program takes
our field experience to the next level. Ballard, through its
automotive partners--Ford and DaimlerChrysler--as part of the
DOE initiative, will be powering approximately 60 vehicles in
various locations throughout the United States. Right now,
Ballard fuel cells are powering more than 130 vehicles on four
different continents.
Now, effective demonstrations are critical, but the single
most important determinant of when fuel cells can be introduced
to the mass market is the will and commitment of government.
There's no better investment for government to make in the
health and welfare of its people than an all-out Apollo-like
commitment to hydrogen and fuel cells.
The President's hydrogen initiative has galvanized the
industry and government in support of the hydrogen economy, and
continues to facilitate public/private collaboration. The
pending energy bills, R&D and demonstration programs, if fully
funded, will strengthen the President's initiative and provide
a vital boost to fuel cell commercialization.
It's a great start, and I congratulate the committee for
their outstanding leadership in getting the energy bill to this
point. But considering the stakes, I urge Congress to do more.
An effective national strategy to accelerate the hydrogen
economy must also include a transition to market plan. Only
government can overcome the classic ``chicken and egg'' problem
and kickstart the transition to fuel cell power. We applaud the
proposed $1,000 per kilowatt tax credit for stationary fuel
cells. For automotive fuel cells, the framework of an effective
transition to market program is present in legislation
sponsored earlier this year by Senators Dorgan and Graham, and
is also captured in the energy bill's vehicles and fuels
provision.
In closing, I strongly recommend that Congress
significantly increase funding for this fuel cell vehicle
procurement program. A vigorous procurement program targeting
fuel cell vehicles for Federal and State fleets must be in
place alongside R&D and demonstrations as a third component of
a national strategy to accelerate the hydrogen economy. A clear
commitment by Congress to make a specific and sizable annual
outlay in fiscal years 2010 to 2015 on State and Federal fuel
cell fleets would support the volume production necessary to
drive costs down, to stimulate the build-out of a hydrogen
infrastructure, draw additional private capital into the
sector, and provide the American public with a large-scale
introduction to the hydrogen economy. There's no doubt the
challenges are real, but they can and will be met.
Thank you for the opportunity to appear before you today,
and I look forward to answering any questions you may have.
[The statement of Mr. Campbell follows:]
Prepared Statement of Dennis Campbell, President and CEO,
Ballard Power Systems
Mr. Chairman, Members of the Committee, my name is Dennis Campbell
and I am the President and CEO of Ballard Power Systems. Thank you for
the opportunity to speak with you today on a subject of central
importance to today's pressing energy, economic, and environmental
challenges.
Ballard is recognized as the world leader in developing and
manufacturing proton exchange membrane or PEM fuel cells. We've been
developing PEM fuel cells since 1983 and hold nearly 1,000 patents,
granted and pending, on some of the most fundamental fuel cell
technologies.
We are the exclusive fuel cell supplier to Ford Motor Company and
DaimlerChrysler and to date have supplied eight of the top 10
automotive manufacturers. Today, Ballard fuel cells power more customer
demonstration vehicles than all other fuel cell developers combined.
Based on our more than 20 years of research, development and
extensive over-the-road experience, we've concluded--and I believe each
of the major automotive manufacturers would agree--that hydrogen fuel
cells will be the automotive powertrain of the 21st century.
Fuel cells have the power to transform our world because they offer
a comprehensive solution to the most pressing problems of our time:
energy security, global climate change, urban air quality, and long-
term energy supply.
In addition to these obvious benefits, a fuel cell powered
automobile is also simpler to build, inherently more reliable with
fewer moving parts, and has the potential to be feature rich, more
versatile and more fun to drive.
At Ballard our corporate vision statement is ``Power to change the
world''. While that may sound like a lofty statement, there are those
who would take it a step further and state that fuel cells in fact,
have the power to save the world.
The fact is, the hydrogen economy is not just some Utopian dream,
it is an opportunity that is within our reach. The building blocks are
here today, and we have clear line of sight to solutions that will meet
the remaining technical challenges.
As with any disruptive technology, there are legions of critics,
those who prefer the status quo, those for whom the glass is always
half empty.
When I was a student at the University of Oklahoma in 1967, the
Senator from New York came to our campus for a talk. That night, Bobby
Kennedy said something that has stayed with me all these years and
continues to inspire me today. He said:
``Some men see things as they are and ask `Why?' I dream things
that never were and ask, `Why not?' ''
At Ballard we are focused on ``why not.'' We're focused on solving
problems, on advancing the technology, on meeting the challenges.
We are responding to those who claim that fuel cell technology is,
and will remain, prohibitively expensive; that onboard fuel storage is
too difficult; that a hydrogen refueling infrastructure is too much
trouble; or that it takes too much energy to produce hydrogen.
We're focused on providing evidence, not opinion. Let me offer some
data to set the record straight.
Last year, before the House Science Committee, Dr. Joseph Romm, a
leading critic of fuel cell technology, claimed that PEM fuel cell
costs were about 100 times greater than the cost of a comparable
internal combustion engine and that a major technology breakthrough
would be needed in transportation fuel cells before they would be
practical.\1\
---------------------------------------------------------------------------
\1\ Dr. Joseph Romm before the House Science Committee, March 3,
2004.
---------------------------------------------------------------------------
The truth is that from 1999 to 2003, at Ballard we reduced the cost
of our fuel cell by 80% while achieving a ten-fold increase in
lifetime. By 2004, we reduced the cost of our fuel cell, adjusted for
high volume production, to $103 dollars per kilowatt--that's only a bit
more than three times higher than the commercial target the Department
of Energy has set for 2010. Our goal this year is to get down to $85,
and we're confident that by 2010 we can achieve DOE's target of $30 per
kilowatt.
This is not unlike developments in the computer industry. In 1956,
a gigabyte of memory cost $10 million. By 1980, the cost had been
reduced to $193,000 per gigabyte. Today, the cost is about $1.15.
The hydrogen delivery infrastructure, cited by many critics as an
insurmountable obstacle, is merely an engineering problem. There are
already more than 100 fueling stations in place around the world. The
estimated cost for broad deployment of a hydrogen fueling
infrastructure in the U.S. is variously estimated at between $10 and
$20 billion--not much more than the $11 billion that the industry
reportedly spends each year to simply maintain its present gasoline
delivery system.
With respect to on-board storage of hydrogen, progress is being
made with higher pressure tanks, purpose built vehicles, and the
investigation of solid storage media.
Governments are assembling the building blocks of the hydrogen
economy in fuel cell vehicle demonstrations throughout the world.
Through these demonstrations, citizens are gaining exposure to hydrogen
and fuel cell vehicles and the promise of clean, energy independent
transportation.
One such demonstration is the Department of Energy's Fleet
Validation program. Ballard, through its automotive partners Ford and
DaimlerChrysler, will be powering approximately 60 vehicles in this
initiative in various locations throughout the U.S., generating
important data and experience that will directly advance the
technology.
Another highly successful demonstration program is the European
Fuel Cell Bus Project. Since 2003, Ballard fuel cells have been
powering 30 Mercedes-Benz Citaro buses in daily revenue service in 10
different cities. This program is co-financed by the European Union.
To date, more than 3.5 million passengers have ridden these Ballard
powered buses, putting them in direct contact, today, with clean, quiet
and efficient hydrogen-fueled transportation. In London, Mayor Ken
Livingstone embraces these fuel cell buses as part of his initiative to
reduce ambient noise levels in the city.
In addition to the European program, six other Ballard powered
transit buses are operating in Perth, Australia and Santa Clara,
California with three more scheduled for Beijing later this year.
Through these and other demonstrations, Ballard fuel cells are
powering more than 130 vehicles on four different continents,
approximately three quarters of all publicly demonstrated fuel cell
vehicles on road today.
As we move from demonstrations to a commercially viable fuel cell
product for the automotive sector, there are four key technical
challenges to be overcome: reducing the cost, increasing the
durability, ensuring reliable startup in freezing temperatures, and
doing so within the available package space.
Ballard has a plan to overcome each of these challenges . . . what
we call our technology ``road map'', our public commitment to
demonstrate commercially-viable automotive fuel cell stack technology
by 2010. This ``road map'' is fully aligned with the DOE's published
commercial targets for this technology.
Let me first address fuel cell cost. Meeting DOE's 2010 cost target
of $30 per kW will ensure that a fuel cell engine is cost competitive
with today's internal combustion engines. There are a number of factors
that affect fuel cell cost. Two of the most challenging are the amount
of platinum used in the catalyst, and the type of membrane used in the
fuel cell construction. Ballard has done significant research and
development to reduce the amount of platinum we use. In 2004 we
demonstrated a 30% reduction without compromise to performance,
efficiency or durability. We are also looking at a number of membrane
chemistries and constructions to significantly reduce the cost of this
critical component. We believe we are on track to achieve the DOE
target of $30 per kilowatt by 2010.
Durability is the second key technical challenge we face. The DOE
has set a 2010 commercial target of 5,000 hours--about 150,000 miles
which is roughly equivalent to the lifetime of today's internal
combustion engines. As with the cost challenge, membrane design and
material is a key factor in fuel cell lifetime. Last year, we
demonstrated automotive fuel cell technology with a lifetime of 2,200
hours. Many of the Ballard-powered fuel cell buses operating as part of
the European Fuel Cell Bus Project have achieved more than 2,500 hours
of operation. We have a stationary fuel cell--our cogeneration system
for residential usage in Japan--that has achieved more than 25,000
hours of lifetime. We are confident that we can deliver the DOE target
of 5,000 hours by 2010.
The third technical challenge is to improve the ability of our fuel
cells to start in freezing temperatures. The electrochemical reaction
within a fuel cell produces water and heat. Managing that water in sub-
freezing temperatures is essential to a successful start-up. Our
advanced simulation tools and testing methods have provided us with
insight and a fundamental understanding of how water behaves through
the various cycles of fuel cell operation. Last year, we demonstrated
technology that was able to start at -20 Celsius, reaching 50% of the
rated power within 100 seconds. Our goal for 2010 is to demonstrate
start-up from -30 Celsius, reaching 50% of the rated power in 30
seconds. The DOE target for 2010 is -20 Celsius, reaching 50% of the
rated power in 30 seconds.
Power density, is an important boundary condition that constrains
the previous three goals to ensure that the solutions can be packaged
within the limited vehicle space available. Last year, we demonstrated
fuel cell technology at 1,200 watts per liter net. The DOE's 2010
commercial target is 2,000 watts per liter net. As in the case of
freeze start, we've actually set a more stringent target for ourselves,
at 2,200 watts per liter net, based on our customers' requirements, and
we're confident that we can achieve that.
To summarize: we know what the technical challenges are, we have
multiple technology paths that we are pursuing, and we are confident
that we will demonstrate commercially-viable automotive fuel cell stack
technology by 2010.
The single most important determinant of when fuel cells will be
commercially available for automotive application is the will and
commitment of government. If the role of government is to protect and
serve its people, there is no better investment for government to make
than an all-out, Apollo-like commitment to hydrogen and fuel cells.
The President's Hydrogen Initiative has galvanized industry and
government in support of the hydrogen economy, and continues to
facilitate public-private sector collaboration.
Though I believe a higher overall funding commitment is
appropriate, the pending energy bill's important R&D and Demonstration
programs will strengthen the President's initiative and, if fully
appropriated, provide a push at a crucial stretch along the
commercialization timeline.
Yet I urge Congress to take a further step. A national strategy to
accelerate the hydrogen economy must not only have strong R&D and
Demonstration programs but also a robust transition to market plan that
provides a bridge to commercialization. Only government intervention
can overcome the classic chicken and egg problem and kick-start the
transition to a hydrogen economy. The proposed $1,000 per kilowatt tax
credit for stationary fuel cells is a good beginning--but more must be
done to support vehicular fuel cell introduction.
The framework of an effective transition to market program for fuel
cell vehicles is present in legislation sponsored earlier this year by
Senators Dorgan and Graham, and is also captured in the energy bill's
Vehicles and Fuels provision. I strongly recommend that Congress
elevate, expand, and significantly increase funding for this
procurement program for fuel cell vehicles. A strong procurement
program aimed at fuel cell vehicles for federal and state fleets must
be in place, along side R&D and Demonstrations, as a third component of
the national strategy to accelerate the hydrogen economy.
Broadcast early enough and with sufficiently clear guidelines, a
clear commitment by the Congress to make a specific and sizable annual
outlay for the fiscal years 2010 to 2015 on federal and state fleet
procurement of fuel cell vehicles would: (a) support early volume
production by automotive OEMs and suppliers that is necessary to drive
cost down; (b) support the build out of hydrogen infrastructure; (c)
draw additional private capital into the sector, and (d) provide the
American public with a large scale introduction to the hydrogen
economy.
In closing, let me say that the challenges are real--but they can
and will be met.
I would like to commend the committee on its outstanding leadership
with respect to this year's energy bill, and for the forward-thinking
hydrogen and fuel cell provisions therein.
Thank you for the opportunity to appear before you today. I look
forward to any questions you may have.
Senator Alexander. Thank you, Mr. Campbell, and thanks to
each of you for your testimony. Why don't we each take about 5
minute turns, and we'll just keep going for awhile.
Mr. Bentham, you talked about production of hydrogen; most
of it's from natural gas today, I believe, and I had two
questions related to that. One is, if in the United States we
produce hydrogen from natural gas, won't we just be increasing
our reliance on overseas natural gas, which is where we're
going to have to get a lot of our gas over the next few years,
and won't we create the same problem with natural gas that we
have now with overseas dependence on oil? And second, I don't
believe you mentioned nuclear power as you listed the variety
of ways that we might produce hydrogen; would that not be an
obvious way for the United States to produce hydrogen?
Mr. Bentham. Thank you for the question.
As you mentioned, indeed, most of the world's hydrogen
production currently is culled from natural gas, and I'd like
to say that the most efficient ways of producing hydrogen are
from chemical conversion. That chemical conversion can be
applied to natural gas, or any hydrocarbon that can be
gasified. And so, coal gasification is a good route to
hydrogen, and we see that to be an increasing possibility going
forward. And it really, then, becomes a question of the
different policy requirements and the various incentives toward
shaping the way forward. It may be, from a system point of
view, at any particular time, better to increase the amount of
indigenous use of coal to create coal gasification and to use
that as electricity into the grid, to back out natural gas and
to use natural gas, or a fraction of that natural gas, to
produce hydrogen. So, you have to think of it in a systems way,
which way is the best way to go forward. And different
circumstances will determine which way forward is the most
appropriate, but indeed, both of those routes would effectively
get efficient production of hydrogen, and can effectively
reduce natural gas usage by increasing the use of indigenous
coal, for example.
You mentioned nuclear, and there are two routes to using
nuclear to produce hydrogen. One of them is using the heat from
nuclear--thermochemistry. That is really rather still a
fundamental development process, and is many years from
practical application. The other one is through electrolysis--
effectively, again, using electricity to produce hydrogen, just
as you might, with a renewable source, use electricity to
produce hydrogen. Overall, it may be more efficient, from an
energy systems point of view, from a national point of view, to
put that electricity directly into the grid to back out the use
of hydrocarbons, to use to produce the hydrogen. So it's really
a systems issue. Each of those routes you can use directly to
produce the hydrogen, but it may be more efficient to use,
indirectly, the hydrocarbon, and to back out the overall use.
Senator Alexander. Thank you very much. Mr. Faulkner, in
the 1990's, the Department of Energy sponsored the partnership
for the next generation vehicles with the idea, I think, of
trying to accelerate the use of the hybrid technologies, and
now we are--we have a FreedomCAR initiative to encourage the
fuel cell vehicle. A National Research Council Report on the
hybrid program in the 1990's was critical, because it was
limited to just three manufacturers of cars, headquartered in
Detroit, only two of which are headquartered in Detroit today.
I wonder if you have given consideration, in the Department
of Energy, to involving all of the companies in the world that
are working with fuel cell technology, including especially
those who do domestic manufacturing? When I visited the
hydrogen fuel cell filling station in Yokohama, there were at
least seven--maybe there were nine--SUVs there from
manufacturers all over the world. And if we want to make
progress in this country on cleaner air, global warming, energy
independence, then we have to think about all of the cars that
are produced in the United States and sold in the United States
and not just by the two companies that are still headquartered
in Detroit.
So, what are your plans for including all automobile
companies, at least those that are engaged in domestic
manufacturing in the United States, in the hydrogen fuel cell
initiative?
Mr. Faulkner. Senator, could I make a comment, before I get
started on that, on the natural gas question that you asked Mr.
Bentham at the table?
Senator Alexander. Sure.
Mr. Faulkner. Natural gas is seen as a transition to other
sources of hydrogen production. We would eventually like to get
to renewable sources of hydrogen, renewable sources for
hydrogen production, and I think the Energy Information
Administration has projected that that transition would only
increase natural gas demand by less than 3 percent by 2025.
In response to your question about foreign auto makers,
we're not averse to working with, to building R&D partnerships
with foreign auto makers, those in Asia. I think we're looking
to develop relationships with all auto makers, if we can share
fully and actively in research and development. We're keeping
an open mind on that. Our currently relationship is with the
USCAR, that's the Big Three in Detroit now--DaimlerChrysler, GM
and Ford.
Senator Alexander. Excuse me, Mr. Faulkner, where is
DaimlerChrysler headquartered?
Mr. Faulkner. It's in Europe, sir. That relationship with
USCAR, that entity requires as a condition of its membership
that a foreign auto maker do major power train research and
development here in the United States, and DaimlerChrysler is
foreign, and it does do that.
Meanwhile, foreign auto makers can still participate in the
whole range of meetings, helping to develop documents,
participate in solicitations, subject to U.S. laws and
regulations. Hyundai is in our learning demonstration program,
Toyota is doing ``work for others''--a technology transfer tool
with Savannah River Lab in hydrogen storage. So I think the
bottom line is, we're open to that, but we do have this formal
relationship with USCAR, sir.
Senator Alexander. Well, thank you, Mr. Faulkner, maybe
we'll come back to that. I mean, we're very proud of General
Motors, for example, which is why they're here today, and they
make cars in Tennessee. We're very proud, also, that Nissan
makes cars in Tennessee as well. In the energy bill, we
considered this question twice, and decided to support domestic
manufacturing, which meant all cars and vehicles that are
produced in the United States by members, so I hope you'll
consider that.
Senator Dorgan.
Senator Dorgan. Mr. Chairman, thank you very much. Mr.
Faulkner, some while ago, I guess 3 or 4 years ago, when the
Department of Energy representatives were in front of the
committee, I asked them if they were doing some work to look
forward 50 years, for example, to evaluate in 50 years what we
aspired to have happen with respect to the supply and the type
of energy we used. The reason I asked that is that we talk
about Social Security 50 years, and 75 years and 100 years, and
I was just curious, what is our strategy, and what is our
aspiration with respect to the kind of energy in our energy
future that leads back to 50 years. The answer, at that point,
from the Department of Energy was, ``No, we really--we don't
have a road map for 50 years from today.'' So that's what got
me kind of interested in the notion of trying to figure out how
we move toward alternatives. Because I think, ultimately,
retaining this addiction to foreign oil is unhealthy for our
country.
Your testimony was well-done and it suggests that the
Department now feels like it's committed and really has a
significant interest in hydrogen and fuel cell technology--is
that a good way to describe where the Department is?
Mr. Faulkner. Well, sir, the President deserves a lot of
credit for his visionary stance in promoting hydrogen fuel
cells. Yes, the Department is committed to that, to his vision,
and I think we're well on the way to success there.
Senator Dorgan. You're absolutely correct, the President
does deserve credit. I did say his initial suggestion was a
little more timid than I would be, because about half of it was
taken from other funding, and it was about $1.2 billion or so;
but nonetheless, it is true that President Bush provided the
leadership to say, ``Let's step in this direction,'' and he
deserves substantial credit for that, and I think the Congress,
and particularly in this conference committee that has now come
up with a $3.73 billion authorization, also recognizes that we
need to move in this new direction.
Let me ask, Mr. Campbell, Dr. Burns or Mr. Bentham--tell me
what you see of the plans in other areas of the world, such as
Europe? I've read a lot about what Europe is doing with respect
to hydrogen fuel cells, and their aspirations for an energy
future; can you contribute some knowledge in that area?
Mr. Campbell. Well, I can give you some information on what
we see in Japan. Prime Minister Koizumi has been very
aggressive in support of the transition to hydrogen and fuel
cells in that country. I'm proud to say that the Prime Minister
has a Ballard fuel cell in his official residence, providing
hot water and electricity for his home. But he's been very
supportive for hydrogen fuel cells for automobiles, and has set
a target in Japan to have 50,000 fuel cell vehicles on the road
by 2010, and to have 5 million on the road by 2020. Now that's
a very aggressive target, far more aggressive than the numbers
that we're looking at in this country--and whether or not it's
feasible is a different question--but at least they have set
out an ambitious agenda for transition to hydrogen fuel cells
in Japan.
Senator Dorgan. Mr. Bentham.
Mr. Bentham. Yes, I'll add a little bit on what's happening
within Europe. A lot of the activity within Europe has so far
been driven at both the level of the member states themselves,
but also the European Commission, and there is a European
Hydrogen and Fuel Cell Technology Platform, which I have the
pleasure of chairing, which is bringing together the various
stakeholders around Europe to provide strategic overview. I
would say that they are still in the process of catching up in
terms of the level of development of activity compared to Japan
and the United States, but they have an awful lot of good
science, good engineering there. They also have the kinds of
fiscal flexibility in terms of the cost of the taxation on
vehicles, and the cost of the taxation on fuel to give
flexibility to help encourage the path going forward, and they
have a projection or a plan, an aspiration to see approximately
2 million vehicles on the roads in Europe by 2020.
Senator Dorgan. Can I go back to you, Mr. Campbell? Tell me
again the targets and timetables in Japan.
Mr. Campbell. The targets that have been articulated by the
Prime Minister are to have 50,000 fuel cell vehicles by 2010,
and 5 million by 2020.
Senator Dorgan. I would just say, in the energy conference
report we just passed, I pushed like the dickens to get targets
and timetables. They're a little bit squishy, I must admit, but
I tried to get them in, in any event. We do have section 811,
100,000 hydrogen fuel cell vehicles in the United States by
2010, and 2.5 million by the year 2020. So I really feel that
if you're going to move in a direction, you need to set some
waypoints, or some targets and timetables, and that's the
reason I kept pushing for that. And, again, they're not--these
are not any mandates, but nonetheless, they give us a roadmap
of what we're going to do.
Just one additional question. China has about 20 million
automobiles at the moment. They've got 1.3 billion people, I
believe, and 20 million automobiles. It's estimated they will
have 120 million automobiles by the year 2020, so they'll go
from 20 million to 120 million in the next 15 years. They're
going to want to fuel those vehicles, so just figure what the
demand side does on oil, to run gasoline through the fuel
injectors or the carburetors. And that's one of the reasons I
feel so strongly about what's going to happen to the price of
oil with the limited supply and only so much oil under the sand
in such a small part of the world. We need to look at all these
alternatives. Do you have any notion of what the Chinese are
thinking about--we know a little bit because of their CNOOC's
approach to buying Unocal, but what else are they thinking
about with respect to an auto industry and how they would power
that industry? Do any of you know the answer to that?
Mr. Campbell. Senator, I could offer some insight. We have
been meeting for some time with the various technical
institutes and the Ministry of Science and Technology in China.
They have a very aggressive technology development effort on
the way in China. There is no place on earth that has a more
compelling case for fuel cell technology than China. There's
every reason to believe that China will do what they have done
with wireless telephone and skip the wire line; they could
easily skip the petrol infrastructure and go right to a
hydrogen infrastructure. It makes tremendous good sense for
China to do that.
Senator Dorgan. I had not thought about that point, but
it's a fascinating point, because they're at such an embryonic
stage here that they could just create their own infrastructure
that is very different for a new type of energy.
Mr. Campbell. That's absolutely right, and frankly, that's
what they're thinking.
Senator Dorgan. Just one aside. You also know that one of
our U.S. domestic auto manufacturers is suing the Chinese for--
they alleged--lifting the entire production design for a little
car that the Chinese are now producing called the QQ, produced
by the Cherry Company. One of our companies says that it's
simply from a stolen set of designs for a U.S. vehicle. And the
Chinese are also launching and ramping up an auto industry for
export, aggressive export at the same time, which is just an
aside on this entire Chinese issue.
Mr. Campbell. Well, Senator, if I could add, the issue of
intellectual property rights in China is a very important one,
and a cautionary tale as we begin to engage with the Chinese on
an advanced technology like fuel cells.
Senator Dorgan. It's a big issue. And let me just say that
testimony of all four of you today has just been excellent, I
think it really adds substantially to our knowledge and to the
interest in this hydrogen fuel cell economy. Thank you very
much.
Senator Alexander. Thank you, Senator Dorgan.
We welcome Senator George Allen. I will call on him in just
a minute.
On your point, Mr. Campbell, and yours, Senator Dorgan,
about China skipping a generation, and skipping over a
distribution system, in effect, Japan did that with steel after
World War II. All of their steel mills were destroyed, so they
built a whole new generation of steel mills, creating a lot of
problems for us here in the United States because we had old
steel mills.
Senator Salazar.
Senator Salazar. Thank you very much, Chairman Alexander
and Ranking Member Dorgan, for holding this important question.
My question I think refers to you, Mr. Faulkner. We spent a
lot of time here over the last 6 months working on this energy
bill, and I think it's a good step in the right direction.
Perhaps not the perfect bill that any one of us would have
wanted, but that's the nature of compromising. But I'm hopeful
that we will have a bill that the President will sign here
soon.
There's a lot of investment in here with respect to
hydrogen, billions of dollars in terms of the fiscal impact
coming out of this energy bill. One of my scientist friends
wrote me this note with respect to the hydrogen. He says, ``I
don't like the bill where it speaks specifically with respect
to hydrogen. The hydrogen economy is still mostly a theory.
There are many technical hurdles to overcome if hydrogen
transportation and production is to be used on a large-scale
basis. The demonstration of hydrogen-powered vehicles generates
press, but the cost of these vehicles is near $1 million, so
it's almost hypocritical to say that we're going to get there
with regard to the goals that have been articulated by the
Department of Energy and by the President.'' So my friend might
go as far here as to tell me that that's what I ought to do is
feed opposition to the conference committee report, which I
will not do. But will you respond to that? Because I think that
with a lot of members of the public, you start talking about
the technology of hydrogen fuel cells, and that's sort of their
response. It's sort of pie in the sky, when we're talking about
the kinds of timelines that DOE has articulated, and Mr.
Campbell, the goals that you said you thought were reasonable.
How do we go about explaining to the public that this is, in
fact, something doable?
Mr. Campbell. That's a good question, sir. Well, first of
all, I don't think that anyone--at least I wouldn't sit here
and say I'm 100 percent certain we're going to reach all of the
targets we've laid out, that's not the nature of research, but
we feel confident that we've laid out with our partners a good
research plan. The President laid out a 5-year program, and
we're already starting to talk internally about going beyond
that.
I understand the sentiment. A couple of the sentiments
embedded in what you've said, one of them is, ``This is so
important, the percentage of imported oil that we use is going
up, so why can't we go faster?''. Well, I think the nature of
research is, sir, that unfortunately it may be unpopular to
say, but sometimes you can only go so fast. You can't--you
know, fundamental research doesn't occur overnight, and
breakthroughs are impossible to predict ahead of time. But I
think we do have technical hurdles in here, and I think that
we're on a good pathway now. This program is, from a government
standpoint, one of our--it's reviewed and dissected and
overseen by a lot of different people, it's got a good
partnership program, and I think the other thing I would
probably say is, if you have to get started today to reach
long-term goals, what if we had started this 5 or 10 years ago,
how much further along would we be? So we have to start
sometime, and we are making progress, as I laid out in my
testimony. I won't go through any of that right now, but I
think we have a good target, we have a good plan and we have a
good partnership.
Dr. Burns. Senator, if appropriate, I'd like to make a
comment on that from General Motors' perspective. We've
publicly stated that we are designing and validating a fuel
cell propulsion system by 2010 that can go head-to-head with
the internal combustion engine. I think it's one of these
phenomenon--an ``if we build it, they will come'' kind of a
mindset, like a Field of Dreams, in a sense.
I have the honor of leading a team of researchers and
scientists in our laboratories working on this technology
daily. They're creating the state-of-the-art. I'd be more than
happy to invite your friend to our laboratory to show him at
least what I can show him without violating our own
confidentiality, we're so confident that these targets can be
met. Certainly if your friend is spending time in state-of-the-
art fuel cells facilities, that's great. He certainly may have
reached different conclusions from the science than we're
reaching. We don't see anything right now that says it can't be
done.
And so we just need to keep moving aggressively toward the
goals we've set for ourselves to get this propulsion system
validated, show the world that it is, indeed, possible to have
a propulsion source that has one-tenth as many moving parts as
an internal combustion engine. Keep in mind that an internal
combustion engine is a pretty complicated mechanical device. It
marries up with a transmission and a mechanical drive train and
a fuel system, and controls an emissions system, exhaust
systems and all of that. We're talking about, conceptually, a
much simpler pile of parts to make the vehicle move, and all we
have to do is put one fuel on it--hydrogen. And it's immensely
scalable from small applications to large applications.
We're doing this for business reasons, and if we can see
that possibility, our competitors can see that possibility.
Certainly, we believe we need to do unto ourselves before
others do unto us. So I think it's possible, I'd be happy to
share some insights with your friend if he or she is interested
in doing that.
Senator Salazar. Let me just say this comment to both Dr.
Burns and Mr. Faulkner: I've appreciated your testimony here,
and I think it's compelling that you can make the statement, as
you just did, Dr. Burns, that in 5 years from now we're going
to be in the position where you, from a General Motors
perspective, can say that we can, in fact, replace the internal
combustion engine. That's an incredible statement to make,
because we're not talking about 50 years out, we're not talking
about 25 years out, we're talking about 5 years out.
A question for you, Mr. Faulkner: for someone like me,
learning about the hydrogen fuel economy, where is it within
the DOE complex that someone like me or my fellow Senators or
others might be able to get a good on-the-ground briefing with
respect to what you're doing with respect to the R&D and
milestones? It probably would not be at the National Fuel and
Energy Lab in Golden; or would it be?
Mr. Faulkner. Well, NREL plays a key role in this issue,
sir. You could also probably find quite a bit on the website
and we'd be willing to come up and talk to you personally. We
have a hydrogen posture plan, we have a hydrogen vision and
roadmap. These are developed not just by government, but in a
partnership with technical targets, timelines----
[The following was received for the record:]
The following organizations may be visited to provide Senator
Salazar with ``a good on the ground briefing'' of hydrogen and fuel
cell technologies related to the Department of Energy's (DOE) Hydrogen
Program.
national renewable energy laboratory (nrel), golden, colorado
A tour can be arranged to provide an overview of key research
activities and milestones related to hydrogen production, storage, fuel
cells, and technology validation as well as cross-cutting areas of
systems analysis and safety, codes, and standards. NREL is the lead
laboratory in the Center of Excellence in carbon-based materials for
hydrogen storage. The tour will include laboratory facilities as well
as wind turbines, solar photovoltaics, and electrolyzers to produce
hydrogen.
Contact: George M. Sverdrup, Ph.D. Technology Manager, Hydrogen,
Fuel Cells and Infrastructure Technologies, National Renewable Energy
Laboratory, 1617 Cole Boulevard, Golden, CO 80401-3393; Tel--(303) 275-
4433; Mobile--(303) 919-8762; [email protected].
general motors corporation (gm)
Tours may be arranged at GM's facilities in Warren, Michigan, and/
or in Honeoye Falls, New York. The Honeoye Falls site is preferred
because that is the location where most of the GM fuel cell research
takes place. Laboratory facilities related to hydrogen and fuel cell
technology development as well as prototype hydrogen fuel cell vehicles
may be seen. GM is a partner in DOE's ``learning demonstration'' effort
to develop and demonstrate hydrogen fuel cell vehicles in real world
operating conditions and has several fuel cell vehicles in the DC area.
Contact: Keith Cole, Director, Legislative and Regulatory Affairs,
General Motors, Suite 401, 1660 L Street, NW, Washington, DC 20036;
Tel--(202) 775-5040; [email protected].
shell hydrogen
Shell Hydrogen, set up in 1999 to develop business opportunities in
hydrogen and fuel cells technologies, is a global business of The Shell
Group with headquarters in Amsterdam, the Netherlands, and regional
bases in Houston and Tokyo. A tour may be arranged to visit the first
hydrogen fueling station in Washington, DC, on Benning Road.
Shell is partnering with GM in DOE's ``learning demonstration''
activities to develop and demonstrate hydrogen infrastructure
technologies for fuel cell vehicles.
Contact: Sara B. Glenn, Washington Counsel, Shell Oil Company,
Government Affairs, 1401 Eye St., NW, Suite 1030, Washington DC 20005;
Tel--(202) 466-1400; [email protected].
utc power
A tour may be arranged at UTC Power in South Windsor, Connecticut,
to view laboratory facilities as well as stationary fuel cell power
plants and prototype fuel cell vehicles. Technology development
facilities and test stations may be seen for a range of fuel cell
applications, including fuel cells developed for NASA's space program
(Apollo, space shuttle, etc.). UTC is a leader in fuel cell technology,
with more than 40 years of experience, and provides on-site power
systems for commercial and industrial markets, with fuel cell power
plants in 19 countries.
Contact: Judith Bayer, Director, Government Business Development,
UTC Power, 1401 Eye Street, NW, #600, Washington, DC 20005; Tel--(202)
336-7436; [email protected].
In addition, the DOE Hydrogen Program Manager is willing to visit
Senator Salazar's office anytime to provide an overview and details of
the DOE hydrogen program. An appointment may be coordinated through:
Jennifer A. Sollars, Advisor, Legislative Affairs, Office of Energy
Efficiency and Renewable Energy, U.S. Department of Energy, 1000
Independence Avenue, SW, Washington, DC 20585; Tel--(202) 586-0440;
[email protected].
Senator Salazar. Let me ask you--this is a personal
question with me. I visited NREL for about 3 hours. And I know
that Senator Dorgan and others have been leading the charge
with respect to ethanol, and I'm very proud of the fact that
I'm one of the partners trying to push us in that direction. I
was very impressed with what was happening with cellulostic
ethanol research and some of the other activities going on
there at NREL. It makes a big difference when you actually see
these things on the ground and in the laboratory. So my simple
question to you is, where can I get a similar kind of review?
Do I have to go to GM? Would you be able to do something for me
if I come out and visit your plant?
Dr. Burns. Could you just repeat the very last part of your
comment? I'm sorry.
Senator Salazar. I'd like to have the same kind of tour
that I essentially had at NREL at someplace, either the DOE or
maybe with some of the private sector partners, just to get a
good sense of what you're talking about. Because what you're
talking about, again, is revolutionary, if you are talking
about replacing the internal combustion engine within a 5-year
timeframe. That is just an incredible statement to make, and I
want to get some kind of raw information on that.
Thank you very much for your testimony.
Senator Alexander. Senator Allen.
Senator Allen. Thank you, Mr. Chairman. Thank you and
Senator Dorgan for holding this hearing. Hopefully by the end
of this week we will have passed an energy policy for this
country that's gone through a lot of stalling, a lot of
stalled-out vehicles on getting that thing done, but we're
finally, I think, going to get it done.
And I'm one who feels that this is a very important measure
for our country for a variety of reasons. One is our national
security, since we're far too reliant on foreign sources of
energy. Second, it will be important for jobs. Whether there
are jobs here presently, or jobs in the future, some will be in
this new area of technology. And third, it's support for our
competitiveness. We all need affordable, clean--if we can make
it as clean as possible--energy, whether it's for
transportation, for electricity, a variety of other functions.
I'm one who's always embraced advances in technology and the
hydrogen aspect of this measure, the incentives for it, as well
as the research and development. I think is very important. And
rather than being on a petroleum-based economy, or the internal
combustion engines, to the extent that these new technologies
can give us an affordable, reliable energy, that's important
for our competitiveness. And I do believe that our energy bill
does move the United States closer to this goal, and
particularly the hydrogen fuel initiative, which brings in
Federal agencies, universities, the private industry and others
all working together. And I think the Generation IV nuclear
reactors producing hydrogen fuel that these vehicles of the
future will need is a good idea as well.
Now, let me ask you all some questions. I'm sorry I was
late, I had to be on a conference call on some other matter.
This speaks to Mr. Burns and Mr. Campbell. One of the aspects
of this whole energy bill is that we need more production of
natural gas here in this country, which is important not just
for our own fertilizer, chemicals, plastics, wood forestry
products, tires and all sorts of manufacturing. I think one of
you said something to the extent that we're going to have
hydrogen fuel cells made, ultimately, derived from natural gas.
Did one of you say that this would only affect 3 percent of the
natural gas demands of this country? Because we have such great
demands, and skyrocketing prices.
Mr. Faulkner. I said that, sir.
Senator Allen. Okay.
Mr. Faulkner. I was quoting from the Energy Information
Administration, an independent arm of the Department of Energy,
that in that transition, we're looking now at natural gas as
the first step in the transition to hydrogen production from a
number of sources, hopefully renewable in the end.
Senator Allen. All right, so it's 3 percent. Now, let me
ask you this, you mentioned----
Senator Dorgan. He was saying they wouldn't ultimately use
natural gas, but they would use natural gas in the interim as a
step to other fuel stops. I think that's what he was saying
there.
Senator Allen. All right. But with our high demand for
natural gas and our limited supplies, you're saying that this
would take up 3 percent of the present natural gas supply, or
this is what you were quoting from, Mr. Faulkner?
Mr. Faulkner. I believe what EIA said was, it would only
increase natural gas demand by 2025 by less than 3 percent.
Dr. Burns. I may be able to help with that a bit. We've
done an analysis that if you were going to put 10 million fuel
cell vehicles on the road in the United States, recognizing
there's over 200 million vehicles in the United States today,
but to get this started, when you are thinking about the first
10 million, that that would increase the demand for natural gas
by 2 percent, so that's a calculation that we've done.
Our view is that hydrogen can come from so many different
sources. That's what we like. So we don't think in terms of
relieving 98 percent dependence on petroleum and shift that all
the way over to 98 percent dependence on some other energy
pathway. In fact, what we'd like is to get a little bit from a
whole bunch of sources.
Senator Allen. All right. Mr. Faulkner mentioned something
about renewable hydrogen; is that what you're talking about, or
are you talking about hydrogen from some other sources, from
gasoline, from what other sources?
Dr. Burns. We would certainly like to see it come from
coal. It can come from nuclear in the form of electricity,
electrolyzing water, hopefully down the road, nuclear in terms
of direct hydrogen creation, renewable--wind, geothermal,
solar, biological sources--whatever the local economy sees as
their strength, as the most cost-effective way to create the
hydrogen in an environmentally friendly way is the one that
should win out in the marketplace, and we'd like to see all
these pathways competing on a daily basis for our customers'
energy dollar.
Senator Allen. All right. Now it comes down to cost, Mr.
Campbell. I was reading your testimony where you actually have
hydrogen fuel cell vehicles, mostly buses, in different places
around the world. Mr. Burns, you have Senator Salazar all fired
up and he's probably thinking, ``Hey, we're going to have fuel
cells in 5 years in our vehicles,'' but regardless, what is the
operating cost difference right now, because affordability does
matter? What is the operating cost difference from having the
propulsion from fuel cells versus conventionally powered? And I
realize there can be a cost difference, I'm just talking about
absolute dollars or yen out of the pockets, and then you can
say, well it costs a little bit more, but look, we don't have
any of the emissions, the by-product is water. But if you could
share that with us. If you've said it already, I'm sorry, but
I'd just like to know what that is.
Mr. Campbell. Well, thank you, I'll try to answer your
question, Senator. A couple of ways to look at it--if you look
at the energy cost, various studies have reported--and Mr.
Faulkner has better data on this than I do, probably--that the
energy cost per mile driven for hydrogen used in a fuel cell is
actually lower than the energy cost per mile driven in a piston
engine car. So the cost of operation, in other words, fuel
costs, as one component of the operating costs should actually
be less for a fuel cell vehicle.
Senator Allen. Is it less in these situations, these
programs you're involved in?
Mr. Campbell. Yes, if you can buy the hydrogen at $2 to $3
a kilogram, yes.
Senator Allen. Well, can you?
Mr. Campbell. I think the station that was recently opened
in Washington, where the President was pumping gas, was $4.50?
Mr. Bentham. That's about right. A lot of the cost,
ultimately, in hydrogen is not the fuel itself, but it's the
cost of distributing the fuel and having the facilities to
bring that forward. Clearly, as you go into an established
market, those costs come down--you don't have to distribute as
far, you don't have to have the same kind of network
optimization issues that you would have when you're only doing
a demonstration. So we have a line of sight that brings us to
that point, that in a fully developed market, the supply of
hydrogen, the price of hydrogen per mile traveled would be of
the same order as it currently is with gasoline. Clearly there
are a number of steps toward that point, but in a fully
established market that is the goal, and we have a line of
sight on that.
Senator Allen. Well, that's very encouraging, because some
of the concerns we've had--I'm very much in favor of this
hydrogen economy, so to speak. The concern is you use so much
energy just to create the hydrogen that it increases the cost
of hydrogen. And while there's the environmental benefits from
it, you may not have all of the environmental benefits, unless
the way that you're actually going through the entire process
is also a clean process. And then, ultimately, you get the
final price. To the extent it ends up being a distribution
issue, that's something that does have to be solved, but that
could be more easily solved for fleets, as Mr. Campbell's
company is doing, where you know the defined number of miles
that they'll be driving and coming back to that distribution
center. Ultimately, that's some of the problem that we've found
over the years in, say, natural gas-powered vehicles, they
simply don't have Shell gas stations or Wawa's or Flying J's or
whatever one has all over. So that's very, very encouraging
that you actually believe that the actual cost of the fuel,
notwithstanding the distribution system, is the same.
Let me ask this final question, Mr. Faulkner. Mr. Chairman,
if I may. I'm aware that this is another alternative, and I'd
like to get your view of this, and this is the Solid State
Energy Conversion Alliance within the Department of Energy
that's leading efforts to commercialize what is called low cost
solid oxide fuel cells for application in industrial uses,
households and military applications. Is there any effort to
utilize this solid oxide fuel cell technology in the
transportation sector? If you're aware.
Mr. Faulkner. If I could, if you'll let me, I'd like to
make one point on the conversation you just had about natural
gas.
Senator Allen. Yes.
Mr. Faulkner. One reason we won't use as much natural gas
as you may think is that all the different pathways for
producing hydrogen for fuel cell vehicles would use less
energy, total energy than the gasoline internal combustion
engine. As you noted, I think we would use more energy, maybe,
up front, producing the hydrogen, but you gain a lot more on
the back end because the fuel cell vehicles are more efficient
than internal combustion engines. The SECA, the acronym for
that, I'll have to get you something on the record, sir, I'm
not as familiar with that as I probably should be.
[The following was received for the record:]
Solid oxide fuel cells (SOFCs) operate at high temperatures (650-
1000C) therefore they take a long time to start up. They are much less
suited for passenger vehicle applications than direct-hydrogen polymer
electrolyte membrane fuel cells (PEMFCs). PEMFCs operate at lower
temperatures (80C), can start up quickly, and are very good at load-
following.
SOFCs are proposed for stationary applications where steady-state
performance and a long start up time are acceptable and where the high
quality heat can be used for cogeneration applications. To accelerate
development of SOFC technology, the DOE Office of Fossil Energy's Solid
State Energy Conversion Alliance (SECA) focuses on SOFC research and
development (R&D) for stationary applications such as centralized power
plants and distributed generation applications (e.g., 10-100 kW). FY
2005 funding for the SECA program was $54.2M.
SOFCs have some limited transportation applications such as
auxiliary power units in heavy-duty trucks to minimize diesel engine
idling, thus saving oil and providing environmental benefits. DOE's
Office of Energy Efficiency and Renewable Energy has a very small R&D
effort ($750K in FY 2005) on solid oxide fuel cells for transportation
applications. This effort includes projects to design, develop, and
perform in-vehicle demonstration of diesel-fueled SOFC auxiliary power
unit systems configured to provide electrical power for the sleeper
cabs in heavy-duty trucks.
Senator Allen. Are any of you aware of this concept of the
solid oxide fuel cells?
Dr. Burns. Yes, we are.
Senator Allen. Could you comment on that and any of their
applications to transportation?
Dr. Burns. There are a couple of different classes of fuel
cell technology. We use what's called a PEM fuel cell, a proton
exchange membrane. You mentioned the solid oxide. The latter is
really more conducive for auxiliary power. So let's say you
have a large truck that you're using for transportation of
freight, and it pulls into a rest stop and it wants to generate
power for the vehicle to run its accessories. We think that's a
nice application for this solid oxide, but the industry pretty
much started down, I guess it was about a decade ago, when we
were looking at challenges like power density, and the extreme
range in which you have to operate automobiles. We concluded
that the PEM technology had the most promise for transportation
applications, certainly for accessories and other things, for
military uses. We think the latter technology has promise.
Mr. Campbell. If I could add to that, just to explain the
difference between a solid oxide and a PEM fuel cell. A PEM
fuel cell operates at low temperatures--85 degrees Celsius--so
it starts up very quickly and it has great load-following
capability. So it's really good for an automobile with lots of
transient behaviors. A solid oxide fuel is a very high
temperature device--800, 900 degrees Celsius. So it takes a
long time to warm up, and you want to run it for a steady state
over long periods of time. So it's great for distributed
generation, it's not very good for standby or backup power,
it's not very good for automotive. So it may be good for a
locomotive-type application, for a rail application, but not
for a car or a truck.
Senator Allen. Mr. Bentham, you seem to know what all this
is, too. Do you have any comment on the solid oxide?
Mr. Bentham. Just to re-emphasize the point that Mr.
Campbell was stating, that we've seen the solid oxide fuel cell
as being very good technology for those stationary power
applications, where you want something that will run for 50,000
hours, nonstop, but you don't want to be starting it up and
shutting it down every few minutes.
Senator Allen. Thank you, all four of you gentlemen, and
thank you, Senator Dorgan, also and our chairman. Thank you for
your answers and insight. I'm very much looking forward to
working with you all and we can all use your insight and
knowledge. And I think that people ought to be encouraged about
the future. I think we'll work on a bipartisan basis with the
incentives to make sure that this research and development goes
forward with the proper incentives also for the private sector,
the marketplace. I think it makes great sense. I'm not one who
likes dictates or mandates, I like carrots rather than sticks,
and you've given me some good evidence here to continue with
that advocacy. Thank you all.
Senator Dorgan [presiding]. Senator Allen, thank you very
much. The Chairman had to leave, and asked me to adjourn the
hearing as the ranking member. Let me just make an observation.
The reason that I asked you to yield for a moment is I think
that natural gas will certainly be used as a source of
hydrogen, but I think it's also the intention of virtually
everyone to find sources of hydrogen from many other areas. But
initially, I think, as a start-up, you rely more heavily on
natural gas, and the question you asked on that is a perfectly
important question.
I also think that in every area of this type there are the
skeptics, that is, people who believe that this science doesn't
exist, or will never exist. And then there are the incumbents,
in whose interest it is never to change what is. So I
understand that. I happen to be a big fan of ethanol, I like
growing energy in our fields, and pulling up to a service
station and saying, ``Fill it up with corn.'' I kind of like
that approach. But I also know that the incumbent providers of
our fuel have done all sorts of studies saying that it takes
more energy to produce ethanol than you get from ethanol, which
is patently nonsense. The studies are just fatally flawed. But
nonetheless, it ricochets around the Internet, and the same
will happen with respect to hydrogen. We will have people
continue to say, ``This can't work, it won't work, it doesn't
add up,'' and I understand that. I know my colleague from
Virginia understands that.
I am encouraged by your comments as well, because I think
there's a sizable group of us here in Congress who are
determined to try to chart a different course so that we have
greater capability to control our own destiny, rather than have
the destiny of our country and its economy controlled by
someone else, somewhere else. I just think this is a very
important issue, and I think your contribution to that body of
knowledge today is very important.
I'm pleased to work with the U.S. Fuel Cell Council and the
Natural Hydrogen Association and many others who are engaged in
this work. There are a lot of interests engaged in this, as
well as the Department of Energy, and having the benefit of all
of their combined knowledge is very, very important, as we
proceed to make what we hope is good policy. And I do think if,
at the end of this week, the President signs this conference
report on energy, if he does that, the hydrogen title, dealing
with hydrogen fuel cells both in that title and also in the
vehicle title, authorizes about $3.73 billion. It's a huge step
forward in an exciting new direction, and that will be good
news for our country. With that, we thank you all, and we
adjourn the hearing.
[Whereupon, at 4:22 p.m., the hearing was adjourned.]
APPENDIX
Responses to Additional Questions
----------
Responses of Jeremy Bentham to Questions From Senator Domenici
Question 1. Other nations also support programs in hydrogen and
fuel cell development. Is the United States government coordinating
effectively with other governments in developing codes and standards
for hydrogen and fuel cell vehicles? Please explain.
Answer. The U.S., through efforts led by DOE and NREL have
effectively shaped the hydrogen codes and standards process in the U.S.
and helped in the organization of global efforts through the
International Partnership for the Hydrogen Economy (IPHE) as well as
other existing channels such as U.S. TAG in the ISO arena. The impact
of these efforts have helped identify areas needing research and data
generation and have allowed multiple stakeholders and organizations to
efficiently communicate and share information.
Question 2. Your testimony addressed the importance of public
awareness and understanding and the need for government actions to
foster such understanding. Are there other nations who have model
efforts in this regard? What can the United States learn from public
education in other countries?
Answer. One major point should be made at the outset: No other
country has the scope or the market to serve as a template for a
program on the scale of U.S. needs.
That being said, Iceland, a country about the size of Kentucky,
with a population of nearly 300,000, is highly dependent on imported
sources of energy. As such, the government of Iceland has taken the
step of establishing a multi-stakeholder (industry, government, NGO,
etc.) initiative group to develop hydrogen strategies for enhancing
public awareness in Europe as part of the European Hydrogen and Fuel
Cell Technology Platform (HFP).
Responses of Jeremy Bentham to Questions From Senator Bunning
Question 1. The biggest hurdle to full implementation of fuel cell
vehicles has often been cited as the creation of the refueling
infrastructure. Estimates peg the cost of such infrastructure at $10 to
$15 billion. Where do you envision the funding coming from? What do you
think should be the role of the federal government?
Answer. As noted in the testimony, we don't believe the
infrastructure is the biggest hurdle. We believe that hurdle will be
the widespread availability of mass-produced, customer-pleasing
hydrogen vehicles. Focusing on the isolated question of fuel supply
infrastructure, however, we believe that fuel supply can be achieved on
a fully commercial basis once there is sufficient demand to ensure that
facilities are reasonably utilized.
For a limited period, therefore, some publicly funded, market-based
initiatives will be necessary to support first-phase investment from
industry. Federal and state policies will need to recognize this.
Overall, and in the long term, the bulk of the investment will come
from business.
Question 2. What specific programs and agencies, other than the
Department of Energy and the Department of Defense would you like to
see included in developing the federal government's hydrogen policies?
Answer. The Department of Agriculture could be a leader in
sponsoring programs exploring the adaptation of fuel cell and hydrogen
technology by Agribusiness. The government also sets standards for
storage and transportation and the relevant departments should be
involved in maximizing public safety. Agencies such as NASA have a
great deal of hydrogen experience. All of these have practical and
regulatory experience with hydrogen questions. All that will be
involved eventually should be involved now.
Question 3. The price of hydrogen is also a potential hurdle to
widespread implementation. Given the efficiency advantage, what price
range do you believe hydrogen needs to reach to be competitive? What
policies would you recommend to reach that goal?
Answer. Customers will make decisions on vehicles taking into
account many factors including vehicle prices, fuel prices, and safety,
among others. We believe the development of the FC vehicle industry
will be best stimulated by having the fuel price per mile-driven,
comparable to that the familiar gasoline fuel.
Where there are many complex questions of technology and motorist
acceptance to be answered, it is our aim--and expectation--to be able
to develop a cost position comparable to gasoline. Fuel taxation policy
both for hydrogen and traditional fuels will play a role in shaping the
price range that customers will accept.
When the discussion widens beyond customer acceptance, there are
some facts to consider. While 50 million tons of hydrogen are produced
around the world each year, for industrial use, hydrogen is not yet a
commodity in the sense natural gas or coal is. Its production and use
are restricted to isolated regional industrial complexes with minimal
national or international trade.
Apart from limited demonstration fleets, it is not yet used as a
fuel for vehicles, so no retail ``market price'' for hydrogen fuel
exists. Once hydrogen becomes a large-scale commodity, that will
change. We expect it will then move to direct comparability with
gasoline. As such, it would be economically competitive.
The chief variable, apart from taxes, would be the manufacturing
source. If hydrogen largely comes from conventional, low-cost, natural
gas reforming, costs may remain fairly stable. We believe, with the
gradual introduction of renewable/sustainable hydrogen increasingly
added to the mix of sources, costs could still be relatively stable
thanks to R&D, growing economies of scale, and expanding commercial
application.
Question 4. How do you see hydrogen technology affecting job
growth? What are your projected estimates for job growth related to
transitioning to this energy source?
Answer. The degree of job creation will be largely a factor of
which country develops the definitive technological next-step first.
Shell has a high degree of confidence that hydrogen and fuel cell
technology could come in any of a number of forms and will come in at
least one. The main question of both job-and wealth-contribution is
whether the fuel cells and FCVs come from the U.S. or to the U.S.
If the advances come from the U.S., hydrogen and fuel cells will
represent major technological opportunities leading to the creation of
significant new jobs in many companies in many industries.
Particularly significant job growth may occur as revolutionary fuel
cell engines and electric drive systems replace steel engines,
transmissions and mechanical drive components.
A hydrogen economy will not happen overnight. It will be phased in
as other systems phase out. Both the phase-in and the phase-out will be
providing some level of new jobs. For example, new vehicle fuels will
require new stations and means of transmission of bulk quantities of
fuel for storage and resale. Naturally, new R&D will be required to
support jobs and maximize the opportunities presented by the new energy
source.
These and other possibilities can develop in the U.S. if the right
environment is fostered. But it should be noted that the U.S. is no
longer the only country with an R&D infrastructure able to develop the
next generation of products, or a manufacturing system able to support
this scope of change, or a steady mass demand for the new products that
will be created. In today's global market, other countries that unite
cheap labor, multiple gas and coal hydrogen sources, and aggressive
technical development pose a threat to our economic leadership that
really didn't exist in recent decades.
Question 5. Do you envision a hydrogen-refueling infrastructure
based on hydrogen pipelines or based on on-site hydrogen production?
Answer. We believe the appropriate refueling infrastructure will be
driven the local market circumstances such as the density of local
demand, the degree of urbanization, the availability of land, etc. It
will also be influenced by the most economical locally available
primary source of hydrogen manufacture, (e.g., coal, natural gas,
etc.), and the degree to which CO2 needs to be captured and
sequestered.
Finally, it will be influenced by the need to support the
development of a hydrogen pipeline transportation and storage network
if that is competitive with local availability of hydrogen fuels from
local sources.
The optimal infrastructure will be a mix of different approaches
driven by these various local market conditions.
Question 6. Do you see hydrogen technology taking off in certain
geographic areas of the country at a faster rate? How do we ensure that
fuel cell technologies penetrate rural areas of the country?
Answer. We anticipate that the earliest markets for fuel cell
vehicles and hydrogen will be California and the Northeast U.S. due to
the high population and vehicle density, high concentration of early
adopters, and receptive state governments. Shell Hydrogen demonstration
projects--already underway--and our planned Lighthouse Projects are
focused on these two early markets.
Given the need of vehicle providers to build up a service network,
and given the economic importance of facility utilization to fuel
providers, it is important to encourage concentrated activity in major
urban centers during the first phase of the industry development.
Rural customers, may well, however, choose fuel cell technology for
distributed electricity generation from a very early point.
With respect to the hydrogen fuel penetration of rural areas, it is
worth noting that 100 years ago, the auto fuel industry was starting
from an effective baseline of zero. Yet within 20 years, there was
scarcely a small town in rural America without the
representation of at least two to four brands of gasoline. It seems
safe to say, the penetration of new fuels today will proceed at least
as fast as the penetration of gasoline did in the conditions of the
early 1900s.
______
Responses of Dennis Campbell
Question 1. In the FreedomCAR partnership, clearly both fuel cell
manufacturers and automobile manufacturers must work closely together.
Is that partnership structured in a way that representatives of both of
these industries can be at the table together, and collaborate
effectively? What are the strengths and weaknesses of the current
partnership structure?
Answer. The FreedomCAR partnership continues to play a central role
in the commercialization of fuel cell and hydrogen technology for the
transportation sector. The partnership's effectiveness resides in its
model of public-private collaboration, which enables members of
industry, DOE, and the national labs to work together toward the shared
vision of the hydrogen economy.
The membership of the partnership--Ford, DaimlerChrysler, GM
Corporation, BP America, ChevronTexaco Corporation, ConocoPhillips,
ExxonMobil Corporation, and Shell Hydrogen--effectively captures the
major automotive and energy supply companies involved in the transition
to the hydrogen economy in the United States. It does not, however,
provide for representation for automotive fuel cell manufacturers.
Reflecting the highly interdependent relationship between the fuel
cell, the corresponding system that enables it to power a vehicle, and
the vehicle design itself, the FreedomCAR partnership could be
strengthened by including relevant automotive fuel cell manufacturers
in a formal advisory role capacity. This addition will allow DOE to
more accurately identify, enable, and monitor progress toward key
technical targets for the automotive fuel cell.
Question 2. In the last six years, fuel cell power has increased by
a factor of seven. Do you believe we can continue to make such rapid
strides in size and efficiency, or are there limiting physical or
technological parameters on the horizon?
Answer. Earlier this year, Ballard released a roadmap that provides
milestones by which we will measure progress toward the goal of
developing commercially viable fuel cell technology by 2010. Power
density is one of the four areas of measurement, and we are on track to
meet our target for 2010 of 2500 watts/liter for the fuel cell stack.
As our roadmap indicates, we do not expect power density for the
automotive fuel cell stack to increase at a rate equal to that
previously achieved. Importantly, however, similar gains in power
density are not required to support the development of a commercially
viable automotive fuel cell stack.
Lastly, the efficiency ratio of the fuel cell to internal
combustion engine is approximately 2.4 and is not expected to increase
dramatically.
Question 3. What specific programs and agencies, other than the
Department of Energy and Department of Defense, would you like to see
included in developing the government's hydrogen policies?
Answer. The fuel cell provisions in Title XII (Vehicles and Fuels)
and Title XIII (Hydrogen) of the National Energy Policy Act of 2005 can
make an important contribution to the current public-private sector
effort to accelerate the hydrogen economy. These programs should be
fully funded and implemented.
Federal and State Procurement of Fuel Cell Vehicles and Hydrogen
Energy Systems (Title XII, Sec. 782) should be elevated, and its
funding levels significantly increased, so that it represents the third
major component (following R&D and Demonstrations) of the national
strategy for the hydrogen economy.
Broadcast early enough and with sufficiently clear guidelines, a
clear commitment by the Congress to make a specific and sizable annual
outlay for the fiscal years 2010 to 2015 on federal and state agency
procurement of fuel cell vehicles and supporting hydrogen
infrastructure would: (a) support early volume production by automotive
OEMs and suppliers that is necessary to drive cost down; (b) support
the build out of hydrogen fueling stations; (c) draw additional private
capital into the sector, and (d) provide the American public with a
large scale introduction to the hydrogen economy.
Question 4. The price of hydrogen is a potential hurdle to
widespread implementation. Given the efficiency advantage, what price
range do you believe hydrogen needs to reach to be competitive? What
policies would you propose to reach that goal?
Answer. A recent Stanford University study, the results of which
were published in the June 24, 2005 Science journal, is instructive in
this area. Reflecting the health and climate benefits of hydrogen
generated from wind, the study focused on this renewable energy
feedstock. It estimated that the unsubsidized near-term mean cost (<10
years) of supplying wind-generated hydrogen to the end-user is $3 to
$7.4 per kg or $1.12 to $3.20 per gasoline gallon equivalent. This
places the mean cost of wind-generated hydrogen at a competitive $2.16
per gasoline gallon equivalent.
The study found that this already competitive position improves
when the societal costs of gasoline--including reduced health, lost
productivity, hospitalization, death, and the remediation of polluted
sites--are considered. These externalities add $0.29 to $1.80 to the
cost of a gallon of gasoline.
The government role in facilitating the supply of cost-competitive
hydrogen fuel includes a robust national procurement program (as
outlined above) that will serve to kick-start the build out of fueling
infrastructure; continued support for R&D programs that increase
efficiencies in hydrogen production and delivery; and meaningful tax
policies that encourage private sector investment in hydrogen
production, distribution, and delivery infrastructure.
Question 5. How do you see hydrogen technology affecting job
growth? What are your projected estimates for job growth related to
transitioning to this energy source?
A mature hydrogen economy will have profound economic growth
implications for the United States. This job growth will occur as
wealth that is now transferred overseas for foreign oil is instead
invested domestically in a diverse set of energy feedstocks (including
clean coal, nuclear, and renewables) that produce hydrogen to fuel our
transportation sector.
To date, there has not been a comprehensive analysis of the
economic benefits of a hydrogen economy. As such, reliable job growth
figures are not yet available.
Question 6a. Do you see hydrogen technology taking off in certain
geographic areas of the country at a faster rate?
Factors such as an early commitment to a hydrogen infrastructure
and state regulatory policies are likely to determine which areas of
the country lead the transition to the hydrogen economy. California,
with its hydrogen highway plan and ``Zero Emission Vehicles'' (ZEV)
policies, is an example of one state that is helping to pioneer the
commercialization of hydrogen and fuel cell technology. Massachusetts,
Rhode Island, Maine, Vermont, Connecticut, New York, and New Jersey
have also adopted ZEV regulations while Oregon, Washington, North
Carolina, and Maryland are at various stages of opting into a ZEV
regulatory regime.
Question 6b. How do you ensure that fuel cell technologies
penetrate rural areas of the country?
The level of hydrogen fueling infrastructure will be an important
determining factor in the rate of penetration for fuel cell vehicles in
a given community. Accordingly, rural communities should actively
support and use federal and state programs that promote the development
of hydrogen fueling infrastructure, including demonstration and
procurement initiatives and tax policies.