Wanted: $200 Billion for Hydrogen Cars

July 18, 2008

You've undoubtedly been hearing a lot about the "hydrogen economy" in recent years, as automakers ramp up efforts to develop fuel-cell vehicles and other technologies capable of running on the ultra-clean fuel, hydrogen.

Technical challenges abound, though the obstacles are starting to fall. The latest fuel cell "stacks" are more powerful, lighter, and more affordable than ever, and progress is taking place at a rate that even computer chip manufacturers might envy. Next-generation hydrogen storage systems are still lacking, but improvements are clearly coming. And energy companies know how to produce the gas in volume when the time comes.

Here's the problem, however: Putting everything in place, from the factories to produce fuel-cell vehicles, or FCVs, to the hydrogen refineries to the fueling stations the nation will need by the tens of thousands, the total cost will come to about $200 billion by 2023, according to a new report by the National Academies of Science.

The bulk of that will need to come from the auto and energy industries, though the NAS estimates government contributions will come to around $55 billion.

Even then, the rollout of hydrogen-powered vehicles will be slow, noted the 256-page report. Hydrogen technology is "not likely to be cost competitive until 2020," and it sees FCVs accounting for a maximum 2 percent of the nation's motor vehicle fleet by 2023. But then, hydrogen power "could grow rapidly," with such vehicles reaching 80 percent of the market by 2050.

Hydrogen power emerged as a serious technology a decade ago, as manufacturers came under pressure to produce "zero-emission vehicles," or ZEVs. Only two technologies currently qualify: the battery car and the fuel-cell vehicle. The former technology is plagued with problems, such as limited range, long charging times, and high cost. Today's FCVs also are costly, though manufacturers believe they will eventually become cost-competitive with internal combustion technology. And fuel cells, sometimes called "refillable batteries," don't have range limitations, as long as there's a network of filling stations available.

While hydrogen is often seen as the darling of environmentalists, some have begun to question its long-term advantage. Used in a fuel-cell stack, the gas creates nothing more than water vapor in its exhaust. (Burned as a substitute for gasoline in an internal combustion engine, trace amounts of smog-causing NOx are produced.) But the question is where to get the gas.

To some, hydrogen is an "energy carrier," rather than a fuel, like petroleum-derived gasoline. It may be the most abundant element in the universe, but you can't pump it from the ground, like oil, or dig it up, like coal. It must be produced by breaking down a more complex compound. That can be water, made up of two parts hydrogen, one part oxygen, or from coal, natural gas, and a variety of other substances. Doing so takes energy, however, lots of it. And if that comes from dirty sources, such as coal-fired electric plants, the switch to hydrogen would have minimal impact on the environment overall.

So, the battle to build the hydrogen economy will be about more than just finding enough money.

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