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The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs
drogen program budget).4 The funding level for direct programs would represent a near doubling of budget authority (appropriated funds) over funding for FY 2003, during which direct programs received $96.6 million.
SCOPE, ORGANIZATION, AND FOCUS OF THIS REPORT
Statement of Task
The committee assessed the current state of technology for producing hydrogen from a variety of energy sources; made estimates on a consistent basis of current and future projected costs for hydrogen; considered potential scenarios for the penetration of hydrogen technologies into the economy and the associated impacts on oil imports and carbon dioxide (CO2) gas emissions; addressed the problems and associated infrastructure issues of how hydrogen might be distributed, stored, and dispensed to end uses, such as cars; reviewed the DOE’s RD&D plan for hydrogen; and made recommendations to the DOE on RD&D, including directions, priorities, and strategies.
The current study is modeled after an NRC study that resulted in the 1990 report Fuels to Drive Our Future (NRC, 1990), which analyzed the status of technologies for producing liquid transportation fuels from domestic resources, such as biomass, coal, natural gas, oil shale, and tar sands. That study evaluated the cost of producing various liquid transportation fuels from these resources on a consistent basis, estimated opportunities for reducing costs, and identified R&D needs to improve technologies and reduce costs. Fuels to Drive Our Future did not include the production and use of hydrogen, which is the subject of this committee’s report.
The statement of task for the committee was as follows:
This study is similar in intent to a 1990 report by the National Research Council (NRC), Fuels to Drive Our Future, which evaluated the options for producing liquid fuels for transportation use. The use of that comprehensive study was proposed by DOE as the model for this one on hydrogen. With revisions to account for the different end use applications, process technologies, and current concerns about climate change and energy security, it will be used as a general guide for the report to be produced in this work. In particular, the NRC will appoint a committee that will address the following tasks:
Identify and evaluate the current status of the major alternative technologies and sources for producing hydrogen, for transmitting and storing hydrogen, and for using hydrogen to provide energy services especially in the transportation, but also the utility, residential, industrial and commercial sectors of the economy.
Assess the feasibility of operating each of these conversion technologies both at a small scale appropriate for a building or vehicle and at a large scale typical of current centralized energy conversion systems such as refineries or power plants. This question is important because it is not currently known whether it will be better to produce hydrogen at a central facility for distribution or to produce it locally near the points of end-use. This assessment will include factors such as societal acceptability (the NIMBY problem), operating difficulties, environmental issues including CO2 emission, security concerns, and the possible advantages of each technology in special markets such as remote locations or particularly hot or cold climates.
Estimate current costs of the identified technologies and the cost reductions that the committee judges would be required to make the technologies competitive in the market place. As part of this assessment, the committee will consider the future prospects for hydrogen production and end-use technologies (e.g., in the 2010 to 2020, 2020–2050, and beyond 2050 time frames). This assessment may include scenarios for the introduction and subsequent commercial development of a hydrogen economy based on the use of predominantly domestic resources (e.g., natural gas, coal, biomass, renewables [e.g., solar, geothermal, wind], nuclear, municipal and industrial wastes, petroleum coke, and other potential resources), and consider constraints to their use.
Based on the technical and cost assessments, and considering potential problems with making the “chicken and egg” transition to a widespread hydrogen economy using each technology, review DOE’s current RD&D programs and plans, and suggest an RD&D strategy with recommendations to DOE on the R&D priority needs within each technology area and on the priority for work in each area.
Provide a letter report on the committee’s interim findings no later than February 2003 so this information can be used in DOE’s budget and program planning for Fiscal Year 2005.
Publish a written final report on its work, approximately 13 months from contract initiation.
The committee’s interim letter report and final report will be reviewed in accordance with National Research Council (NRC) report review procedures before release to the sponsor and the public.
Structure of This Report
Chapter 2 describes the U.S. energy system as it exists today and explains how energy infrastructure is built up and how production technologies mature. The chapter also describes key, overarching issues that will be treated in later chapters. Chapter 3 discusses the demand side—describing the categories of technologies, such as automotive and stationary fuel cells, that use hydrogen and postulating the future demand for these units should hydrogen become a com-
“Direct funding” is defined by the DOE as funding that would not be requested if there were no hydrogen-related activities. “Associated” efforts are those necessary for a hydrogen pathway, such as hybrid electric components in the DOE’s budget within the FreedomCAR Partnership, a cooperative research effort between the DOE and the United States Council for Automotive Research (USCAR).