Keynote Speech

I'm the guy credited by many people for getting the Bush administration to stand up a hydrogen initiative. There are a number of items that went into that decision that I'm going to talk about today, to give you some perspective as to why this makes sense as public policy. And then I’m going to look at some of the challenges we face, and try to talk about where I think some of those solutions lie in a lot of those arenas. This is one of those areas that has been some time in coming; I started working on hydrogen about 20 years ago in the Congress, at a time when very few people were looking at this as a potential alternative. I believed, based largely on my experience in the space program, that there were a lot of things that could be done with hydrogen that had tremendous merit.

By the time I became Chairman of the Committee on Science in the House of Representatives, we were able to pass the Hydrogen Futures Act, which in and of itself was an authorization for about $100 million over a period of five years. More importantly, what it did was establish legitimacy for the subject. I have been very much involved throughout the Clinton administration with working with the Department of Energy on the Partnership for New Generation Vehicles. I found that, in the early days of that program, no one was looking at hydrogen alternatives. When we passed the Hydrogen Futures Act, what we were able to get was an understanding by people in that program that maybe this idea did have legitimacy. They began to look at what some hydrogen concepts might look like, and we've now seen it play itself out in a variety of ways.

For example, General Motors, a company that is investing hundreds of millions and even billions in developing fuel-cell technology, believes that some time within the next decade they will have fuel-cell powered cars on the road. So we have seen a considerable transformation in the public thinking, investment thinking, and public policy thinking in the past few years.

How do we get there, why did we get there, why did this administration decide to stand up a hydrogen program? I started my thinking, and where I started the process of convincing others, with the idea that in hydrogen we have an unlimited supply of energy. Now, I have an economic formula that worked for me during the time I was in the Congress, and that is, if you want to achieve something real what you need is unlimited access to unlimited supply. In hydrogen, the advantage is you have the unlimited supply; the question for policymakers worldwide is how do you achieve unlimited access? That's really the issue that is being solved by people who are writing legislation today.

It's true that hydrogen has to come from somewhere, but the fact that it can be obtained from a variety of resources is an advantage for it. For example, the best way to use nuclear reactors is to run them at 100% capacity all of the time, but the problem is that you can't always utilize them that way. So what you often get is waste heat from nuclear reactors; why can't you use that to generate hydrogen? All of a sudden you get an interrelationship between those two technologies that makes a lot of sense.

I like to talk about biomass, because I like the idea that every landfill becomes a fuel dump for the future if you're moving toward a hydrogen economy. Again, it's a matter of obtaining the methane and processing that into hydrogen, but the advantages over the long term are considerable. So there is a supply that is available, if we can figure out the right ways to manufacture the hydrogen that we would need inside the hydrogen economy.

That takes me to my next point, which is that there is a huge geopolitical advantage to moving into a hydrogen economy. First of all, you end your reliance on foreign supply of energy needs. I would suggest to you that, even today, as we begin to look at policies that promote hydrogen, the rest of the world is beginning to recalculate the implications of a reduced US dependence on oil, even by as little as from 2 percent and 5 percent.

But even more important in my mind is that you provide an alternative energy infrastructure for the growing economies of the world. China and India are examples of future competitors in the marketplace for energy supplies that we traditionally have used.

If in fact you can begin internationally to move toward an economy based on hydrogen, you begin to rationalize the overall petroleum economy for the next 50 years. That is a huge advantage, and something we need to look at. Having a variety of alternatives for transportation, not just those that depend on oil, is the reason why this administration has stood up the international partnership for a hydrogen economy.

Countries like China don't have to stand up the same infrastructure we have in this country; they could stand up an economy that is largely reliant on hydrogen, in much the same way they moved directly to cell phones without having first to put land lines in place.

The third thing that I think is an advantage in moving toward a hydrogen economy is the whole concept of distributed power. We are seeing a move toward decentralization in all phases of our economic life, including in Third World countries. They don't want the problems associated with building significant centralized infrastructures; there's too much investment involved. So the concept of distributed power is pretty attractive; it's attractive globally, and it's attractive here. One of the reasons it's attractive here despite the massive infrastructure is because the threat of terrorism includes threats against those centralized sources of power. If you can decentralize your power generation, you have a much greater potential for dealing with terrorist threats. One of the questions is, of course, is how do you end up doing this? How do you move hydrogen around after you’ve produced it? You can do it through a reformer technology, but the fact is there are technologies in place that many of us have not considered. For example, a lot of people don't know that we already pipe hydrogen around; Air Products, for example, has hundreds of miles of hydrogen pipelines. The fact is that there is an ability to move hydrogen around into a network that has power generation in a more distributed manner.

The fourth thing is the environment. In fact, development of a hydrogen economy is a positive environmental impact. In addition to generating only water, it makes the rest of the alternative generation technologies more practical. The fact is, if we are going to develop solar, if we are going to develop wind, they will not be very adaptable to the transportation economy unless there is some carrier of that energy that can be utilized. Hydrogen is that carrier. You can use a number of energy sources to obtain the hydrogen, and once you have hydrogen you have a significant energy carrier that can be used across the economy. That is a huge environmental advantage.

And finally, I suggest to you that one thing we can get out of hydrogen are superior products. The fact is, we will not be able to have hydrogen-powered cars unless they are better cars. The idea that you're going to sell people cars because they are environmentally better probably doesn't work. People will buy automobiles that they can get the best price on, and that are better cars. I think that there will be some things that will be kind of interesting about hydrogen cars: I think that people during a blackout will find it pretty attractive to have 100 kW of power sitting in their garage that they could plug into and provide totally clean power, and power not only their house but their neighbor's house as well. Now that is in addition to a car model that you don't employ with internal combustion.

Some of the early hydrogen uses will probably be in high-end products such as luxury cars. It is possible that fuel cells may be used initially solely to power the electrical components in a car, and not to power the vehicle. Those are high-end applications that may be attractive to a lot of people. Getting outside of transportation, there is potential for replacement of batteries that will have a long-term effect, such as having a computer battery that will last all the way in flying across the Pacific rather than carrying spare batteries. Those are good applications that have the potential for making a real impact.

What are the challenges, then, of getting there? First of all, hydrogen really does have a problem with public perception, and public understanding of hydrogen has been largely negative, based on a misunderstanding of the Hindenburg disaster as well as concern over the term " H-bomb". I lived near the Three Mile Island nuclear plant, and I remember well the hydrogen bubble that occurred in the course of Three Mile Island’s emergency in 1979. The hydrogen bubble was in fact a real problem, but it was interpreted erroneously by the press and the public as hydrogen 'bomb'. One member of Congress recently announced "I'll be damned if I'm going to drive around with an H-bomb in my gas tank". This tells you that some education is needed, both on Capitol Hill and with the public. The truth is that hydrogen would be in many ways a safer alternative than the gasoline we now use.

There has been tremendous opposition from many environmental groups to the Administration program. You would think that the these people would have jumped on board immediately, if only for something that offers a clean alternative for the future. Opponents say, in part, that this technology is so far off it would be better to focus on short term, rather than long time, solutions. However, the technology is probably much closer than many of us imagine.

The second issue that I think is a challenge is investment and all the issues that surround the investment climate. If we're going to get a hydrogen economy anytime within the next decade, we are going to have to get a buy-in from the government and from private investors. There has also been a good deal of activity at the state and local levels. If you hear what some of the governors are saying, you begin to hear people talking about standing up hydrogen highways as the first step toward having an infrastructure in place for the application of a hydrogen economy. You also have considerable industry attention: for example, BMW plans to have a dual hydrogen-gasoline vehicle within the next four years, and the company plans to provide the hydrogen infrastructure through their individual dealerships. General Motors announced plans to have a hydrogen car available for sale within the next decade; a lot of those cars will probably not be sold in this country, but rather in countries like China that see the advantages of having infrastructure stood up in places where there is no current infrastructure. And that leads me to my second point about investment.

One of the real problems in this arena is that we have huge investments now in the carbon economy that have to be transitioned. You have companies whose whole net worth is based on the amount of resources they have in petroleum. A sudden change in infrastructure, which is quite unlikely, would mean that these companies would lose both the sale of the product and the sunk costs of infrastructure in hand. What we've got to do is find a way to begin the process of transition. For example, a move toward distributed power will have to be done in a way where utilities can balance that inside their existing portfolio. Of course, the problem with that is that some of those industries actually block the transition in order to protect their current investment portfolio. The real solution, then, is to effect a transition over the short and long-term that utilizes the existing infrastructure. The organizations that are heavily invested in natural gas will see this as a great advantage, for those processes involving reforming of natural gas to produce hydrogen, but environmentalists worry that by using natural gas you're not taking carbon out of the environment. The point is that natural gas is a short-term expedient to get you to where you want to go in the totality of a hydrogen economy. And, as I mentioned earlier, there are several applications where you can begin to use waste heat to generate hydrogen.

The third issue, the third challenge, pertains to infrastructure. However, the problem in transitioning from one infrastructure to another is not as big a problem as some people imagine. Remember, that over a period of time you are only going to have a small percentage of products, particularly transportation related, that are hydrogen based, allowing for a gradual adoption of the new infrastructure that can be managed. For example, Air Products has developed an infrastructure that allows you to put a trailer full of hydrogen at a service station to refuel hydrogen vehicles there; at least for the immediate future, for the next several years, that's plenty of infrastructure for some of these hydrogen highways, and it's fairly inexpensive.
You're having a lot of early adapter countries, such as Iceland, which is able to stand up a hydrogen economy by utilizing their geothermal resources. Several US states, including California, Nevada, and Illinois - as well as the government of Canada - have announced hydrogen highways initiatives.

The infrastructure problems we are going to face are more likely to be institutional rather than technical. It is the institutional problems, particularly for state and local governments, which are going to be the problem. Much of this involves public perception, which is why it is important to have a public education program. It also means that the federal government has to be the institutor of programs to set codes and standards. If we do not have codes and standards, it will be difficult for state and local governments to respond in a positive manner.

The next challenge is costs. It is fine to talk about the advantages of a hydrogen economy, but if it can't survive in the real world of costs it's probably not going to happen. And that gets to the question of manufacturing hydrogen: how do you do that at a cost that is competitive with carbon-based products? As you look toward manufacturing techniques that utilize the present infrastructure, you may well find an ability to do that. Fuel cell costs are certainly higher than an internal combustion costs, and the feeling is that you have to get down to between $50 and $100 a kilowatt if you're going to make it competitive with internal combustion. We are not there yet, but there is a lot of movement in the direction of getting there. Some of the nano-technology applications to make new materials for the membranes of fuel cells appear to be able to eliminate or reduce the need for some of the exotic metals that have gone into fuel cells, and that will reduce the costs considerably. And there are the costs of paradigmatic transition; we have to calculate those costs in designing those programs for the future.

If I had to say where we are at the present time, I would say that we are at the same place the Internet was in the mid-1980s. We as policymakers on Capitol Hill were looking at a variety of ideas to make the Internet more viable. Ultimately, the public got way ahead of the policymakers, and in many ways is still ahead. I think the same thing is likely to take place with hydrogen, and that hydrogen-based products in the public realm will be of such worth that the public will begin to adapt more quickly than policymakers realize. I look at the next decade as being as one during which fuel cells and hydrogen applications will become part of our way of life.

Where do you want to be? It seems to me whether you are government, industry or just concerned, you want to be in front of what is going to be an economic change. It will impact how we work, how we live, how we play - how we do all of the things that are important to us in life. And getting out in front of that means you will help to find how that takes place. My guess is that's where you want to be, and that's where you should be. And that's my message.