Hydrogen Fuel Initiative
DOE Has Made Important Progress and Involved Stakeholders but Needs to Update What It Expects to Achieve by Its 2015 Target Gao ID: GAO-08-305 January 11, 2008The United States consumes more than 20 million barrels of oil each day, two-thirds of which is imported, leaving the nation vulnerable to rising prices. Oil combustion produces emissions linked to health problems and global warming. In January 2003, the administration announced a 5-year, $1.2 billion Hydrogen Fuel Initiative to perform research, development, and demonstration (R&D) for developing hydrogen fuel cells for use as a substitute for gasoline engines. Led by the Department of Energy (DOE), the initiative's goal is to develop the technologies by 2015 that will enable U.S. industry to make hydrogen-powered cars available to consumers by 2020. GAO examined the extent to which DOE has (1) made progress in meeting the initiative's targets, (2) worked with industry to set and meet targets, and (3) worked with other federal agencies to develop and demonstrate hydrogen technologies. GAO reviewed DOE's hydrogen R&D plans, attended DOE's annual review of each R&D project, and interviewed DOE managers, industry executives, and independent experts.
DOE's hydrogen program has made important progress in all R&D areas, including both fundamental and applied science. Specifically, DOE has reduced the cost of producing hydrogen from natural gas, an important source of hydrogen through the next 20 years; developed a sophisticated model to identify and optimize major elements of a projected hydrogen delivery infrastructure; increased by 50 percent the storage capacity of hydrogen, a key element for increasing the driving range of vehicles; and reduced the cost and improved the durability of fuel cells. However, some of the most difficult technical challenges lie ahead, including finding a technology that can store enough hydrogen on board a vehicle to achieve a 300-mile driving range, reducing the cost of delivering hydrogen to consumers, and further reducing the cost and improving the durability of fuel cells. The difficulty of overcoming these technical challenges, as well as hydrogen R&D budget constraints, has led DOE to push back some of its interim target dates. However, DOE has not updated its 2006 Hydrogen Posture Plan's overall assessment of what the department reasonably expects to achieve by its technology readiness date in 2015 and how this may differ from previous posture plans. In addition, deploying the support infrastructure needed to commercialize hydrogen fuel-cell vehicles across the nation will require an investment of tens of billions of dollars over several decades after 2015. DOE has effectively involved industry in designing and reviewing its hydrogen R&D program and has worked to align its priorities with those of industry. Industry continues to review R&D progress through DOE's annual peer review of each project, technical teams co-chaired by DOE and industry, and R&D workshops. Industry representatives are satisfied with DOE's efforts, stating that DOE generally has managed its hydrogen R&D resources well. However, the industry representatives noted that DOE's emphasis on vehicle fuel cell technologies has left little funding for stationary or portable technologies that potentially could be commercialized before vehicles. In response, DOE recently increased its funding for stationary and portable R&D. DOE has worked effectively with hydrogen R&D managers and scientists in other federal agencies, but it is too early to evaluate collaboration among senior officials at the policy level. Agency managers are generally satisfied with the efforts of several interagency working groups to coordinate activities and facilitate scientific exchanges. At the policy level, in August 2007, DOE convened the inaugural meeting of an interagency task force, composed primarily of deputy assistant secretaries and program directors. The task force is developing plans to demonstrate and promote hydrogen technologies.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-08-305, Hydrogen Fuel Initiative: DOE Has Made Important Progress and Involved Stakeholders but Needs to Update What It Expects to Achieve by Its 2015 Target
This is the accessible text file for GAO report number GAO-08-305
entitled 'Hydrogen Fuel Initiative: DOE Has Made Important Progress and
Involved Stakeholders but Needs to Update What It Expects to Achieve by
Its 2015 Target' which was released on February 11, 2008.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as part
of a longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
January 2008:
Hydrogen Fuel Initiative:
DOE Has Made Important Progress and Involved Stakeholders but Needs to
Update What It Expects to Achieve by Its 2015 Target:
Hydrogen Fuel Initiative:
GAO-08-305:
GAO Highlights:
Highlights of GAO-08-305, a report to congressional requesters.
Why GAO Did This Study:
The United States consumes more than 20 million barrels of oil each
day, two-thirds of which is imported, leaving the nation vulnerable to
rising prices. Oil combustion produces emissions linked to health
problems and global warming. In January 2003, the administration
announced a 5-year, $1.2 billion Hydrogen Fuel Initiative to perform
research, development, and demonstration (R&D) for developing hydrogen
fuel cells for use as a substitute for gasoline engines. Led by the
Department of Energy (DOE), the initiative‘s goal is to develop the
technologies by 2015 that will enable U.S. industry to make hydrogen-
powered cars available to consumers by 2020.
GAO examined the extent to which DOE has (1) made progress in meeting
the initiative‘s targets, (2) worked with industry to set and meet
targets, and (3) worked with other federal agencies to develop and
demonstrate hydrogen technologies. GAO reviewed DOE‘s hydrogen R&D
plans, attended DOE‘s annual review of each R&D project, and
interviewed DOE managers, industry executives, and independent experts.
What GAO Found:
DOE‘s hydrogen program has made important progress in all R&D areas,
including both fundamental and applied science. Specifically, DOE has
reduced the cost of producing hydrogen from natural gas, an important
source of hydrogen through the next 20 years; developed a sophisticated
model to identify and optimize major elements of a projected hydrogen
delivery infrastructure; increased by 50 percent the storage capacity
of hydrogen, a key element for increasing the driving range of
vehicles; and reduced the cost and improved the durability of fuel
cells. However, some of the most difficult technical challenges lie
ahead, including finding a technology that can store enough hydrogen on
board a vehicle to achieve a 300-mile driving range, reducing the cost
of delivering hydrogen to consumers, and further reducing the cost and
improving the durability of fuel cells. The difficulty of overcoming
these technical challenges, as well as hydrogen R&D budget constraints,
has led DOE to push back some of its interim target dates. However, DOE
has not updated its 2006 Hydrogen Posture Plan‘s overall assessment of
what the department reasonably expects to achieve by its technology
readiness date in 2015 and how this may differ from previous posture
plans. In addition, deploying the support infrastructure needed to
commercialize hydrogen fuel-cell vehicles across the nation will
require an investment of tens of billions of dollars over several
decades after 2015.
DOE has effectively involved industry in designing and reviewing its
hydrogen R&D program and has worked to align its priorities with those
of industry. Industry continues to review R&D progress through DOE‘s
annual peer review of each project, technical teams co-chaired by DOE
and industry, and R&D workshops. Industry representatives are satisfied
with DOE‘s efforts, stating that DOE generally has managed its hydrogen
R&D resources well. However, the industry representatives noted that
DOE‘s emphasis on vehicle fuel cell technologies has left little
funding for stationary or portable technologies that potentially could
be commercialized before vehicles. In response, DOE recently increased
its funding for stationary and portable R&D.
DOE has worked effectively with hydrogen R&D managers and scientists in
other federal agencies, but it is too early to evaluate collaboration
among senior officials at the policy level. Agency managers are
generally satisfied with the efforts of several interagency working
groups to coordinate activities and facilitate scientific exchanges. At
the policy level, in August 2007, DOE convened the inaugural meeting of
an interagency task force, composed primarily of deputy assistant
secretaries and program directors. The task force is developing plans
to demonstrate and promote hydrogen technologies.
What GAO Recommends:
GAO recommends that DOE update its Hydrogen Posture Plan‘s assessment
of what can reasonably be achieved by 2015 and how this may differ from
its prior posture plans. In commenting on a draft of the report, DOE
agreed with the recommendation, stating that it will update its posture
plan during 2008.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.GAO-08-305]. For more information, contact Mark
Gaffigan at (202) 512-3841 or gaffiganm@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
The Hydrogen Fuel Initiative Has Made Important Progress but Will
Require Significant Scientific Advances and Continued R&D beyond 2015
and Investment in Developing the Physical Infrastructure:
DOE Has Partnered Well with Industry on Vehicle Technologies, but
Efforts to Develop Stationary and Portable Technologies Are Too New to
Evaluate:
DOE Has Effectively Coordinated with Other Federal Agencies at the
Working Level, but Efforts at the Policy Level Have Just Begun:
Conclusions:
Recommendation:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Department of Energy:
Appendix III: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Fuel Cell Types and Examples of Their Applications:
Table 2: Status of Key Hydrogen Fuel Initiative Technologies and Target
Dates:
Table 3: Funding for the Hydrogen Fuel Initiative, Fiscal Years 2004
through 2008:
Figures:
Figure 1: U.S. Refineries' Oil Prices, 1968 to 2007:
Figure 2: Schematic of a Typical Fuel Cell:
Abbreviations:
DOD: Department of Defense:
DOE: Department of Energy:
DOT: Department of Transportation:
HTAC: Hydrogen and Fuel Cell Technical Advisory Committee:
IWG: Interagency Working Group on Hydrogen and Fuel Cells:
IPHE: International Partnership for the Hydrogen Economy:
NASA: National Aeronautics and Space Administration:
NIST: National Institute of Standards and Technology:
R&D: research, development, and demonstration:
USCAR: U.S. Council for Automotive Research:
United States Government Accountability Office:
Washington, DC 20548:
January 11, 2008:
The Honorable Bart Gordon:
Chairman:
Committee on Science and Technology:
House of Representatives:
The Honorable Nick Lampson:
Chairman:
The Honorable Bob Inglis:
Ranking Member:
Subcommittee on Energy and Environment:
Committee on Science and Technology:
House of Representatives:
The Honorable Michael M. Honda:
House of Representatives:
The United States uses more than 20 million barrels of oil each day,
roughly two-thirds of which is imported. Disruptions in supply from
natural disasters such as hurricanes in the Gulf of Mexico and
political instability in some oil-producing regions have caused
prolonged price spikes, at times quadrupling the price of oil. In
recent years, reduced domestic production and increased world
consumption have contributed to recent records for the price of oil. In
2004, when oil cost refiners about $41 a barrel, the nation spent about
$6 billion a week for its oil when adjusted for inflation; by October
2007, oil cost refiners about $80 per barrel and the nation spent more
than $11 billion a week. Oil prices are likely to climb even higher as
global oil production peaks, which many studies estimate could occur
within the next 35 years. Moreover, the nation's transportation sector
is 97 percent dependent on oil-derived products that, when burned in
conventional internal combustion engines, produce harmful emissions
that raise health problems and global warming concerns.
To reduce the nation's dependence on foreign oil and to decrease
greenhouse gas emissions, President Bush in January 2003 announced the
initial phase of a 5-year, $1.2 billion Hydrogen Fuel Initiative to
conduct research, development, and demonstration (R&D) for developing
hydrogen-powered fuel cells as an alternative to the internal
combustion engine in vehicles. Hydrogen fuel cells emit only water and
heat as byproducts--an important factor for limiting carbon emissions.
The Hydrogen Fuel Initiative, primarily led by the Department of Energy
(DOE), set a target date of 2020 for making hydrogen vehicles
commercially available to consumers to achieve its goal of allowing a
child born in 2003 to be able to drive a hydrogen vehicle as his or her
first car.
Since the 1970s, the federal government has conducted R&D on hydrogen
and fuel cells, which operate similarly to a battery to produce
electricity. Hydrogen, like electricity, carries energy in a usable
form from one place to another. Moreover, hydrogen can be stored and
efficiently converted to energy when needed, making it ideal to power
fuel cells to generate energy. In addition to potential use in
vehicles, hydrogen fuel cells can be used in stationary applications,
such as replacing diesel generators used to provide emergency power in
hospitals, and portable applications, such as replacing batteries used
in electric wheelchairs and laptop computers. However, while hydrogen
is the most plentiful element in the universe, it is not found in its
gaseous state on earth because it is lighter than air and rises in the
atmosphere. Instead, hydrogen must be extracted from such common
compounds as fossil fuels, biomass, and water, a process that requires
energy.
To develop the Hydrogen Fuel Initiative, DOE met with stakeholders,
including industry executives and university scientists, in a series of
meetings and workshops. DOE determined that hydrogen fuel cell
technologies must be ready by 2015 to enable industry to begin
commercialization by 2020. DOE issued its first Hydrogen Posture Plan
in February 2004 and updated it in December 2006. The plan established
priorities for hydrogen R&D areas and set interim and final targets,
focused on developing hydrogen-powered fuel cells that match the
performance of gasoline-powered vehicles in terms of driving range,
durability, and cost. DOE began to implement the Hydrogen Fuel
Initiative in fiscal year 2004. DOE's Office of Energy Efficiency and
Renewable Energy, which conducts most of the initiative's R&D work,
oversees the Hydrogen Fuel Initiative through the hydrogen program
manager. The initiative's R&D is coordinated with other renewable
energy programs; DOE's Offices of Fossil Energy, Nuclear Energy, and
Science; and the Department of Transportation (DOT), which conducts R&D
in such areas as vehicle-related safety codes and standards and medium-
and heavy-duty vehicle demonstrations.
Title VIII of the Energy Policy Act of 2005 extended the Hydrogen Fuel
Initiative beyond the President's initial 5-year program by authorizing
R&D funding through 2020 and directing DOE to conduct R&D to develop,
among other things, the necessary supporting infrastructure, including
pipelines and fueling stations. The act also directed DOE to work with
industry and established the Hydrogen and Fuel Cell Technical Advisory
Committee (HTAC)--which includes representatives of industry, academia,
professional societies, government agencies, financial organizations,
and environmental groups--to review and make recommendations to the
Secretary of Energy on DOE's implementation of its hydrogen R&D
programs and activities; the safety, economical, and environmental
consequences of technologies; and DOE's long-term R&D plans. In
addition, the act directed the President to establish the Interagency
Task Force, chaired by the Secretary of Energy, to coordinate federal
agencies' hydrogen and fuel cell R&D efforts and promote hydrogen
technologies. The task force is to include representatives from, at a
minimum, DOT, the Department of Defense (DOD), the Department of
Commerce, the Department of State, the National Aeronautics and Space
Administration (NASA), the Environmental Protection Agency, and the
White House's Office of Science and Technology Policy. Subsequently, in
November 2006, HTAC recommended that the Interagency Task Force include
assistant secretary-level officials with policy-setting authority from
each participating agency.
DOE--with input from industry, university, and federal agency
stakeholders--identified the following four major technical challenges
that must be overcome before hydrogen technologies can be deployed on a
large scale:
* Production. Current production R&D efforts focus on economically
extracting hydrogen from other compounds using fossil, renewable, and
nuclear energy. For example, DOE established 2015 as the target date
for extracting hydrogen from natural gas at a cost equivalent of $2 to
$3 per gallon of gasoline.
* Storage. Storing hydrogen requires it to be either compressed under
very high pressure as a gas or super-cooled to obtain a liquid;
however, these technologies consume significant amounts of energy and
are currently too costly. Current hydrogen storage R&D efforts focus on
developing less energy-intensive and less expensive methods of storing
hydrogen. For example, DOE established 2015 as the target date for
developing a hydrogen fuel cell vehicle that can travel at least 300
miles using only the hydrogen stored onboard.
* Delivery. Current truck delivery technologies cannot compete with
gasoline technologies because of the cost of compressing or liquefying
hydrogen. Although delivery by pipeline is more economical, hydrogen
causes pipelines to become brittle, raising safety concerns. Current
R&D efforts focus on, among other things, reducing the cost of
delivering hydrogen by truck and pipeline, and developing new composite
materials for safer delivery by pipeline, targeting a point-to-point
delivery cost of less than $1 per gallon of gasoline equivalent.
* Fuel Cell Cost and Durability. The type of hydrogen fuel cell
considered the most promising for vehicles currently has cost and
durability limitations. Specifically, current fuel cell systems (1)
cost about $8,000 to produce at high volume, compared to $2,000 to
$3,000 to produce a conventional internal combustion engine and (2)
operate for less than half the life span of a conventional internal
combustion engine. Current hydrogen fuel cell R&D efforts focus on
reducing the cost and increasing the durability of fuel cells. For
example, DOE set a target date of 2015 to develop a fuel cell with a
life span of about 5,000 hours--or about 150,000 miles--making it
competitive with internal combustion engines.
Industry representatives have noted that they are spending far more for
hydrogen R&D than the federal government's Hydrogen Fuel Initiative.
Specifically, while actual R&D figures are proprietary, Chrysler LLC,
Ford Motor Company, and General Motors Corporation each has reported
spending at least as much as the federal government on R&D for hydrogen
fuel cell vehicles, and each plans to spend $6 to $10 billion from 2006
through 2015.
Furthermore, DOE is analyzing infrastructure requirements for deploying
hydrogen fuel cell technologies, including hydrogen production
facilities and pipelines to deliver hydrogen to major metropolitan
markets. To facilitate this effort, DOE is working with DOT, industry
groups, and international organizations to develop national and
international safety codes and standards, such as fire codes for
stationary fuel cells and standards for hydrogen fueling stations. DOE
is also validating hydrogen technologies in real-world environments by,
for example, collecting information on the performance of 77 hydrogen
fuel cell vehicles used as a demonstration in several cities for
commuting and other daily driving needs. To stimulate public awareness
and acceptance of hydrogen technologies, DOE is disseminating safety-
related information for emergency personnel as well as nontechnical
information for the general public on hydrogen production, storage, and
delivery; fuel cells; and near-term markets.
You asked that we assess DOE's Hydrogen Fuel Initiative as DOE enters
the last year of its initial 5-year, $1.2 billion program.
Specifically, you asked that we examine the extent to which DOE's
hydrogen R&D program has (1) made progress in meeting the initiative's
R&D targets, (2) worked with industry to set and meet R&D targets, and
(3) worked with other federal agencies to develop and demonstrate
hydrogen technologies.
To ensure that we obtained a thorough understanding of DOE's hydrogen
R&D program, we reviewed documents and interviewed DOE program managers
and national laboratory scientists, company and industry association
executives, independent experts, and state government officials. More
specifically, to assess DOE's progress in meeting its R&D targets, we
(1) reviewed DOE's Hydrogen Posture Plans and R&D project reports; (2)
attended DOE's annual review of its projects in May 2007; (3)
interviewed DOE hydrogen program managers and scientists at DOE's
National Renewable Energy Laboratory and Los Alamos National
Laboratory; (4) spoke with HTAC members and attended HTAC meetings; (5)
interviewed industry representatives and reviewed industry assessments
of DOE's progress in developing and demonstrating vehicle, stationary,
and portable technologies; and (6) reviewed reports of the National
Academies of Science and Engineering on the hydrogen program and spoke
with cognizant officials. To determine the extent to which DOE has
worked with industry to set and meet R&D targets, we reviewed pertinent
documents and assessed DOE's processes for soliciting industry input,
including attending a meeting of the fuel cell technical team at Los
Alamos National Laboratory. We also interviewed cognizant DOE managers
and scientists and executives of car manufacturers, energy companies,
utilities, hydrogen producers, fuel cell manufacturers, and suppliers
of hydrogen-related components. To determine the extent to which DOE
has worked with other federal agencies to develop and demonstrate
hydrogen technologies, we reviewed pertinent documents and spoke with
officials at DOE, DOT, DOD, the Department of Commerce, NASA, and the
U.S. Postal Service. We also attended the Interagency Task Force's
first meeting in August 2007. We conducted our work from March through
December 2007 in accordance with generally accepted government auditing
standards. Appendix I provides additional information about our scope
and methodology.
Results in Brief:
DOE's hydrogen R&D program has made important progress, but some of the
most difficult technical challenges--those that require significant
scientific advances--lie ahead, and many years of hydrogen R&D and
infrastructure development beyond the 2015 target date will be needed
before hydrogen can compete with current technologies. Specifically,
DOE has reduced the cost of producing hydrogen from natural gas--an
important source of hydrogen through the next 20 years; increased the
storage capacity of hydrogen by 50 percent--a key element for
increasing the driving range of vehicles; developed a sophisticated
model to identify and optimize major elements of a projected hydrogen
delivery infrastructure, and reduced the cost and improved the
durability of fuel cells. However, DOE and industry officials stated
that meeting some longer-term targets will require major scientific
advances. For example, current fuel cell technology relies on platinum
to separate electrons from protons to generate electricity. Because of
the high cost of platinum, DOE's targets for reducing fuel cell costs
include reducing the amount of platinum in fuel cells by more than 80
percent from its 2005 levels or finding a substitute. Some industry
representatives noted that DOE's target dates were very ambitious,
given the technical challenges and budget constraints. Relatedly,
nearly 25 percent of the Hydrogen Fuel Initiative's funding for fiscal
years 2004 through 2006 was spent on congressionally directed projects
that were largely outside the initiative's R&D scope. In response, DOE
has pushed back target dates for certain key technologies--the target
date for using wind energy to produce hydrogen was pushed back from
2015 to 2017--and reduced funding for stationary and portable
applications. Although DOE has pushed back interim target dates, it has
not updated its 2006 Hydrogen Posture Plan's overall assessment of what
the department reasonably expects to achieve by its technology
readiness date in 2015, including how this may differ from previous
posture plans. DOE also has not identified the R&D funding needed to
achieve its 2015 target. Moreover, deploying the production facilities,
fueling stations, and other support infrastructure needed to
commercialize hydrogen fuel cell vehicles across the nation will
require sustained industry and federal investment of tens of billions
of dollars over several decades after 2015, according to DOE officials
and industry representatives.
DOE has effectively solicited industry input and has worked to align
its R&D priorities with those of industry, and industry representatives
stated that DOE generally has managed its hydrogen R&D resources well.
Specifically, DOE involved industry and university experts at the
earliest planning stages and has continually focused on the highest R&D
priorities. DOE has hosted annual peer reviews of each R&D project and
has sponsored periodic workshops to solicit industry feedback on the
progress, priorities, and direction of the hydrogen R&D program. DOE
has also established 11 technical teams with DOE, industry, and
national laboratory representation to assess progress in specific areas
and bring technical and other issues to management attention. In
addition, both the National Academies of Science and Engineering and
HTAC provide input. One area of criticism that industry representatives
identified is that DOE has focused its limited resources on developing
vehicle technologies and given low priority to stationary and portable
technologies. These industry representatives note that stationary and
portable technologies may have more near-term market potential than
vehicle technologies and, therefore, may be integral to resolving
technical or infrastructure challenges and developing the public
acceptance necessary to deploy hydrogen nationally. DOE recently has
begun to emphasize near-term stationary and portable market
applications by soliciting industry, non-profit, and federal
organizations for ideas on early adoption of technologies and providing
R&D grants.
DOE's interagency coordination efforts among working level managers and
scientists have been productive and useful, but it is too early to
evaluate collaboration among senior officials at the policy level
because a body created to do so, the Interagency Task Force, just held
its first meeting in August 2007. At the working level, DOE has
established several interagency coordination bodies to facilitate
cooperation and share knowledge. For example, one working group has
created Web-based tools and joint workshops to coordinate R&D
activities and facilitate interagency technology partnerships by
bringing the Defense Logistics Agency together with DOE in an
initiative for deploying hydrogen-fuel-cell-powered forklifts. Working
level managers at federal agencies involved in hydrogen-related
activities generally were satisfied with the level of coordination.
However, the Interagency Task Force--composed of deputy assistant
secretaries, program directors, and other senior officials--has just
begun to plan actions to demonstrate and promote hydrogen technologies.
In its inaugural meeting in August 2007, the task force did not clearly
define its role or strategy, but member agencies plan to develop a path
forward and an action plan by May 2008. HTAC criticized DOE for taking
too long to initiate the effort and for not securing participation of
departmental assistant secretaries to ensure appropriate authority
inside each agency for making hydrogen-related budget and policy
decisions. In addition, some Interagency Task Force members observed
that lack of a common vision may hinder decision making.
To accurately reflect the progress made by the Hydrogen Fuel Initiative
and the challenges it faces, we recommend that the Secretary of Energy
update the Hydrogen Posture Plan's overall assessment of what DOE
reasonably expects to achieve by its technology readiness date in 2015,
including how this updated assessment may differ from prior posture
plans and a projection of anticipated R&D funding needs. DOE agreed
with our recommendation, stating that it plans to update the Hydrogen
Posture Plan during 2008.
Background:
For decades, oil has been relatively inexpensive and plentiful, helping
to spur the United States' economic growth. Despite price spikes
primarily caused by instability in the Middle East and other oil-
producing regions or by natural disasters, the price of oil has
historically returned to low levels. However, in recent years,
increasing world consumption of oil has put more upward pressure on the
price of oil, making the price less likely to return to low levels.
Figure 1 shows the volatility of the oil market because of political
instability and natural disasters, but also illustrates an upward trend
in price in recent years.
Figure 1: U.S. Refineries' Oil Prices, 1968 to 2007:
This figure is a line graph showing U.S. refineries' oil prices between
1968 and 2007. The X axis represents the calendar years, and the Y axis
represents the dollars per barrel.
[See PDF for image]
Source: GAO analysis of DOE data.
Note: Oil prices are in real terms, adjusted to fiscal year 2007
dollars to account for inflation. For 2007, oil prices for January
through September were averaged. Refiners' oil prices better reflect
the cost of oil than spot market prices because refiners typically
purchase oil through long-term contracts that generally are not
affected by short-term price changes.
[End of figure]
In 2005, the world consumed about 84 million barrels of oil per day,
and world oil production has been running at near capacity to meet the
growing demand. DOE's Energy Information Administration projects that
world oil consumption will continue to grow, reaching about 118 million
barrels per day in 2030. In February 2007, we reported that most
studies, amidst much uncertainty, estimate that oil production will
peak sometime between now and 2040, which could lead to rapid increases
in oil prices.[Footnote 1] We concluded that the United States--which
consumes about one-quarter of the world's oil and is about 97 percent
dependent on oil for transportation--would be particularly vulnerable
to the projected price increases.
Fuel cells convert the chemical energy in hydrogen--or a hydrogen-rich
fuel--and oxygen to create electricity with low environmental impact.
Although fuel cells can use a variety of fuels, hydrogen is preferred
because of the ease with which it can be converted to electricity and
its ability to combine with oxygen to emit only water and heat. Fuel
cells look and function very similar to batteries. However, for a
battery, all the energy available is stored within the battery and its
performance will decline as its fuel is depleted. A fuel cell, on the
other hand, continues to convert chemical energy to electricity as long
as fuel is fed into the fuel cell. Like a battery, a typical fuel cell
consists of an electrolyte--a conductive medium--and an anode and a
cathode sandwiched between plates to generate an electrochemical
reaction. (See fig. 2.) Like the respective negative and positive sides
of a battery, the current flows into the anode and out of the cathode.
Figure 2: Schematic of a Typical Fuel Cell:
This figure is a visual image of schematic of a typical fuel cell.
[See PDF for image]
Source: DOE.
[End of figure]
Fuel cells typically are classified according to their type of
electrolyte and fuel. Table 1 identifies the various types of fuel
cells and their uses.
Table 1: Fuel Cell Types and Examples of Their Applications:
Fuel cell type: Alkaline;
Examples of applications: Space exploration;
Operating temperature: 194-212[O] F;
Electric output (kilowatts): 10 - 100.
Fuel cell type: Phosphoric acid;
Examples of applications: Stationary and combined heat and power;
Operating temperature: 302-392[O] F;
Electric output (kilowatts): 50 - 1,000.
Fuel cell type: Proton exchange membrane;
Examples of applications: Vehicles, backup generators for emergency
service, mobile phones, and electronics;
Operating temperature: 122-212[O] F;
Electric output (kilowatts): Less than 250.
Fuel cell type: Molten carbonate;
Examples of applications: Electric utilities and other industrial
applications;
Operating temperature: 1,112-1,292[O] F;
Electric output (kilowatts): Less than 1,000.
Fuel cell type: Solid oxide;
Examples of applications: Electric utilities and other industrial
applications;
Operating temperature: 1,202-1,832[O] F;
Electric output (kilowatts): 5 - 3,000.
Source: DOE.
[End of table]
NASA began conducting R&D on hydrogen and fuel cells in the 1960s to
develop a simple alkaline fuel cell for the space program. However,
alkaline fuel cells do not work well for cars, in part because of their
propensity to be damaged by carbon dioxide. In response to the 1973 oil
embargo, the federal government began conducting R&D to improve
automobile efficiency and reduce the U.S. transportation sector's
dependence on oil by developing technologies for using alternative
fuels, including (1) ethanol from corn and other biomass, (2) synthetic
liquids from shale oil and liquefied coal, and (3) hydrogen directly
used in internal combustion engines. In 1977, DOE's Los Alamos National
Laboratory began R&D on fuel cells called polymer electrolyte membrane
or proton exchange membrane, which have a low operating temperature,
need only hydrogen and oxygen from the air, and are very efficient.
However, DOE and industry reduced R&D funding for alternative fuels
during the 1980s, when crude oil prices returned to historic levels.
DOE formed (1) an R&D partnership with the U.S. Council for Automotive
Research (USCAR)[Footnote 2] in 1993 and (2) the FreedomCAR Partnership
in 2002 to develop advanced technologies for cars, including hydrogen
fuel cells for vehicles. The hydrogen-related R&D elements of the
FreedomCAR became part of the Hydrogen Fuel Initiative. While DOE
conducts most of the initiative's R&D, which generally has focused on
developing fuel cells for vehicles, DOT also is a member of the
initiative, primarily focusing on regulatory issues related to the
safety of vehicles, pipelines, and transport of hydrogen. The Hydrogen
Fuel Initiative is also working with industry to demonstrate and deploy
other types of fuel cells for stationary and portable applications.
DOE further focused its hydrogen R&D in response to the National Energy
Policy issued in 2001, which highlighted hydrogen as one of several R&D
priorities. DOE hosted several meetings and workshops, including two
major workshops in 2001 and 2002 that were designed to develop an R&D
agenda and involved stakeholders from industry, universities,
environmental organizations, federal and state agencies, and national
laboratories.[Footnote 3] These meetings and workshops laid the
groundwork for identifying a common R&D vision and challenges, and each
DOE program has used meetings and workshops to develop separate
detailed R&D plans that set near-term and long-term targets to enable
commercialization decisions by 2015.
In February 2004, DOE integrated these plans into its first Hydrogen
Posture Plan, a single high-level agenda. The Hydrogen Posture Plan's
approach is to conduct R&D in multiple pathways within key technology
areas with the intent of providing several promising options for
industry to consider commercializing. For example, DOE is using a mix
of fossil, renewable, and nuclear energy to develop and demonstrate
technologies that can extract hydrogen from a variety of sources,
including natural gas, coal, biomass, water, algae, and microbes. DOE
officials state that they prioritize the most promising technologies
and terminate specific efforts that show little potential. Based on its
review of the posture plan, the National Academy of Engineering made 48
recommendations, most of which were incorporated by DOE, including
focusing on both applied and fundamental science R&D.[Footnote 4]
In addition to the R&D funded through the Hydrogen Fuel Initiative, DOE
conducts R&D on various other hydrogen-related technologies. For
example, the Office of Fossil Energy is working on a hydrogen-based
solid oxide fuel cell, with funding provided through the Solid State
Energy Conversion Alliance, for stationary applications of electricity
generation. Fossil Energy's R&D plan for extracting hydrogen from coal
complements a separately funded demonstration program called FutureGen.
The effort is designed to construct a prototype integrated gasification
combined-cycle coal power plant to be operational by 2015 that will
demonstrate production of hydrogen as well as reduced emissions. Fossil
Energy also funds R&D on the capture and sequestration of carbon
dioxide, considered an important area of R&D if coal is to be used as a
long-term source of hydrogen. The Office of Nuclear Energy's R&D plan
for producing hydrogen-using nuclear energy--called the Nuclear
Hydrogen Initiative--complements the separately funded Next Generation
Nuclear Plant program. The effort focuses on conducting R&D on a new
generation of nuclear power plants capable of producing large amounts
of hydrogen efficiently and economically. The first prototype is
scheduled to be operational between 2018 and 2021.
The Hydrogen Fuel Initiative Has Made Important Progress but Will
Require Significant Scientific Advances and Continued R&D beyond 2015
and Investment in Developing the Physical Infrastructure:
DOE's hydrogen R&D program has made important progress, but some target
dates have been pushed back, and further progress in certain areas will
require significant scientific advances and continued R&D beyond 2015.
Specifically, during its first 4 years, the Hydrogen Fuel Initiative
has achieved such targets as reducing the cost of extracting hydrogen
from natural gas, but other target dates have slipped as a result of
technical challenges and budget constraints. For example, DOE officials
and industry representatives stated that achieving targets for hydrogen
storage will require fundamental breakthroughs, while achieving targets
for other technologies will require significant scientific advances and
cost reductions. However, DOE has not updated its 2006 Hydrogen Posture
Plan's overall assessment of what the department reasonably expects to
achieve by its technology readiness date in 2015 and its anticipated
R&D funding needs to meet the 2015 target. Furthermore, full-scale
deployment of hydrogen technologies will require sustained industry and
federal investment, possibly for decades beyond 2015, to develop
supporting infrastructure.
The Hydrogen Fuel Initiative Has Made Important Progress, but Some
Target Dates Have Slipped, and Some Targets Require Significant
Scientific Advances:
According to DOE, key R&D targets to achieve technology readiness in
2015 focus primarily on (1) extracting hydrogen from diverse, domestic
resources at a cost equivalent to about $2 to $3 per gallon of
gasoline, (2) storing hydrogen on-board vehicles to enable a driving
range of at least 300 miles for most light duty vehicles, (3)
delivering hydrogen between two points for less than $1 per kilogram,
and (4) developing proton exchange membrane fuel cells that cost about
$30 per kilowatt and deliver at least 5,000 hours of service for
vehicles--which compares to about 150,000 miles in conventional
gasoline-powered vehicles--and at least 40,000 hours for stationary
applications. As shown in table 2, DOE has made progress on meeting
some of its near-term targets, in both applied and fundamental science,
important stepping stones for meeting DOE's 2015 targets.
Table 2: Status of Key Hydrogen Fuel Initiative Technologies and Target
Dates:
Technology: Fuel cell;
Target area: Cost[A];
Status: $107/kW;
Target (2010): $45/kW;
Target (2015): $30/kW.
Technology: Fuel cell;
Target area: Durability;
Status: 2,000 hours;
Target (2010): 5,000 hours (80°C);
Target (2015): 5,000 hours (80°C).
Technology: Storage;
Target area: System gravimetric capacity (net)[B];
Status: 2.3 wt%;
Target (2010): 6 wt%;
Target (2015): 9 wt%.
Technology: Storage;
Target area: System volumetric capacity (net)[C];
Status: 0.8 kWh/L;
Target (2010): 1.5 kWh/L;
Target (2015): 2.7 kWh/L.
Technology: Storage;
Target area: Cost[D];
Status: $15-$18/kW;
Target (2010): $4/kW;
Target (2015): $2/kW.
Technology: Production;
Target area: Cost, distributed natural gas[E];
Status: $3.00/gge;
Target (2010): $2.00-$3.00/gge;
Target (2015): $2.00-$3.00/gge.
Technology: Production;
Target area: Cost, distributed bio-derived renewable liquids;
Status: $4.40/gge;
Target (2010): $3.80/gge (2012 target);
Target (2015):
