It's Expensive

In a "hydrogen economy," the main energy carrier would be hydrogen that is produced from pollution-free sources of energy. This goal rests on two pillars: a pollution-free source for the hydrogen and a device for cleanly converting this hydrogen into useful energy (the fuel cell).

Hydrogen is not a readily accessible energy source like coal or wind. It is bound up tightly in molecules like water (H₂0) and natural gas (primarily composed of methane, or CH₄) so it is expensive and energy-intensive to extract and purify. More than 95 percent of U.S. hydrogen is produced from natural gas today because that is the cheapest method. Yet delivering hydrogen from natural gas to the tank of a fuel-cell car in usable form costs four times as much as gasoline with an equivalent amount of energy. Hydrogen from pollution-free sources, such as renewables, is even more expensive. A hydrogen infrastructure built around existing or near-commercial technologies would cost more than $600 billion, according to the most comprehensive study done, by the Argonne National Laboratory.

Fuel cells are small, modular, electrochemical devices, similar to batteries, but which can be continuously fueled. A fuel cell takes in hydrogen and oxygen and puts out electricity and heat; its only "emissions" are water. This sounds like an energy panacea-but today, more than 160 years after the first fuel cell was built, and after more than $15 billion in public and private spending, fuel cell technology still has not achieved major commercial success.

The technical challenges are enormous. In September 2003, a U.S. Department of Energy panel on basic research needs for the hydrogen economy, chaired by MIT professor of physics and electrical engineering Mildred Dresselhaus, reported that transportation fuel cells are 100 times more expensive than internal combustion engines. The most mature hydrogen storage systems-using ultrahigh pressure-contain seven to 10 times less energy per unit volume than gasoline, and require a significant amount of compression energy. Just last month, a prestigious National Academy of Sciences panel concluded that such storage has "little promise of long-term practicality."  And a report published this month by the American Physical Society concluded that "a new material must be discovered" to solve the storage problem.

The Department of Energy panel noted that the cost of producing hydrogen would have to be reduced by a factor of four to make hydrogen economically competitive with today's fossil fuels. Major advances would also be required in hydrogen infrastructure and safety. The panel concluded that these gaps "cannot be bridged by incremental advances of the present state of the art," but instead require "revolutionary conceptual breakthroughs."

If this sounds like it will be a long time before we see a commercially viable product in the marketplace, that should be no surprise. Breakthroughs that revolutionize energy technology are rare. It has taken wind power and solar power each about 20 years to see a tenfold decline in prices, after major government and private-sector investments in R&D and deployment-and they still account for well under one percent of U.S. electricity generation.

Alternative fuel vehicles (AFVs) are a greater challenge, because they must overcome a trillion-dollar investment in the gasoline fueling infrastructure. Two major efforts to commercialize AFVs in the past two decades-electric vehicles and natural gas vehicles-both failed, even though electricity and natural gas are widely available and inexpensive. Hydrogen, by contrast, is hardly available anywhere and is relatively expensive. Our cars and our fueling infrastructure are designed around liquid fuels, which have high energy densities and are easier to handle than diffuse gases like hydrogen.

Based on my discussions with experts around the country, I think it unlikely that hydrogen cars will achieve even a five percent market share by 2030. But we shouldn't be in a hurry to deploy hydrogen cars.