New Rules Project - Democratic Energy - New report calls Bush and state hydrogen efforts economically ruinous

New report calls Bush and state hydrogen efforts "economically ruinous"

Report urges adopting a sugar economy rather than a hydrogen economy to develop a less expensive transportation fuel strategy

MINNEAPOLIS - Federal and state plans to build a massive new hydrogen energy system to support millions of new fuel cell-powered cars are economically ruinous, said David Morris, vice president of the Institute for Local Self-Reliance (ILSR), in a report released today. The report anticipates a series of state agency recommendations to the legislature on Jan. 15 to encourage hydrogen-related businesses.

Morris, who authored the report, "A Better Way of Getting From Here to There: A commentary on the hydrogen economy and a proposal for an alternative strategy," notes hydrogen’s major shortcomings - astonishingly high costs and the reliance on nonrenewable fuels to generate the hydrogen.

His report contrasts these shortcomings with the dramatically lower cost and near-term feasibility of building an energy economy based on converting sugars into alcohols rather than hydrogen into electricity - a sugar economy instead of a hydrogen economy.

"Because hydrogen always comes attached to another element, it often takes more energy to make and deliver hydrogen than is contained in the hydrogen itself," said Morris, who has advised or consulted to the energy departments of Presidents Ford, Carter, Clinton and Bush

The report argues that a new automotive technology is now available that makes it possible to envision a dual fuel transportation strategy. That technology is the hybrid car, which uses both electric motors and an engine for propulsion.

Morris’ report recommends a three-pronged strategy. First, dramatically accelerate the use of hybrid vehicles. Given their 30-50 percent improvement in energy efficiency this action alone could cut oil imports into the United States by half.

Second, increase the electric-only driving capacity of the hybrid electric vehicle (HEV) by expanding its battery system and including a plug-in capability. This could reduce engine fuel consumption by 85 percent or more and allow the vehicle to operate primarily on electricity from the grid system.

The electricity needed by plug-in HEVs could come from rapidly increasing the output of renewable energy sources such as wind-generated electricity. Morris noted that wind-generated electricity is already competitive or nearly competitive with fossil fuel generated electricity. Wind-generated hydrogen, on the other hand, is two to three times more expensive than fossil fuel-generated hydrogen.

Third, use ethanol made from sugars as a primary fuel rather than, as now, a 6-10 percent gasoline additive. In the United States these sugars come from corn. In Brazil they come from sugar cane, in Europe from wheat. Commercial operations to use the sugars extracted from the far more abundant cellulosic resources, like grasses, corn stalks, wheat straw and urban organic wastes, are beginning to come on-line.

"A sugar economy makes more sense than a hydrogen economy," said Morris. "Ethanol is less expensive to produce than hydrogen, it is more environmentally friendly than hydrogen produced from nonrenewable resources, and ethanol production could bring major economic benefits to Minnesota’s rural areas.

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A Better Way - Fact Sheet

We can replace 10 percent of our transportation fuels with ethanol 10-25 years before replacing a similar amount with hydrogen, with no new investments in redesigning cars or gas stations or energy delivery systems.

The current cost of hydrogen is $4-8 per gallon of gasoline equivalent (gge). The wildly optimistic federal goal is $2.65 per gge by 2015. The current cost of ethanol is $1.50-2 per gallon.

The current cost of converting a gas station to ethanol is $50,000. The current cost of converting a gas station to hydrogen is over $600,000.

The current cost of modifying a conventional car so that it can run on 100 percent ethanol is $160. The current cost of a fuel cell car is $1 million. The most optimistic projection for the increased cost of a fuel cell car in 2015 is $10,000.

A sugar-based economy can bring major benefits to rural areas. Currently ethanol represents 10 percent of Minnesota’s transportation fuel supply. It is produced in 14 biorefineries, the majority of which are owned by over 5,000 Minnesota farmers. Sugars can also be used to make environmentally safe chemicals that substitute for petrochemicals.

A sugar-based economy can have beneficial worldwide ramifications. Today agriculture is one of the most contentious issues in trade negotiations because farmers are competing with farmers. An economy where fuels and industrial materials are made primarily from plants allows farmers to cooperate to meet domestic demand. The beneficial impact can be even greater in poorer countries where the agriculture sector comprises a much higher proportion of the population, and where hard currency must be earned to pay for imported fuels and chemicals.