Air Date: Week of August 20, 2004

Host Steve Curwood talks with Amory Lovins of the Rocky Mountain Institute in Colorado about the challenges of implementing a hydrogen economy in the United States.

Transcript

CURWOOD: It’s Living on Earth, I’m Steve Curwood. And our topic this week is the Promise of Hydrogen.

Now, so far in our program we’ve heard how the tiny nation of Iceland is positioning itself as a leader in the science, technology and politics of making the switch from a fossil fuel to a hydrogen economy. But there are projects here in the U.S., too, that are ushering a revolution in energy use.

Small fleets of hydrogen cars are already cruising the streets of Washington D.C., Los Angeles and San Francisco as test models. And the state of California is preparing a string of fueling stations for hydrogen vehicles. American companies are also manufacturing fuel cells to power not just vehicles, but commercial buildings and homes – even laptops and cell phones.

President George W. Bush has noted this coming Hydrogen Age, saying it could mean cleaner air, fewer greenhouse gases and less reliance on foreign oil.

BUSH: We import over half of our crude oil stocks from abroad. And sometimes we import that oil from countries that don't particularly like us. It jeopardizes our national security. If we develop hydrogen power to its full potential, we can reduce our demand for oil by over 11 million barrels per day by the year 2040.

CURWOOD: Joining me to talk about what role hydrogen may play in the nation’s energy future is Amory Lovins, who heads the Rocky Mountain Institute, an energy think-tank based near Aspen, Colorado.

Now tell me, what are the relevant differences, if any, between the United States and Iceland?

LOVINS: (LAUGHS) Just about everything is different. Iceland is a small country with a fairly homogenous and ancient culture. It has very rich geothermal and hydroelectric resources. Not much energy use. But the United States is equally rich in renewable energy resources, even though it’s a big, diverse, young country.

Certainly we have plenty of opportunity to run all renewable and all hydrogen if we want. Just the attractive wind-power resources in North and South Dakota could make as much hydrogen as the world makes now – that’s about 50 million tons a year. And if our highway vehicles were feasibly and profitably efficient that would be enough to run all our highway vehicles.

CURWOOD: That’s a big if, of course.

LOVINS: Well, it’s not all that difficult. Cars and light trucks and even heavy trucks have been designed already with spectacularly greater efficiency. The round number is that you can save a factor of five or six on your light vehicles, and about a factor two on your heavy vehicles – both very profitably compared to present wholesale gasoline prices.

CURWOOD: So you’re saying it’s pretty easy to get a car that’s five or six times as efficient as what people are driving today?

LOVINS: Yeah. And the key is not just to mess with the engine – that only gives you a factor two or so – but to start by making the car half the weight, giving it lower aerodynamic drag and rolling resistance, which is the energy that goes into heating the tires and road. So you reduce by three-fold the power needed to run the car.

Of course, when you make the car three times more efficient by working on its physics, then whatever you’re propelling it with gets three times smaller. This means, for example, that you have a three-times-smaller fuel cell, if you’re going to hydrogen, so you can afford to pay three times as much per kilowatt. So you can adopt fuel cells many years earlier before the prices come down.

Moreover, your storage tanks for the hydrogen get three times smaller, so they fit conveniently and leave plenty of room for people and cargo. Therefore you don’t need any breakthroughs in storage – the tanks on the market will do the job.

CURWOOD: Well if ordinary processes can get to such high efficiencies, why should we be thinking about hydrogen at all?

LOVINS: Because it’s very versatile. You can make it from any hydrocarbon or carbohydrate, or any other source of energy. Nuclear electricity, renewable electricity, whatever. Generally, making it out of electricity is quite expensive, and we don’t do it that way – 96 percent of our hydrogen is made from natural gas. And that will go on, I think, being the cheap method for a long time.

But it’s possible, for example, that it may be very cheaply make-able from coal -- using coal basically to pull hydrogen out of water and then take the resulting carbon dioxide and keep it from going in the air. Some serious analysts think that will also be profitable -- which would mean a long climate-safe future for the coal industry, and they would like that idea.

CURWOOD: Indeed.

LOVINS: Then, hydrogen of course releases nothing bad when you use it. You can burn it in an engine or turbine very efficiently. Companies like Boeing and Airbus have looked seriously at liquid hydrogen powered airplanes, cryoplanes, because liquid hydrogen is incredibly light – that’s why they use it in rockets. It has about the density of medium styrofoam. And they concluded that actually such planes would be feasible, and would be safer than today’s aircraft in a crash.

The use in buildings would be typically through fuel cells, which are about twice as efficient as engines. And generally, whether it’s in a building or a car, a well-designed system for using hydrogen will be two or three times as efficient as using a hydrocarbon fuel to do the same job by normal means. That’s why it’s worth paying a lot more per unit of energy for hydrogen than for fossil fuels, because you can get more work out of it.

That means, in turn, that the hydrogen in our hydrocarbons is probably worth more without the carbon than with the carbon – even if nobody will pay us for keeping the carbon out of the air. So this is actually an attractive future for oil and gas companies as well.

CURWOOD: This is I think a point of contention, though. Other folks say, hey, if you use natural gas, oil or coal to generate hydrogen, in fact you’ve got to do something with this carbon. And the technology is not there yet to keep the carbon out of the environment.

LOVINS: That last part is true. There are a number of ways being developed for keeping the carbon out of the air. Some of them are being tested; I wouldn’t say any of them is yet proven.

But if you, for example, pipe natural gas through the existing pipes to a gasoline filling station where you’ve installed a new gizmo, called a “miniature reformer,” that will turn it into hydrogen -- half extracted from the natural gas, half from steam – and then pump the hydrogen into the tanks of fuel cell cars; even if you release all that CO2 into the air, it’ll be two to six times less CO2 per mile than you’re releasing right now in your gasoline car.

So it’s, I think, a very reasonable stop on the way to the hydrogen economy. And it’s a lot more climatically responsible than what we’re doing. It will also reduce your fuel cost per mile from roughly five cents to something around three cents.

CURWOOD: So, let me see if I understand your vision then of the United States. We’re going to create hydrogen from fossil fuels…

LOVINS: Typically natural gas, and directly not through electricity.

CURWOOD: … and that this will have less of a burden on such issues as climate change and ground level pollution than the present system. Even, say, going with very efficient hybrids?

LOVINS: Yes.

CURWOOD: Now tell me, looking ahead to this hydrogen economy, how do we move it around? How do we move the hydrogen from one place to another?

LOVINS: Typically, we will be producing the hydrogen at the filling station. Filling stations serving about 90 percent of our cars have natural gas piped to them right now. If they can get very cheap electricity, which they also can get through the grid, it’s conceivable that in some situations they might be able to make competitive electricity that way. But I think that’s a lot less likely. Electricity is an awfully expensive way to make hydrogen. So I think natural gas will continue to rule.

This, by the way, will not use more natural gas. It may sound like, gee, we’re already short of natural gas. How can we also make it into hydrogen without running out faster? Well, the reason is that, meanwhile, you would be saving natural gas at power plants displaced by the electricity made by fuel cells; at refineries, where you’re using it to make gasoline and diesel fuel displaced by fuel cell vehicles; and in buildings, where you’re using it in furnaces and boilers displaced by waste-heat recovered by fuel cells in the building.

So when you work out all the balance, it turns out the hydrogen transition doesn’t use more natural gas, and may well use less.

CURWOOD: Okay, let’s say for a moment that we adopted this plan. You say we need ultra-efficient cars, and this is a way that the U.S. gets going with the hydrogen economy. What will be the infrastructure costs here to do this, say, over the next 35 years you suggest we could do this?

LOVINS: Oh, probably a few tens of billions of dollars. The hundreds of billions you commonly hear is clearly exaggerated. It’s based on making hydrogen centrally and building a complete new pipeline infrastructure to pipe it everywhere. I don’t think there’s any reason to do that, it doesn’t make sense.

You also need to net out the investment you’re not making in sustaining the oil-fueling infrastructure. And it turns out that oil is more capital-intensive upstream than gas is, and that the miniature reformers are probably cheaper and more efficient than centralized ones, which was a bit of a surprise.

So when you work all this out, you find you’re probably saving hundreds of dollars per car on the whole infrastructure for creating and delivering the fuel into your tank if you choose hydrogen rather than gasoline, and do an apples-to-apples comparison of investments required on both sides.

CURWOOD: Now, some people who work in the energy field don’t think that future cars will all run off hydrogen. They say, look, what about getting fuel from biomass, agricultural byproducts, or even crops specifically grown to produce fuel.

LOVINS: Mm-hmm.

CURWOOD: How do you see that fitting into our future energy needs?

LOVINS: These are all competitors. And in fact, in our study “Winning the Oil Endgame”, we’re looking at how they all interplay, and which ones have how much of the market in the long run. And I think the answer is going to be that they’ll all be active. We are already seeing a lot of biodiesel and other bio-fuels emerging in the market.

Those processes are getting steadily better. What they will tend to do, just like what hydrogen will tend to do, is squeeze out oil. Because these alternatives -- whether in saving oil or substituting for it -- tend to have rising reserves and falling costs, whereas oil tends to have falling reserves and rising costs. And the curves are starting to cross.

You know, I’ve been looking at the history of the American whaling industry. And before Drake struck oil in Pennsylvania in 1859, whaling had peaked two years before that and was already headed down. Not because there weren’t more people wanting to light their houses, but because the whale oil price had been high enough for long enough to elicit fatal competitors. In this case, kerosene and town gas, both made mainly from coal.

Basically, the whalers ran out of markets before they ran out of whales. And the remaining whales were saved by technological innovators and profit-maximizing capitalists, who came up with better, cheaper ways to light your house. Now this came as a great surprise to the whaling industry because apparently nobody had added this stuff up – saying here’s what’s on the market, here’s what’s in the lab, and then there’s that guy over there Thomas Edison who’s working on electric light. And if you kind of look at that whole picture, the future for whale oil doesn’t look very good.

I think we’re at that stage now for oil. The things we do with it, we’re now realizing we can do better and cheaper without it. These hadn’t been added up before. But I think when you do, investors will start reallocating their assets, hedging their bets, and realizing they can make more profit at less risk following an impeccable business case for getting off oil.

CURWOOD: Talk to me a bit about the politics of the promise of hydrogen. President Bush mentioned it in a State of the Union address. Some people said that he was saying this to avoid dealing with other parts of the question of climate change. What’s your analysis of the interest of the government and hydrogen?

LOVINS: It’s impossible to tell from the outside whether the intention of the federal hydrogen program is sincere. And I expect that would depend on which people you’re referring to in the program and in its senior guidance. The trouble is the administration has this self-inflicted wound of having done its best to block any significant improvement in light vehicle efficiency, and meanwhile held out the long-term vision of hydrogen.

So I think environmental groups have gotten suspicious of the program for several reasons. One is, who’s in favor of it is not their traditional allies. And second, I’m afraid that the administration’s opposition to short-term gains in fleet efficiency creates the suspicion, worthy or unworthy, that hydrogen is meant as a distraction or a stall rather than a compliment to short-term fleet efficiency.

A sensible policy would of course go for both. We would make fleets dramatically more efficient by accelerating the turnover of the capital stock. We would reward people for buying efficient vehicles and scrapping inefficient ones. And there are ways to do that that are revenue-neutral, and very good for the industry. They get to sell more cars and they’ll make more money.

CURWOOD: Umm —

LOVINS: But that isn’t how we’ve approached it. You know, we’ve had instead the assumption that efficient cars will be unattractive to the buyer because they’ll have trade-offs and compromises. So you need government intervention via either mandatory standards or fuel taxes to get people to buy these undesirable vehicles. And we’ve been gridlocked over twenty years on which of those two instruments to choose.

CURWOOD: Thinking back to where we started, which was looking at the Icelandic experience, what’s your grand vision for the U.S. energy economy thirty, forty, fifty years from now?

LOVINS: If we led always to save or produce energy, compete fairly at honest prices --regardless of whether they’re on the supply or demand side, what kind they are, how big they are, and who owns them – we will end up with a very efficient, diverse, dispersed, renewable energy system. And I suspect that hydrogen may well emerge as the dominant energy carrier over the coming decades.

CURWOOD: Amory Lovins is the CEO of the Rocky Mountain Institute. Thanks so much for taking this time with me.

LOVINS: Thank you.

[MUSIC: Gus Gus “Anthem” GUS GUS VS. T-WORLD (4AD Records – 2000)]

 

Links

Fuel Cells 2000

U.S. Deptartment of Energy: Hydrogen, Fuel Cells & Infrastructure technologies Program

Rocky Mountain Institute