A primary objective of the Hydrogen and Clean Fuels program is to achieve energy security and a sustainable hydrogen economy by economically producing hydrogen from coal.  Hydrogen represents a clean alternative fuel that can help to reduce the nation’s requirements for imported oil. The program will reduce environmental concerns associated with energy use in automotive and stationary power applications through the clean production of hydrogen from coal in tandem with carbon sequestration. 

The cost, efficiency, and benefits associated with hydrogen production pathways are continually evaluated on a system basis to provide guidance to the program and allow a rational prioritization of activities. Some of the major conclusions and observations of these studies are summarized below.

Benefits
The United States is becoming increasingly dependent on imported oil for transportation fuels. U.S. coal reserves nearly equal the total proved world conventional oil reserves – a 250-year supply of U.S. coal at today’s domestic production rates. Gasification technologies have shown the potential to produce clean synthesis gas from coal with virtually zero pollutant emissions. Carbon sequestration technologies are providing the means to cost effectively use concentrated CO₂ streams, for example, in enhanced oil recovery. Fuel cells are poised to provide efficient, emission-free power from hydrogen in both automotive and stationary power applications. 

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DOE conducted a benefits analysis to evaluate hydrogen from coal. The potential emissions benefits for hydrogen from coal with sequestration and use in fuel cell vehicles compared to hybrid electric vehicles and internal combustion vehicles are shown in the figure at right. The production of hydrogen from coal for use in fuel cell vehicles in the transportation sector will reduce U.S. reliance on foreign imports of petroleum.  If used in 100 million fuel cell vehicles, hydrogen produced from coal could reduce petroleum demand by 3 million barrels per day. The results show clearly that if the CO₂ from making the hydrogen is captured and sequestered, the CO₂ emissions would be much lower. Overall system emissions of sulfur dioxide and nitrogen oxide emissions are also lower for the fuel cell vehicle cases.

The program will ensure the availability of a major primary energy resource that can be used for the production of hydrogen in volumes sufficient to provide the fuel which will be needed for the future fuel cell-powered vehicle market.

Comparison of Current and Future Technology for Hydrogen from Coal
At the present time, no coal-based facilities employing modern entrained gasification have been constructed that produce both hydrogen and electric power; however, similar facilities based on heavy oil partial oxidation are in operation.  Conceptual plants fed with coal have been simulated using computer models to estimate the technical performance and economics of a co-production plant producing hydrogen and power, based on current technology.  Computer simulations also have been developed for conceptual plants that produce hydrogen and some excess power, based on advanced technologies that are presently unavailable for commercial deployment. The status of these advanced technologies varies.  Some are close to commercialization while others are farther back in the R&D pipeline.  The table below summarizes the information developed from three of these computer simulations, all of which include carbon sequestration.  A more detailed evaluation of additional co-production cases can be found in the Mitretek report, Hydrogen from Coal. This study is currently being updated, and preliminary results of the update for the required hydrogen selling prices are shown in the table.

Summary of Hydrogen from Coal Cases

Comparison of Hydrogen Production Costs from Coal and Natural Gas
The chart below shows hydrogen production cost for making hydrogen from natural gas as a function of gas price. The DOE goal for cost of hydrogen delivered to the pump is $2-3 per gallon of gasoline equivalent (gge), or about a kg of hydrogen, as shown on the chart in the two horizontal dashed lines. The cost goal for delivery alone is $1/gge. Producing hydrogen from natural gas near the pump (distributed production) is cheaper than other sources as long as natural gas prices are low. However, natural gas prices are subject to fluctuation, and more gas is being imported via LNG.  The chart shows how the cost of producing hydrogen from natural gas varies as the cost of natural gas fluctuates. Thus, distributed production of hydrogen from natural gas may be a short-term solution, but not a long term one.

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Today, centralized production of hydrogen from coal, delivered to the pump, including sequestration of the CO₂, would cost slightly more than $5 per gallon of gasoline equivalent. However, about 2/3 of that cost is for delivery from the plant to the filling station. If DOE can reduce the production cost from coal to approximately $1, and the delivery cost to $1, that would achieve the overall cost goal of $2/gge. Estimates of the cost of hydrogen from advanced coal technologies are currently being updated, but indicate that a centralized production cost of approximately $1 to 1.50/gge will be feasible. Since fuel cell vehicles are more efficient than ICEs, the driving cost of a fuel cell vehicle using hydrogen would be lower than for an ICE vehicle using $2 gasoline (untaxed). The cost of hydrogen from biomass gasification without sequestration of CO₂ is a little higher than for coal with sequestration.

There are estimates that SNG can be made from coal at about $5-7/MMBtu.  Use of SNG from coal to supply regional or local hydrogen production may help to stabilize costs and assist in early commercialization of fuel cell vehicles. A recent study examined a conceptual, site specific location in Texas that co-produces at least three products: electric power, hydrogen or SNG, and CO₂.  The electric power would be sold to the grid, the hydrogen would be sent by pipeline to the Gulf Coast petroleum refineries, the SNG would be sold as a natural gas supplement, and the CO₂ would be pipelined to the West Texas oil fields for enhanced oil recovery (EOR).  This study showed that siting a mine-mouth, lignite-fed gasification plant in Texas to produce hydrogen, SNG, electric power, and CO₂ could be economically feasible in an era of high natural gas prices.  For the case where the three products are electricity, SNG, and CO₂, the costs for SNG range from $5.00/MMBtu to $6.90/MMBtu (higher heating value (HHV) basis).  This depends on the gasification system, the value of co-produced power, and the value of the CO₂.  For this study it was assumed that these plants would be base load and that the value of the electricity is $35.6/MWH and $12/ton for the CO₂.  If natural gas prices remain well above $5.00/MMBtu then the configuration using an advanced dry feed gasification system would be economically viable for production of SNG.  It is planned to examine this option for other low-rank coals such as Wyoming subbituminous and North Dakota lignite coals that are priced lower than Texas lignite.

Costs of Producing Hydrogen from Liquid Fuels from Coal
The current cost to produce liquid fuels from coal by the FT process is projected to be about $40-$55 per barrel of coal-derived liquid fuel.  The current cost of producing hydrogen from liquids reforming at a sub-central plant is estimated to be $1.90/kg to $2.30/kg of hydrogen if the liquid feed cost is $45-$55 per barrel.  The estimated cost of delivery of this hydrogen by tanker truck is $1.80 per kg of hydrogen, including liquefaction, for a total delivered hydrogen cost of $3.70/kg to $4.10/kg of hydrogen.  Deployment of advanced technology for the production of coal-derived FT fuels is expected to lower the cost to $35 per barrel.  The cost of hydrogen produced by fuels reforming then will decrease to $1.60/kg of hydrogen.  Based on the 2004 National Academy of Sciences report, The Hydrogen Economy:  Opportunities, Costs, Barriers, and R&D Needs, the delivery cost of hydrogen by tanker truck can be reduced to $1.10/kg of hydrogen in the future.  This results in a delivered cost of $2.70/kg of hydrogen produced via coal-derived, hydrogen-rich liquid fuels reforming at sub-central stations, which is within the DOE cost range of $2.00/kg to $3.00/kg of hydrogen. 

Other program elements within Hydrogen & Clean Fuels Technology include the following:

• Central Hydrogen Production
• Alternate Hydrogen Production
• Utilization