<DOC>
[107th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:80677.wais]
DEPARTMENT OF ENERGY'S FREEDOMCAR: HURDLES, BENCHMARKS FOR PROGRESS,
AND ROLE IN ENERGY POLICY
=======================================================================
HEARING
before the
SUBCOMMITTEE ON
OVERSIGHT AND INVESTIGATIONS
of the
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
JUNE 6, 2002
__________
Serial No. 107-111
__________
Printed for the use of the Committee on Energy and Commerce
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
__________
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80-677 WASHINGTON : 2002
___________________________________________________________________________
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COMMITTEE ON ENERGY AND COMMERCE
W.J. ``BILLY'' TAUZIN, Louisiana, Chairman
MICHAEL BILIRAKIS, Florida JOHN D. DINGELL, Michigan
JOE BARTON, Texas HENRY A. WAXMAN, California
FRED UPTON, Michigan EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida RALPH M. HALL, Texas
PAUL E. GILLMOR, Ohio RICK BOUCHER, Virginia
JAMES C. GREENWOOD, Pennsylvania EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia SHERROD BROWN, Ohio
RICHARD BURR, North Carolina BART GORDON, Tennessee
ED WHITFIELD, Kentucky PETER DEUTSCH, Florida
GREG GANSKE, Iowa BOBBY L. RUSH, Illinois
CHARLIE NORWOOD, Georgia ANNA G. ESHOO, California
BARBARA CUBIN, Wyoming BART STUPAK, Michigan
JOHN SHIMKUS, Illinois ELIOT L. ENGEL, New York
HEATHER WILSON, New Mexico TOM SAWYER, Ohio
JOHN B. SHADEGG, Arizona ALBERT R. WYNN, Maryland
CHARLES ``CHIP'' PICKERING, GENE GREEN, Texas
Mississippi KAREN McCARTHY, Missouri
VITO FOSSELLA, New York TED STRICKLAND, Ohio
ROY BLUNT, Missouri DIANA DeGETTE, Colorado
TOM DAVIS, Virginia THOMAS M. BARRETT, Wisconsin
ED BRYANT, Tennessee BILL LUTHER, Minnesota
ROBERT L. EHRLICH, Jr., Maryland LOIS CAPPS, California
STEVE BUYER, Indiana MICHAEL F. DOYLE, Pennsylvania
GEORGE RADANOVICH, California CHRISTOPHER JOHN, Louisiana
CHARLES F. BASS, New Hampshire JANE HARMAN, California
JOSEPH R. PITTS, Pennsylvania
MARY BONO, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska
ERNIE FLETCHER, Kentucky
David V. Marventano, Staff Director
James D. Barnette, General Counsel
Reid P.F. Stuntz, Minority Staff Director and Chief Counsel
------
Subcommittee on Oversight and Investigations
JAMES C. GREENWOOD, Pennsylvania, Chairman
MICHAEL BILIRAKIS, Florida PETER DEUTSCH, Florida
CLIFF STEARNS, Florida BART STUPAK, Michigan
PAUL E. GILLMOR, Ohio TED STRICKLAND, Ohio
RICHARD BURR, North Carolina DIANA DeGETTE, Colorado
ED WHITFIELD, Kentucky CHRISTOPHER JOHN, Louisiana
Vice Chairman BOBBY L. RUSH, Illinois
CHARLES F. BASS, New Hampshire JOHN D. DINGELL, Michigan,
ERNIE FLETCHER, Kentucky (Ex Officio)
W.J. ``BILLY'' TAUZIN, Louisiana
(Ex Officio)
C O N T E N T S
__________
Page
Testimony of:
Culver, Robert N., Executive Director, United States Council
for Automotive Research.................................... 40
Garman, Hon. David K., Assistant Secretary, Energy Efficiency
and Renewable Energy, U.S. Department of Energy............ 10
Miller, William T., President, UTC Fuel Cells................ 82
Paul, Donald L., Vice President and Chief Technology Officer,
ChevronTexaco.............................................. 86
Roan, Vernon P., Professor of Mechanical Engineering,
Director, Fuel Cell Laboratory, University of Florida, on
behalf of the PNGV Peer Review Committee, National Research
Council.................................................... 56
Wells, Jim, Director, Natural Resources and Environment, U.S.
General Accounting Office.................................. 8
DEPARTMENT OF ENERGY'S FREEDOMCAR: HURDLES, BENCHMARKS FOR PROGRESS,
AND ROLE IN ENERGY POLICY
----------
THURSDAY, JUNE 6, 2002,
House of Representatives,
Committee on Energy and Commerce,
Subcommittee on Oversight and Investigations,
Washington, DC.
The subcommittee met, pursuant to notice, at 9:30 a.m., in
room 2123, Rayburn House Office Building, Hon. James C.
Greenwood (chairman) presiding.
Members present: Representatives Greenwood, Stearns,
Gillmor, Bass, Fletcher, Deutsch, and Dingell (ex officio).
Staff present: Peter Spencer, majority professional staff
member; Joe Greenman, legislative assistant; Yong Choe,
legislative clerk; Jonathan J. Cordone, minority counsel; and
Bruce Gwinn, minority professional staff member.
Mr. Greenwood. Good morning. The meeting will come to
order. Today we'll be examining a far-reaching and quite bold
automotive research initiative that has been launched by the
Department of Energy and the big three automakers.
The FreedomCAR program, a public-private research and
development initiative, presents a vision of a day when
automobiles will not be only pollution free, but no longer
dependent on petroleum. This is a bold vision indeed.
The focus of this initiative is for the long term, of
course, which may have merit for setting priorities, but it
also raises some basic issues I hope we can explore in depth
today. Some of these issues involve assuring that we will be
able to assess, as the program moves forward, whether taxpayer
money is well spent. Some issues also involve placing this
program in the broader context of our energy policy, an
important area of the full committee's jurisdiction, and fully
appreciating the challenges the program will face.
Some of you may remember the large ad campaign a couple of
months ago for the new model lineup from Nissan's Infiniti
division. The flashy ads displayed futuristic vehicles, the
kind we used to read about in Popular Science, with the catchy
question, ``where are the cars we were promised?''
We know now those so-called future cars promised to be
right around the corner were never delivered. The ads struck
me, because they pointed to something I think can affect our
thinking about future technology. We can get carried away with
our imagination, only to be disappointed by reality. This is
not to say that we shouldn't have bold visions that go beyond
what we are presently capable of achieving. Innovation would
wither away otherwise. But it should serve to remind us as we
go forward with spending from limited resources to seek policy
goals that are important for our Nation that we must maintain
some perspective and be willing to say no when a vision goes
off track.
The two panels from which we will hear this morning should
help us make sure that we stay on track with this program so
that we can be confident it is a beneficial pursuit for our
Nation's energy policy goals. The panelists should help us
check whether we will be able to assess as time goes on that
the program fits with policy goals, that it will make a
positive impact on our efforts to reduce our oil dependence and
cut pollution, or whether adjustments are necessary.
At the outset, there are some key questions we need to
consider about the respective roles in the program of the
Department of Energy and the U.S. Council for Automotive
Research, which represents the auto makers.
For example, there are some threshold questions about the
structure of the program. What is the role of industry in this
partnership? How is the money spent? Where does it go? There
are questions about the balance of the technology portfolio
currently being pursued by FreedomCAR. Has the shift in focus
to a fuel cell, hydrogen future diminished the pressure to get
the intermediate gains in automobile efficiency we've already
been researching and spending more than a billion dollars on
these past 8 years?
As our General Accounting Office witness will point out in
his testimony, reviews of past R&D efforts by the Federal
Government reveal that, surprise, surprise, some of these
efforts have come up short due to lack of focus, absence of
measurable goals and benchmarks, or failure to consider actual
marketplace potential of the research. Some efforts have
produced positive results, so we have some experience here that
offers up lessons we should consider as we examine FreedomCAR.
It is essential that we examine this program in the context
of our broader energy policy. We must consider how the pieces,
the technology portfolio, the benchmarks and goals fit together
to make an actual difference in how we use energy and in what
we emit into the air. When all is said and spent, this
initiative should enable the production of something that
consumers and businesses will want to purchase and use. Is
FreedomCAR structured to help launch products and innovation
into the marketplace?
Is the strategy contemplated by the Department of Energy
sufficient to prevent advances from gathering dust on a lab
shelf? Panelists today will help us put FreedomCAR's goals and
its connection to a hydrogen future in proper perspective. I
look forward to discussion about the requirements for
infrastructure, the demands on fuel supply, the cost barriers
and challenges. I look forward to learning about what Congress
may have to consider to help address these issues. I'm not sure
that all that will be involved or how long this vision will
take to be realized has been fully appreciated by the public.
Moreover, I'm not sure the questions are settled about the
current course of FreedomCAR. We will hear today about other
aspects of research and development concerning hydrogen
infrastructure. For example, that might need more immediate
attention if the hydrogen vision is to overcome the chicken-
and-egg problem. Unlike conventionally fueled vehicles, after
all, you can't really convince people to leap to fuel cell cars
unless they can drive them far and wide without worry about
filling up.
Finally, as we step back to view the program in a broad
context, we should also not lose sight of its potential for
positive side effects. There is something to be said about
long-range focus. Properly sighted, it can generate research
outcomes we cannot even contemplate as it fosters innovation.
So I'd like to kick off this hearing on that upbeat note,
but without forgetting that we should not let our imaginations
get too far ahead of us when we're spending the taxpayers'
money.
[The prepared statement of Hon. James C. Greenwood
follows:]
Prepared Statement of Hon. James C. Greenwood, Chairman, Subcommittee
on Oversight and Investigations
Good morning and welcome. Today we'll be examining a far-reaching
and quite bold automotive research initiative that has been launched by
the Department of Energy and the Big Three automakers.
The FreedomCAR program, a public-private research and development
initiative, presents a vision of a day when automobiles will be not
only pollution free, but no longer dependent on petroleum. This is a
bold vision indeed.
The focus of this initiative is for the long-term, of course, which
may have merit for setting priorities, but it also raises some basic
issues I hope we can explore in depth today. Some of these issues
involve assuring that we will be able to assess, as the program moves
forward, whether taxpayer money is well spent. Some issues also involve
placing this program in the broader context of our energy policy--an
important area of the full Committee's jurisdiction--and fully
appreciating the challenges the program will face.
Some of you may remember the large ad campaign a couple of month's
ago for the new model line-up from Nissan's Infiniti division. The
flashy ads displayed all these futuristic vehicles--the kind we used to
read about in Popular Science--with the catchy question: ``Where are
the cars we were promised?'' We know now those so-called future cars,
promised to be right around the corner, were never delivered.
The ads struck me because they pointed to something I think can
infect our thinking about future technology; we can get carried away
with our imagination, only to be disappointed as reality sets in.
Now, this is not to say that we shouldn't have bold visions,
visions that go beyond what we're presently capable of achieving.
Innovation would wither away otherwise. But it should serve to remind
us, as we go forward with spending from limited resources to seek
policy goals that are important for our Nation, that we must maintain
some perspective, and be willing to say no when a vision goes off
track.
The two panels we will hear this morning should help us make sure
we stay on track with this program so we can be confident it's a
beneficial pursuit for our nation's energy policy goals. The panelists
should help us check whether we will be able to assess, as time goes
on, that the program fits with policy goals, that it will make a
positive impact on our efforts to reduce our oil dependence and cut
pollution, or whether adjustments are necessary.
At the outset, there are some key questions we must consider about
the respective roles in the program of the Department of Energy and
U.S. Council for Automotive Research, or USCAR, which represents the
automakers.
For example, there are some threshold questions about the structure
of the program. What is the role of industry in this partnership? How
is the money spent? Where does it go?
There are questions about the balance of the technology portfolio
currently being pursued by FreedomCAR. Has the shift in focus to a fuel
cell, hydrogen future diminished the pressure to get the intermediate
gains in automobile efficiency we've already been researching--and
spending more than a billion dollars on--these past eight years?
As our General Accounting Office witness will point out in his
testimony, reviews of past R&D efforts by the federal government reveal
that some of these efforts have come up short--due to lack of focus,
absence of measurable goals and benchmarks, or failure to consider
actual marketplace potential of the research. Some efforts have
produced positive results. So we have some experience here that offers
up lessons we should consider as we examine FreedomCAR.
It is essential that we examine this program in the context of our
broader energy policy. We must consider how the pieces' the technology
portfolio, the benchmarks and goals--fit together to make an actual
difference in how we use energy, in what we emit into the air. When all
is said and spent, this initiative should enable the production of
something that consumers, businesses will want to purchase and use.
Is FreedomCAR structured to help launch products and innovation
into the marketplace? Is the strategy contemplated by the Department of
Energy sufficient to prevent advances from gathering dust on a lab
shelf?
Panelists today will help us put FreedomCAR's goals and its
connection to a hydrogen future in proper perspective. I look forward
to discussion about the requirements for infrastructure, the demands on
fuel supply, the cost barriers and challenges. I look forward to
learning about what Congress may have to consider, to help address
these issues. I am not sure that all that will be involved or how long
this vision will take to be realized has been fully appreciated by the
public.
Moreover, I'm not so sure the questions are settled about the
current course of FreedomCAR. We will hear today about other aspects of
research and development--concerning hydrogen infrastructure, for
example--that might need more immediate attention if the hydrogen
vision is to overcome the chicken and egg problem. Unlike
conventionally fueled vehicles, after all, you can't really convince
people to leap to fuel cell cars unless they can drive them far and
wide, without worry about filling up.
Finally, as we step back to view this program in a broad context,
we should also not lose sight of its potential for positive side
effects. There's something to be said about long-rang focus, properly
sighted. It can generate research outcomes we cannot even contemplate
as it fosters innovation.
So I'd like to kick off this hearing on that upbeat note, but
without forgetting that we should not let our imaginations get too far
ahead of us when we're spending other people's money.
Mr. Greenwood. The Chair recognizes the ranking member, Mr.
Deutsch.
Mr. Deutsch. Thank you, Mr. Chairman. Again, I appreciate
this hearing. I don't think that there is a more important
domestic policy issue than what this program is about. The
potential in terms of fuel cells would have a dramatic effect
on our national security, on our macroeconomy, and so it
clearly is a very, very high priority in terms of the goals of
this country, and I look forward to the testimony and working
with the committee and the committee staff in trying to make
this program as successful as possible. Thank you.
Mr. Greenwood. The Chair thanks the gentleman and
recognizes the gentleman--the other gentleman from Florida--Mr.
Stearns, for an opening statement.
Mr. Stearns. Thank you, Mr. Chairman, and I thank you for
having this hearing. Over the past year and a half, much of the
energy policy debate has centered around CAFE standards.
Obviously as summer approaches, more Americans are taking more
vacations. The demand and subsequently the price of gasoline is
increasing. Add to that the tensions in the Middle East, and we
are again looking at possibly a higher set of gasoline prices
this summer.
As America searches for ways to become more self-sufficient
in energy consumption, we're also looking for ways to reduce
consumption. So I believe today's hearing shed light on the
problem talking about perhaps not a new approach, but an
improvement over an older approach to fuel efficiency. As many
of you know, nearly 9 years ago, President Clinton announced a
new government and industry program called the Partnership for
New Generation of Vehicles. The goal was to eventually produce
an environmentally friendly vehicle that would achieve greater
fuel economy without sacrificing performance, affordability and
safety. These are the same influential factors within the CAFE
standards debate. As many are concerned that arbitrarily
raising CAFE standards would hurt these same areas.
The new program brought together the resources and
expertise of both the private sector and the Federal
Government. The research centered around reducing U.S. oil
consumption by developing new technologies, such as hybrid
electric fuel cells and light-weight materials. At the
beginning of this year, the Bush administration decided to
expand the research and development of fuel cells within a new
initiative called FreedomCAR. This expands upon the old
partnership initiative, while narrowing the focus. Fuel cells
offer the most promising opportunity, especially in terms of
domestic production. In addition, the new initiative focuses on
expanding the use of new technologies across a wider spectrum
of car manufacturing design so as to make such technologies
more marketable.
And this makes business sense. In light of President Bush's
energy policy and the desire for all of us to wean ourselves
off the nearly 60 percent reliance on foreign fuel imports, the
FreedomCAR initiative is a proper step in focusing these
research efforts to a more and what we hope to be achievable
goal.
As a member representing a State that imports nearly 100
percent of its fuel needs in Florida, I support common sense
approaches to fuel efficiency and the increased use of new
technologies. So, again, Mr. Chairman, I thank you for this
hearing. Look forward to our witnesses.
Mr. Greenwood. The Chair thanks the gentleman.
[Additional statements submitted for the record follow:]
Prepared Statement of Hon. Paul E. Gillmor, a Representative in
Congress from the State of Ohio
Mr. Chairman, given the recent focus on formulating our nation's
energy policy, I am grateful for this opportunity to address the status
of the DOE's new FreedomCAR program. In particular, I am anxious to
hear about the progress of fuel cell technology and FreedomCAR since
its announcement last January.
Like many of the Members here, I support conservation efforts,
while at the same time, enhancing the use of renewable energy
resources, improving energy efficiencies, and increasing domestic
energy supplies to decrease America's dependency on foreign oil. At the
onset, I believe this program is a step in the right direction to
achieve this goal.
However, with a technology of chemically generating electricity
from hydrogen, one that is not market-ready in our nation's automotive
industry, I feel it is important to continue to improve upon and give
attention to current technologies such as hybrids.
Furthermore, as we delve into this issue, I am hopeful that this
program will produce long-term goals that motivate researchers, inspire
the public, and provide the appropriate avenues to measure progress.
Again, I thank the Chairman and yield back my time.
______
Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman, Committee
on Energy and Commerce
Thank you Chairman Greenwood. And, let me also thank you for
putting together what promises to be a very interesting hearing this
morning on the Department of Energy's FreedomCAR partnership.
Several policies we pursue on this Committee aim, in one way or
another, to encourage innovation and technological advancement and to
assist efforts to deploy workable innovations into the marketplace.
Whether it is pharmaceuticals, telecommunications, the Internet, or, of
course, energy, the bulk of this innovation comes from private sector
initiatives.
Clearly, the federal government can and does aid in this process.
It pursues its own research and development, which has spin offs into
the market--think of the Intemet's development, for example. And it can
implement policies that encourage (or at least don't stifle) the
innovative and technological pursuits of those in the private sphere.
The federal government also can serve as an incubator of sorts, or can
assist through demonstration projects and the like, where there is
promise but not enough incentive for individual companies to pursue.
Or, in the case of the program at hand, federal R&D can work in
partnership with the private sector--and appropriately so, if it is
properly structured.
However, I think there's a delicate balancing act, which we in
Congress must monitor very carefully. We have a responsibility, as you
indicated Mr. Chairman, to make sure taxpayer dollars are spent wisely
on initiatives that are in the public interest--and that hold some
promise of producing results. And as Members of this Committee, with
its broad jurisdiction, know quite well, we also have limited
resources, but a seemingly unlimited number of vexing problems we'd
like to address.
I look forward to learning from the witnesses about the structure
of this program, and the measures in place, or that will be put into
place, that will assist Members as well as the agency and automaker
planners themselves to track the progress of FreedomCAR, and to correct
its course, if necessary.
I also look forward to hearing about the prospects of this program
in our dynamic marketplace, and the ongoing innovations and changes
that occur in the transportation sector.
It's been encouraging to see advances such as hybrid vehicles
coming into the market, and to see demonstrations of other advanced
engine technology on the verge of market introduction. When we consider
the goals of this program, it's important to look at them against the
backdrop of the marketplace, rather than just a blackboard.
It's also important to look at the goals in the context of our
nation's energy policy, which, as it happens, is one of the Energy and
Commerce Committee's front-burner issues at the moment.
I look forward to learning about the broader, but related, goals of
a leap to a hydrogen economy. I'd like to hear more about how this will
effect our energy usage, how it will effect innovation and the future
of transportation, and our economy. These are big questions. I'm
pleased we're taking a stab at them today.
I thank the witnesses for taking the time to come and discuss these
important issues with us, and I yield back, the remainder of my time.
______
Prepared statement of Hon. Diana DeGette, a Representative in Congress
from the State of Colorado
Mr. Chairman, thank you for holding this hearing today and I thank
our witnesses for being here as well. FreedomCAR does have a nice ring
to it. I hope that the program's goals go deeper than that, though. I'd
like to see substantial changes in the vehicles we drive.
As a member of the Renewable Energy and Energy Efficiency Caucus,
it probably will not surprise anyone here that I am very interested in
today's discussion. I strongly believe that we have to think creatively
to solve our current energy needs and look toward solving the energy
needs of tomorrow.
I have been in Congress for three terms. But I have a lot of
friends and colleagues who have been here for much longer. I won't name
any names. When we get to talking about these projects to develop cars
and trucks that are more fuel efficient, they tell me how they have
been talking about how the fuel cell vehicle is just around the corner.
Those conversations, I'm afraid to say, have taken place for the last
three decades. And we are still having the same conversations.
I don't think I'm alone in realizing how important it is to develop
new technologies that will help our country to be less reliant on oil.
Of course our current oil dependence is largely driven by our car
culture. Major assertions to the contrary, we have not made great
strides in implementing technologies that substantially improve gas
mileage. Instead, the recent trends toward larger and larger vehicles
have only increased this dependence.
I like the sound of Secretary Abraham's assertions that this
project aims to ``leapfrog the status quo'' and pursue ``dramatic
environmental benefits.'' I look forward to hearing how the goals of
this program differ from earlier federal efforts and how they are more
achievable. We do not want to re-invent the wheel here. By that, I am
saying that I think we need to continue to build on the research that
has already taken place.
I want to talk about how we aim to implement any new technologies
we develop. How do we build on past research to develop the next
generation of vehicles that will actually wean us from our dependence?
How do we safely transport and store hydrogen?
I think this is also an excellent opportunity to further explore
some interim solutions. I am glad that the Department of Energy has
decided that we are heading to a day when we all drive clean, fuel-
efficient, hydrogen-powered vehicles--albeit in ten years. But I
wouldn't mind discussing improvements we could implement sooner in
order to achieve cleaner air standards sooner.
And I wouldn't mind hearing why we have determined that hydrogen
has become the fuel of choice to drive this mission. I am not saying it
isn't the way to go. I would just like to discuss why it is the best
option.
Further, I do not pretend to be a physicist or mechanical engineer.
That is why I am glad we have the experts here to help us achieve a
better understanding of these issues. I ask that we use this hearing to
get a clearer map of where we are heading and why it is that that is
the best direction in which to head. Thank you.
______
Prepared Statement of Hon. John D. Dingell, a Representative in
Congress from the State of Michigan
Mr. Chairman, I want to thank you for holding this important
hearing. The industry must search for long-term ways to boost fuel
economy substantially. Among those methods--10 to 20 years or more from
now--the President's fuel cell program holds a lot of promise. The
development of hydrogen fuel cell technologies is vital to the future
competitiveness of the U.S. auto industry. Public-private partnerships,
such as FreedomCAR and Michigan's Next Energy initiatives, are
necessary to apply these developing technologies to practical uses and
to adequately prepare the Nation's infrastructure to receive and
support them.
For the immediate future, however, the answer is either hybrids or
advanced clean burn diesel technology. The problem with hybrid electric
technology is that its reliability and performance are unproven. The
reliability and performance of clean burn diesel technology, on the
other hand, has been well demonstrated.
Clean burn diesel technology is in wide use in the European Union
(EU), the world's second largest vehicle market. Clean burn diesel
vehicles accounted for 48 percent of all light-duty vehicles and 75
percent of all luxury vehicles sold in the EU last year. By 2010,
diesels are expected to account for 75 percent of all light-duty
vehicle sales in the EU.
One of the primary reasons this technology is so popular in Europe
is that diesels have outstanding fuel economy. Audi's recently
introduced A2 model has a fuel economy rating of 78 miles per gallon.
The A2's mileage rating is better than that of the Honda Insight with
its hybrid electric engine, and the A2 seats four passengers rather
than the Honda's two passengers.
If diesel accounted for only 30 percent of California's fleet of
motor vehicles, estimates are that fuel consumed by vehicles in
California could be cut in half. If fuel consumed nationwide could be
reduced by half, the Department of Energy says fuel consumption would
be reduced to a level we haven't seen since November 1964.
Clean burn diesel engines are also very close to meeting U.S.
emission standards. The motor vehicle companies have until 2007 to meet
new nitrous oxide standards and the manufacturers believe they can do
it.
None of these clean burn diesel vehicles, however, can be sold in
the U.S., now or in the future, unless the U.S. cleans up its diesel
fuel as the EU is doing. The U.S. allows 15 parts per million sulfur in
its diesel fuel--not the six parts per million fuel that EPA used in
its testing of the European Toyota.
Europe has been far more aggressive than the U.S. in banning sulfur
from both gasoline and diesel fuels. Sweden has already adopted
regulations allowing only ``zero sulfur'' diesel to be sold in that
country. By 2005, the sulfur content of diesel fuel sold throughout the
EU must be effectively ``zero.''
With essentially sulfur-free diesel fuel, recent advances in
catalyst emission control technology make it possible to reduce nitrous
oxide emissions from clean burn diesel engines by as much as 90
percent. Particulate emissions would also be greatly reduced with
particulate trap technology. With clean burn diesel, hydrocarbon
emissions are also much less than with current state-of-the-art
gasoline engines.
Technology can be developed to make clean burn diesel engines meet
U.S. standards, but it cannot happen without clean diesel fuel. U.S.
refiners must take the sulfur out of diesel fuel just as the EU is
doing. At the current U.S. standard of 15 parts per million, both the
efficiency and durability of diesel engines is compromised to the point
that the fuel economy advantages diesels offer cannot be realized.
All that blocks our path to high fuel economy here in the U.S.,
like the Audi A2's 78 miles per gallon, is dirty diesel fuel and the
technology to overcome one test hurdle on nitrous oxide. Industry's
engineers can overcome the nitrous oxide problem. But the motor vehicle
industry can do nothing about cleaning up diesel fuel. That is a task
only the Congress can handle.
I will be introducing legislation that requires refiners to produce
lower sulfur diesel fuel. Because there will be investment and
development costs associated with this requirement, my legislation will
also provide for tax credits for the refining industry.
Diesel is the way of the future, and I am hopeful that its short-
term benefits will not be overlooked by the Administration or the
Congress, even as we examine longer term strategies.
Again, thank you for holding this hearing.
Mr. Greenwood. The Chair recognizes and welcomes our first
panel, consisting of Mr. Jim Wells, who is the director of
Natural Resources and Environment for the U.S. General
Accounting Office; the Honorable David Garman, who is assistant
secretary, Energy Efficiency and Renewable Energy at the U.S.
Department of Energy; and Mr. Robert N. Culver, executive
director of United States Council for Automotive Research. We
welcome you all and thank you for helping us out this morning.
I believe you all are aware that this committee is holding
an investigative hearing and it has had the practice of taking
testimony under oath. Do any of you object to giving your
testimony under oath? The Chair then advises you that under the
rules of the House and the rules of the committee, you are
entitled to be advised by counsel. Do any of you choose to be
advised by counsel while you testify?
In that case if you'd please rise and raise your right
hand, I'll swear you in.
[Witnesses sworn.]
Mr. Greenwood. Okay. Thank you. You are under oath, and we
will recognize you for your opening statements, and we will
begin with Mr. Wells.
TESTIMONY OF JIM WELLS, DIRECTOR, NATURAL RESOURCES AND
ENVIRONMENT, U.S. GENERAL ACCOUNTING OFFICE; HON. DAVID K.
GARMAN, ASSISTANT SECRETARY, ENERGY EFFICIENCY AND RENEWABLE
ENERGY, U.S. DEPARTMENT OF ENERGY; AND ROBERT N. CULVER,
EXECUTIVE DIRECTOR, UNITED STATES COUNCIL FOR AUTOMOTIVE
RESEARCH
Mr. Wells. Thank you, Mr. Chairman, and members. I too
would like to begin my statement in an upbeat note, as you
mentioned. We are pleased to be here to discuss the previous
work on the Federal R&D initiatives that have provided some
perhaps useful insight as the Congress considers the FreedomCAR
initiative. As you know, gasoline consumption in the
transportation sector is huge, 160 billion gallons a year.
Given the reliance on petroleum, there's a high vulnerability
to the uncertainties related to a world oil market. As a
result, the Federal Government is and has been spending
billions of dollars attempting to reduce the consumption of
petroleum in the transportation sector. A variety of means have
been tried. Tax incentives, mandates to use vehicles that run
on alternative fuels and laws designed to enhance fuel
efficiency.
More recently, the old last year's $1.2 billion partnership
between industry and government as referred to the Partnership
New Generation Vehicle, is being replaced with the new
FreedomCAR initiative. Clearly, today's cars, Mr. Chairman, are
more fuel efficient, and they are less polluting. The sad news
is that any gains in fuel efficiency are being outpaced by the
increase in the total miles that are being driven and the
growing popularity of the sport utility vehicles and light
trucks. We're using approximately 10-plus million barrels of
petroleum a day to fuel these vehicles, and we're heading
toward 15-plus million barrels in 2010.
As a result, I'd like you to look at the chart to my left
here. It is also there in my printed statement. I draw your
attention to that slender line at the top. This is the result
so far in reducing petroleum usage. The largest dark-shaded
area will show you two things: The annual petroleum usage is
going up, increasing 40 billion gallons just in the last 10
years. You're looking at a 10-year period with billions of
gallons to the left and 160 billion gallons at 2001. 97 percent
of our transportation usage is gasoline, not alternative fuels.
That light-colored line that you see there at the top shows
that we really haven't made much of a dent. Consumers have not
widely embraced vehicles that run on anything other than
gasoline. The challenge is going to be whether you build a car,
a new hydrogen car and or whether you reduce the dependence on
oil. Clearly these goals are going to be formidable goals. As
Congress considers the FreedomCAR initiative or any comparative
Federal-sponsored research program, we're here today to
suggest, perhaps, four themes for Congressional oversight.
These are based on some of the lessons we've learned as
auditors in looking at these programs over 20 years.
The first one, make sure that the research being performed
by private industry would not do on its own. Earlier, GAO had
looked at work relating to the Department of Commerce's
Advanced Technology Program. Forty percent of the participants
in that program responded to the auditors that they would have
performed the research even without Federal funding. A second
theme, make sure the programs specify a clear and measurable
goal.
Clearly, SEMATECH in the late 1980's, early 1990's, a
Federal industry consortium, was successful because it clearly
articulated both a goal that was improving the competitiveness
of the U.S. manufacturer capability in semiconductors, and it
did have a method to achieve this goal, and that was to build
state-of-the-art semiconductors using only equipment
manufactured in the United States.
Although the recent PNGV program began with a clear goal,
they tried to develop a highly fuel efficient family sedan. The
partnership struggled a little bit in not later reassessing the
goal as consumers' tastes shifted away from the family sedans
toward lighter trucks--light trucks and sport utility vehicles.
The third theme that we bring to your attention is to ensure
that all the new initiatives they devise a strategy to directly
address the goal.
Although it may sound surprising, the government-sponsored
R&D research programs over the years sometimes have articulated
a goal and then not devised a strategy that directly addressed
that goal. The classic case was the Energy Policy Act of 1992.
It had a goal of reducing petroleum fuel reduction, but it also
allowed a strategy to be put in place instructing the Federal
agencies to buy alternative fuel vehicles, which ended up being
powered by gasoline, and as a result, achieved no fuel
reductions.
As you consider the FreedomCAR initiative, it's important
to recognize as was the case with alternative fuels and was
mentioned by the chairman, that there is a lack of
infrastructure for fuels other than gasoline. Look at these
charts. The question will be asked, how far are you willing to
drive to find fuel? The top chart represents gasoline
infrastructure. The bottom chart represents filling stations
related to alternative fuels. This lack of infrastructure could
pose a very significant challenge to the implementation of any
kind of FreedomCAR-type initiative when the vehicles it
develops will run on anything other than gasoline.
And my last theme would be to consider whether consumers
will buy the product resulting from the R&D expenditure and
efforts that you put forth. We've seen that Federal research
sometimes producing compelling technical accomplishments but
few marketable products. In 1995, we reported the U.S. advanced
battery consortium could potentially achieve its immediate
technical goals, and they did, but the resulting batteries
would be too expensive, and would not enable the electric cars
that were equipped with these batteries to be competitive with
the traditional automobiles.
Mr. Chairman, in conclusion, the FreedomCAR initiative plan
to develop fuel cell technology clearly, in our opinion,
represents an exciting area of research. The payoff could be
large. As auditors based on our earlier reviews, it would be
critical for the initiative to keep one eye on achieving
technical goals, and also to keep one eye particularly on the
marketplace. Moreover, if there's one thing I want to leave you
with, the ultimate success of how this new FreedomCAR
initiative may be judged in the future, it may be judged not by
the specific technical goals that it achieves along the way,
but by its contribution toward enlarging that slim sliver of a
line that I showed you earlier on the chart that represents
future nonpetroleum usage.
Mr. Chairman, that concludes my summary, remarks, and will
be glad to answer questions at a later time. Thank you.
[The prepared statement of Jim Wells appears at the end of
the hearing.]
Mr. Greenwood. Thank you, Mr. Wells. We appreciate your
testimony and we'll now turn to Mr. Garman.
STATEMENT OF DAVID K. GARMAN
Mr. Garman. Thank you, Mr. Chairman. I appreciate the
opportunity to discuss FreedomCAR, which is an initiative to
reduce the Nation's dependence on foreign oil by dramatically
changing how we will 1 day power our cars and light trucks.
This light illustrates the expanding gap between declining
domestic oil production and our increasing demand, even if we
open ANWR, a business-as-usual approach, to research and
development does not close the gap. Mindful of this fact,
Secretary Abraham challenged us to take a bolder approach to
our work. He challenged us to leapfrog the status quo and
pursue dramatic environmental benefits.
On January 9, Secretary Abraham, joined by top leadership
of General Motors, Daimler-Chrysler and Ford announced
FreedomCAR at the North American International Auto Show in
Detroit. The ``CAR'' in FreedomCAR stands for ``cooperative
automotive research,'' and the ``Freedom'' concept represents
our fundamental long-term goals for this program: Freedom from
petroleum dependence, freedom from pollutant emissions, freedom
for Americans to choose the kind of car they want to drive and
to drive where they want when they want.
In short, we're looking to eventually remove the automobile
as a factor in the environmental equation and as a factor that
drives our dependency on foreign petroleum. If we want all of
these things as well as performance functionality and
affordability in a wide range of vehicles, we see the most
promising long-term approach is hydrogen-fueled fuel cells
combined with electric drive. Therefore, the first element of
our strategic approach is to develop technologies enabling mass
production of affordable fuel cell vehicles and to assure the
hydrogen infrastructure to support those vehicles.
The partnership we've enjoyed in the past, the Partnership
for a New Generation of Vehicles, had some successes, and we're
certainly not abandoning them. Indeed many of the research
elements of the PNGV program are embodied in the second element
of our approach to continue support for hybrid and other
technologies that can dramatically reduce oil consumption and
environmental impacts in the near term.
The third element of our strategic approach is to develop
technologies applicable across a wide range of passenger
vehicles. One of the problems with the PNGV program was it
focused on a production prototype of a family sedan. We're not
limiting our focus.
In its most recent peer review of the PNGV program, the
National Academy of Science has made a number of observations
and recommendations. They suggested that PNGV goals be re-
examined. They observed that the real opportunities for saving
energies are in increasing the efficiencies of sport utility
vehicles and pickups. They cautioned that it's inappropriate
for government to be involved in the development of production
prototypes. And we took their advice to heart and made changes.
With respect to key goals, FreedomCAR is focused on
petroleum-free, emissions-free transportation with an emphasis
on hydrogen fuel cells and also on systems and components
applicable to many types of vehicles. PNGV was focused on a
production prototype 80-mile-per-gallon family sedan. With
respect to timeframe, Free-domCAR has a long-term vision with
component technology goals over the next 10 years to gauge our
progress. PNGV was a 10-year program focused on 2004.
With respect to government leadership and focus, FreedomCAR
is a partnership solely between DOE and USCAR. PNGV was a
collaboration between USCAR and seven government agencies led
by the Department of Commerce. With respect to technology
emphasis, FreedomCAR is focused on hydrogen and fuel cells with
transitional efficiency gains from advanced combustion and fuel
processors. PNGV emphasized compression, ignition, direct
injection hybrids. With respect to vehicle focus, FreedomCAR's
focus is R&D at the component level with equal emphasis on cars
and light trucks. PNGV emphasized development and demonstration
of preproduction, mid-sized family sedans. We're not abandoning
the good work that has emerged from PNGV.
There are many shared components between an advanced hybrid
electric vehicle and a fuel cell vehicle including light-weight
materials, power electronics, electric motors and batteries.
Advances we make in these components need not wait for fuel
cells or hydrogen infrastructure to reach the market, as they
can be introduced as soon as they're ready. We'll also be
continuing our work in alternative fuel and advanced combustion
engines needed to support the development of advanced hybrid
electric vehicles.
Of course, new areas of emphasis needed for fuel cell
vehicles include hydrogen storage, on-board reformation and
fuel cell stack development. This is our budget cross-cut for
FreedomCAR. We're proposing to spend $150.3 million on this
initiative in fiscal year 2003. And a lot has been said about
specific technology goals. The transition to a hydrogen-based
transportation system is a long-range vision.
To assure progress, intermediate goals are necessary to
ensure that these accomplishments can be measured and our
progress can be measured along the way. We have goals to ensure
reliable affordable fuel cell power trains. We have goals to
promote energy efficient vehicles operating on hydrocarbon-
based fuels to be powered either by internal combustion power
trains or fuel cells. We have goals focused on improving hybrid
durability and affordability. We have goals focused on the need
for a widespread availability of hydrogen fuels. We have goals
designed to assure vehicle functionality. We have goals
designed to improve the manufacturing base, and we also have
goals geared to performance-based management.
In summary, our vision for FreedomCAR is a bold one in
response to Secretary Abraham's challenge that we act boldly.
Although FreedomCAR is a long-term effort beyond any near-term
political horizon, we've developed intermediate goals to ensure
that we make measurable demonstrable progress toward our vision
in the coming decade. Thank you, Mr. Chairman.
[The prepared statement of David K. Garman follows:]
Prepared Statement of David K. Garman, Assistant Secretary for Energy
Efficiency and Renewable Energy, U.S. Department of Energy
Mr. Chairman, I appreciate this opportunity to discuss FreedomCAR--
our flagship research and development initiative to reduce the nation's
dependence on foreign oil by dramatically changing how we power our
cars and light trucks.
By way of background, the most striking feature of our
transportation system is its nearly complete dependence on petroleum as
an energy source. Petroleum is used to satisfy 95% of America's
transportation energy needs, consuming two-thirds of all the petroleum
we use. Since roughly 55% of our petroleum is imported from abroad, the
implications of this dependency on our energy security are well
understood by the members of this Committee, and I need not dwell on
them here.
the ``gap'' is growing
This slide illustrates the expanding gap between declining domestic
oil production and our increasing demand. As you can see, opening the
Coastal Plain of the Arctic National Wildlife Refuge to exploration
would clearly help, but that alone would not close the gap. The R&D
approach we were previously embarked on would have also helped . . .
but would not have closed the gap either. Indeed, both taken together
would not have closed the gap.
Mindful of these realities, Secretary Abraham challenged the
Department of Energy to take a bolder approach to our work. He directed
us to focus our efforts on programs that ``revolutionize how we
approach conservation and energy efficiency.'' He challenged us to
``leapfrog the status quo'' and to pursue ``dramatic environmental
benefits.''
freedomcar is a partnership
On January 9, 2002, Secretary Abraham, joined by top leadership
from General Motors, Daimler Chrysler, and Ford, announced FreedomCAR
at the North American International Auto Show in Detroit.
The CAR in FreedomCAR stands for Cooperative Automotive Research.
And the ``Freedom'' concept represents our fundamental, long-term goals
for this program:
<bullet> Freedom from petroleum dependence;
<bullet> Freedom from pollutant emissions;
<bullet> Freedom for Americans to choose the kind of vehicle they want
to drive, and to drive where they want, when they want; and
<bullet> Freedom to obtain fuel affordably and conveniently.
We are seeking to develop cars and trucks that are free of foreign
oil and harmful emissions, without sacrificing safety, freedom of
mobility and freedom of vehicle choice. We are looking to eventually
remove the automobile as a factor in the environmental equation, and as
a factor that drives our dependency on foreign petroleum.
This is a dramatic, far reaching vision . . . one that requires new
technology. We cannot break the bonds of oil dependency by continuing
with the status quo. Given the low gasoline and diesel prices we enjoy
today, we can reasonably expect consumers to continue demanding larger,
heavier, more powerful vehicles, and vehicle manufacturers to continue
using internal combustion engines to satisfy that demand. We clearly
see this in the marketplace today. The majority of the new passenger
vehicles sold in 2001 were, for the very first time in automotive
history, light trucks in the form of sport utility vehicles, vans and
pickups.
strategic approach
How is it possible to offer performance, convenience and
functionality in a range of vehicles that can meet the needs of a
diverse population without using petroleum? We believe the most
promising long-term approach is to employ hydrogen fuel cells combined
with electric drive.
Therefore, the first element of our strategic approach is to
develop technologies to enable mass production of affordable hydrogen-
powered fuel cell vehicles and assure the hydrogen infrastructure to
support them.
Fuel cells, of course, can be thought of as batteries that are
continuously replenished by a constant supply of hydrogen. And
hydrogen, the most plentiful element in the universe and the third most
plentiful on earth, can be derived from a variety of sources including
petroleum, natural gas, coal, biomass, and even water.
But there are significant technical and infrastructure barriers
that must be overcome, including fuel cell cost and durability;
electric drive performance and cost; hydrogen production, storage, cost
and distribution challenges; and many others. Neither industry nor
government, working alone, is likely to overcome these barriers in any
reasonable timeframe. Therefore, we must work in partnership.
The partnership we have enjoyed in the past, the Partnership for a
New Generation of Vehicles (PGNV), has had some successes, and we are
certainly not abandoning those successes or the collaborations it
fostered. Indeed, many of the research elements of PNGV are embodied in
the second element of our approach: Namely, to continue support for
hybrid technologies and advanced materials that can dramatically reduce
oil consumption and environmental impacts in the nearer term.
But one of the problems of PNGV was its focus on a production
prototype of a family sedan. Therefore, the third element of our
strategic approach is to develop technologies applicable across a wide
range of passenger vehicles.
national academy of sciences observations and recommendations
In its most recent peer review of the PNGV program, the National
Academy of Sciences made a number of observations and recommendations,
a few of which I will list here:
<bullet> ``[T]he priorities and specific goals of the PNGV program
should be reexamined. There is a need to update the program
goals and technical targets in the context of current and
prospective markets . . . government and industry participants
should refine the PNGV charter and goals.''
<bullet> ``[T]he demand for sport utility vehicles, vans, and pickup
trucks in the United States has drastically increased . . .
This has increased the importance of reducing the fuel
consumption of these vehicles compared to the typical family
sedan.''
<bullet> ``If the program goal (sic) were refocused on reducing total
new light duty vehicle petroleum consumption, this would
encourage the emphasis to be placed on those vehicles that
offer the greatest potential for achieving this societal
goal.''
<bullet> ``. . . it is inappropriate to include the process of building
production prototypes in a precompetitive, cooperative
industry-government program.''
freedomcar differs from pngv
We have accordingly made changes responsive to the observations and
recommendations of the peer review panel. With respect to key goals:
FreedomCAR is focused on petroleum free, emissions free transportation,
with emphasis on hydrogen fuel cells. PNGV was focused on building a
production prototype 80 mile-per-gallon family sedan.
With respect to timeframe: FreedomCAR has a long-term vision with
2010 component technology goals to gauge progress. PNGV was a 10-year
program focused on 2004.
With respect to government leadership and focus: FreedomCAR is a
partnership solely between DOE and USCAR.
PNGV was a collaboration between USCAR and seven government
agencies led by the Department of Commerce.
With respect to technology emphasis: FreedomCAR is focused on
hydrogen and fuel cells, with transitional efficiency gains from
advanced combustion and fuel processors. PNGV emphasized compression
ignition direct injection (diesel) hybrids.
With respect to vehicle focus: FreedomCAR's focus is R&D at the
component level with equal emphasis on light trucks and cars. PNGV
emphasized development and demonstration of pre-production mid-sized
family sedans.
freedomcar and hybrids share technology
Let me again emphasize that we are not abandoning the good work
that has emerged from PNGV. There are many shared components between an
advanced hybrid electric vehicle and a fuel cell vehicle, including
lightweight materials, power electronics, electric motors, and
batteries. Breakthroughs we make in these components need not wait for
fuel cells or hydrogen infrastructure to reach the market, as they can
be employed as soon as they are ready.
We will also be continuing our work in alternative fuels and
advanced combustion engines (including emissions controls R&D) that are
needed to support the development of advanced hybrid electric vehicles.
fuel cell vehicle components
Of course, new areas of emphasis aboard the vehicle include
hydrogen storage, on-board reformation, and fuel cell stack
development.
But we are also beginning to address the technologies necessary to
make a transition to a hydrogen-based transportation economy. Principal
among these efforts will be solving the problems associated with
producing and making hydrogen fuel widely available. To that end,
elements of the hydrogen program in the Office of Power Technologies
(OPT) are being integrated into the FreedomCAR effort. Efforts by DOE's
Fossil Energy office on deriving hydrogen from coal (with sequestered
carbon) are also being reviewed. In addition, a related effort in OPT
on hydrogen-fueled internal combustion engines is under consideration
for inclusion.
In November of 2001 my office convened senior executives
representing energy industries, environmental organizations and
government officials to discuss the role for hydrogen systems in
America's energy future. This group addressed a common vision for the
hydrogen economy, the time frame for the vision and the key milestones
needed to get there. There was general agreement that hydrogen can be
America's clean energy choice, and that the transition to a hydrogen
future has already begun but could well take 40-50 years to fully
unfold. We are working on a specific technology roadmap covering
production, storage, conversion and infrastructure that leads us to
that vision, and we are continuing that work as a part of the
FreedomCAR program plan.
freedomcar research components and spending levels
My next slide shows our budget crosscut for FreedomCAR. We are
proposing to spend $150.3 million on this initiative in FY 2003. The
most notable changes in the FY 2003 budget are: 1) increased funding
for vehicle fuel cell R&D of $8.075 million, to a level of $50 million,
and 2) increased funding for hydrogen generation, transport and fueling
infrastructure by $9.659 million relative to FY 2002 appropriation
levels.
Whereas PNGV was a multi-agency partnership, the only Federal
partner in FreedomCAR is the Department of Energy. Since the inception
of PNGV, DOE has accounted for most of the government's contributions.
In FY 2001, we provided 86 percent of the funding that was directly
relevant to the PNGV goals, and that was linked with the plans
developed by the PNGV government-industry technical teams. While other
agencies are not formally involved as FreedomCAR partners, we intend to
coordinate our work with the appropriate technology research,
development and demonstration programs managed by other Federal
agencies, and by State governments as well. The mechanisms by which
coordination is accomplished will be worked out during the next few
months.
specific technological goals and timetables
The transition to a hydrogen-based transportation system is a long-
range vision. To assure progress, nearer-term goals are necessary so
that accomplishments can be measured and recognized. Therefore, the
Partnership has identified the following 2010 technology-specific
goals.\1\
2010 technology goals: fuel cell powertrains
<bullet> To ensure reliable systems for future fuel cell
powertrains with costs comparable to conventional internal combustion
engine/automatic transmission systems, the goals are:
<bullet> Electric Propulsion System with a 15-year life capable of
delivering at least 55kW for 18 seconds, and 30kW continuous at
a system cost of $12/kW peak.
<bullet> 60% peak energy-efficient, durable fuel cell power system
(including hydrogen storage) that achieves a 325 W/kg power
density and 220 W/L operating on hydrogen. Cost targets are at
$45/kW by 2010 ($30/kW by 2015).\2\
2010 technology goals: hydrocarbon fuel platform
<bullet> To enable clean, energy-efficient vehicles operating on
clean, hydrocarbon-based fuels powered by either internal combustion
powertrains or fuel cells, the goals are:
<bullet> Internal combustion engine powertrain systems costing $30/kW,
having a peak brake engine efficiency of 45%, and that meet or
exceed emissions standards.
<bullet> Fuel cell systems, including a fuel reformer, having a peak
brake engine efficiency of 45%, and that meet or exceed
emissions standards with a cost target of $45/kW by 2010 and
$30/kW in 2015.\2\<SUP>,</SUP>\3\
2010 technology goal: hybrid systems
<bullet> To enable reliable hybrid electric vehicles that are
durable and affordable, the goal is:
<bullet> Electric drivetrain energy storage with 15-year life at 300 Wh
with discharge power of 25 kW for 18 seconds and $20/kW.
2010 technology goals: hydrogen transition
<bullet> To enable the transition to a hydrogen economy, ensure
widespread availability of hydrogen fuels, and retain the functional
characteristics of current vehicles, the goals are:
<bullet> Demonstrated hydrogen refueling with developed commercial
codes and standards and diverse renewable and non-renewable
energy sources. Targets: 70% energy efficiency well-to-pump;
cost of energy from hydrogen equivalent to gasoline at market
price, assumed to be $1.25 per gallon (2001 dollars).\4\
<bullet> Hydrogen storage systems demonstrating an available capacity
of 6 weight percent hydrogen, specific energy of 2000 W-h/kg,
energy density of 1100 W-h/liter at a cost of $5/kWh.\5\
<bullet> Internal combustion engine powertrain systems operating on
hydrogen with a cost target of $45/kW by 2010 and $30/kW in
2015, having a peak brake engine efficiency of 45%, and that
meet or exceed emissions standards.
2010 technology goals: manufacturing base
<bullet> To improve the manufacturing base, the goal is:
<bullet> Material and manufacturing technologies for high volume
production vehicles which enable/support the simultaneous
attainment of:
<bullet> 50% reduction in the weight of vehicle structure &
subsystems,
<bullet> affordability, and
<bullet> increased use of recyclable/renewable materials.
performance based management
<bullet> Key metrics to be tracked annually
<bullet> 2010 goals supported by targets and milestones detailed in
EERE's Budget Request
<bullet> All FreedomCAR work to be assessed annually against the R&D
investment criteria developed as part of the President's
Management Agenda
I understand that these goals are highly technical, and they all
have a target year of 2010. I also understand that the NAS criticized
PNGV for not developing interim milestones for its ten-year ``stretch''
goals. Therefore, we are developing a suite of easily understandable
key metrics that can be presented graphically and will be tracked
annually so that we can measure our progress.
We have also developed numerous supporting objectives for the
various sub-programs that will contribute to the FreedomCAR goals. We
have identified an easily quantifiable performance indicator for each
of these objectives to ensure that all of the sub-programs are making
progress.
In addition, as with all DOE applied R&D programs, FreedomCAR R&D
will be assessed annually against the R&D investment criteria developed
as part of the President's Management Agenda to ensure that the R&D:
<bullet> Does not drift into areas that are inappropriate for Federal
investment
<bullet> Will maintain strong merit and is well planned
<bullet> Is producing beneficial results
Furthermore, FreedomCAR R&D will strictly follow the cost-sharing
guidelines developed with the Administration's R&D investment criteria.
conclusion
Mr. Chairman, our vision for FreedomCAR is a bold one, in response
to Secretary Abraham's challenge that we act boldly to ``revolutionize
how we approach conservation and energy efficiency.''
FreedomCAR is clearly a long-term effort beyond any near-term
political horizon. But even as we pursue our ultimate vision of
emissions-free, petroleum-free, safe and affordable transportation, we
have developed near-term goals to ensure that we make measurable,
demonstrable progress toward that vision in the coming decade.
And again, while we do face significant technology and
infrastructure risks, the exceptional rewards and national benefits we
could achieve justifies the effort.
I welcome your questions.
References
\1\ Cost references based on CY 2001 dollar values. Where power
(kW) targets are specified, those targets are to ensure that technology
challenges that would occur in a range of light-duty vehicle types
would have to be addressed.
\2\ Does not include vehicle traction electronics.
\3\ Includes fuel cell stack subsystem, fuel processor subsystem
and auxiliaries; does not include fuel tank.
\4\ Targets are for hydrogen dispensed to a vehicle assuming a
reforming, compressing and dispensing system capable of dispensing 150
kilograms per day (assuming 60,000 SCF per day of NG is fed for
reforming at the retail dispensing station) and servicing a fleet of
300 vehicles per day (assuming 0.5 kgs used in each vehicle per day).
Targets are also based on several thousand stations, and possibly
demonstrated on several hundred stations. Technologies may also include
chemical hydrides such as sodium boro-hydride.
\5\ Based on lower heating value of hydrogen; allows over 300-mile
range.
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Mr. Greenwood. Thank you, Mr. Garman.
Mr. Culver.
STATEMENT OF ROBERT N. CULVER
Mr. Culver. Thank you, Mr. Chairman. Members of the
committee, thank you for inviting me to address the committee
today on the new government industry partnership called
FreedomCAR. My name is Bob Culver and I'm the executive
director of United States Council for Automotive Research, or
USCAR. USCAR is the umbrella organization formed in 1992 by
Daimler-Chrysler, Ford Motor Company and General Motors to
conduct collaborative precompetitive research.
USCAR partners fully support Department of Energy Secretary
Spencer Abraham's vision of a personal transportation system
free from reliance on petroleum fuels. We are pleased to join
Secretary Abraham at the auto show in Detroit on January 9th
when he announced the FreedomCAR program to pursue this goal.
While the vision of FreedomCAR partnership is long range,
many aspects of the program will have near-term benefits.
Light-weight material technologies can and will provide
benefits for a variety of vehicles, regardless of the
propulsion system. And power electronic technologies, which are
critical for fuel cells are equally beneficial for near-term
vehicles.
The USCAR partners also support continuing FreedomCAR
funding to address promising combustion and after-treatment
technologies for internal combustion engines. Through decades
of research, many industry and government and environmentalist
experts have come to agree that hydrogen powered fuel cells are
our best investment into the future of transportation. Nearly a
decade ago, the possibility that a fuel cell could power a car
or light truck appeared light years away.
At that time, in order to achieve the power equivalent of
an internal combustion engine, the fuel cell required would be
larger than the vehicle it would power. However, today
experimental passenger vehicles powered by fuel cells have been
demonstrated by our companies in a variety of segments, from
compact cars to SUVs and mini vans.
While progress on this very promising technology is being
made, much research and development work is still needed.
Affordability remains a major challenge. The cost associated
with putting fuel cell power trains into vehicles at the
current technology level are literally in the hundreds of
thousands of dollars. Significant progress on this
affordability challenge must be made in order to make a
business case for producing them and marketing them.
Because this technology is high risk but offers significant
societal benefits, it is appropriate and necessary for
government. USCAR worked with the Department of Energy to
streamline and refocus our partnership on longer term, higher
reward technologies such as hydrogen powered fuel cells. As
Secretary Abraham made clear, this is not a short-term vision.
It will take many years of hard work by the auto industry, by
energy providers and Federal research organizations to realize
this bold vision. Industry and the DOE have agreed on detailed
near-term technical goals for each research area. Mr. Garman
just showed you those. And they are also attached to my
testimony.
Along with technical road maps, the goals will ensure that
funds are being spent in the most promising areas and that
research is progressing. While the vision of a hydrogen-based
transportation system is decades away, it is extremely
important to begin addressing the issues involved with shifting
the balance from petroleum and toward hydrogen. It is also
critical to demonstrate user-friendly hydrogen fueling stations
and to develop a road map for the new infrastructure
development. FreedomCAR can serve to jointly develop those
demonstration plans and milestones to lead the transition to
hydrogen-powered vehicles.
FreedomCAR research is being focused at the component and
subsystem level which will be applicable to a wide range of
vehicle segments. This will facilitate the migration of
technologies into the most appropriate vehicle platform as the
technologies meet their goals. The auto industry pledges to
bring these advanced technologies to market as soon as the
business case can be made for them, while at the same time
providing our customers with vehicles that are safe and give
them the kinds of performance, function, utility and value they
need and expect for their money. Past USCAR and government
collaborative programs have provided, and will continue to
provide, benefits to the American public. New material
technologies have helped reduce weight and combustion and after
treatment technologies are migrating to today's vehicles. Clean
fuels including low sulfur diesel are a must if these interim
technologies are going to make it into the marketplace.
All of the USCAR partners have announced hybrid electric
vehicles in the 2003 and 2004 timeframe, and all in truck and
light duty or SUV segments where this technology will yield the
maximum fuel savings.
In summary, the USCAR partners are in full support of
FreedomCAR and are hard at work at advanced technologies
including technologies that will help make hydrogen powered
vehicles a reality. Thank you.
[The prepared statement of Robert N. Culver follows:]
Prepared Statement of Robert N. Culver, Executive Director, United
Sates Council for Automotive Research
Mr. Chairman and Members of the Committee: Thank you for inviting
me to address the committee on the new industry/government cooperative
research partnership called FreedomCAR. My name is Bob Culver and I am
the Executive Director of the United Sates Council for Automotive
Research, or USCAR. USCAR is the umbrella organization founded in 1992
by DaimlerChrysler, Ford Motor Company, and General Motors to conduct
collaborative, pre-competitive research.
The USCAR partners fully support Department of Energy Secretary
Spencer Abraham's vision of a personal transportation system free from
reliance on petroleum fuels. We were pleased to join Secretary Abraham
at the North American International Auto Show on January 9 when he
announced the FreedomCAR program to pursue this goal.
While the vision of the FreedomCAR partnership is long range, many
aspects of the research will likely have nearer term benefits.
Lightweight material technologies can and will provide benefits for a
variety of vehicles regardless of propulsion system. And power
electronic technologies, critical for fuel cell drivetrains, are
equally beneficial for nearer-term vehicles. The USCAR partners also
support continuing FreedomCAR funding to address promising combustion
and aftertreatment technologies for internal combustion engines.
Through decades of research, many industry, government and
environmentalist experts have come to agree that hydrogen-powered fuel
cells are our best investment into the future of transportation. Merely
a decade ago, the possibility that a fuel cell could power a car or
light truck appeared to be light years away. At that time, in order to
achieve the power equivalent of an internal combustion engine, the fuel
cell required would be larger than the vehicle it would power. However,
today experimental passenger vehicles, powered by fuel cells, have been
demonstrated by our companies in a variety segments, from compact cars
to SUVs and minivans.
While progress on this very promising technology is being made,
much research and development works is still needed. Affordability
remains a major challenge. The costs associated with putting fuel cell
powertrains into vehicles at the current technology level are literally
in the hundreds of thousands of dollars. Significant future progress on
this affordability challenge must be made in order to make a business
case for producing them. Because this technology is high risk but
offers significant societal benefits, it is appropriate and necessary
for Government involvement.
USCAR has worked with DOE to streamline and refocus our Partnership
on longer term, higher reward technologies such as hydrogen-powered
fuel cells. As Secretary Abraham has made clear, this is not a short-
term vision--it will take many years of hard work by the auto industry,
energy providers, and federal research organizations to realize this
bold vision. Industry and the DOE have agreed on detailed near term
technical goals for each research area, which are attached to this
testimony. Along with technical roadmaps, the goals will ensure that
funds are being spent in the most promising areas and that research is
progressing.
While the vision of a hydrogen-based transportation system is
decades away, it is extremely important to begin addressing the issues
involved with shifting the balance from petroleum and toward hydrogen.
It is also critical to demonstrate user-friendly hydrogen fueling
stations and develop a roadmap for the new infrastructure development.
FreedomCAR can serve to jointly develop demonstration plans and
milestones to lead the transition to hydrogen powered vehicles.
FreedomCAR research is being focused at the component and sub-
system level which will be applicable to a wide range of vehicle
segments. This will facilitate the migration of technologies into the
most appropriate vehicle platforms as the technologies meet their
goals. The auto industry pledges to bring advanced technologies to
market as soon as a business case can be made for them while at the
same time providing our customers with vehicles that are safe and give
them the kind of performance, function, utility, and value they need
and expect for their money. Past USCAR and government collaborative
programs have provided, and will continue to provide benefits to the
American public. New materials technologies have helped reduce weight,
and combustion and aftertreatment technologies are migrating to today's
vehicles. Clean fuels including low sulfur diesel is a must if these
interim technologies are going to make it into the market place. All of
the USCAR partners have announced hybrid electric vehicles in 2003/2004
and all are in truck and SUV segments where this technology yields the
maximum fuel savings.
In summary, the USCAR partners are in full support of FreedomCAR
and are hard at work on advanced technologies, including technologies
that will help make hydrogen powered vehicles a reality.
FreedomCAR: Energy Security for America's Transportation
[agreement between department of energy and united states council for
automotive research]
Vision: Affordable full function cars and trucks are free of
foreign oil and harmful emissions, without sacrificing safety, freedom
of mobility and freedom of vehicle choice.
Message: America's transportation freedoms:
<bullet> Freedom from petroleum dependence
<bullet> Freedom from pollutant emissions
<bullet> Freedom to choose the vehicle you want
<bullet> Freedom to drive where you want, when you want
<bullet> Freedom to obtain fuel affordably and conveniently
National Benefits: Ensure the Nation's transportation energy and
environmental future, by preserving and sustaining America's
transportation freedoms. In other words, Freedom and Security made
available through Technology.
The government and industry research partners recognize that
the steady growth of imported oil to meet our demand for
petroleum products is problematic and not sustainable for the
Nation in the long term. No single effort limited to one
economic sector can successfully change this trend. Altering
our petroleum consumption patterns will require a multi-tiered
approach, including policy and research programs, across every
end use sector of our economy. The transportation sector has a
significant role to play in addressing this challenge, and
success resulting from the FreedomCAR research initiatives will
help accomplish the broader National Goals and Objectives that
are being pursued.
Strategic Approach:
<bullet> Develop technologies to enable mass production of affordable
hydrogen-powered fuel cell vehicles and assure the hydrogen
infrastructure to support them.
<bullet> Continue support for other technologies to dramatically reduce
oil consumption and environmental impacts.
<bullet> Instead of single vehicle goals, develop technologies
applicable across a wide range of passenger vehicles.
Technology Specific 2010 Goals \1\
<bullet> To ensure reliable systems for future fuel cell powertrains
with costs comparable to conventional internal combustion
engine/automatic transmission systems, the goals are:
<bullet> Electric Propulsion System with a 15-year life capable of
delivering at least 55kW for 18 seconds, and 30kW
continuous at a system cost of $12/kW peak.
<bullet> 60% peak energy-efficient, durable fuel cell power system
(including hydrogen storage) that achieves a 325 W/kg power
density and 220 W/L operating on hydrogen. Cost targets are
at $45/kW by 2010 ($30/kW by 2015).\2\
<bullet> To enable clean, energy-efficient vehicles operating on clean,
hydrocarbon-based fuels powered by either internal-combustion
powertrains or fuel cells, the goals are:
<bullet> Internal combustion engine powertrain systems costing $30/
kW, having a peak brake engine efficiency of 45%, and that
meet or exceed emissions standards.
<bullet> Fuel cell systems, including a fuel reformer, having a
peak brake engine efficiency of 45%, and that meet or
exceed emissions standards with a cost target of $45/kW by
2010 and $30/kW in 2015.\2\<SUP>,</SUP>\3\
<bullet> To enable reliable hybrid electric vehicles that are durable
and affordable, the goal is:
<bullet> Electric drivetrain energy storage with 15-year life at
300 Wh with discharge power of 25 kW for 18 seconds and
$20/kW.
<bullet> To enable the transition to a hydrogen economy, ensure
widespread availability of hydrogen fuels, and retain the
functional characteristics of current vehicles, the goals are:
<bullet> Demonstrated hydrogen refueling with developed commercial
codes and standards and diverse renewable and non-renewable
energy sources. Targets: 70% energy efficiency well-to-
pump; cost of energy from hydrogen equivalent to gasoline
at market price, assumed to be $1.25 per gallon (2001
dollars).\4\
<bullet> Hydrogen storage systems demonstrating an available
capacity of 6 weight percent hydrogen, specific energy of
2000 W-h/kg, energy density of 1100 W-h/liter at a cost of
$5/kWh.\5\
<bullet> Internal combustion engine powertrain systems operating on
hydrogen with a cost target of $45/kW by 2010 and $30/kW in
2015, having a peak brake engine efficiency of 45%, and
that meet or exceed emissions standards.
<bullet> To improve the manufacturing base, the goal is:
<bullet> Material and manufacturing technologies for high volume
production vehicles which enable/support the simultaneous
attainment of:
<bullet> 50% reduction in the weight of vehicle structure &
subsystems,
<bullet> affordability, and
<bullet> increased use of recyclable/renewable materials.
References
\1\ Cost references based on CY 2001 dollar values. Where power
(kW) targets are specified, those targets are to ensure that technology
challenges that would occur in a range of light-duty vehicle types
would have to be addressed.
\2\ Does not include vehicle traction electronics.
\3\ Includes fuel cell stack subsystem, fuel processor subsystem
and auxiliaries; does not include fuel tank.
\4\ Targets are for hydrogen dispensed to a vehicle assuming a
reforming, compressing and dispensing system capable of dispensing 150
kilograms per day (assuming 60,000 SCF per day of NG is fed for
reforming at the retail dispensing station) and servicing a fleet of
300 vehicles per day (assuming 0.5 kgs used in each vehicle per day).
Targets are also based on several thousand stations, and possibly
demonstrated on several hundred stations. Technologies may also include
chemical hydrides such as sodium boro-hydride.
\5\ Based on lower heating value of hydrogen; allows over 300-mile
range.
Mr. Greenwood. Thank you, Mr. Culver. The opening statement
of the gentleman from Michigan will be placed in the record.
And we appreciate his presence.
The Chair recognizes himself for 5 minutes for questions.
To each of the members of the panel, I would ask this
question. It is implicit in the fact that the Congress
appropriates roughly $150 million annually for this program
that we are investing in research that would otherwise not
happen, not occur. I'm interested in understanding the premise
for that assumption. The auto makers have spent a lot of money,
I believe a billion dollars was spent on acquiring Ballard fuel
systems--Ballard power systems--by Daimler-Chrysler and Ford
collectively to acquire partial ownership in that company. So
why do we think that without the investment of public dollars,
this research would not go on at a pace in the private sector?
We'll start with you, Mr. Culver.
Mr. Culver. I'd like to try that one, Mr. Chairman. The
investment in fuel cell manufacturers is a new investment for
all the auto companies to ensure their place once the research
goals of being able to make these affordably will be realized.
I believe that there is still tremendous research needed to
help reduce the cost, improve the durability, improve the
efficiency of fuel cells before they can be ready for the
marketplace. Combining the efforts of the auto industry, the
supplier community, the national labs will help ensure that and
accelerate that progress.
Mr. Greenwood. Mr. Wells, your views.
Mr. Wells. I can relate to the work we did a couple of
years ago when we were actually looking at the accountability
and trying to track the contributions during the PNGV program.
Clearly when we talked to the industry, we were made aware of a
large dollar value of their committed R&D effort. I believe in
that particular year it was, like, $18 billion by the major car
companies in all kinds of R&D efforts. Their contribution self-
acknowledged to the Federal agencies that were involved in the
PNGV effort were in the neighborhood of $980 million, if I
remember the numbers right, approximately 5 percent of their
research they self-disclosed to us was being contributed toward
related technologies for the PNGV vehicle.
Our point from a lessons-learned standpoint, as you design
future efforts, to ensure that there are mechanisms available
to ensure clear, crisp accountability and trackability for
monitoring who's spending what and what the money is being
spent for. So we would come at it from an accountability and a
documentation standpoint.
Mr. Greenwood. Mr. Garman.
Mr. Garman. Yes, Mr. Chairman. It's difficult to expect
auto makers to really invest their heart and soul and their
dollars in technologies that aren't going to be ready for the
showroom floor for 10 or 20 years, and I'll give you some
examples. Hydrogen storage is a major problem to make the car
have the kind of range it will need so that a consumer will
want to buy it. One of the very long-term R&D efforts that the
government is involved in that no auto maker is involved in are
advanced storage technologies--such as carbon nanotubes--that
have an affinity for the storage of hydrogen.
This is the kind of work that goes on at a place such as
the National Renewable Energy Lab in Colorado, a government
lab. But I wouldn't expect the auto makers to engage in that
kind of high-risk long-term technology, because its promise for
the showroom is so far off, that it's just not a good
investment of their dollars. It's a very iffy proposition. So
it's an appropriate role for the government to invest in long-
term high-risk technologies, and that's part of the focus and
the thrust behind FreedomCAR.
Mr. Greenwood. Well, personally, I would invest zero or ten
times what we're investing if I thought it was going to--
whatever approach would give us the results that you gentleman
have referred to as quickly as possible. How do we know--how do
we arrive at the appropriation figure that we have? We've got
this assumption that the auto makers are interested in having
and have a national interest in investing in future technology,
that this may be sufficiently over the horizon, that this
inducement or this additional public investment makes a
difference, but how do we know--who determines or how do we get
to the answer of the question, what is the appropriate level of
Federal funding that gets us where we want to go the quickest?
Mr. Garman. The real purpose of the Federal funding is to
leverage some of the public dollars into the private dollars
and to attract auto makers into areas of R&D that they wouldn't
do by themselves. Ultimately, of course, Congress decides how
much is appropriated, and our proposal is to appropriate
roughly $150 million toward these activities, but there's the
leveraging effect. We bring to the table--the Federal
Government brings to the table facilities at the national labs,
talent at the national labs that the auto makers would not by
themselves have access to, regardless of how much money they
spent in some cases.
Mr. Greenwood. The time of the Chair has expired.
The Chair recognizes the gentleman from Michigan for 5
minutes, and would say in advance that after the gentleman from
Michigan's inquiry, the committee will recess for this vote and
then return.
Mr. Dingell. Mr. Chairman, thank you for your courtesy and
I commend you for the hearing. I thank you for inserting my
statement into the record.
Mr. Culver, do you believe that in view of our interest in
promoting clean-burn diesels for passenger use in the United
States, that we should lower the sulfur content in the diesel
sulfur rule now pending at EPA?
Mr. Culver. Mr. Dingell, thank you for the question. The
alliance has recommended in the past the--that sulfur content
of diesel fuel be reduced to 5 PPM or near-zero fuel. Such a
reduction will increase the efficiency, help improve the
durability of after-treatment systems, and help reduce the cost
of after-treatment systems.
Mr. Dingell. In other words, you'll improve the reliability
of your catalytic converter?
Mr. Culver. Yes, sir. Every so often you have to purge your
catalytic treatment, your particulate trap. The lower the
sulfur reduces the number of times you have to do that,
improving the durability, lowering the cost, and you use diesel
fuel to do that. So if you don't have to do it as often, you
actually improve----
Mr. Dingell. Europeans are going to zero?
Mr. Culver. That is correct.
Mr. Dingell. And that will especially enable them to bring
on the Audi A-2 system, will it not?
Mr. Culver. I'm not familiar with the Audi A-2 system, but
I know that----
Mr. Dingell. They have a clean burn system in Europe, the
Audi A-2, which will get them 78 miles a gallon for a four-
passenger car. The hybrids and the fuel cell vehicles and so
forth will get some 60 miles per gallon for a two-seater car, a
much smaller vehicle. Is that not true?
Mr. Culver. I'm not sure of the Audi system, sir, but I do
know that----
Mr. Dingell. Would you----
Mr. Culver. Zero PPM sulfur will enable the full potential
of diesel technology to be realized without compromises of
after-treatments.
Mr. Dingell. So is the feasibility of developing the
technology to meet future sulfur emissions requirements greater
with fuel that has a sulfur content of 5 to 10 parts per
million rather than the 15 parts per million required by EPA's
diesel sulfur fuel? I believe you said yes to that.
Mr. Culver. Absolutely.
Mr. Dingell. Now, it's been reported that EPA has had
Toyota run emissions tests on clean burn diesel vehicles for
the European market. The tests were conducted using diesel fuel
with a sulfur content of 6 parts per million. The vehicle
passed all but one of the emissions tests the EPA performed.
The test that failed was conducted by running the vehicle for
long periods of time at highway speeds, fully loaded and with
air-conditioning on. Is it feasible for the U.S. motor industry
to develop technology to make clean-burn diesel engines that
comply with the emissions tests that the Toyota vehicle
recently failed, or should we be thinking in terms of lowering
the sulfur content even below 6 parts per million?
Mr. Culver. Again, I'm not familiar with the technology
that was on the Toyota vehicle, but I do agree that the
durability and performance at 5 PPM or closer to zero PPM will
improve the durability and enable us to meet the tests--meet
all the tier 2 requirements much easier than with 15 PPM.
Mr. Dingell. Now, the American auto industry currently
makes clean burn diesel vehicles that are used throughout
Europe. Is that not so?
Mr. Culver. Yes, sir, it is. In fact----
Mr. Dingell. And what percentage of the new light duty
vehicle sales and new luxury vehicle sales are attributable to
clean burn diesel vehicles in the European market?
Mr. Culver. Currently, it's about 30 percent. There are
reports that it will go as high as 50 percent as Europe tries
to meet their CO<INF>2</INF> commitments.
Mr. Dingell. Europe is going to zero on diesel fuel sulfur
content; is that right?
Mr. Culver. That is correct.
Mr. Dingell. Now Mr. Garman, do you agree that the lower
sulfur fuel like they have in the European Union is necessary
for emissions technology to work effectively and durably over
the life of a clean burn diesel vehicle?
Mr. Garman. Yes, sir, a lower sulfur standard in diesel is
very desirable. I need to make one clarification, though.
Currently the EU standard for on-road diesel is 350 parts per
million. They're moving to a cap of 50 parts per million in
2005 and considering a lower cap for later years. Some of the
European countries have a diesel fuel tax incentive in place to
reward the use of 10 parts per million fuel in later years.
They generally refer to the 10 part per million number as zero
sulfur fuel even though it doesn't actually have zero, but it
has very low amounts. The EPA standard--our current U.S. cap is
500 parts per million which is clearly not amenable to clean-
burning diesel. We need to do a lot better than that, and the
U.S. has established a cap of 15 parts per million for 2006.
Mr. Dingell. Mr. Chairman, I know my time is up but I have
just one more question if you'd bear with me.
Do you believe, Mr. Culver, that clean-burn diesel vehicles
would be attractive to consumers in the U.S. market?
Mr. Culver. Absolutely. We know that they would be very
attractive.
Mr. Dingell. Given effectively zero sulfur diesel fuel, do
you believe the U.S. motor vehicle industry can build clean
burn diesel vehicles that will satisfy EPA emission
requirements at a price customers will be willing to pay?
Mr. Culver. I do, and I believe that we'd also bring them
in in markets where they provide the biggest benefit in
vehicles like light trucks and SUVs and mini vans.
Mr. Dingell. And we can do this at huge fuel savings, can
we not?
Mr. Culver. The projection of fuel savings range from 25 to
35 percent improvement over existing fuel economy.
Mr. Dingell. Mr. Chairman, I thank you.
Mr. Greenwood. The Chair thanks the gentleman. The
committee will stand in recess until approximately 10:30.
[Brief recess]
Mr. Greenwood. The committee will return to order. The
Chair recognizes the gentleman, Mr. Stearns, for 5 minutes.
Mr. Stearns. Good morning and thank you, Mr. Chairman.
Before I start, I'd like to welcome Dr. Vernon Roan, professor
of mechanical engineering and director of the Fuel Cell
Laboratory at the University of Florida. He was kind enough to
come up here and say hello to me.
On the new apportionment, Mr. Chairman, I might have, and
the University of Florida returned to be within my
Congressional district, and I look forward to that opportunity.
The first question I have is for Mr. Culver. I just have
sort of a threshold question to start out. Is government needed
in this research? Clearly the auto makers are pursuing fuel
cell technology and other advanced automotive technology on
their own, spending sums far greater than the Department of
Energy is spending. So can you sort of elaborate on your role
in the FreedomCAR partnership. What does the USCAR bring to the
partnership considering the amount of money that they're doing
and the amount that the private industry is doing, and perhaps,
do we need government research on this when the private
industry is doing it?
Mr. Culver. Let me--thank you. Let me start by saying that
the numbers Mr. Wells quoted earlier are directionally correct
for the year that the GAO talked to us, but the far great
majority of that money we spent on R&D is heavily related to
the D side in developing products for the next generation of
vehicles going into production within the next few years, and
quite--and the pressure is to put more and more toward the near
term and less and less on the long term as we get into
especially tight years like we're in right now.
I do believe government research is necessary for many
reasons. One, government scientists have shown that they are
free from some of the constraints that the auto industry is,
and when we can combine their expertise with our sense of the
business case, we can really push the technology forward
collaboratively, the leverage opportunities of all of us
working together really actually make the sum total much
greater than would be any one of us working alone. So I think
the collaborative aspect is really important in this whole
aspect.
And finally, I believe that the goals that we're working on
for the FreedomCAR program all have costs and durability kinds
of efforts in them, which is a little new to this program
before the prior program. And it's important to do that,
because if we have the costs and durability and customer into
the equation now with the new program, we can help really
ensure that these technologies will get to the marketplace
faster.
The auto company is spending a lot of money on these
technologies. With the government we're really accelerating the
pace of bringing that to the marketplace.
Mr. Stearns. I think it has been brought out in some of the
opening statements is to get to the ultimate goal of the
FreedomCAR of the hydrogen as a fuel, it's going to require a
lot more expenditure for petroleum products, and can you talk a
little bit about that tradeoff, we're going to have to spend a
lot more, go import a lot more to even get us to the point
where we have the feasibility or release of a fuel cell of
hydrogen? I mean, it seems like it's a total impediment to get
us to where we want to go, we're going to have to expend more
petroleum to get it out of the ground, to store it and all
that.
Mr. Culver. I apologize. I'm not sure of the question. I
know there are many--you're talking about the production of
hydrogen?
Mr. Stearns. Yeah. Just to get to the production of
hydrogen, we're going to have to spend a lot of gasoline
petroleum products to get there. Isn't that true?
Mr. Culver. Well, there are many different scenarios being
investigated for the production of hydrogen.
Mr. Stearns. Let me ask Mr. Garman on that. Is that true?
Mr. Garman. Sure. I mean, we don't see market penetration
of this technology for quite some time, so in the general
course of events, we will be importing and using a lot of
petroleum between now and then, and also----
Mr. Stearns. But to get to the ultimate objective, we're
going to spend even more petroleum than we would in a normal--
--
Mr. Garman. Not necessarily, because hydrogen can be
produced from a variety of sources. It can be produced from
natural gas. It can be produced from renewable energy, from
biomass, from nuclear. There are a lot of options available to
us in the short and long term to produce hydrogen from a
variety of different sources, and that's one of its
attractions.
Mr. Stearns. Mr. Garman, what do you see as the greatest
technological impediment to this program's success?
Mr. Garman. Fuel cell cost and durability. Right now fuel
cells cost on the order--the designs we have today--of $400 to
$450 per kilowatt. We're going to an internal combustion engine
costs roughly $30 to $35 per kilowatt. We're going to have to
decrease the cost of the fuel cell stack by an order of
magnitude in order to make it competitive with internal
combustion engines.
Right now the models we have operate an average of 3,000
hours. If you want to get something comparable to an automobile
that will last 120 or 150,000 miles, we need a 5,000-hour fuel
cell. So cost and durability of the fuel cell itself are
fundamentally important technical challenges for us to
overcome.
Mr. Stearns. Mr. Chairman, this is my last question. This
is for Mr. Garman. Again, you say in your testimony that,
quote, neither industry nor government working alone is likely
to overcome these barriers in any reasonable timeframe.
Therefore, we must work in partnership. And I ask Mr. Culver a
little bit about the government's need for research and so
forth. So can you explain how this working together is--will
speed up the process and perhaps elaborate on the government's
role and the industry's role in this partnership and how that
works.
Mr. Garman. Sure, and I'll probably do that the best way by
giving you a real world example. The auto makers have been
looking at fuel cells for many years and dismiss them as being
just too expensive and saying it's going to take us a long time
to bring down that cost. And actually there's work at Los
Alamos National Laboratory by scientists there, working in
partnership with the industry to actually say, how can we bring
down the cost of fuel cells?
There's a membrane and a PEM fuel cell of the type we're
talking about that uses a lot of platinum in that membrane to
actually help the reaction happen, and the scientists at Los
Alamos were able to reduce the amount of platinum needed in
that membrane by a factor of 10, and thus they brought down the
costs significantly.
I mentioned how expensive fuel cells were now in relation
to where they needed to be to produce a commercial product, but
I failed to mention the fact that--in the last 5 or 6 years--
we've decreased the cost of fuel cells by an order of magnitude
as well. So we've made great progress, and what we want to do
is to continue that progress so that we get toward a commercial
product.
Mr. Stearns. That magnitude has come down 10 percent, 20
percent--what would you say the percent that that costs.
Mr. Garman. An order of magnitude of a 100 percent. I'm
sorry, an order of magnitude of 1000 percent.
Mr. Stearns. Thousand percent?
Mr. Garman. Yes.
Mr. Stearns. Thank you, Mr. Chairman.
Mr. Greenwood. I thank the gentleman and recognize the
gentleman from Florida, Mr. Deutsch, for 5 minutes.
Mr. Deutsch. Thank you. If each of you can respond to this
question. How long will it take to develop fuel cell-powered
vehicles for mass production in the United States? Mr. Culver.
Mr. Culver. I believe mass production won't occur for at
least a decade. We will be seeing fleets appear on the market,
small volume fleets in the numbers of hundreds of vehicles
within the next 2 to 3 years, but the cost--to get down to the
costs that Mr. Garman just mentioned will take at least another
decade in my opinion.
Mr. Deutsch. Mr. Wells.
Mr. Wells. One of the first questions we asked, about the
FreedomCAR, we were told that this is not a car. We've also
heard DOE talk to a horizon 40, 50 years in terms of building
component pieces and putting it all together.
Mr. Deutsch. Mr. Garman.
Mr. Garman. If we meet every one of the technology goals
that we've specified over the next decade, the auto makers--we
believe--will be in a position to make a decision about
commercialization in the 2012 to 2015 timeframe, and that's a
commercialization decision on mass production vehicles. As Mr.
Culver indicated, we have a few tens of fuel cell vehicles on
the road today that will migrate up to hundreds, then
thousands, then 10,000's as we do demonstrations and start to
work on aspects of infrastructure, but mass marketed hundreds
of thousands of vehicles on the road we don't see until the
2015 to 2020 timeframe. And total fleet turnover would take
much longer than that, and that's assuming that we're
successful in addressing these first tranche of technological
goals that we have for ourselves over the next decade.
Mr. Deutsch. So in your opinion in a best-case scenario,
are you talking 2015 for a mass production?
Mr. Garman. Yes, sir.
Mr. Deutsch. And that's----
Mr. Culver. In that case is with the--such that we have in
place at that time an infrastructure that will support those
vehicles, which is absolutely crucial.
Mr. Deutsch. Uh-huh. And what comes first?
Mr. Culver. That's a great question. Constantly talking
about the chicken and egg of whether you get fuel cells first
or whether you get an infrastructure first and the way to
really address that is to look at demonstrations and the
Department of Energy's plan includes demonstrations that will
have limited fleets expanding to wider fleets and more wide
fleets and as the track develops around those fleets, it will
be critical to expand it in many areas before commercialization
is possible.
Mr. Deutsch. You were mentioning there how many fuel cell
vehicles actually on the roads today in demonstrations?
Mr. Garman. We've through the California fuel cell
partnership, SunLine transportation, Ballard has some--in
Vancouver, Canada. Mostly on bus and fleet vehicles, in the
tens, I would say.
Mr. Culver. Probably not more than a hundred worldwide.
Mr. Deutsch. Worldwide?
Mr. Culver. Right.
Mr. Deutsch. Okay. And outside of the United States, I
mean, is anyone taking any kind of a role in any magnitude
comparable to us?
Mr. Culver. Europe has some programs going on, especially
in Germany with some buses that are out at Munich Airport, for
example. Japan is doing some work as well in fuel cell
vehicles. We've had a chance to see one of those at the Future
Car Congress earlier this week. So there is worldwide effort
going on.
Mr. Deutsch. Is there any kind of coordination between
these pure research efforts?
Mr. Culver. Not on the fuel cell manufacturer level. There
have been calls for development on how we approach
infrastructure together. Secretary Abraham has talked about a
conference to bring together the different markets to talk
about these issues and----
Mr. Deutsch. Is there any reason why we shouldn't be
coordinating with basically all of the industrialized world on
this issue?
Mr. Culver. Well, areas like the California fuel cell
partnership also bring in the Japanese manufacturers and the
European manufacturers as well. So some of that is happening at
that level. It's a little tougher to collaborate worldwide on a
day-to-day basis like we do with the Department of Energy, but
I think those efforts are increasing.
Mr. Deutsch. Why is it more difficult?
Mr. Culver. Just face-to-face collaboration, working
together in the same laboratory side by side with researchers.
And that's what FreedomCAR really helps us do, get those people
together.
Mr. Deutsch. You know, one of the comments people were
saying that the development of fuel cell-powered vehicles for
mass production is around the corner over 30 years ago. What
has changed to make this goal more realistic today?
Mr. Culver. I believe the progress in the last decade. As
Mr. Garman pointed out, we've already reduced the fuel cell
price a tenth by--down to a tenth of what it was a decade ago.
Size of the fuel cells, as I mentioned, were so huge, you had
to tow them in a trailer 15 years ago. Now they're in A class
vehicles. So I think that progress has really excited us about
moving that much closer to marketplace than we were 20 years
ago.
Thank you. I see my time has expired.
Mr. Gillmor. Thank you very much, Mr. Chairman. And let me
ask Mr. Garman: You state in your testimony that you are
beginning to address the technologies necessary to make a
transition to a hydrogen-based transportation economy. Several
of the witnesses highlight in their testimony the need to
address infrastructure issues. What is the timeframe for
addressing hydrogen infrastructure development, and what are
FreedomCAR's plans on this front?
Mr. Garman. It is very important that we develop
infrastructure in a timeframe that makes it possible, about the
same time that the automakers are making that commercial
ization decision in the 2013 to 2015 timeframe. Before we start
investing heavily in infrastructure, it is important that we
continue to see over the next year or 2 or 3 that we are
meeting these very difficult technical challenges, the cost and
durability goals and fuel cells, so that we are assuring
ourselves that we do have something that we would be building
an infrastructure for ultimately. But I think we are in the
process of putting together our 1904 budget and, planning in a
5-year planning timeframe, for budgets in the 1904 to 1909
timeframe, are thinking very hard about this infrastructure
problem and how government will work in this area.
Some of the areas that we need to work on include codes and
standards, how hydrogen would be handled, how it would be
stored. This is a government role. We also want to employ the
convening power of government to bring energy companies into
the mix. Companies such as BP, Texaco, Shell, and others are
thinking themselves not exclusively as oil companies anymore,
but energy companies, and they as well have to think about how
they might want to provide this service to consumers when the
time is right.
So, part of the technical milestones as outlined in the
testimony are geared specifically and directly toward the cost
of hydrogen and the ability to produce it in an affordable
manner and distribute it appropriately.
Mr. Gillmor. Are you working with companies that may, in
the future, be providing some of that infrastructure; for
example, oil companies, pipeline companies?
Mr. Garman. Yes, sir. We have involved them in some of our
hydrogen technology road-mapping exercises, companies such as
Air Products and Chemicals, Prax Air. There is--they have a
substantial amount of hydrogen pipelines and production in play
today, and it's roughly a $2 billion industry, if memory
serves.
Mr. Gillmor. When we are talking about energy security
issues, you mentioned that hydrogen is very plentiful as a
resource to produce for the fuel cell car. But given that the
hydrogen must be produced, how is FreedomCAR and DOE addressing
the fuel supply issues?
Mr. Garman. We, in a variety of ways, through DOE's fossil
energy program, we are looking at ways, for instance, to use
coal. Where coal would be gasified, the carbon dioxide and
sulfur could be sequestered, and the pure hydrogen put into
use. Through the nuclear energy program, we are also looking at
the possibility of high-temperature gas reactors being used
over the very long term to produce hydrogen. We are also
looking at hydrogen conversion technologies, using biomass and,
of course, renewable--other renewable technologies such as wind
and solar.
We have a variety of different ways to produce hydrogen.
The one that's used mostly today is natural gas, the steam
reformation from natural gas. Natural gas is very rich in
hydrogen, and that's how it's mainly done today.
Mr. Gillmor. Let me ask you to elaborate a little more on
what's being done and what the potential is in the coal area.
And I have a somewhat parochial interest in asking that since
Ohio is the Saudi Arabia of coal with a 600-year supply that we
can't use. So I would be interested in how far we are coming
and what you realistically think the potential might be in that
respect.
Mr. Garman. Yes. Absolutely. I mean, the United States is
blessed with a bountiful and abundant coal resource, and coal
is chemically nothing more than long strings of hydrogens and
carbons with some sulfurs and a few other elements mixed in. If
we can use coal gasification technology, which we have been
working on at DOE for some years, and marry that up with
sequestration, that that could separate the rich hydrogen gas
from the coal gas, capture the other elements, and sequester
them in perhaps the mine from which the coal came through a
chemical or other type of process, then we would have coal, the
use of coal that would be consistent with a carbon-free future.
And this is something that is very important to us.
Again, this is a long-term technology. We don't see this
happening in an economic fashion any time soon, but in the next
15-, 20-year timeframe, we hope that we can have some
demonstrations of this technology well in hand.
Mr. Gillmor. Thank you.
Mr. Greenwood. The next gentleman, and recognizes himself,
for 5 minutes for this next round of questions.
There has been some concern as to whether the FreedomCAR
program, with its bold vision of leaping forward into fuel
cells, is going to in any way diminish our efforts with regard
to the intermediate steps, trying to get the hybrid vehicles on
line and available to the public.
Mr. Culver, what are your views on that? Are we, in fact,
in any way, by focusing some of these resources on the fuel
cells, diminishing our progress in the other hybrid vehicles?
Mr. Culver. Well, I trust not, sir, Because about 50
percent of the budget that was proposed, the FreedomCAR budget,
goes toward--directly toward hydrogen and fuel cell
technologies. The other 50 percent goes to nearer-term
technologies, like lightweight materials, advanced combustion,
batteries, those types of technologies, which, for the most
part, will be required and are very supportive of the longer-
range fuel cell goals.
I think it's very important, and the U.S. Car Partners have
provided input to the Appropriations Committee that those
technologies be preserved in the budget and still get the
adequate funding. There are promising technologies under way
investigating on reducing after-treatment--or reducing
emissions through advanced after-treatment technologies. New
materials like magnesium and advanced composite materials are
slowly coming into the realm of being available for nearer-term
vehicles.
So these types of technologies, we believe, are crucial and
critical and should be retained in the FreedomCAR program.
Mr. Greenwood. Let me ask you, on that question, and I
would like Mr. Garman to respond and perhaps Mr. Wells as well,
what are the incentives to get, to make, to reach milestones by
particular timeframes? In other words, if a group of scientists
in a research lab in the private sector--clearly there are
corporate goals, and they, I imagine, devote a certain amount
of attention trying to figure out how to reach those milestones
in a timely fashion. I mean, there is a sense that--
particularly because of our concern with the war on terrorism
and our desire to be free of foreign oil, freer of foreign
oil--that we have an almost Manhattan Project approach to
getting these vehicles on line. Is that--is there a sense of
urgency? And what determines the pace, what drives the pace of
our getting to these hybrid cars, and how do we in Congress
judge whether we are making the progress in a timely enough
fashion?
Mr. Culver. I believe there are many parts to the answer to
that question. Let me begin by saying the ultimate answer is
that they get into the marketplace. In the next 2 years, you
will see hybrid offerings from all the Big Three in trucks,
SUVs. Customers are starting to show greater appreciation for
fuel economy as a discriminator amongst various models, and the
companies recognize that being able to offer higher-fuel-
economy vehicles are certainly going to be in the marketplace
and be more attractive. So I think the customer side, the pull
of these technologies is starting to come into play much more
than it was even a few years ago. So I think that will help
bring it to marketplace a lot faster.
Mr. Greenwood. I'm not sure that that's responsive to my
question. My question, if we were simply relying on the pull of
the marketplace, we wouldn't need Federal dollars, because the
car--automakers would accelerate their efforts to beat--to get
marketable vehicles on the market faster than the other
companies. So if we are going to infuse $75 million a year into
accelerating this advancement, my question is, what makes the
guys in the laboratories scurry across the room faster and, you
know, work their brains quicker and collaborate more
efficiently using these Federal dollars?
Mr. Culver. I do believe the new goals, with timing and
cost in all of the new goals, will help accelerate that
progress and help get that sense of urgency across to everyone
involved in this program.
Mr. Greenwood. Let me ask Mr. Wells and Mr. Garman to also
respond to that question.
Mr. Wells. Mr. Chairman, as they design this program, the
Congress should insist that measurable points in time be
identified so that you can measure success.
Mr. Greenwood. And is it your view that those milestones
are now absent?
Mr. Wells. I believe those milestones are not--I'm not able
to interpret those milestones yet because they are fairly
technical, and it's difficult at this moment to really measure
the concreteness of those measurements. But clearly we have
moved into a society where performance and results will get
future funding in terms of the scarce dollars we have. So the
program is going to have to be held accountable to demonstrate
results quickly to get continued funding.
Mr. Greenwood. Mr. Garman.
Mr. Garman. I would agree. And one of the reasons that we
had technical milestones is that our own Office of Management
and Budget insisted that we did and will be measuring our
budget requests and our performance against those technical
milestones on a year-by-year basis. This is a very, very
important thing.
I also--I think there is a certain excitement in this
partnership between the government project managers, and the
private sector scientists and the government scientists in the
lab who are working on this process, because we developed these
milestones together. In the past there have been some so-called
partnerships where the government said this is our goal, this
is our milestone, and, frankly, the private sector participants
weren't full participants in the process of setting these
milestones. But they are invested in these milestones. They
would come up with--they came up with them in partnership with
us, and they are excited but challenged by the milestones, and,
like any engineer or any lab, you know, you get excited by a
good challenge. These are tough challenges.
I would also, with respect to your question about hybrids,
which are very important, I think it's very important to
recognize what the Congress has done in response to the
President's energy plan in putting forth tax credit
opportunities for hybrid vehicles. We think this is very
important and commend the Congress for doing that. We think
this is going to be an important incentive for customers who
are teetering on the edge of buying a hybrid to be able to do
it. I have one hybrid vehicle, and I am looking forward to the
time when I get to purchase another one from a U.S. auto
manufacturer, and, frankly, the tax credit is helpful in that
regard.
Mr. Greenwood. A final question. What are the proprietary
issues? How are they managed in terms of U.S. automakers,
foreign automakers? Is it--how are we balancing out the normal
commercial interests or proprietary knowledge against the
societal urgency of getting where we want to go here? Who wants
to take a stab at that? Mr. Garman?
Mr. Garman. I see this first-hand when you go to, for
instance, Oak Ridge National Laboratory. We have a power
electronics lab where lab scientists and industry scientists
will work side by side on a workbench on a technology. But we
also have space in that lab for proprietary technology in which
the private sector worker will go behind the curtain, if you
will, and try to carry it further or make it distinctive in
some way for their own commercial interest.
We think this is kind of a healthy dichotomy of approaching
these kinds of R&D challenges. They work together on one hand,
but they have an opportunity to take the technology and take it
a step further and commercialize it perhaps sooner than their
competitors can. And we try to maintain that balance.
Mr. Culver. I would agree.
Another good example is the California fuel cell
partnership, where all the companies are collaborating together
to demonstrate refueling, demonstrate the safety, demonstrate
the drivability of these vehicles. Yet, at night, those
vehicles go into very secure individual garages, and we don't
share any of that kind of information, so there is room for
proprietariness and collaboration to coexist at the same time.
Mr. Greenwood. Thank you, gentlemen, for your testimony,
and we appreciate your help here this morning, and you are
excused.
And the Chair would call forward the second panel,
consisting of Dr. Vernon Roan, professor of mechanical
engineering, and director of the Fuel Cell Laboratory at the
University of Florida; Mr. William Miller, president of UTC
Fuel Cells; and Dr. Donald Paul, vice president and chief
technology officer of Chevron-Texaco.
Doctor, I think we would like you to sit at that chair.
Welcome, gentlemen. We thank you for your assistance this
morning. You heard me notify the first panel that this is an
investigative hearing, and it is our practice to take testimony
under oath. Do any of you object to giving your testimony under
oath?
Seeing no such objection, I would advise you that, pursuant
to the rules of the House and this committee, that you are
entitled to be advised by counsel during your testimony. Do any
of you wish to be advised by counsel?
Okay. In that case, if you would rise and raise your right
hand, I will swear you in.
[Witnesses sworn.]
Mr. Greenwood. Thank you. You are under oath. And I
understand I should stand corrected; it's Dr. Vernon P. Roan,
not Run. We thank you, and you are recognized to give your
testimony, sir.
TESTIMONY OF VERNON P. ROAN, PROFESSOR OF MECHANICAL
ENGINEERING, DIRECTOR, FUEL CELL LABORATORY, UNIVERSITY OF
FLORIDA, ON BEHALF OF THE PNGV PEER REVIEW COMMITTEE, NATIONAL
RESEARCH COUNCIL; WILLIAM T. MILLER, PRESIDENT, UTC FUEL CELLS,
SOUTH WINDSOR, CONNECTICUT; AND DONALD L. PAUL, VICE PRESIDENT
AND CHIEF TECHNOLOGY OFFICER, CHEV-RONTEXACO
Mr. Roan. Thank you, sir. Thank you for inviting me here
today. I would like to start by just giving a few comments from
the summary of the Peer Review Committee, who oversaw the PNGV
program, and I will just go right into that. Since I have
issued a written copy of all this, I'm only going to hit just a
few of the points because I have a few additional comments I
would like to make.
Of the goals, goal 3 is the one that has received the most
attention, and that's to try to develop the fuel-efficient car,
family sedan, up to 80 miles per gallon. In terms of the--some
of the comments and recommendations from the Peer Review
Committee, the first bullet, the Committee believes that the
PNGV program has established a unique and valuable framework
for directing closely coordinated industry and government
research efforts toward the development of technologies capable
of solving societal problems.
That's probably the most important bullet from the
recommendations of the committee and the comments, because
basically we see this government industry framework as having
worked.
The fourth bullet down: Fuel cells continue to show promise
of high efficiency and very low emissions, with continuous
progress toward targets that are very difficult to meet for any
general-purpose, high-volume automotive application.
And, as such, the next to the last bullet, from the
inception of PNGV, practical automotive fuel cell power plants
have been considered to be well beyond the 2004 time limit of
the program.
And the next one, basically we said that we should extend
those targets.
If I go to the next sheet, a couple of recommendations.
Essentially the first bullet says that the PNGV program should
be refined and redefined to better reflect current societal
needs, and the ability of the cooperative program, so forth, to
meet these needs.
The second bullet: Because of the potential for near zero
tailpipe emissions and high-energy efficiency of the fuel cell,
the PNGV should continue the research and development efforts
on fuel cells even though achievement of performance and cost
targets simultaneously will have to be extended substantially
beyond the original expectations.
So what these issues say is that the Peer Review Committee
felt that the PNGV approach worked. We felt that the fuel cell
was one of the most attractive technologies, and that should be
considered on a longer-term basis, and, essentially, that's
what the FreedomCAR program does.
I would like to skip the next slide, if I may, and go to
the next one.
Hydrogen production issues. And this comes to a little of
what Congressman Stearns was asking about a moment ago. Right
now almost all of our hydrogen is produced from natural gas. We
get about a 70 or 75 percent energy efficiency in doing that,
and actually a little lower when we take into account
compressing and transferring the hydrogen to where it's used.
So it takes about 4 pounds of natural gas to produce a pound of
hydrogen, roughly.
When we use renewable energy sources, you have to consider
the question: Do you do better making hydrogen, or do you do
better by using that renewable energy to retire some of the
fossil-burning coal plants which are still operating at 25 or
30 percent efficiency?
The next slide, please.
As Mr. Garman mentioned, there are other ways than steam
reforming hydrocarbons or the electrolysis of water to produce
hydrogen, but none of these have really been shown to be
successful yet. It is also possible to sequester the
CO<INF>2</INF>. That's still an unknown. The electricity can be
produced in a lot of ways, but if we use fossil fuel to make
electricity, and if we use fossil fuel--namely, natural gas--to
make hydrogen, we wind up actually putting more CO<INF>2</INF>
into the air than we are doing right now.
In terms of the magnitude of this--the next slide, please,
the effect of electrolysis. To produce hydrogen for an 80-mile-
per-gallon fuel cell car would take about 600 kilowatt hours
per month of electricity from using electrolysis of water. For
a two-car family, assuming they drive a little less than the
average combined, this would be about 1,000 kilowatt hours per
month, and that's about what the average home actually uses
right now.
So, regardless of where we get this electricity, including
from renewable, we are essentially going to have to duplicate
the entire grid insofar as electrical energy is concerned if we
are going to produce enough hydrogen for all of the cars.
I won't go into the next ones, I'm out of time----
Mr. Greenwood. Dr. Roan, don't worry about the time.
Mr. Roan. Yes, sir.
Mr. Greenwood. Don't worry about the time.
Mr. Roan. Continue?
Mr. Greenwood. Please do.
Mr. Roan. Okay. The next slide on the transportation issues
is basically the fuel for hydrogen transportation.
The next one, please. No, the previous one.
This shows what we can do with basically 1 pound of natural
gas. Right now, if we use this in a conventional car, which we
can and we do, this would take us about 4.3 miles. If we put
this in a 60-mile-per-gallon hybrid, which we can, this would
take us about 9.6 miles. If we put it into a fossil-fuel fuel
cell car, which hasn't really been demonstrated, but we
projected about 70 miles per gallon, this pound of natural gas
would take you about 11 miles.
If we use natural gas to make hydrogen, that same pound of
natural gas now would take us about 2.6 miles in a present car,
about 5.8 in a hybrid, and about 7.5 in a hydrogen fuel cell
car, which is going to be more efficient than the hydrocarbon
fuel cell car.
I don't think that we would have any problem with 80-mile-
per-gallon on that.
The next slide basically shows what we are doing from the
standpoint of carbon dioxide in the atmosphere, And these are
very approximate numbers, because, obviously, they depend on
the assumptions that you make.
But if we use our petroleum fuel directly, on the left side
I have the amount of energy, of petroleum-based energy, that's
required. This is to travel 300 miles. Using a present car
would take about 1.4 million BTUs of petroleum energy. That
produces around 240 pounds of carbon dioxide. If we go to a 60-
mile-per gallon hybrid, that brings that down to about 630,000
and about 107 pounds of carbon dioxide. If we go to a
hydrocarbon fuel cell--and, again, the 70-miles-per-hour--70-
miles-per-gallon would still have to be demonstrated--we are
down to about 540,000 BTUs and 95. It actually, in terms of the
best utilization, probably right now would be a diesel
compression ignition, CIDI, hybrid, which would give probably
about 80 miles per gallon. So this gives us the lowest
consumption of petroleum and the least amount of CO<INF>2</INF>
produced.
If we go to hydrogen produced from steam-reformed natural
gas, the amount of energy now, because we are losing energy in
producing hydrogen, is up to about 2.1 million BTUs; and, if we
use it in a conventional car--which we can--and that produces
about 270 pounds of CO<INF>2</INF>. In a spark ignition hybrid,
that would bring it down to 950,000, and 125; and the hydrogen
fuel cell down to about 710,000 and about 95 pounds of
CO<INF>2</INF>.
And, finally, if we use hydrogen from electrolysis, older
fossil plants--now, this is not from renewable, this is using
our current electricity supply to produce hydrogen--then we
have the worst in terms of the CO<INF>2</INF> and the BTUs.
Even if we use hydrogen fuel cell, it's a lot of energy, and
it's a lot of CO<INF>2</INF>. In other words, using current
electricity is not the way to produce hydrogen.
The bottom line on that--the next slide--as we move toward
this hydrogen economy, we will probably use more fossil fuel
and produce more greenhouse emissions per capita than we do
right now; and this is likely to continue until there is a big
reduction in fossil fuel power plants. We either have to go to
renewable or nuclear. And even after we transition, the total
energy--not fossil energy, but total energy consumption is
probably going to increase unless we change our energy use
patterns, because it takes more energy to make the hydrogen
that we are using for our transportation systems.
And, finally, I support the concept of the FreedomCAR
program. I think this is a long-term thing, and I think we
really need to be working on it. And I think that what the
government can do, especially with the support of the national
labs, that's going to be of great benefit in eventually getting
there.
So the production and distribution of hydrogen, the storage
of hydrogen onboard vehicles. Just, very quickly, right now, if
you took the size of a gasoline tank and used it to store
compressed hydrogen, it would hold about 2 pounds of hydrogen,
roughly, and that would take you less than 100 miles. So we
have to have some way to store the hydrogen onboard the
vehicles.
And, of course, the fuel cells themselves, they have to be
made, the price right, durable, safe, and so forth.
Thank you, sir.
[Material submitted by Vernon P. Roan follows:]
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Additional Comments by Vernon P. Roan, Professor, University of Florida
These comments are presented as an addendum to the brief summary of
relevant issues from the NRC 7th PNGV Peer Review Report that I have
submitted to the Committee. I also refer the Committee to the complete
report for additional information. This addendum is not based on any
type of consensus from the PNGV Peer Review Committee but represents my
own observations and opinions.
Since no specific questions have been presented to me by the
Committee on Energy and Commerce, I will offer opinions which I think
relate to the probable areas of consideration by the Committee, namely:
1. The appropriateness of emphasis on hydrogen and fuel cells for
transportation-related energy visions of the future.
2. The viability of the proposed FreedomCAR program as an approach for
directing government-sponsored research and development in
support of long-range transportation energy goals.
With respect to the first area of consideration, the ultimate
transition from fossil fuels to hydrogen as the primary chemical fuel
is essentially inevitable. Fossil fuels represent a finite resource
which will become increasingly more difficult and expensive to utilize.
Further, it seems likely that other technologies competing for limited
fossil fuel supplies (especially petroleum) such as for textiles,
plastics, medicines, etc., might achieve a higher priority than simply
burning the fuel to produce heat. Hydrogen, on the other hand, can be
produced without consuming fossil fuels through the electrolysis of
water by using non-fossil primary energy to produce the electricity.
The non-fossil primary energy sources include hydro, wind, solar,
geothermal, tidal, and nuclear.
The downside of producing hydrogen through the electrolysis of
water is that more electrical energy goes into producing the hydrogen
than will be available from the hydrogen fuel. This fact emphasizes the
importance of utilizing the hydrogen in the most efficient manner as a
transportation fuel. The most efficient manner currently known is to
use the hydrogen in a fuel cell-powered vehicle. It should be noted,
however, that while electricity is still being produced for the
national power grid using some fossil fuel power plants, it might
conserve more fossil fuel and produce fewer greenhouse gases to put the
renewable energy-produced power into the grid and take older power
plants off-line. Another potentially more efficient alternative could
be to use the renewable-energy-produced power to recharge batteries in
electric vehicles.
An interesting and troubling likely outcome of the transition
period where a significant portion of the electricity to produce
hydrogen might come from fossil-fuel plants and/or where hydrogen is
partially produced from steam-reforming natural gas (as almost all
hydrogen is produced today) is that the consumption of fossil fuel per
unit of fuel energy available for transportation will likely increase.
In other
words, there will probably be a period of time when we actually use
more fossil fuel in our efforts to transition from fossil fuels to
hydrogen in transportation systems. In addition, since hydrogen must be
produced in an energy loss process, the total electrical energy
consumption as we move towards a hydrogen economy is sure to increase
dramatically. For example, an average American home uses around 1000
kWh of electricity per month. If this home has two fuel cell cars
operating on hydrogen, it will take about an additional 1000 kWh of
electricity to produce the hydrogen fuel for the cars. The implication
is that a complete transition to electrolysis-produced hydrogen for
transportation fuel will roughly require doubling the residential
electrical generation capacity.
Thus, the DOE vision of proceeding towards a hydrogen economy with
fuel cells becoming the preferred way to utilize the hydrogen for
transportation certainly seems appropriate but there will be troubling
events along the way.
The second area of consideration involves the path and some of the
related priorities en route to the long-range vision. The path and
priorities are extremely important since, even under the best of
circumstances, there will likely be some very difficult issues. Fossil
fuels, which have been essentially free except for the costs of
extracting and processing them, will be replaced with hydrogen which
must be ``produced.''' Millions of megawatts of new, non-fossil, power
generation plants will be needed to replace older fossil fuel plants
and to provide electrical power to produce the hydrogen. This
transition will take decades and will involve huge amounts of capital
expenditures. During this lengthy transition period, it will become
increasingly important to have an orderly evolution of technologies
which can contribute to more fuel-efficient vehicles. It will also be
important to use the available fossil fuels in the most appropriate
manner. As an example of the appropriate use of fuels, consider natural
gas.
Natural gas is the cleanest burning and has the highest mass
heating value of any fossil fuel currently being consumed. It is the
primary heat source for many electrical power plants including
virtually all now under construction or in the planning stages. It is
also used as a motor fuel in spark ignition, compression ignition
(diesel), and gas turbine engines. In addition, it is the feedstock for
many chemical processes including virtually all of the hydrogen
currently being produced. Each of these uses of natural gas is related
to transportation energy options. Specifically, some of the ways that
natural gas could be utilized for transportation, are:
1. Directly as a motor fuel for conventional cars.
2. Directly as a motor fuel for spark ignition (SI) or compression
ignition (CI) hybrid vehicles.
3. Directly as a fuel for hydrocarbon fuel cell-powered vehicles
(utilizing onboard fuel processors).
4. Directly as a power plant fuel to produce electricity for recharging
electric vehicle batteries.
5. Indirectly as a feedstock to produce transportation hydrogen fuel
through steam reforming.
6. Indirectly as an electricity generation power plant fuel to produce
electricity which would then be used to produce transportation
hydrogen fuel through electrolysis of water.
Adding to the complexity is the fact that the hydrogen produced by
methods 5 or 6 could also be used in many ways for transportation
purposes, including as a fuel for conventional vehicles, hybrid
vehicles, or fuel cell vehicles. Interestingly, for the relatively near
term, probably the most energy-efficient way to utilize the natural gas
for transportation is directly as a fuel in CI hybrid vehicles. The
least energy-efficient option is to use it to produce hydrogen by
electrolysis and then to use the hydrogen in conventional vehicles. The
successful development of enabling hydrocarbon fuel, fuel cell
technologies could provide not only another energy-efficient
alternative but also an alternative with extremely low emissions.
However, once the hydrogen is produced (by any means), the most energy-
efficient way to utilize it will be in hydrogen fuel cells.
Similar options obviously exist also for the most effective ways to
utilize petroleum or any other form of fossil fuel. The options which
are actually feasible will depend on many factors but certainly
including the successes in developing many enabling technologies.
Clearly, of high importance in technology development must be included
the following:
1. Exhaust emission reduction at the source or through after-treatment
for fuel-efficient compression ignition (diesel) engines.
2. The fuel processing and other issues associated with hydrocarbon
fuel cell systems that would have costs, performance, physical
characteristics, durability, etc., compatible with consumer
cars and other transportation systems.
3. Clean and energy-efficient ways of producing hydrogen.
4. A plan for developing a hydrogen infrastructure that would be
compatible with widespread distribution and use of hydrogen-
powered vehicles.
5. Development of vehicle onboard hydrogen storage that will allow safe
and inexpensive onboard storage of sufficient hydrogen to
provide an adequate vehicle range.
6. The resolution of costs, performance, and other issues to make the
hydrogen fuel cell truly a technology compatible with mass-
produced, low cost automotive applications.
As a final note, it should be emphasized that even with a good plan
for achieving large-scale hydrogen production and infrastructure, it
will be exceedingly difficult and expensive to implement. As an
example, an Argonne National Laboratory study (ANL/ESD/TM-140)
concluded that capital costs for production facilities capable of
producing 1.6 millions of barrels of gasoline-equivalent hydrogen fuel
per day, could be $400 billion for production and $175 billion for
distribution. Their study was based on a ``high'' market penetration of
hydrogen-fueled vehicles by the year 2030. Another study by Directed
Technologies, Inc. (DE-ACO2-94CE50389, July 1997) was more optimistic
but was partially based on assumptions of unlimited availability of
very inexpensive natural gas and unlimited availability of off-peak
electricity at 1.5 cents per kWh. There are also the inevitable
problems with siting and licensing of facilities, as well as the
obvious safety concerns of distributing massive quantities of liquid (-
423(F.) or high pressure (3000 to 5000 psi) hydrogen.
There are, of course, many other issues to be considered including
many that should be fostered by the government en route to the long-
term vision of a hydrogen economy and an efficient transportation
utilization of the hydrogen. However, it is felt that the ones
mentioned above are among the more important.
In summary, with respect to the proposed FreedomCAR plan, it
appears that it is reasonably well considered and includes the
necessary elements to guide and support the more critical technology
developments in a fashion appropriate for the government. Since the
duration will involve many years of activities and many potential
pitfalls, progress should be reviewed regularly and programs and plans
changed as deemed appropriate.
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Mr. Greenwood. Thank you, Dr. Roan.
Mr. Miller?
TESTIMONY OF WILLIAM T. MILLER
Mr. Miller. Thank you, Mr. Chairman. I am Bill Miller of
UTC Fuel Cells, a subsidiary of United Technologies
Corporation. I appreciate the opportunity to testify regarding
DOE's FreedomCAR program and the role it plays in our national
energy policy.
UTC Fuel Cells has been developing and producing fuel cells
for more than four decades. With NASA, we have supplied the
fuel cells for every U.S. manned space mission since the
1960's, including Apollo and today's space shuttle orbiter.
Since 1991, we have produced a 200-kilowatt fuel cell for
buildings called the PC25, and we have delivered 250 of these--
is that better? Delivered more than 250 of these to customers
in 19 countries on 5 continents.
Building on this extensive experience, we are now
developing new fuel cell technology, the PEM technology, for
transportation, commercial buildings, and residential.
UTC Fuel Cells is working with DOE and a number of car and
bus manufacturers. These include BMW, Hyundai, Nissan, and
Renault for auto applications, and ThoranAirs Bus for bus
applications.
My written testimony is more detailed, but I would like to
highlight several key points today.
UTC Fuel Cells participated in the PNGV program. As a
leading developer of fuel cells, I can tell you that PNGV was a
success because it served as a catalyst for fuel cell
technology. Let me give you an example.
In our case, this public-private partnership led to the
development of on a PEM fuel cell system that operates at
ambient pressure and, consequently, is 20 percent more fuel-
efficient than other PEM fuel cell technology, which relies on
a compressor.
In addition, we developed the first gasoline-powered fuel
cell system powerful enough to operate an automobile. This
technology would allow us to use the existing gasoline
infrastructure if it takes longer to develop the hydrogen
infrastructure than we were expecting.
Today's FreedomCAR initiative builds on PNGV successes, but
it faces hurdles. On the technical side, we must still reduce
the system's cost, size, and weight while improving its
durability and performance. We also need to address
manufacturing processes and materials issues. Continued
investment in core fuel cell power plant technology from both
the private and public sources is needed to reach these goals,
and the same joint effort is needed in the areas of hydrogen
production, storage, and distribution that are key to
establishing the hydrogen infrastructure that we are talking
about.
PNGV drew on expertise from 19 national labs and 400
organizations in 38 States, and we urge that FreedomCAR
continue the successful approach by incorporating and promoting
significant involvement from fuel cell power plant makers and
the entire supplier base to fuel cells. Every State represented
on this committee has a fuel-cell-related supplier or natural
gas interest that can benefit from fuel cell commercialization.
But let me be clear. Although petroleum-free, emission-free
transportation is a revolutionary concept, like most
technologies, it will require an evolutionary process.
The introduction of stationary fuel cell power plants using
PEM is the key starting point. UTC Fuel Cells plans to
introduce new stationary fuel cells by the end of next year
that will cost $1,500 to $2,000 per kilowatt in volumes of a
few hundred, but they will be competitive in producing
electricity in high-electricity areas like California and New
York. This will be followed by the introduction of fuel cells
for buses, starting with inner-city buses, and demonstrations
in the 2004-2005 timeframe, with commercial availability in
2006 or 2007.
Automotive applications are the most demanding in terms of
cost, weight, and size. Hence, it is understandable to take
longer for fuel cells to successfully compete in this market.
We are targeting $50 per kilowatt for the personal vehicle
application by the end of the decade, as volume gets into the
hundreds of thousands and millions of vehicles. In fact, we
think the introduction will happen by 2010. As we gain
experience and build volume by deploying fuel cells for
stationary markets and then buses and then trucks and fleet
vehicles, these successes can pave the way for the zero
emission personal vehicle.
In summary, UTC Fuel Cells believes the FreedomCAR
initiative is appropriately focused on hydrogen-fuel-cell-
powered vehicles as a key element of a comprehensive long-term
national strategy that will enhance energy security and deliver
environmental benefits, and we look forward to partnering with
DOE to achieve our common goal of an emission-free cycle of
energy.
Thank you for the opportunity to testify, and I would be
happy to answer your questions.
[The prepared statement of William T. Miller follows:]
Prepared Statement of William T. Miller, President, UTC Fuel Cells
Thank you Mr. Chairman. I'm Bill Miller, president of UTC Fuel
Cells (UTCFC). I appreciate the opportunity to testify regarding the
Department of Energy's (DOE) FreedomCAR program and the role it plays
in national energy policy.
UTC Fuel Cells (UTCFC) is a unit of United Technologies
Corporation, which is a $28 billion global manufacturer of Pratt &
Whitney aircraft engines, Carrier air conditioners, Otis elevators and
escalators, Hamilton Sundstrand aerospace systems and Sikorsky
helicopters.
utcfc's fuel cell experience
UTC Fuel Cells has more than four decades of fuel cell experience.
We've developed and produced the fuel cells for every U.S. manned space
mission since the Apollo missions in the 1960s and continuing today
with the Space Shuttle program. These fuel cells produce the
electricity for the orbiter when it is in space and all the drinking
water for the astronauts.
We've also sold more than 250 stationary fuel cell power plants to
customers in 19 countries on five continents. Our installed base of
these 200 kW fuel cell power plants, known as the PC25 <SUP>TM</SUP>,
has accumulated more than five million hours of operating experience.
The PC25 provides powers for schools, hospitals, military
installations, data processing centers and other facilities in diverse
operating conditions and customer configurations.
Building on this extensive experience, we are now developing new
fuel cell technology for transportation, commercial and residential
applications. UTCFC is working with DOE and a number of car and bus
manufacturers to develop fuel cell power plants and auxiliary power
units for vehicles. Our partners include BMW, Hyundai, Nissan and
Renault for auto applications as well as United Parcel Service, Thor
and Irisbus in the heavy-duty vehicle market.
For example, our hydrogen fuel cells now power four Hyundai Santa
Fe Sport Utility Vehicles (SUVs). These cars are the world's first zero
emission SUVs and get the gasoline equivalent of 50 to 60 miles per
gallon. We are a member of the California Fuel Cell Partnership that is
demonstrating fuel cell vehicle technology, including the Santa Fe, in
real world operating conditions.
fuel cells and pngv
Fuel cell R&D was funded under the Partnership for a New Generation
of Vehicles (PNGV) effort during the early years of the program.
Hundreds of technologies were evaluated prior to a 1997 ``down select''
of promising technologies that included: hybrid electric vehicle drive,
direct injection engines, fuel cells and lightweight materials.
From UTCFC's perspective, PNGV was a success. It served as a
catalyst for fuel cell technology, including UTCFC efforts with the
Ford Motor Company that kicked off our entry into Proton Exchange
Membrane (PEM) fuel cells for transportation applications.
We had two dramatic technology breakthroughs as a result of this
cost shared program.
First, in cooperation with DOE, we developed a PEM fuel cell that
operates at ambient or room pressure. Why is this important? This
enables our system to achieve substantially better fuel economy than
other automotive fuel cell systems.
Our system does not need a compressor, which can consume large
amounts of power and decrease overall system efficiency. This ambient
pressure technology enabled us to win ``best in class'' honors in two
key performance tests at the Michelin Bibendum in California last year
where new automotive technologies are evaluated by independent judges.
This breakthrough would not have been possible without cost-shared PNGV
funding.
Our second significant accomplishment under PNGV was the
development of the first gasoline powered fuel cell system powerful
enough to operate an automobile. This technology provides an
alternative to automakers should the hydrogen infrastructure take
longer than expected to develop by allowing us to use the existing
gasoline infrastructure.
UTCFC's distinction is that its power plant can use readily
available, pump grade gasoline. Other systems rely on specialized de-
sulfurized fuel to accomplish this feat. UTCFC's success in this area
is the result of leveraging its own resources, the resources and other
expertise available through our United Technologies Research Center, as
well as funding from the Department of Energy.
freedomcar/fuel cell hurdles
Today's FreedomCAR initiative faces hurdles, not the least of which
is a sustained national commitment and adequate levels of investment by
the private and public sector. Other FreedomCAR challenges include
technical, market, infrastructure and public policy hurdles before fuel
cell vehicles are commercially available and DOE's vision of a
petroleum free, emission free transportation system is a reality.
Fuel cells face a number of technical challenges including reducing
the system's cost, size and weight while improving durability and
performance characteristics. We also need to address manufacturing
processes and materials issues. While substantial progress has been
made on many of these fronts, more work needs to be done.
Cost is a major issue driven by volume as well as a number of
technical factors. New technology, improved manufacturing processes,
materials substitution and other strategies have been used to reduce
fuel cell costs over the past two decades from $600,000 per kilowatt
for the unique needs of the Space Shuttle orbiter application to $4,500
per kilowatt today for UTCFC's current PC25 stationary power plant with
an annual volume of 50 units per year. We expect to be at $1,500-$2,000
per kilowatt by the end of 2003 with stationary volumes of 200 units
per year, driving towards $50 per kilowatt for the automotive market
when volume approaches one million units per year.
Continued investment in fuel cell core power plant technology is
needed to reach these goals. We believe the government has a legitimate
role to play in supporting high-risk fuel cell core technology R&D
efforts on a cost-share basis with industry so the public at large can
enjoy the efficiency, reliability and environmental benefits of fuel
cell technology.
In addition to these technical challenges, the country also faces
significant infrastructure hurdles such as hydrogen production, storage
and distribution. The goal is to ensure the successful convergence of
parallel efforts to meet fuel cell and hydrogen infrastructure
performance goals. A fuel cell vehicle that meets all the performance
targets will have very limited commercial viability without affordable
and widespread access to hydrogen fueling capability, availability of
service technicians to maintain the equipment and development and
adoption of appropriate codes and standards to facilitate customer
acceptance and use. All these issues need to be addressed
simultaneously so there is no ``long pole in the tent'' holding back
commercialization.
Practically speaking, this means hydrogen production, storage and
distribution research and development efforts must be funded in tandem
with research, development and demonstration efforts for the power
plant.
This parallel R&D emphasis on core technology and infrastructure
needs to embrace significant supplier involvement to maximize the
opportunity for success. PNGV drew on expertise from 19 national labs
and 400 organizations from 38 states. We urge that FreedomCAR continue
this successful approach by incorporating and promoting significant
involvement by the fuel cell power plant and supplier base, which we
believe will accelerate the pace of technology deployment as well as
generate innovative approaches.
It is essential that we harness the ingenuity, innovation and speed
with which the supplier base brings technology to the market. For
example, a FreedomCAR focus on fuel cell membrane suppliers will help
bring down fuel cell system costs and based on a common stationary/
transportation technology platform, these breakthroughs can be applied
in the near term to buses, fleet vehicles and stationary applications.
benchmarks for progress
Our nation's visionary goal to put a man on the moon first required
launching primates into space. This was followed by manned orbits of
progressively longer flights with more complex missions before the
ultimate objective of the manned moon landing was accomplished.
Similarly, our long-term objective of powering our economy with a
renewable source of hydrogen is a revolutionary concept that will
require an evolutionary approach.
UTCFC believes the sequence of this evolutionary process will
include first the deployment of stationary power plants by the end of
2003 at a cost of $1,500-$2,000 per kilowatt that will start to be
competitive in areas with high electricity costs such as California and
New York. This will be followed by inner city bus demonstrations in the
2004-2005 timeframe and commercial availability in 2006. These
milestones are on track and we believe will occur spurred by
developments in California.
Transit buses are ideal candidates for the initial deployment of
fuel cell vehicles. Hydrogen storage is not a problem because of space
availability on the roof of buses. And hydrogen fueling stations and
technician training can be made available given the relatively small
number of inner city bus stations and service technicians.
Since the automotive application is the most demanding in terms of
cost, weight, size, durability, ease of maintenance, start up time and
other performance criteria, it is understandable that it will take
longer for fuel cells to successfully compete in this market. But as we
gain experience in deploying fuel cells for stationary, inner city
buses and fleet applications, these successes can pave the way for zero
emission personal vehicles and serve as benchmarks to measure progress
towards the 2010 goals of the FreedomCAR initiative. It will be
important to balance funding requirements so the fuel cell and hydrogen
infrastructure R&D efforts as well as stationary and fleet vehicle
demonstration programs receive appropriate levels of support.
role in energy policy
The FreedomCAR initiative is a key element of a more comprehensive
strategy to address heavy-duty vehicles as well as stationary power
generation. This important effort will need to be coordinated with
other key federal agencies such as the Departments of Transportation
and Defense. It should also be integrated with strategies for these
other fuel cell applications as indicated above. This will maximize the
synergies that exist and leverage public and private investment.
summary
In summary, UTCFC believes DOE's FreedomCAR initiative is
appropriately focused on hydrogen fuel cell powered vehicles as a key
element of a comprehensive, long-term national strategy that will
enhance energy security and deliver environmental benefits. Deployment
of stationary fuel cells and inner city buses powered by fuel cells
represent important milestones that will help us measure progress. R&D
efforts should focus on fuel cell as well as hydrogen production,
storage and distribution with the full involvement of the supplier
community and national laboratories. Capturing and leveraging the
synergies between the various fuel cell applications will maximize
taxpayer benefit and accelerate the pace of deployment.
Thank you for the opportunity to testify. I would be happy to
respond to any questions.
Mr. Greenwood. We thank you, Mr. Miller.
Dr. Paul?
TESTIMONY OF DONALD L. PAUL
Mr. Paul. Chairman and members of the subcommittee.
ChevronTexaco is pleased to have the opportunity to testify
before the subcommittee on the FreedomCAR program and the
future of advanced energy technologies. As ChevronTexaco's
chief technology officer, I am involved in all facets of our
company's energy technology, including fuel cell research and
development, and can share our experiences about both key
market incentives as well as the challenges to the development
of new energy technology. Today, I will focus my testimony on
our work in fuel cell technology applications, challenges to
commercializing the technology, and public policy
recommendations.
By way of background, ChevronTexaco is an integrated global
energy company that produces oil, natural gas, transportation
fuels, and other energy products. We operate in 180 countries,
and employ more than 55,000 people worldwide. ChevronTexaco is
the second largest U.S.-based energy company and fifth largest
in the world. We consider ourselves to be an environmentally
responsible company; and, in addition to supplying global
energy, we are also involved in a whole host of advanced clean
energy and fuel technologies.
We believe that fuel cell technology will continue to
evolve. Stationary fuel cells to generate high-quality power
are commercially available in selected operations today;
however, we believe that mobile source fuel cells have a much
longer timeframe for development given the complexities of the
issues.
We continue to support development of fuel cell technology
and the conversion of hydrocarbon fuels into hydrogen for use
in fuel cells. We are actively working to develop safe methods
for storing and delivering hydrogen in anticipation of future
energy demands. To meet the numerous challenges involved with
this new technology, we are involved in partnerships,
participate in government and private workshops, and privately
fund basic and applied research for hydrogen fuels and
refueling stations.
An example of this type of activity is the California Fuel
Cell Partnership, which was formed to explore pathways to
commercialization of fuel cell vehicles, to demonstrate these
vehicles in everyday driving conditions, and to demonstrate
fueling options and other infrastructure needs. ChevronTexaco
has been an active partner in the California Fuel Cell
partnership since it was formed in 1999.
Challenges facing the development of the technology. First,
the supply of hydrogen. Hydrogen is a fuel; it is not a natural
resource; it must be manufactured from other sources. The two
primary sources of hydrogen are water and hydrocarbons. For the
past 50 years, we have been engaged in the conversion of
hydrocarbons to hydrogen through refinery and gasification
processes. We are leveraging our longstanding core competencies
in fuels, catalysis, proprietary gasification, and process
engineering technology to explore the development of a fuel
processing business for hydrogen.
Reforming gasoline into hydrogen. An avenue that leverages
the existing fuel infrastructure is to produce hydrogen
onboard. We are collaborating to develop systems for the
conversion of gasoline into hydrogen within a car.
ChevronTexaco and General Motors are engaged in a multiyear
research collaboration in support of General Motors'
development of a gasoline-fed fuel cell for vehicles. One key
component of this collaboration is the development of an
economically producible gasoline that can be used in vehicles
with fuel cells and conventional internal combustion engines.
Providing consumers with this practical solution may help
remove fuel availability as a near-term impediment to
commercial fuel cell vehicle systems.
The delivery of hydrogen. One of the other challenges--one
other challenge is how hydrogen would be distributed in a
decentralized manner. We are trying to design a hydrogen
refueling station that is economic and safe. Designing these
stations requires incorporation of a range of new technologies,
including hydrogen extraction, safe site storage technologies,
stationary fuel cells to provide power at the site, and
advanced hydrogen detection to control systems to make the
station safe for consumer use.
Hydrogen storage. Distribution of fuels for commercial and
consumer uses will require an infrastructure that must provide
for hydrogen storage. We are currently engaged in the R&D and
commercialization of a new hydrogen technology. Our focus is to
produce safe, reliable products, using a common technology
capable of meeting a wide range of applications, including
small portable, automotive, and bulk storage applications.
Challenges to commercialization. We have operated in the
refining and marketing business segment for over 100 years. The
financial investment has been enormous. Integrated oil
companies in the United States have generally been reducing
their exposure to this business because of our inability to
achieve a required return on capital. It is unlikely that U.S.
refiners and marketers would create a substantial new
infrastructure investment without believing they could obtain
satisfactory economic returns. The interest--therefore, the
introduction of fuel cell cars must be coordinated with the
introduction of the infrastructure. Hydrogen must be available
when and where it will be needed. We understand that customers
must be confident that hydrogen will be available before they
will buy cars powered by hydrogen.
It is likely that some of the first fleet refueling
stations and even retail stations will make the hydrogen right
at the station. We need codes and standards to be developed
that will let us demonstrate this concept. They do not
currently exist.
The challenge will be to build a network of large-scale
industrial hydrogen generation facilities, pipelines, truck
delivery systems, and smaller onsite generation facilities. The
cost of hydrogen to consumers needs to be competitive in the
marketplace with other energy fuels.
From our perspective it will take time to work through all
of these challenges. Centralized fleets of fuel cell cars and
buses are going to be important to get the infrastructure
started and to prove the value and functionality of the fuel
cell vehicle infrastructure. Specialty applications and niche
markets that use much of the same technology but in different
products are going to be important and will be signposts. We
recommend the following:
One, consider the infrastructure as well as the technology.
This should be a high priority in terms of DOE and other
government R&D funds.
Two, manage public expectations to ensure that the public
understands that this technology has a long time line.
Three, leverage private industry stakeholders. We believe
that it will help make the technology commercial and also focus
government priorities on areas where there is the most need.
Four, monitor market signals. Often we see that there are
factors that change the need for particular technology, either
increasing or decreasing its demand, and these factors need to
be considered when it comes to looking at competing
technologies as well.
Thank you for the opportunity to testify, and I will be
happy to answer any questions.
[The prepared statement of Donald L. Paul follows:]
Prepared Statement of Donald L. Paul, Vice-President and Chief
Technology Officer, ChevronTexaco
Chairman Greenwood, Ranking Member Deutsch, and Members of the
Subcommittee: ChevronTexaco is pleased to have the opportunity to
testify before the Energy and Commerce Oversight and Investigations
Subcommittee on DOE's FreedomCAR Program and the future of advanced
energy technologies.
As ChevronTexaco's Chief Technology Officer, I am involved in all
facets of our company's energy technology, including fuel-cell research
and development, and can share our experiences about both key market
incentives as well as challenges to the development of new energy
technology.
Today I will focus my testimony on our work in fuel-cell technology
applications, challenges to commercializing the technology and public
policy recommendations.
By way of background, ChevronTexaco is an integrated, global energy
company that produces oil, natural gas, transportation fuels and other
energy products. We operate in 180 countries and employ more than
55,000 people worldwide. ChevronTexaco is the second-largest U.S.-based
energy company and the fifth largest in the world, based on market
capitalization. We consider ourselves to be an environmentally
responsible company. In addition to supplying global energy, we are
also involved in a whole host of advanced clean energy and fuel
technologies.
We believe that fuel-cell technology will continue to evolve.
Stationary fuel cells to generate high quality power are commercially
available in selected operations today. ChevronTexaco is particularly
optimistic about stationary fuel-cell applications and believes that
mobile source fuel cells have a much longer time frame for development
given the complexity of issues. For example, it was relatively easy for
us to install Northern California's first commercial fuel-cell power
plant, located at our office park in San Ramon, California. This fuel
cell converts hydrogen from natural gas into electricity, clean water
and usable heat, and provides secure digital-grade power to information
technology systems. We undertook this project to gain experience with
designing and installing stationary fuel-cell systems, and to help us
translate this experience into other types of fuel cell projects.
However, mobile source fuel-cell technology faces substantially more
challenges.
chevrontexaco's research and development initiatives
We continue to support development of fuel-cell technology and the
conversion of hydrocarbon fuels into hydrogen for use in fuel cells. We
are actively working to develop safe methods for storing and delivering
hydrogen in anticipation of future energy demands. To meet the numerous
challenges involved with this new technology, we are involved in
partnerships, participate in government and private workshops, and
privately fund basic and applied research for hydrogen fuels and
refueling stations. These efforts were under way prior to DOE's
announcement regarding the FreedomCAR initiative; however, certainly
this does provide an impetus for the private sector to focus its
attention on the development of this technology. Unlike stationary fuel
cells, this technology will require long-term development, especially
with regard to fuel production and distribution infrastructure.
An example of the type of activity that we are involved in as a
private/public partnership includes:
<bullet> California Fuel Cell Partnership: One of the most well-
recognized initiatives is the California Fuel Cell Partnership,
which was formed to explore pathways to commercialization of
fuel-cell vehicles, to demonstrate these vehicles in everyday
driving conditions, and to demonstrate fueling options and
other infrastructure needs. ChevronTexaco has been an active
participant in the California Fuel Cell Partnership since it
was formed in 1999. This organization is a voluntary
collaboration of 8 automakers, 4 energy companies, a number of
State and Federal government agencies, and technology
providers.
Working with other energy partners, we are providing hydrogen to
operate a project facility that safely delivers high-pressure
hydrogen to demonstration vehicles. Today, the partnership is
operating about a dozen fuel-cell vehicles at its West
Sacramento facility.
Examples of our research and development activities, which reflect
the many challenges facing the development of this technology, include:
<bullet> Supply of Hydrogen: Hydrogen is a fuel--not a natural
resource. It must be manufactured from other sources, so how
the supply system is developed is critical. The two primary
sources of hydrogen are water and hydrocarbons. For the past 50
years, we have been engaged in the conversion of hydrocarbons
to hydrogen through refinery and gasification processes. As you
may be aware, oil refineries are the largest current producers
and users of hydrogen. We are leveraging long-standing core
competencies in fuels, catalysis, proprietary gasification and
process engineering technology to explore the development of a
fuel-processing business. The total environmental consequences
of making hydrogen from any source need to be carefully
evaluated. There needs to be a cost effective technology that
enables fuel-cell systems to operate on readily available
hydrocarbon fuels and to deliver hydrogen fuels at competitive
costs. We have developed relationships with leading fuel-cell
developers, utilities and suppliers in an effort to introduce
competitive fuel-cell systems into the market. We have hydrogen
fuel-processing systems under development that will convert a
hydrocarbon feedstock, such as natural gas, into hydrogen.
<bullet> Reforming Gasoline Into Hydrogen: An avenue that leverages the
existing fuel infrastructure is to produce the hydrogen on-
board. We are collaborating to develop systems for the
conversion of gasoline into hydrogen within a car.
ChevronTexaco and General Motors are engaged in a multi-year
research collaboration in support of General Motor's
development of a gasoline-fed fuel cell for vehicles. GM is
developing gasoline-fueled fuel cells as its interim strategy
until a hydrogen infrastructure is established. This technology
is largely based on fuel refining and related expertise, and is
targeted to improve performance of converting gasoline-like
fuels to hydrogen.
Technology to convert gasoline to hydrogen in on-board processors
has been demonstrated. However, to use a gasoline-like fuel to
produce hydrogen, on-board a vehicle, it will be necessary to
reduce sulfur to very low levels, below that of the cleanest
fuels available today. Development of a method to reduce sulfur
to very low levels is one of the main features of our research
with General Motors. We also are investigating other
modifications to gasoline that will be needed for use in fuel-
cell systems.
One key component of this collaboration is the development of an
economically producible gasoline that can be used in vehicles
with fuel cells and conventional internal combustion engines.
As I will discuss in more detail later, the special
infrastructure requirements, high costs and safety issues
associated with hydrogen delivery are virtually prohibitive, at
least in the near term. It is for this reason that we are
working with GM to develop on-board fuel processors that will
allow customers to use gasoline-like fuels that are familiar,
the least expensive and use existing fueling infrastructure.
Providing consumers with this practical solution may help
remove fuel availability as a near-term impediment to
commercial fuel-cell vehicle systems.
<bullet> Delivery of Hydrogen: One other challenge is how hydrogen
would bedistributed in a decentralized manner. We are trying to
design a hydrogen refueling station that is economic and safe.
Designing these stations requires the incorporation of a range
of new technologies including hydrogen extraction from natural
gas, safe-site storage technologies, stationary fuel cells to
provide power at the site, and advanced hydrogen detection and
control systems to make the station safe for consumer use. This
is a daunting array of simultaneous technical challenges that
we are excited to take on, but recognize that they will require
involvement of many industry technology providers as well as
public and government agencies to make them happen.
<bullet> Hydrogen Storage: Distribution of fuels for commercial and
consumer uses will require an infrastructure that must provide
for hydrogen storage. We are currently engaged in the R&D and
commercialization of new hydrogen storage technology. Our focus
is to produce safe, reliable products using a common technology
capable of meeting a wide range of applications including small
portable, automotive, and bulk storage applications. We are
forming partnerships and associations with companies in various
areas to coordinate our efforts.
challenges to technology commercialization
We have operated in the refining and marketing business segment for
over 100 years. The financial investment has been enormous. The current
level of discretionary capital spending on the refining business
segment by integrated oil companies has been close to zero. Integrated
oil companies have generally been reducing their exposure to this
business because of our inability to achieve a required return on
capital. This has created an environment where refining assets have
been sold for about 20% to 40% of replacement cost. It is estimated
that six to nine refineries may be up for sale in the U.S. within the
next 12 months either because of weak business conditions or Federal
Trade Commission mandates. It is unlikely that U.S. refiners and
marketers would create a substantial new infrastructure investment
without believing that they could obtain a satisfactory economic return
to compensate for this risk.
The introduction of fuel-cell cars must be coordinated with the
introduction of the infrastructure. We know that the infrastructure
must be in place before customers buy these cars. We also know that
this will require significant investment with a minimal return
initially until widespread adoption occurs.
In addition to the financial risks outlined above, we see the
following additional challenges to the commercialization of this new
technology and infrastructure:
Hydrogen must be available when and where it will be needed. We
understand that customers must be confident that hydrogen will be
available before they will buy cars powered by hydrogen. It is a
significant task to develop technology to:
1. produce the hydrogen at a reasonable cost;
2. deliver it over a broad geographic area;
3. store it at the sales point;
4. fuel the cars; and
5. in addition, the technology must be employed in a safe manner to
achieve total consumer confidence.
There are 9 million tons per year of hydrogen produced and used in
the United States. Worldwide production is 40 million tons per year.
Most of this hydrogen is used in refineries, chemical plants, metals
processing and the electronics industry. Hydrogen right now is a
specialty chemical, and it must be transformed into a broader energy
fuel as it begins to be used for transportation.
Storing hydrogen in the car, at the refueling station and
throughout the delivery infrastructure is a sizable, unfulfilled
challenge. The problems are different at each location, and they each
deserve the attention of industry, national labs and the DOE. Much
attention is given to storing hydrogen on board the car, and rightly
so, but similar attention is needed in the other places that hydrogen
needs to be stored. This technology still needs to be developed, tested
and embraced.
It is likely that some of the first fleet refilling stations and
even retail stations will make the hydrogen right at the station from
reforming natural gas. We need codes and standards to be developed that
will let us demonstrate this concept; they do not currently exist.
Eventually the hydrogen market may be big enough that we can make
hydrogen in large centralized plants, similar to refineries today. But
this still needs to be distributed across the country. The challenge
will be to build a network of large-scale industrial hydrogen
generation facilities, pipelines, truck delivery systems and smaller
on-site generation facilities--all expanding as an economic market
develops due to increasing consumer acceptance of fuel-cell vehicles.
Once large centralized plants are built, it will be possible to
capture a significant portion of the carbon dioxide made as a by
product. Capturing, inertly storing or sequestering large volumes of
CO<INF>2</INF> are two distinct challenges yet to be solved.
New codes and standards need to be developed that permit the
development of the infrastructure. Existing building codes and hydrogen
system design standards were not developed with consumer applications
in mind. Today's codes provide large distance ``setbacks'' from other
facilities that limit the locations where hydrogen can be manufactured,
stored and dispensed. This was appropriate for the technology and
hydrogen applications of the 20th century, but they make retrofits of
existing sites with limited area for expansion impractical for future
hydrogen facilities. Codes and standards will need to be updated to
reflect the developments in safer hydrogen technologies arising from
the new storage and control system technologies. In some cases,
building codes will need to strengthened to ensure safe maintenance
facilities. In all cases, revisions of the codes will need to occur
simultaneously with developing hydrogen technologies.
The cost of hydrogen to consumers needs to be competitive in the
market with other energy fuels. We need to be convinced that hydrogen
can compete with other fuels in the market. This looks achievable once
the demand for hydrogen is substantial, but as of yet this has not been
demonstrated. The ability to supply hydrogen to the market while the
demand is very low is difficult.
From our perspective, it will take time to work through all these
challenges. Centralized fleets of fuel-cell cars and buses are going to
be important to get the infrastructure started and to prove the value
and functionality of the fuel-cell vehicle and infrastructure.
Specialty applications and niche markets that use much of the same
technology but in different products are going to be important and will
be a signpost along the path. One opportunity in this area would be for
use of the technology by the military. In addition, applications, such
as airport ground equipment vehicles and fleets of industrial vehicles
with centralized and stationary refueling, need to be successful before
consumers become a significant user of this technology.
public policy recommendations
We believe that there are several areas that are critical to the
development of the technology and the need for a public-private
partnership. We recommend the following:
1. Consider the Infrastructure As Well As The Technology: It is
absolutely critical that DOE work on the infrastructure issues
simultaneously. Although technology can be developed, it will
not be implemented until there is an infrastructure to support
it. Energy companies have a large role to play in the
development. This should be a high priority in terms of DOE and
other government R&D funds.
2. Manage Public Expectations: When new technologies are on the
horizon, there is a lot of fanfare and media attention
surrounding the development of the technology. Unfortunately,
this leads to unrealistic public expectations that such
technology will be readily available within a short time frame.
We believe that it is critical and responsible to ensure that
the public understands that this technology has a long
timeline, and not create unrealistic or false expectations.
3. Leverage Private Industry Stakeholders: DOE has held a number of
meetings bringing together public and private industry
stakeholders. We believe that this will help make the
technology commercial, and also focus government priorities on
areas where there is the most need.
4. Monitor Market Signals: Often we see that factors can change the
need for a particular technology--either increasing or
decreasing demand. Some of these factors may include competing
technologies, availability of resources, public opinion, etc.
For example, we expect that hybrid cars are going to increase
the fuel economy of future cars and impact the market. To
embark on a long-term major government initiative without doing
mid-course reviews would be a mistake. By doing periodic full
reviews, there would be an opportunity to steer or change
policy as needed and implement appropriate mid-course
corrections.
I should note that pending energy legislation, now in a House-
Senate conference, does include several provisions to address issues
related to this technology as well as other advanced energy
technologies.
Thank you for the opportunity to testify and I would be happy to
answer any questions.
Mr. Greenwood. Thank you, Dr. Paul.
Let me start with you, Dr. Roan, and your comparison of the
various vehicles and their efficiencies and the amount of fuel
used, and particularly the amount of CO<INF>2</INF> emitted. My
recollection--I don't know if we can get those slides back up,
but my recollection was that it was a hybrid that took the blue
ribbon; is that correct?
Mr. Roan. In terms of using petroleum fuel today, that's
correct. Now, that's the diesel or compression ignition hybrid.
And that's why I personally believe that continuing the
research--the government-sponsored or supported research on the
exhaust emissions, both at the source, meaning combustion
process and cleanup, is important.
Mr. Greenwood. What are the challenges in getting that
diesel, that diesel engine, widely used in the marketplace?
Mr. Roan. Well, I probably am not the best one to ask,
someone from the industry would be better, but I can give you
my opinion. I think that there really are two.
No. 1 is, of course, the problem in meeting the EPA and the
California emission requirements. That's extremely difficult
for diesels. No. 2, of course, is the image.
Mr. Greenwood. I think you were present when Mr. Dingell
was making inquiries about the sulfur content of fuel. Is it
your understanding that if we were to succeed in getting close
to zero sulfur content, that, in fact, that would eliminate
that concern, and, in fact, move us very quickly toward very
significant fuel efficiency?
Mr. Roan. I don't believe that that eliminates the concern,
but I do believe that it's a great big help. I think that it
helps considerably, and especially in terms of the alternatives
for emission treatment. There still is the issue of
particulates to deal with and the--it's very difficult for the
diesel engine to meet it; however, I do think it's possible,
especially with very low sulfur fuel.
Mr. Greenwood. What about--what's the most positive thing
we can say about the amount of CO<INF>2</INF> that we will be
putting into the atmosphere in the best of all scenarios?
That's the question I would pose to any of you.
Mr. Roan. Right now we would be minimizing the amount of
CO<INF>2</INF> that we put in the atmosphere either with this
compression ignition hybrid vehicle, or with the hydrocarbon
fuel cell hybrid vehicle. I believe that, ultimately, there
would not be much difference in terms of the fuel efficiency,
and the fuel cell would have an advantage with respect to
emissions. The fuel cell would not have the difficulty in
meeting the emission requirements that the diesel does.
So, those two, I think, are our best bet using petroleum.
Mr. Greenwood. Mr. Miller?
Mr. Miller. Well, I would just say you could eliminate
CO<INF>2</INF> entirely if we get to the point where we can
produce electricity through a renewable means, either through
wind or solar or through nuclear. And then you electrolyze
water to produce hydrogen, and then you use the hydrogen in
cars to transport people, you would literally have no
CO<INF>2</INF> emissions in that type, if we get to that point
of where we get power from--if we can find power from renewable
means.
Mr. Greenwood. Dr. Paul.
Mr. Paul. Yes, Mr. Chairman. One way, probably a third
option--all of those, I think, are options. A third option is
if you were able to have an infrastructure that allowed for a
large central production of hydrogen where you could capture
and sequester the CO<INF>2</INF>, you would have effectively
the same situation.
Mr. Greenwood. And how would you do that?
Mr. Paul. How would you capture it?
Mr. Greenwood. How do you sequester the CO<INF>2</INF>?
Mr. Paul. Well, there are challenges there, as you are
probably aware, but there is a considerable amount of research
effort going on in the industry as well as in the DOE around
finding geologic formations where one could inject and
sequester CO<INF>2</INF>, for example, in the subsurface. And
there are, in fact, a number of projects looking specifically
at the options for capture and sequestration of CO<INF>2</INF>.
Mr. Greenwood. A question for each of you gentlemen. We
saw--in the previous panel we saw the graph of petroleum
utilization by this country. It's heading upward. What is a
realistic scenario based on the technology, the research that
we are doing on all of this automotive technology? What is a
realistic scenario in which we see--is there a realistic
scenario in which we see that trend line take a negative
direction?
Mr. Roan. Well, I will give you comments on some of the
things that were discussed along that line. First of all,
nothing is probably going to cause it to decrease for the
immediate future, because the mechanism is already in place for
a continuation of the increase. The thing that's going to cause
it to decrease, of course, is if we consume less petroleum, and
this means that either the consumers are restricted in the
amount of petroleum that they can use, or the vehicles are
restricted in the amount of fuel that they can consume; or,
that there is some kind of a strong incentive for the consumer
to want to use the higher-mileage, lower petroleum-consuming
vehicles.
Mr. Miller. I would say for the next 10 years, the trend
line is going to be difficult to change, but if we do get fuel
cell cars on the road in the next decade, they would be powered
by hydrogen, probably coming from natural gas; and, instead of
importing oil, we have a lot of more resources in terms of
natural gases in North America than--and that could change the
trend line from importing petroleum.
Mr. Greenwood. Dr. Paul.
Mr. Paul. I would agree with both gentlemen here. Basically
the issue to drive down petroleum use is the fundamental energy
demand in the system, the efficiency of the system. Looking at
a broad array of technologies that introduce and improve energy
efficiency, this is certainly one of the programs and one of
the big sources of the use of energy. But I think it's a broad-
based issue of improving energy efficiency and use in the U.S.
to track down overall petroleum and natural gas.
Mr. Greenwood. Looking specifically at the FreedomCAR
program, are there--given the challenges, the visions that you
have outlined in your testimony and in your response to the
questions, do you believe that the existing program as it is
functioning now is on the right track? Do you think or would
you recommend the Congress make significant changes, or even
minor changes in the program to get us where we want to go
sooner?
Mr. Roan. My personal opinion is that I do believe it's on
the right track; however, as you can see from some of the
things I've said, I see enormous pitfalls in getting to the
capability to produce hydrogen and also the infrastructure. And
so I think that it has to be reviewed often and carefully to
see about the progress being made, and to make sure it is going
in the right direction.
Mr. Greenwood. Mr. Miller.
Mr. Miller. In general, we support the FreedomCAR program.
I would say--I would like to add one thing and emphasize one
thing, which is we believe in this evolutionary model. It's
like in the computer industry. If, before computers were
invented, we tried to invent the PC, it never would have
happened. You had mainframes, and then you went to the first
PCs, and now we are today where everyone can afford them.
I think the same thing is going to happen in the fuel cell
industry. That's why we think it's important for the Federal
Government and DOE to support the introduction of stationary
fuel cells, which can afford to pay the most for fuel cell
technology, then buses, and then cars. And we think it will be
that evolution over the next 10 years which gets us--and it
will also keep businesses and suppliers interested, because
they will be getting revenue serving as suppliers to the fuel
cell industry over that period of time as opposed to continuing
to try and fund research in the hopes that 10 or 12 years from
now there will be a payoff.
So we think it will be an evolutionary process, and we
think it's important for the government to focus on the interim
steps as well.
Mr. Greenwood. Mr. Paul?
Mr. Paul. Yes. I would say, in general, we do support the
program. As I discussed in my remarks, it is important to
ensure that the program includes these infrastructure elements.
I would also say that it's important that some of the basic
research that sits underneath the technology development
continue. Research in areas like surface chemistry, material
science, memory and technology, and things like that are
extremely important because they support the broad platform
around fuel cell technologies that will have a broad array of
applications in addition to perhaps the central feature of
transportation.
Mr. Greenwood. How do--what are your views on Congress
increasing the CAFE standards? I think it was Dr. Roan who said
that, in the absence of essentially government efforts or
impositions on fuel utilization, that we were going to continue
an upward trend for the foreseeable future. What do each of you
think about Congress increasing the average fleet efficiency?
Mr. Roan. I--there are so many issues involved there that I
hesitate----
Mr. Greenwood. I don't have anybody here to take the
microphone, so it's okay.
Mr. Roan. I think that it is going to work better if there
is an incentive for the industry to make more fuel-efficient
vehicles, such as hybrids, which they seem to be intending to
do, and for the consumers to buy them. The CAFE standards have
probably served a good purpose, and it's certainly conceivable
to me that it could do the same thing again, that it could
bring fuel consumption down. It seems to be kind of a hard way
to do it--a tough way to do it, I should say, but I think it
could work.
Mr. Greenwood. Mr. Miller, do you have views on that
subject?
Mr. Miller. Well, let me answer it may be in a little
roundabout way. I would just note that the State of California
has put in very strict guidelines for emissions of a certain
percentage of each manufacturer's fleets for cars in the 2007/
2008 timeframe. I believe that's been instrumental in getting
most of the major auto manufacturers to spend in excess of $100
million each annually to go pursue fuel cell vehicles.
California also has legislative requirements on buses for
transit agencies, and the result of that is that many of the
bus transit agencies are starting to purchase small fleets of
fuel cell buses. And so the State of California is taking a
leading role, and consequently industry is responding because
of how large that market is.
Mr. Greenwood. Dr. Paul.
Mr. Paul. Chairman, Texaco has not taken a position on CAFE
standards. We just feel that's not our business.
Mr. Greenwood. Okay.
The Chair recognizes the gentleman from Kentucky for 5
minutes for questioning.
Mr. Fletcher. Thank you, Mr. Chairman.
I had just a brief chance to look over your testimony.
Forgive me for being a bit late and having to run to vote. But,
Mr. Miller, you mentioned in the testimony that, practically
speaking, how does--your production and storage distribution
R&D must be funded in tandem with R&D in efforts for a power
plant. Do you believe that the FreedomCAR sufficiently pursues
this course now? And what are your thoughts on that?
Mr. Miller. I think the FreedomCAR program, DOE is
absolutely focused and is funding research efforts in both
hydrogen storage and hydrogen production. And so, you know, I
don't have any substantial disagreement with the program as it
stands now.
Mr. Fletcher. Let me ask you a question in general. And I
know this is all fairly new to me, other than we used to talk
about these things years ago when I was in engineering, but
what would you say, before you start looking at these things
being marketable, if we strictly did it on a market basis. What
would the price of gasoline have to get at the pumps before you
would think that this would be competitive and that, from a
consumer standpoint, it would be something they choose based on
that, without government being much more involved?
Mr. Greenwood. Mr. Miller?
Mr. Miller. Yes.
Mr. Greenwood. And I will be glad to hear from the others,
too, committee members as well.
Mr. Miller. That's a good question. I don't have--I might
go back to our people and ask them that question. I don't have
a specific dollar number for the price of gasoline where it
would really encourage--it would really depend on the cost of
hydrogen production.
Mr. Paul. Yes. We--this is a--the price that one could
model in a scenario of the future is a very complex issue,
involves the cost of the infrastructure and the distribution
system, the state of--the number of cars and a lot of other
things. I don't think there has been a--there is a number that
one could put forward at this time. But I will say that a lot
of people are looking at this as a strategic issue, but I
couldn't give you a good number at this point.
Mr. Greenwood. Okay. Let me go back, I guess.
Mr. Fletcher. You mention in your testimony--and this may
have been asked since I was not here all the time, Mr.
Chairman--but in any case, other interim strategies for using
fuels such as natural gas to achieve fuel efficiency gains, has
this been given sufficient consideration or does it conflict
with the goals outlined in FreedomCAR and the hydrogen vision?
Mr. Roan. The issue of natural gas, I don't believe, is
treated specifically in the FreedomCAR program. The issue of
hydrogen production is. I mentioned the natural gas because I
have felt for a long time that we could have a major problem
there. If we provide hydrogen through the conversion of natural
gas and steam, which is what we're doing now, and if we use
additional natural gas to produce the additional electricity
that we would need to produce hydrogen, then I believe we would
be simply importing natural gas, liquefied natural gas, in
much, much larger quantities than we could get it. And we would
with petroleum. So I see the efficient use of natural gas as a
very important part of our energy strategy personally.
Mr. Fletcher. Well, in addition, do you think the
FreedomCAR program, at least as it's currently outlined, do you
believe it's sufficient to really address the various
challenges that your testimony pointed to?
Mr. Roan. I do because of the fact that they included in
the FreedomCAR programs continued research on the exhaust
treatment for the diesel engine, and I think that the diesel
hybrid may prove to be one of our most efficient transportation
systems. They also include additional research, insofar as
hydrogen carbon-fueled fuel cell vehicles is concerned, and I
think that that's a very clean alternative and a very fuel-
efficient alternative to transportation. Both of those would
give us a big increase over the conventional vehicle. So--and
DOE is proposing to do this in addition to the hydrogen fuel
cell and the storage and the production and infrastructure
issues.
So I think, yes, I do agree that they are on the right
track.
Mr. Fletcher. Let me ask just--and it'll be a final
question, a kind of follow-up. If you could look in a crystal
ball, and I know that is difficult to do, but if you're looking
at hydrogen and some of the other alternative fuel systems,
transportation systems, where do you see down the road that
these are going to really become significant? I know we have
some, certainly hybrid cars now, but when you're looking at
hydrogen, when do you see, if you looked into a crystal ball,
that that may be something that we grow accustomed to on a
daily basis?
Mr. Roan. That is pure speculation. I mean, it's really
very hard to tell, but I would see at least two decades, maybe
three decades, before we would have much hope of getting to
that point.
Mr. Miller. I would answer it just by once again focusing
on this issue of an evolutionary change in the industry. I
believe you're going to see many, many fuel cell buses in the
second half of this decade, and it could be that by 2010 almost
all--most buses are fuel cell buses, because fuel cells are
extremely efficient, and they're extremely efficient at low
power or at part power, which is what inner-city driving cycles
are all about.
Cars, it's certainly going to be substantially beyond that,
sometime in the following decade.
Mr. Paul. That is very consistent with our perspective. I
would like to reiterate the support for the evolutionary view
with fuel cell technology extending across stationary power,
fleets, special purpose applications, building that out
extensively over the next decade, and--but I think for a large
distribution of fuel cell vehicles as consumer items, I think
you have to think multidecade timeframes.
Mr. Greenwood. The gentleman has no--Mr. Miller, did you
want to comment?
Mr. Miller. No, that's fine.
Mr. Greenwood. The time of the gentleman from Kentucky has
expired. The Chair recognizes the ranking member, Mr. Deutsch.
Mr. Deutsch. Thank you. Dr. Paul, the EPA has informed us
that it's feasible to reduce sulfur content of diesel fuel to
less than 15 parts per million with existing technology. Given
what we know now about the benefits of low-sulfur diesel fuel,
why is it the petroleum industry in the United States has not
yet reduced the sulfur content in diesel?
Mr. Paul. Well, I would like to say with respect to--
respectfully, with respect to our activities, we're actually
converting our major refinery in Pascagoula, Mississippi to
produce a low-sulfur diesel actually well ahead of the date. So
I think that there are members of the industry that are
beginning to make these changes. So my response would be that
we're making the changes. I believe other members of the
industry are doing so as well.
Mr. Deutsch. You're only converting one refinery. Is that
it?
Mr. Paul. We're converting the Mississippi refinery at this
point in time. We already make clean air gasoline in
California.
Mr. Deutsch. Uh-huh. All right. Dr. Paul, you testified
that U.S. refiners and marketers would not be willing to make a
substantial infrastructure investment without a satisfactory
economic return. If the U.S. auto makers are willing to widely
produce vehicles powered by low-sulfur diesel, would you be
willing to make the fuels to support the significant
investment?
Mr. Paul. We will always make fuels that meet the market,
but when--at the same time, one has to decide on capital that
it takes to build the infrastructure to meet the market. So
those two things I believe go in concert. But we will always
strive to deliver fuels that customers demand in the market.
But the infrastructure issues with fuel production and
distribution and sales are very challenging, and historically
have not delivered in satisfactory terms.
Mr. Deutsch. Interacting with the auto makers, I mean, the
auto makers build the infrastructure, again this chicken-and-
egg-type thing. At what point do you start building the
infrastructure?
Mr. Paul. For new fuels?
Mr. Deutsch. Correct.
Mr. Paul. We of course change fuels--make adjustments to
refineries to meet environmental requirements, as I mentioned
before with the low-sulfur diesel, and as we have for many
years in clean air gasoline in California. We make
infrastructure investments when we believe that the timing of
the investments and the emergence of the markets will support
such investments.
Mr. Deutsch. I want to go back to a question I asked the
panel, and some of you have touched on it, but just to give a
time horizon. If each of you can respond, how long will it take
to develop a fuel-cell-powered vehicle for mass production in
the United States? Dr. Roan.
Mr. Roan. The big issue in developing the vehicle is the
cost, as already was pointed out by Mr. Garman. The progress
has been extremely encouraging. In about a 10-year period,
we've had about a factor of 10 decrease in the predicted price,
as well as the size. I think that the progress is going to
continue. I think that the industry is going to be continuing,
as well as the work done in the national labs and supported by
the government.
We have quite a ways to go. So I think that probably before
we're looking at mass-produced vehicles that would be
competitively priced so that people would actually buy them,
probably 10 years.
Mr. Deutsch. Mr. Miller.
Mr. Miller. 2010. I think there are auto manufacturers
today with plans. Whether they eventuate or not is another
thing, but they have plans, 2010.
Mr. Deutsch. Dr. Paul.
Mr. Paul. Yes, I would agree.
Mr. Deutsch. 2010?
Mr. Paul. Yeah.
Mr. Deutsch. Whoever feels comfortable answering this. But
wouldn't widespread use of hydrogen-powered vehicles almost
double the demand for electricity in the United States?
Mr. Roan. I'm sorry. I didn't hear the last----
Mr. Deutsch. Would the widespread use of hydrogen-powered
vehicles double the demand for electricity in the United
States?
Mr. Roan. Not right now, because----
Mr. Deutsch. But if it were to occur.
Mr. Roan. If we're using renewable energy source--or using
electricity, electrolysis of water to produce the hydrogen to
convert our personal vehicle fleet would roughly double the
amount of electricity we're using for our residential
applications right now.
Mr. Deutsch. Do either one of you want to respond? Is that
the conventional wisdom in terms of the industry at this point?
Mr. Miller. I would say I think there's a debate as to
whether you'll produce hydrogen through electrolysis or through
reformation of a hydrocarbon, and if it happens through the
reformation of a hydrocarbon, in other words, breaking those
hydrogen and carbon bonds, then you wouldn't increase
electricity at all, I don't think.
Mr. Deutsch. Then you're still using the same original
basis, then, in terms of--you know, where you're going to--all
right. Thank you.
Mr. Greenwood. The Chair thanks the gentleman and
recognizes the gentleman, Mr. Stearns, for 5 minutes for
inquiry.
Mr. Stearns. Thank you, Chairman. Again, I welcome Dr. Roan
from the University of Florida. Dr. Roan, I at my home where I
am here in Virginia, I heat the apartment with gas, and down in
Florida I use gas to heat my home. And when you transition to
this FreedomCAR and the use of hydrogen, don't you--won't we
use a lot of gas in this country to do that?
Mr. Roan. Yes, sir. If we continue making hydrogen the way
we do now, which is primarily through the steam reformation of
natural gas, we would dramatically increase the amount of
natural gas that we would use if we are talking about large
numbers of vehicles and the supporting amount of fuel to power
those vehicles. It would be a great deal of gas.
Mr. Stearns. I think what I'm trying to get at, are we
actually going to exhaust in doing--in doing this, that we
might exhaust our domestic supply of natural gas, because a lot
of homes, particularly in the Northeast, are using gas. So this
goes back to what I tried to touch on earlier with Mr. Garman,
and also Mr. Wells when I asked him relative to the use of
petroleum products, to get the hydrogen developed, the
production of hydrogen, we're going to use a lot of petroleum.
So my question to you is, would you say that we're going to
actually exhaust or perhaps--because we don't have the same
kind of gas supply, and we're using more and more gas. So is it
possible we're going to exhaust our gas supply in-country to do
this?
Mr. Roan. I don't consider myself an expert in that area,
but based on the numbers I have seen, I believe we put in
something like 22,000 new gas wells last year and roughly broke
even, and that we're projecting that our imported liquefied
natural gas is going to increase, and that is even without
using natural gas to make large quantities of hydrogen. So I
would have to say that, again, based on what I've read, the
reports and so forth, it seems to me as though we could get
into a very serious problem with the availability of natural
gas.
Mr. Stearns. I'm surprised Mr. Garman didn't sort of agree
with what I told him about petroleum. I didn't ask about gas.
The idea of the new exploration and production in this
country of gas is not going very well, is it? I mean, are there
incentives in place that--when we talk about ANWR for gasoline
products--but there doesn't seem to be the new exploration, new
production of gas. So we have a problem if we continue this
FreedomCAR as a long-term, long-range objective, and at the
same time we don't seem to have the incentives to get more gas
production.
Mr. Roan. Right now gas is still quite cheap even compared
to petroleum. As I remember, the number is on the order of
about $4 per million Btu for natural gas as opposed to about 6
for petroleum. And I think, if that's what you were asking, I
don't think there's a strong incentive there in terms of----
Mr. Stearns. Let me ask Dr. Paul or Mr. Miller what your
feeling is about the thrust of my----
Mr. Paul. I guess in my remarks, the supply of hydrogen is
the issue and----
Mr. Stearns. What did you just say?
Mr. Paul. The supply of hydrogen, how you make the
hydrogen, and certainly today reforming natural gas is the most
common way in which to make hydrogen for commercial use in
either fuel cells or for industrial processes. One of our major
research efforts, and I believe anyone that is involved in the
hydrogen supply business, is how to reform other things in
which there may be much--may be much more plentiful.
One that Dr. Garman mentioned that we've been actively
involved in the technology--in fact, we have over 100 plant
licenses around the world--is to basically gasify coal refinery
bottoms, residuals, very low--in effect low-grade carbons, out
of which you do in fact produce hydrogen as part of the stream.
So it is possible to make a broader array of sources through
technology, turn them into hydrogen; rather than right now the
most attractive one, which is to reform gas.
Mr. Stearns. So, Dr. Paul, you would say we would not be in
danger of exhausting our supplies of natural gas?
Mr. Paul. I think that the conversion of natural gas to
hydrogen is one of the many demands for natural gas but, you
know, burning it in power plants for electricity is certainly a
much, much larger market.
Mr. Stearns. So yes and no. Do you agree with Dr. Roan that
we would possibly exhaust our natural gas supplies at the
present rate we're going if we had to develop the hydrogen
production?
Mr. Paul. In terms of would our use of natural gas--U.S.
supplies, of course----
Mr. Stearns. Yes.
Mr. Paul. [continuing] as opposed to the global supply of
natural gas----
Mr. Stearns. We would become more dependent on somebody
else?
Mr. Paul. Would this demand rise? My guess is that gas
demand will rise.
Mr. Stearns. Okay. And, Mr. Miller, do you----
Mr. Miller. I'm not an expert in that area.
Mr. Stearns. Dr. Roan, the last question is do you believe
the National Research Council can continue to play a role in
reviewing and advising on the progress of this research? As I
understand from staff, these folks, the National Research
Council, are not quite involved. And I guess the question is,
should they continue to play a role; and, perhaps, why aren't
they playing a bigger role?
Mr. Roan. To my knowledge, they are not involved right now,
and my speculation would be that it's too early to even--to set
up the mechanism to do this. But in terms of the first
question, I believe that this involvement played a very
positive role in the PNGV program. I think it was extremely
helpful. And I think that the same thing would be true, insofar
as the FreedomCAR program is concerned. I do think that the
National Research Council could play a very important, positive
role there.
Mr. Stearns. Thank you, Mr. Chairman.
Mr. Greenwood. Thank you, Mr. Stearns. The Chair thanks our
witnesses for your testimony this afternoon. You are excused,
and this hearing is adjourned.
[Whereupon, at 12 noon, the subcommittee was adjourned.]
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