THE HYDROGEN ECONOMY: POWER TO THE PEOPLE

Posted on May 19, 2003 by Dave Pollard

Finally I understand how the energy system of the future, powered by hydrogen, will work. It took three readings of Jeremy Rifkin’s Hydrogen Economy and some home-made charts to figure it out. To my more scientifically savvy colleagues, I get it now. For others, here’s a primer to get you up to speed.

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This chart shows where we are today. Boxes represent forms of stored energy, and arrows conversions of energy. The red boxes and arrows represent sources and processes (combustion, refining, fusion, dams) that are environmentally harmful; the rest are benign. The current state is a centralized distribution system: We are all tied to ‘the grid’. Even so-called ‘hybrid’ vehicles rely on a gasoline-powered process called reforming to produce the hydrogen that powers the fuel cells, which convert energy back to electricity, supplementing that produced by internal combustion and hence improving gas mileage. All in all it’s not a pretty picture.

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By contrast, this second chart shows where we need to be in twenty years. The first, and obvious, difference is the sources of energy: solar, wind, steam and (conditionally) biomass will produce much of the energy needed in the future, replacing environmentally harmful sources. Secondly, the entire process by which our cars are powered will be different. We will buy compressed hydrogen the way we now buy gasoline, and the car we put it in will have no engine, no pedals, clutch or gearshift, make no noise and produce no harmful exhaust. Third, and probably most contentious, the centralized distribution system or ‘grid’ we now use will be replaced by a decentralized system. The compressed hydrogen will be actually produced at the local service station, not merely trucked and stored there. And the unused electricity in our car’s fuel cells will supply much of the electrical need for our homes, and any excess will be available to be sold back to the local electrical utility. So where today central utilities and refineries generate almost all of the energy we consume, in the future most of the energy will be generated by the fuel cells in our cars and by the hydrogen production plants at the local service station.

At first blush, this seems too good to be true .

There are two significant challenges. The first is cost. Fossil-fuel energy costs are about 1.5 cents/kwh, whereas the costs of other sources are two to ten times higher. But even when other sources become cheaper with technological advances, and fossil fuels get more expensive with scarcity, the real cost is the needed investment in new infrastructure. which Rifkin estimates at $100 billion (about the cost of a small pre-emptive war). Although these costs do get recouped quickly as they are amortized against the cost per kwh of clean energy, the only parties currently capable of financing such an amount are governments (which in today’s privatization climate are disinclined to invest in more than research towards a hydrogen economy) and today’s energy companies. If today’s energy companies foot the bill, they will probably be disinclined to obsolesce their existing hydrocarbon, hydroelectric and nuclear facilities sooner than absolutely necessary. In fact, today’s energy companies hope to generate most of the next generation’s compressed hydrogen by burning fossil fuels in existing plants, which undermines the economics of developing new clean energy sources and the environmental benefits of doing so. And rather than the decentralized model shown above, these companies may well want to continue to control production and supply centrally, rather than accommodating co-generation from car-owners’ fuel cells and devolving control to a locally-owned and managed electricity “commons”. So there are both political and economic challenges to making the hydrogen economy a reality.

Of course, the return on investment of hydrogen may prove attractive to new entrants, companies with sizeable cash resources who have nothing tied up in, and hence no compunction not to obsolesce, ‘old’ energy technology and infrastructure. Mr. Buffett and Mr. Gates, are you listening? The auto companies are also interested in investing in hydrogen, if they are not tapped out by the cost of developing hydrogen vehicles.

The economics of co-generation, regeneration and devolution are so compelling that the future state is probably inevitable. The excess energy generation capacity of hydrogen vehicles is so great that if all cars were converted to hydrogen, four times the current capacity of hydrocarbon burning, nuclear and hydroelectric plants combined would become available. Local generation of clean energy would be an enormous economic boon to communities and countries that are today energy-poor – it could make them immediately energy self-sufficient. And no new technological breakthroughs are needed to make this a reality.

And just imagine a world with no traffic pollution and no traffic noise. So whether it’s fifteen years or fifty, the hydrogen economy is coming. In the meantime, you’ll have to settle for a hybrid, and you can get information on how to buy one of them here .

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12 Responses to THE HYDROGEN ECONOMY: POWER TO THE PEOPLE

Martin Wisse says:

May 19, 2003 at 01:53

I gotta see it before I believe. Doubtful we can fulfill all our energy needs just with renewable resources.
Rob Paterson says:

May 19, 2003 at 05:38

Hi DaveYou consistently deliver very thoughtful posts. Thanks.Is not one of the great trends of our time decentralization . Just as the railway/steam and elecftricity, paradoxiaclly centralized how and where we lived and provided the central metaphor that drives all things – this system has reached its design limits
Rayne says:

May 19, 2003 at 06:52

Ah, remember our exchange about a certain chemical company for whom hydrogen was a waste by-product? That’s the ticket — find more places where hydrogen is an emission, a negative, and capture it for use in the new energy supply chain. Any company that makes plastics from petroleum is a candidate for hydrogen sales.Would be better yet if there was a way to harness hydrogen as a waste by-product from green products — I find myself wondering if it’s produced when corn is turned into plastic? (guess which company(ies) do that?)
rich pure&simple says:

May 19, 2003 at 16:42

You left out the hydrogen burning internal combustion engine for trucks etc that need to carry heavy loads for example.
Dave Pollard says:

May 19, 2003 at 17:46

Martin: I’m skeptical too, but you have to believe in something. Not much else to be enthusiastic about these days…Rob: Thanks. What worries me about Bush is he’s playing into the forces that are opposed to decentralization, and giving them more political clout, legal protection (e.g. IP law), and money (the tax cuts mostly benefit them). Decentralization is inevitable, but centralist obstructionists could make it much more difficult. Rayne: I was thinking about this as well. Not sure than any process produces ‘pure’ hydrogen, but I’m not a chemist. I’ve been reading about biomass, and it’s a double-edged sword as an electricity source. How about photosynthesis — what does it do, if anything, with hydrogen? Rich: You’re right, the chart oversimplifies in several areas. When H2 is combusted, is it emission-free?
Doug Alder says:

May 20, 2003 at 20:03

Dave – one new development that I can see throwing a wrench into the change to a hydrogen economy is this http://www.discover.com/may_03/gthere.html?article=featoil.html This technology of turning anything that is carbon based into Texas Sweet Light Crude, at a cost equal to ornlower than current oil prices, has the very real potential to keep us in a petroleum based economy for the forseeable future. Additionally it has a distict advantage in thatprocessing plants can, and will, be set up wherever there is sufficient waste for processing, thereby lowering further the cost of production by lowering the amount of transaportation required. As a by product of this technology there is also a very real potential to break the oil cartels backs as any corporation or community with the requisite funds can buy one of htese processors.I wish it were otherwise as I would love to see us go to a hydrogen based economy but I can’t see it happening anytime in the forseeable future – particularly in light of this invention. – I think it is critical to note that warren Buffet and Berkshire Investments are investing heavily in this technology and the first plant is about to come online. Which means it’s not pie in the sky.
Dave Pollard says:

May 21, 2003 at 11:45

Doug: I’m ambivalent about waste-generated fuel, just as I am about biomass energy. There are clean and dirty ways to do both, and if they use clean burning technology it’s at least a lot better than what we’re doing now. As people who are opting to pay a bit extra for wind-produced energy are showing, there is a small premium that people will pay to feel better about what they buy. We just need to get hydrogen into that range. I think the real battle will be over local community versus private control of the hydrogen ‘stores’.
Doug Alder says:

May 22, 2003 at 00:15

Dave – without a massive investment infratructure you’re not going to get those hydrogen costs down. The technology I pointed out is able to produce texas light crude today at $15US/barrel and the price will drop. That’s already well withing the normal fluctuations of world oil prices. Combine that with the ability for non-traditional companies and/or communities to control the process locally and you have a situation where there is no financial incentive for anyone to pour capital into the hydrogen infrastructure. If the US had signed onto Kyoto then perhaps as it would then have to accont for CO2 emmissions and a shift to a hydrogen economy would hgave greatly assisted that, but they didn’t and won’t so that’s a dead issue. I really think that if this bio mass processing technology lives up to its promise, and I think it will, then hydrogen is doomed. I don’t think there are enough people prepared to pay extra in order to build the massive continental infrastructure needed to produce, store, transport and retail hydrogen fuels.
Dave Pollard says:

May 22, 2003 at 17:55

You don’t think the ROI is good enough to get a Gates or a Buffett to ante up the investment? With current interest rates so low, it wouldn’t take that much equity to leverage into the $100 billion needed to cover the country with hydrogen-producing service stations. Should then be just a case of synchronizing with the car companies production schedules. It’s been done with unleaded and then propane. And the car companies know there’s a market for it. So I remain cautiously optimistic.
Doug Alder says:

May 22, 2003 at 19:16

Well consider Berkshire is already heavily invested in this competing waste biomass processing technology. I think the ROI is too far out – we’re so heavily invested in petroleum that even if you could get the auto companies onside the cost to the consumer is going to be too high to dump their petroleum based vehicles and move to hydrogen in any great numbers with any great speed. The churn rate would likely be rather low as prices for used petroleum vehicles would drop and the cost for new hydrogen vehicles would be higher than today’s new petroleum vehicles. The price spread alone would ensure most people sticking with petroleum vewhicles as long as they can.That would draw out the ROI far beyond acceptable lengths I think. Investors could find better ROI elsewhere and in the case of Buffet (Berkshire) shareholders would skin him alive if he invested in something that didn’t pay an acceptable ROI. Gates is another matter but he’s looking to use his money on disease, malnutrition and hunger, and to a lesser extent education. So it would likely be a hard sell to him – he sees a greater immediate need in the conditions of 3rd world children. (interesting interview with him on NOW a couple of weeks ago – hope you caught it).The only way I think you can make this work is for the government to step in funfd the whole damn thing and mandate the auto companies to cease production of petroleum based cars in year X.
Chris Gupta says:

May 25, 2003 at 16:12

Dave the following item I sent to my list may be of interest you.———————————————I have always wondered why they were pushing fuel cell technology.Surely, the Corporate Monopolies were not going give control of energyback to us the right full owners? Well it all makes sense once you readthe following article.Chris Gupta———————————————————————————————“President Bush surprised many during his 2003 State of the Unionaddress when he said he would vigorously support hydrogen productiontechnology and fuel cell carsan advanced technology that could lead toreduced greenhouse gas emissions and a reduction in oil imports and use.What he failed to mention was that the Bush-Cheney energy plan calls forproducing that hydrogen by building new nuclear power reactors……..There are plenty of other reasons not to choose nuclear energy forH2 production: costs, energy production structure and the untenableproblem of nuclear waste. Therefore, this push for an H2 fuel economy isreally just a major effort to redefine and fund a new generation ofnuclear energy as clean and necessary. The industry hope is to maketarnished nuclear power more palatable to the public, much like theatoms for peace campaign of the 1950s.Bad technology, wrong reasons, limiting optionsLinking nuclear power to H2 production would only ensure that industrychooses H2 technology compatible with industry’s obsolete nuclearreactors. It would surely NOT guarantee us the best available H2generating technology, or the cheapest. The H2 process compatible withnuclear reactors is a difficult technology that is much further fromcommercialization than many other hydrogen production options,explainsJoan Ogden, a researcher at Princeton . What is best for thepreservation of the economically bankrupt nuclear power industry is notwhat is best forsociety or the economy. The growth rate for reactors isprojected to double or triple if they are needed for H2 production-anobvious incentive, for some, to do the wrong thing.Decentralization vs. Corporate MonopoliesUsing the nuclear option for H2 generation would keep power productionin the hands of a few major corporations rather than decentralizing itfor real energy and national security. First, only major companieswould be willing or able to afford the very shaky investment in nuclearpower. Additionally, certain technical realities would makedecentralizing this industry impossible…”Extracted from:http://www.nirs.org/factsheets/Hydrogenproductionbynuclearpower.htm
Edward Ezzell says:

April 23, 2005 at 02:48

Perpetual motion machines do not exist, sorry.You write: “So where today central utilities and refineries generate almost all of the energy we consume, in the future most of the energy will be generated by the fuel cells in our cars and by the hydrogen production plants at the local service station.”A car, that has a limited range to begin with, makes a very unlikely power source. Fill it up at the station, drive home, plug it into your house to provide electricity and sell the excess to the grid, route it to the filling station where it will electrolyze water to create hydrogen, around and around.Of course after powering your house with your car and selling the excess to the grid, don’t be surprised when your car is out of gas.