1. Introduction

Background

This report responds to a request from Senator Byron L. Dorgan for an analysis of the impacts on U.S. energy import dependence and emission reductions that could result from the commercialization of advanced hydrogen and fuel cell technologies in the transportation and distributed generation markets. As described in Senator Dorgan’s request, substantial industry and Federal investments in research, development, and demonstration (RD&D) to enable a hydrogen economy have been, and continue to be, made since the completion of a 2004 National Academy of Sciences study.⁹ The requested service report includes a group of detailed scenarios that highlight key issues affecting U.S. energy import dependence and CO2 emissions. A copy of the service report request letter is provided in Appendix A.

The time horizon and the modeling framework employed to produce quantitative results for this report are beyond the scope of the National Energy Modeling System (NEMS). Industry and government researchers generally (but not universally) concur that significant market penetration of fuel cells and FCVs may begin by 2020 but would not achieve significant impacts until after 2030. EIA agrees with that conclusion; consequently, hydrogen is not modeled within NEMS, which currently has a time horizon through 2030.¹⁰ Instead, EIA used a separate model, VISION,¹¹ for this analysis. The VISION model, described in Chapter 3, allows for a focus on issues directly associated with the hydrogen economy through 2050.

EIA’s long-term projections typically are based on consideration of energy data and recent market trends; however, the availability and quality of hydrogen data are considerably more uncertain than those for other primary fuels or energy carriers. The Census Bureau’s Industrial Gases Survey was discontinued in 2005,¹² and EIA currently surveys only a portion of the overall U.S. hydrogen capacity at oil refineries. Also, much of the published information on the hydrogen sector is incomplete, inconsistent, and outdated. A variety of reported measuring units (e.g., tons versus tonnes, standard cubic feet versus kilograms) and non-standard terminology further confound any analysis. Estimates of U.S. hydrogen capacity, even when published by the same organizations, have varied widely as a result of unit conversion errors. In compiling this report, EIA researched a wide variety of source materials, resolved the inconsistencies where possible, and provided its best estimate in those cases where definitive data were not available. Standard metric units are used to report the data and analysis results.

Report Organization

Chapter 2 of this report systematically reviews the components of existing industrial hydrogen production, capacity, and use, as well as those elements associated with the contemplated future hydrogen economy. The review proceeds from sources of supply and production technologies through distribution and storage issues, and then to dispensing and end uses. End-use issues are related to HICEs and FCVs as well as stationary applications of hydrogen fuel cells.

Chapter 3 provides quantitative estimates of energy and CO2 emission impacts of FCVs, based on different market penetration scenarios, hydrogen production technologies (including the manner in which they are deployed from distributed to centralized production), and hydrogen vehicle efficiency (fuel economy). The results are compared with results for an alternative technology, PHEVs. The analysis provides some observations and insights into the potential impacts of the large-scale introduction of hydrogen vehicles.

Chapter 4 addresses the challenges of making an expanded hydrogen economy a reality. Although EIA cannot project whether or when one or more of the technical breakthroughs required will be achieved, an appreciation of the magnitude of the challenges provides insight into the potential long-term path toward a hydrogen economy.

Notes