The False Promise of Hydrogen
What the president's driving at.


In his State of the Union address, George W. Bush proposed that the federal government spend $1.2 billion on hydrogen fuel-cell research. “With a new national commitment, our scientists and engineers will overcome obstacles to taking these cars from laboratory to showroom, so that the first car driven by a child born today could be powered by hydrogen, and pollution-free,” Bush said. “Join me in this important innovation, to make our air significantly cleaner and our country much less dependent on foreign sources of oil.”

Bush obviously feels significant pressure to appear that he’s doing something about the environment. At some point it might dawn on him that there’s nothing he can say or do that will satisfy the radical environmental lobby and their media lapdogs. Bringing up such issues in high-profile speeches, such as the State of the Union, only provides fodder to his political enemies. Predictably the eco-radicals attacked Bush’s plan for not requiring automakers to put affordable hydrogen cars on the market by a certain model year. They also claim that the plan is just a way to avoid forcing the automobile companies to lower fuel-economy standards.

It makes even less sense, however, for President Bush to throw a lot of money at a technology that is decades away from commercial viability. The “hydrogen economy” has been promoted for years by environmental activists and alternative-energy gurus like Amory Lovins. But hydrogen is not a source of energy, something which hydrogen advocates either don’t understand or refuse to acknowledge. Since hydrogen does not exist in geological reservoirs it must be extracted from fossil-fuel feedstocks or water. The process of extracting hydrogen uses energy, which means that using hydrogen is less efficient that burning fossil fuels. And if you’re worried about global warming you certainly don’t want to go that route. As a recent energy-technology review in Science magazine pointed out last November, “Per unit of heat generated, more CO2 is produced by making H2 [hydrogen] from fossil fuel than by burning the fossil fuel directly.”

The other option is to extract hydrogen from water using renewable-energy sources that deal fossil fuels entirely out of the equation. But that is a pipedream. Renewable energy itself is not cost effective, and by the time you use the energy to extract hydrogen from water, transport that hydrogen to where car owners can get to it and then recombine it with oxygen to re-extract the energy the cost becomes astronomical.

Honda, for example, is leasing five of its FCX fuel-cell vehicles to the city of Los Angeles. It is clearly a PR ploy since the cost to the company for each car is $1.6 million. Honda has also constructed a bank of solar panels in Torrance, California for the purpose of generating “clean” electricity to produce the hydrogen. But it takes a whole week to generate enough power to produce one tank of hydrogen at a cost of $40,000 per tank. Call me crazy, but that’s a long way from affordable transportation.

Renewable energy has its own significant drawbacks. Wind power, the only renewable energy even close to being competitive, requires enormous subsidies to stay afloat. Subsidies for wind power, which include an array of both federal and state tax breaks and credits, along with accelerated depreciation (five years as opposed to 20 years for other electric generating facilities), are so extensive that their value sometimes exceeds the wind farm’s revenues from selling electricity.

One of the subsidies, a 1.7-cent-per-kilowatt-hour production tax credit that must be renewed periodically by Congress, throws the industry into a recession every time it lapses. In 1999, for example, the tax credit wasn’t available and only 50 megawatts of wind generation were installed. Congress renewed the tax credit and new generations soared to 1700 MW. In December 2001, the credit lapsed once again and wasn’t renewed until March 2002. That year, only 410 MW of new capacity were installed. An energy source that is so heavily dependent on taxpayer subsidies does not meet President Bush’s stated goal of providing this nation with affordable and reliable energy.

Moreover, wind farms are incredibly land intensive. Three newly proposed wind farms in West Virginia would occupy 30 to 40 square miles but would produce slightly less electricity than a new 265 MW gas-fired combined-cycle generating plant, which would occupy a few acres. Sallie Baliunas at the Harvard-Smithsonian Center for Astrophysics, estimates, using very conservative assumptions, that producing enough hydrogen with wind power to replace just one-third of the vehicles on the road today would require 210,000 square miles. In reality, that number would likely be much higher.

Finally, the history of federal funding of energy-technology research is downright depressing. It is a landscape littered with dozens of multibillion-dollar failures. It is unlikely that this new endeavor will result in anything more than wasted money.

Paul Georgia is an environmental-policy analyst with the Competitive Enterprise Institute in Washington, D.C. and managing editor of the global-warming newsletter “Cooler Heads.”


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