Hydrogen: A Classic Chicken or Egg Problem

Hydrogen is a major step forward in the auto industry, but what comes first, the vehicle or the infrastructure?
By John Dodge, Editor-in-Chief June 23, 2008

As we ponder alternatives to gasoline, hydrogen invariably enters the conversation. Our Aug. 11 issue will analyze hydrogen for transportation and examine what engineering challenges stand in the way of making it happen. Here’s a preview.

Hydrogen is the most common element on Earth and number one on the periodic table. It is present in every compound and makes up about 90 percent of the universe by weight. Better yet, it doesn’t sit in vast subterranean pools under countries unfriendly to the U.S. and it doesn’t have to be expensively sucked out of the ground. Largely free of pollution when used, hydrogen can be manufactured at the point of use with renewable energy, although 95 percent of industrial hydrogen in the U.S. today comes from natural gas.

If it’s that good, why do energy companies say it’s a long way off and only one of several potential alternatives to fossil fuels? Significant show-stoppers are largely economic not technical, the automakers say, as the number of hydrogen vehicles rises into the hundreds. Longer lasting fuel cells remain an issue as does overall testing in a multitude of climates. GM, Honda and Hyundai have all built fuel cell passenger vehicles (FCV) while BMW powers a 7 Series with hydrogen using an internal combustion engine.

Automakers are well down the path of figuring out key issues such as storage tanks, fuel systems and how to deploy fuel cell stacks. Now, the challenge is making the vehicles as economic and reliable compared to what’s available. Volume production will certainly help, but GM estimates its hydrogen fuel cell Chevy Equinox costs about 10 times its mass production unit with a gasoline engine. The goal is a $25K hydrogen Equinox just like what the internally combusted vehicle costs. I drove one for a morning in May and there were few compromises.

A gargantuan challenge is building out a hydrogen refueling infrastructure. Just count the gasoline stations within 10 miles of your home and you get an idea of the undertaking’s giant scale. The impracticability of setting up 30,000 to 50,000 new service stations has convinced most experts that densely populated areas such as L.A. and New York should be targeted initially.

Chevron has five hydrogen stations and Shell is building a third, but they, like other energy concerns, want to see sufficient vehicles on the road before they scale up their investment so there’s a station on every street corner in a particular city. Hydrogen suffers from the classic chicken and egg problem. Which comes first: the vehicles or the infrastructure? Without a mass market for vehicles, energy companies are reluctant to spend the estimated $2 to $4 million per station with onsite hydrogen production. A report released in March from Oak Ridge National Lab. says without government incentives, the automotive industry would sustain “billions” in losses from FCVs at least until 2022. But the report says the two efforts can be “synchronized.”

Hydrogen needs a bigger boost from the Feds. The Dept. of Energy’s hydrogen program is asking for $265.6 million in FY09 or about $13 million less than what it got in FY08. Our lawmakers should tear a page out of the German government’s playbook used to jump-start its aggressive wind turbine program. After all, the private sector responds to cues and economic incentives provided by our policy makers.

Hydrogen is a major step toward a more energy independent future and far less pollution. With gas prices through the roof, the public could get behind hydrogen, not that it would necessarily be cheaper. But our destiny would be more in our own hands and that would feel good, wouldn’t it?

Write me at john.dodge@reedbusiness.com or visit my Design Engineering at Large blog.

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