SPEAKERS CONTENTS INSERTS
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27–854PS
2006
ENDING OUR ADDICTION TO OIL:
ARE ADVANCED VEHICLES AND FUELS
THE ANSWER?
FIELD HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY
COMMITTEE ON SCIENCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
JUNE 5, 2006
Serial No. 109–52
Printed for the use of the Committee on Science
Available via the World Wide Web: http://www.house.gov/science
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COMMITTEE ON SCIENCE
HON. SHERWOOD L. BOEHLERT, New York, Chairman
RALPH M. HALL, Texas
LAMAR S. SMITH, Texas
CURT WELDON, Pennsylvania
DANA ROHRABACHER, California
KEN CALVERT, California
ROSCOE G. BARTLETT, Maryland
VERNON J. EHLERS, Michigan
GIL GUTKNECHT, Minnesota
FRANK D. LUCAS, Oklahoma
JUDY BIGGERT, Illinois
WAYNE T. GILCHREST, Maryland
W. TODD AKIN, Missouri
TIMOTHY V. JOHNSON, Illinois
J. RANDY FORBES, Virginia
JO BONNER, Alabama
TOM FEENEY, Florida
RANDY NEUGEBAUER, Texas
BOB INGLIS, South Carolina
DAVE G. REICHERT, Washington
MICHAEL E. SODREL, Indiana
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JOHN J.H. ''JOE'' SCHWARZ, Michigan
MICHAEL T. MCCAUL, Texas
MARIO DIAZ-BALART, Florida
BART GORDON, Tennessee
JERRY F. COSTELLO, Illinois
EDDIE BERNICE JOHNSON, Texas
LYNN C. WOOLSEY, California
DARLENE HOOLEY, Oregon
MARK UDALL, Colorado
DAVID WU, Oregon
MICHAEL M. HONDA, California
BRAD MILLER, North Carolina
LINCOLN DAVIS, Tennessee
DANIEL LIPINSKI, Illinois
SHEILA JACKSON LEE, Texas
BRAD SHERMAN, California
BRIAN BAIRD, Washington
JIM MATHESON, Utah
JIM COSTA, California
AL GREEN, Texas
CHARLIE MELANCON, Louisiana
DENNIS MOORE, Kansas
DORIS MATSUI, California
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Subcommittee on Energy
JUDY BIGGERT, Illinois, Chair
RALPH M. HALL, Texas
CURT WELDON, Pennsylvania
ROSCOE G. BARTLETT, Maryland
VERNON J. EHLERS, Michigan
W. TODD AKIN, Missouri
JO BONNER, Alabama
RANDY NEUGEBAUER, Texas
BOB INGLIS, South Carolina
DAVE G. REICHERT, Washington
MICHAEL E. SODREL, Indiana
JOHN J.H. ''JOE'' SCHWARZ, Michigan
SHERWOOD L. BOEHLERT, New York
MICHAEL M. HONDA, California
LYNN C. WOOLSEY, California
LINCOLN DAVIS, Tennessee
JERRY F. COSTELLO, Illinois
EDDIE BERNICE JOHNSON, Texas
DANIEL LIPINSKI, Illinois
JIM MATHESON, Utah
SHEILA JACKSON LEE, Texas
BRAD SHERMAN, California
AL GREEN, Texas
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BART GORDON, Tennessee
KEVIN CARROLL Subcommittee Staff Director
DAHLIA SOKOLOV Republican Professional Staff Member
CHARLES COOKE Democratic Professional Staff Member
MIKE HOLLAND Chairman's Designeé
COLIN HUBBELL Staff Assistant
C O N T E N T S
June 5, 2006
Witness List
Hearing Charter
Opening Statements
Statement by Representative Judy Biggert, Chairman, Subcommittee on Energy, Committee on Science, U.S. House of Representatives
Written Statement
Statement by Representative Michael M. Honda, Ranking Minority Member, Subcommittee on Energy, Committee on Science, U.S. House of Representatives
Written Statement
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Statement by Representative Daniel Lipinski, Member, Subcommittee on Energy, Committee on Science, U.S. House of Representatives
Witnesses:
Dr. James F. Miller, Manager, Electrochemical Technology Program, Argonne National Laboratory
Oral Statement
Written Statement
Biography
Mr. Alan R. Weverstad, Executive Director, Mobile Emissions and Fuel Efficiency, General Motors Public Policy Center
Oral Statement
Written Statement
Biography
Financial Disclosure
Mr. Jerome Hinkle, Vice President, Policy and Government Affairs, National Hydrogen Association
Oral Statement
Written Statement
Biography
Dr. Daniel Gibbs, President, General Biomass Company, Evanston, IL
Oral Statement
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Written Statement
Biography
Mr. Deron Lovaas, Vehicles Campaign Director, Natural Resources Defense Council
Oral Statement
Written Statement
Biography
Mr. Philip G. Gott, Director, Automotive Custom Solutions, Global Insight, Inc.
Oral Statement
Written Statement
Biography
Financial Disclosure
Discussion
Appendix: Additional Material for the Record
''The Billion-Ton Biofuels Vision,'' editorial by Chris Somerville, Science, Vol. 312, June 2, 2006, p. 1277
''Toward Efficient Hydrogen Production at Surfaces,'' article by Jens K. Norskov and Claus H. Christensen, Science, Vol. 312, June 2, 2006, pp. 1322–1323
A Further Assessment of the Effects of Vehicle Weight and Size Parameters on Fatality Risk in Model Year 1985–98 Passenger Cars and 1985–97 Light Trucks, Volume 1: Executive Summary, R.M. Van Auken and J.W. Zellner, Dynamic Research, Inc., January 2003
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2006 KPMG Global Auto Executive Survey, Momentum, KPMG International, January 2006
ENDING OUR ADDICTION TO OIL: ARE ADVANCED VEHICLES AND FUELS THE ANSWER?
MONDAY, JUNE 5, 2006
House of Representatives,
Subcommittee on Energy,
Committee on Science,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:00 a.m., in the Main Council Chambers, Naperville Municipal Center, 400 South Eagle Street, Naperville, Illinois 60566, Hon. Judy Biggert [Chairman of the Subcommittee] presiding.
27854a.eps
HEARING CHARTER
SUBCOMMITTEE ON ENERGY
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COMMITTEE ON SCIENCE
U.S. HOUSE OF REPRESENTATIVES
Ending Our Addiction to Oil:
Are Advanced Vehicles and Fuels
the Answer?
MONDAY, JUNE 5, 2006
10:00 A.M.–12:00 P.M.
NAPERVILLE MUNICIPAL CENTER
400 SOUTH EAGLE STREET
NAPERVILLE, IL 60540
1. Purpose
On June 5, 2006, the Subcommittee on Energy of the House Committee on Science will hold a field hearing titled Ending Our Addiction to Oil: Are Advanced Vehicles and Fuels the Answer? The hearing will examine progress made in the development of advanced on-board vehicle and fuel technologies for passenger vehicles that can increase fuel economy or reduce oil consumption through fuel substitution.
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2. Witnesses
Dr. Daniel Gibbs is President of the General Biomass Company in Evanston, IL. His research interests are in enzymes that digest cellulose, paper waste utilization and cellulosic ethanol production.
Mr. Philip G. Gott is Director for Automotive Custom Solutions at Global Insight, a major economic and financial forecasting firm.
Mr. Deron Lovaas is the Vehicles Campaign Director for the Natural Resources Defense Council.
Mr. Jerome Hinkle is the Vice President for Policy and Government Affairs with the National Hydrogen Association.
Dr. James F. Miller is Manager of the Electrochemical Technology Program at Argonne National Laboratory. He is an authority on energy storage and energy conversion technologies, with a particular expertise in fuel cells and batteries.
Mr. Al Weverstad is the Executive Director for Mobile Emissions and Fuel Efficiency at the General Motors Public Policy Center. He began his engineering career in 1971 with General Motors' Pontiac Motor and Marine Engine Divisions.
3. Overarching Questions
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The Committee hearing will address the following questions:
1. What progress has been made towards realizing the Hydrogen Economy since the 2002 field hearing?
2. What new vehicle technologies and fuel choices might be available in the near future that could increase U.S. energy independence?
3. What technical and economic obstacles might limit or block the availability in the marketplace of cars built with new technologies or using advanced fuels?
4. What should the Federal Government be doing (or not doing) through research and development spending and through the implementation of energy policies to encourage the commercialization of, and demand for new vehicle technologies and fuels?
4. Brief Overview
Currently, the U.S. consumes roughly 20 million barrels of oil daily. Of that, 40 percent is used to fuel cars and trucks at a cost to consumers of more than $250 billion per year. By 2020, oil consumption is forecast by the Energy Information Administration to grow by nearly 40 percent, and our dependence on imports is projected to rise to more than 60 percent. A 10 percent reduction in energy use from cars and light trucks (achieved by introducing an alternative fuel or improving fuel economy) would result in displacing nearly 750,000 barrels of oil per day. A similar percentage reduction in petroleum energy use from heavy-duty trucks and buses would displace around 200,000 and 10,000 barrels per day, respectively. Both the Federal Government and industry are funding programs designed to create affordable vehicles that would use less or no gasoline or petroleum-based diesel fuel, including programs on hydrogen-powered fuel cells, biofuels, and hybrid vehicle technologies.
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The Federal Government will spend over $200 million in fiscal year (FY) 2006 on such research and development (R&D) programs.
One focus of federal programs to increase fuel economy, and part of the President's Advanced Energy Initiative announced this year, is R&D to advance hybrid vehicles. Hybrid vehicles, such as the Toyota Prius or the Ford Escape, use batteries and an electric motor, along with a gasoline engine, to improve vehicle performance and to reduce gasoline consumption, particularly in city driving conditions. Plug-in hybrid vehicles are a more advanced version of today's hybrid vehicles. Plug-in hybrid vehicles require larger batteries and the ability to charge those batteries overnight using an ordinary electric outlet. Such a change would shift a portion of the automotive energy demand from oil to the electricity grid. (Little electricity in the U.S. is generated using oil.) Additional R&D is needed to increase the reliability and durability of batteries, to significantly extend their lifetimes, and to reduce their size and weight.
Fuel substitution R&D focuses on two fuel types: hydrogen and biofuels. Hydrogen gas is considered by many experts to be a promising fuel in the long-term, particularly in the transportation sector. When used as a fuel, its only combustion byproduct is water vapor. If hydrogen can be produced economically from energy sources that do not release carbon dioxide into the atmosphere—from renewable sources such as wind power or solar power, from nuclear power, or possibly from coal with carbon sequestration—then the widespread use of hydrogen as a fuel could make a major contribution to reducing the greenhouse gas emissions. On-board hydrogen storage remains a major technical hurdle to the development of practical hydrogen-powered passenger vehicles.
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Biofuels, such as ethanol and biodiesel, are made from plant material, and therefore can result in decreased greenhouse gas emissions, since the carbon dioxide emitted when biofuel is burned is mostly offset by the carbon dioxide absorbed during plant growth. Biofuel R&D is directed toward developing low-cost methods of industrial-scale production, which includes advanced biotechnology and bioengineering of both plants and microbes (to help break down the plants into usable materials).
On May 24, 2005, the House of Representatives passed H.R. 5427, the appropriations bill for FY 2007 that includes funding for these programs. In the bill:
the overall Vehicle Technology sub-account received $173 million, a reduction of six percent from last year's level. Within this amount, Hybrid and Electric Propulsion, part of the President's Advanced Energy Initiative, received $50 million, up 14 percent from last year.
the Hydrogen Technology sub-account received $196 million, an increase of 26 percent from last year's level; about 42 percent of this is directed to the FreedomCAR program for hydrogen vehicles.
the Biomass Technology sub-account, part of the President's Advanced Energy Initiative received $150 million, a 65 percent increase, most of which is directed toward biofuel development.
Historically, both the Hydrogen sub-account and the Biomass sub-account have been heavily earmarked, with 27 percent of Hydrogen funding and 57 percent of biomass funding diverted to Congressionally directed projects in FY 2006.
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5. Background
On June 24, 2002, the Energy Subcommittee of the House Committee on Science held a field hearing at Northern Illinois University in Naperville, IL titled Fuel Cells: The Key to Energy Independence?(see footnote 1) The hearing focused on developments in hydrogen fuel cell R&D and provided a broad overview of fuel cells for all applications, not just transportation. Witnesses at that hearing were unanimous in their assessment that current technical approaches to on-board storage of hydrogen gas require too large a volume to be practical in vehicles. Solving the storage problem was identified as one of the toughest technical hurdles for the use of hydrogen as a transportation fuel. Their assessment was echoed subsequently by expert reports from the American Physical Society and the National Academy of Sciences.
February 7, 2002—Full Committee Hearing on The Future of DOE's Automotive Research Programs
April 2, 2003—Full Committee Markup of H.R. 238, Energy Research, Development, Demonstration, and Commercial Application Act of 2003
March 5, 2003—Full Committee Hearing on The Path to a Hydrogen Economy
March 3, 2004—Full Committee Hearing on Reviewing the Hydrogen Fuel and FreedomCAR Initiatives
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The Energy Subcommittee held the following hearings:
June 26, 2002—Subcommittee on Energy Hearing on FreedomCAR: Getting New Technology into the Marketplace
June 24, 2002—Subcommittee on Energy Field Hearing on Fuel Cells and the Hydrogen Future
July 20, 2005—Joint Hearing—Subcommittee on Energy and Subcommittee on Research—Fueling the Future: On the Road to the Hydrogen Economy
Since that 2002 field hearing, the Federal Government has focused more attention on the development of advanced vehicle and fuel technologies. In his 2003 State of the Union Address, President Bush announced a $1.2 billion Hydrogen Fuel Initiative to reverse America's growing dependence on foreign oil by developing the technology needed for commercially viable hydrogen-powered fuel cells. From fiscal 2004 to 2006, over $625 million has been allocated to hydrogen research in Department of Energy (DOE), over 40 percent of which was directed to the FreedomCAR vehicle program. The White House Office of Science and Technology Policy established the interagency Hydrogen Research and Development Task Force to coordinate the eight federal agencies that fund hydrogen-related research and development. The Energy Policy Act of 2005 authorized a broad spectrum of research programs related to advanced on-board vehicle, hydrogen and liquid fuel technologies.
With the release of his FY 2007 budget request, the President announced his Advanced Energy Initiative. This initiative provides for a 22 percent increase in funding for clean energy technology research at DOE. Two major goals of the initiative are to reduce demand through greater use of technologies that improve efficiency, including plug-in hybrid technology; and to change the way Americans fuel their vehicles by expanding use of alternative fuels from domestically-produced biomass and by continuing development of fuel cells that use hydrogen from domestic feedstocks.
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Hydrogen
The widespread adoption of hydrogen as a transportation fuel has the potential to reduce or eliminate air pollution generated by cars and trucks, but the source of the hydrogen is important. Hydrogen must be produced from hydrogen-bearing compounds, like water or natural gas, and that requires energy—and, unlike gasoline, more energy is always required to produce it than is recovered when hydrogen is burned or used in a fuel cell. Hydrogen has the potential to reduce America's dependence on foreign oil, but how much it would reduce dependence depends on what energy source would be used to generate hydrogen gas in the first place.
If hydrogen can be produced economically from energy sources that do not release carbon dioxide into the atmosphere—from renewable sources such as wind power or solar power, from nuclear power, or possibly from coal with carbon sequestration—then the widespread use of hydrogen as a fuel could make a major contribution to reducing the emission of greenhouse gases.
A fuel cell is a device for converting hydrogen and oxygen into electricity and water. Fuel cells have been used extensively for electrical power in space missions, including Apollo and Space Shuttle missions. In cars, the electricity would then be used to run electric motors to drive the wheels. Technological breakthroughs have reduced the cost and size of fuel cells, making them promising sources of power for automobiles, but fuel cells are still far too costly for everyday use.
Furthermore, there are research challenges with the fuel itself. To serve as automobile fuel, hydrogen must be stored on-board, but storing pure hydrogen at room temperature requires a large volume. Researchers are therefore working on developing complex fuels that can be stored compactly but can release pure hydrogen as needed. A final obstacle to widespread use is the need for new fueling infrastructure. To make hydrogen-fueled automobiles practical, hydrogen must be as easily available as gasoline, requiring a widespread network of hydrogen fuel stations.
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Virtually all major foreign and domestic automakers have produced hydrogen-powered concept and demonstration vehicles. For example, General Motors has produced several fuel cell vehicle prototypes, including the Hy-wire, Sequel and AUTOnomy concept cars and the HydroGen3 minivan. The minivan is being used in demonstration fleets, but at a cost of more than $1 million per vehicle, these vehicles are far from ready for the market. There are fourteen hydrogen fueling stations in the U.S., including one that General Motors and Shell opened in Washington, D.C., as part of a joint demonstration program. There are nine hydrogen stations in California, which has allowed Honda to offer one of its fuel cell cars, the Honda FCX, to a family in Southern California to demonstrate its day-to-day use.
Biofuels
Rising oil prices in recent years have heightened interest in a variety of alternative sources of liquid fuels. At present, two biologically-derived fuel forms, ethanol and biodiesel, are used in the United States to supplement supplies of conventional gasoline and diesel. Although biofuel combustion releases carbon dioxide, growing the agricultural products to create ethanol consumes carbon dioxide. Both ethanol and biodiesel can be readily blended with conventional gasoline or diesel, respectively, although the fraction of either biofuel is limited by compatibility with some materials in the fuel system and engine, or by gelling of the fuel mixture at low temperatures.
Ethanol is a renewable fuel produced by fermenting sugars from biological products. Many different sources can provide the fermentation feedstock, such as trees and grasses and municipal solid waste, but in the United States, ethanol is now most commonly made from corn. Research is focused on developing feedstocks other than corn, particularly feedstocks that are not otherwise used for food. This requires the development of enzymes to digest what is otherwise waste plant material—stalks, leaves and husks—into fermentable sugars. Known as cellulosic ethanol, ethanol produced using both digestion and fermentation can use more parts of a plant and can expand the variety of economically viable feedstock for the production of ethanol. This would allow introduction of a wide variety of other feedstocks, including woody plants like willow and fast growing switchgrass. As with all ethanol, compatibility with the current fuel infrastructure is not perfect: transportation and energy content are two concerns. Ethanol's detractors argue that because ethanol can absorb water, it cannot be transported in gasoline pipelines, and use of carriers other than pipelines may complicate gasoline substitution on a national scale. Additionally, ethanol is lower in energy per gallon than gasoline, so consumer expectations about how far they can drive on a gallon of fuel need to be managed accordingly.
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Ethanol, in use for years in the Midwest as a gasoline additive for improving octane levels, is now finding wider use by replacing an older octane-boosting additive found to contaminate drinking water. Ethanol can, however, serve as a primary ingredient in vehicle fuel. One blend of ethanol and gasoline is E85, 85 percent ethanol and 15 percent gasoline. Many automobile manufacturers produce Flex-Fuel Vehicles (FFVs) that can run on either E85 or ordinary gasoline, a capability that does not significantly add to vehicle price. General Motors, DaimlerChrysler, Ford, and Nissan all produce FFV cars and trucks. (Some analysts point out that most of these FFVs were produced by manufacturers because they get a credit against their corporate fuel economy requirements, rather than because of any consumer or market demand for the fuel flexibility option.)
Ethanol fuels are also in widespread use abroad. Brazil instituted a policy to encourage flexible fuel cars during the energy crisis of the 1970s, and between 1983 and 1988 more than 88 percent of cars sold annually were running on a blend of ethanol and gasoline. Flex-fuel car sales fell after withdrawal of the subsidy, but even today, fuel in Brazil has a minimum of 25 percent ethanol. Most ethanol in Brazil is produced from sugar cane, a much more efficient process than producing ethanol from corn, as is done in the United States.
Biodiesel is a renewable fuel that can be used in diesel engines, but is produced from vegetable oils and animal fats instead of petroleum. Using biodiesel instead of petroleum diesel reduces emissions of pollutants such as carbon monoxide, particulates, and sulfur. Biodiesel-petroleum diesel blends, with up to 20 percent biodiesel, can be used in nearly all diesel equipment. Higher biodiesel percentage blends may require specialized engines, delivery, and storage technology. Biodiesel is used in the fleets of many school districts, transit authorities, national parks, public utility companies, and garbage and recycling companies.
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E85 and biodiesel fuel stations are scattered around the country. There are 637 E85 fuel stations in the U.S., with 102 in Illinois, and there are 362 biodiesel stations in the U.S., with 11 in Illinois. Compared to the more than 200,000 standard gasoline stations, these biofuels are still very difficult to find. The Alternative Fuels Data Center provides maps indicating the locations of fueling stations with advanced fuels.(see footnote 2)
Plug-in Hybrids
Hybrid vehicles combine batteries and an electric motor, along with a gasoline engine, to improve vehicle performance and to reduce gasoline consumption. Conventional hybrid electric vehicles recharge their batteries by capturing the energy released during braking or through a generator attached to the combustion engine. These energy management techniques mean that these cars dissipate less of the energy contained in their fuel as waste heat. Nearly 200,000 hybrid passenger vehicles, such as the Toyota Prius or the Ford Escape, were sold in the U.S. from 2000 to 2004. Over 40 transit agencies in North America use hybrid buses. There are approximately 700 hybrid buses in regular service in North America, with another 400 planned deliveries through 2006.
Plug-in hybrid vehicles are a more advanced version of today's hybrid vehicles. They involve larger batteries and the ability to charge those batteries when parked using an ordinary electric outlet. Unlike today's hybrids, plug-in hybrids are able to drive for extended periods solely on battery power, thus moving some of the energy consumption from the gasoline tank to the electric grid (batteries are typically charged overnight) and moving some of the emissions from the tailpipe to the power plant (where, in theory, they are more easily controlled).
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Because most Americans commute less than 40 miles a day, plug-in hybrids operable for 40 miles on an overnight charge from the electric grid could reduce U.S. gasoline consumption significantly. The potential for oil savings is related to how far a plug-in hybrid can travel solely on battery power. The electricity used to charge the batteries overnight would be generated from domestic sources (only three percent of the electricity used in the United States is generated from oil) and that electricity would primarily be consumed at night when demand is low.
President Bush, as part of his Advanced Energy Initiative, has established the goal of developing technology that would enable plug-in hybrids to travel up to 40 miles on battery power alone. Plug-in hybrids could benefit consumers because of their greater fuel economy and the relatively low cost of energy from the electric grid. Some proponents of plug-in hybrids claim that consumers will be able to recharge their batteries overnight at gasoline-equivalent cost of $1 per gallon.
While plug-in hybrid vehicles offer many advantages, high initial costs prevent widespread commercial application. Specialty conversion kits are available to upgrade an ordinary hybrid to a plug-in hybrid—although in very limited quantities and at high cost (about $10,000 per kit). Many component technologies, particularly the batteries, will need to achieve significant cost reductions and improvements in reliability before plug-in hybrids are truly attractive to consumers at mass-market scale. Car companies are reluctant to invest in these technologies without demonstrable consumer demand. R&D is needed to increase the reliability and durability of batteries, to significantly extend their lifetimes, and to reduce their size and weight.
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Because batteries on board a plug-in hybrids are recharged by plugging the vehicle into an outlet, these vehicles do not need new types of fuel stations. The large batteries used in plug-in hybrids might also be used to provide power back to the electric power grid. A fleet of plug-in hybrids could offer regulatory services (keeping voltages steady, etc.) to a modernized grid. Advocates say that such vehicle-to-grid transmissions could benefit individual car owners by allowing them to sell the use of their energy storage capacity to grid operators.
The development and widespread use of plug-in hybrid vehicles could act as a stepping stone toward hydrogen-based transportation and fuel cell vehicles, because the electric motors and power control technologies that are required for plug-in hybrid cars would also be useful in fuel cell vehicles.
The first plug-in hybrid produced by a major automaker, the DaimlerChrysler Sprinter van, has been delivered to U.S. customers for test purposes. Many other plug-in hybrids are being tested in prototype form by small firms and individuals.
6. Witness Questions
Dr. Daniel Gibbs
1. How widely available is ethanol today, and how many cars can use it?
2. What are the obstacles to expanding the variety of feedstocks available for conversion to ethanol? Are these hurdles mainly market failures and other economic barriers or are they technical in nature?
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3. What is the largest technical hurdle for each of the following fuels: Corn ethanol, biodiesel, cellulosic ethanol? Does the current federal research agenda adequately address these technical barriers? What actions would most rapidly overcome these technical barriers?
4. Some advocates suggest that biofuels should substitute for 25 percent or more of the Nation's transportation fuel use. Are there market or other barriers that policy might overcome to accelerate realization of the 25 percent biofuels goal?
Mr. Philip Gott and Mr. Deron Lovaas
1. The auto industry in recent years has generally used technological improvements to increase performance instead of fuel efficiency. What would be required to lead automakers to apply technology advancements to improving fuel economy?
2. What hurdles must hybrids, flex-fuel, and hydrogen-powered vehicles clear before the automobile industry, industry analysts, and the automotive press accept these technologies and consumers buy them? How more or less likely is it that these radically new technologies—fuel cells, electric drive trains, or significant battery storage capabilities, for example—will be incorporated into cars rather than incremental innovations to internal combustion engines?
Mr. Jerome Hinkle
1. Many experts indicate that on-board hydrogen storage is the major bottleneck facing realization of the hydrogen economy. What research paths look the most promising for solving the on-board storage problem?
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2. What technical barriers in the production and distribution need to be overcome to permit hydrogen to fuel a quarter of the cars on the highway?
3. What are the tradeoffs between centralized and distributed hydrogen production for fueling the transportation infrastructure?
Dr. James Miller
1. What are the two most significant technical obstacles to making hydrogen-powered fuel cell vehicles affordable and practical to use? What are those obstacles for plug-in hybrids? How soon is significant progress likely to be made on removing each of the obstacles you mention? Can either hydrogen fuel cell vehicles or plug-in hybrids advance rapidly enough to be a more practical alternative to reducing energy consumption and pollution than making continuing improvements in the internal combustion engine would be?
2. Batteries need to be more durable, more rapidly chargeable, have longer lifetimes, and reduced size and weight if plug-in hybrids are to become practical. How are those traits related to one another and are there trade-offs between these performance parameters? Which are the easiest to address? Which of these contribute most significantly to cost?
Mr. Al Weverstad
1. What are the significant cost and technical differences between a flex-fuel engine and a conventional engine? Are there specific challenges to incorporating flex-fuel technologies in plug-in hybrid electric vehicles? Why aren't these technologies incorporated in every car sold?
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2. What technologies would automakers adopt first to enable passenger vehicle to have a fuel economy significantly higher than available today, say 60 miles per gallon? What technologies would be used to hit a 45 mile per gallon target? What technologies would be used to hit a 35 mile per gallon target?
3. Are there gaps in the government's advanced vehicles and fuels research and development portfolio that could help with the more rapid adoption of new technologies? Do the Department of Energy programs have the correct balance between research and technology demonstration?
Chairwoman BIGGERT. Good morning.
I would like to call this meeting to order. Welcome to today's hearing entitled ''Ending Our Addiction to Oil: Are Advanced Vehciles and Fuels the Answer?''
I would now recognize myself for an opening statement.
I want to welcome everyone here to this Energy Subcommittee hearing. Today we're going to examine how new technologies and advanced fuels for passenger vehicles could help our nation's addiction to oil.
I want to thank my Ranking Member Mr. Honda for traveling here from his home in the Silicon Valley of California. I greatly appreciate the time he has taken to come to my favorite part of Illinois.
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I also want to welcome my fellow Member of the Illinois Delegation and the Science Committee, Mr. Lipinski, and thank him for joining us today. He didn't have to come quite so far.
I also want to thank our host, Mayor Pradel, and the citizens of Naperville for opening their Municipal Center for us today.
Finally, I hope you all got a chance to look at the advanced vehicles parked outside, many of which run on alternative fuels. And that's why I'm afraid we started a little bit late because I got involved in driving a scooter and sitting in all the cars. So if you didn't have a chance to do that, they will still be out there after this hearing is over.
We wouldn't be able to peek under the hood or kick the tires of these hybrid, plug-in hybrid and flex-fuel vehicles today if it weren't for the good people at General Motors, Argonne National Laboratory, the Illinois Institute of Technology and Northern Illinois University. So, we thank them very much.
Transportation is always a major issue for suburban communities whether they are in my District, Mr. Honda's or Mr. Lipinski's. As a matter of fact, it was better roads, inexpensive vehicles and cheap gasoline that allowed these suburbs to flourish.
We see that transportation and oil are becoming increasingly important to the growing populations in China and India as well. In addition, various studies suggest that we have reached the peak of production, or will very soon, meaning the gap between supply and demand will only grow larger. This will give countries with sizeable oil resources, many of which are hostile to the United States, and their cartels even more opportunities to manipulate the global market for oil.
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The bad news is that this confluence of factors already is hitting the pocketbooks of American families with oil and gas at more than $70 per gallon. The good news—oh, I'm sorry. Per barrel. Thank goodness it's not gallon yet.
The good news is that there's nothing like a $3 a gallon of gasoline to get everyone thinking about new and creative ways to make transportation more affordable, less polluting and less susceptible to the verges of the world oil market. More than anything else Americans just want to be able to hop into their cars and go. Very few care what makes their car go, they just want it to be inexpensive and easy to get.
Our interest today is in retaining that convenience and minimizing the cost to our national security, to our economic security and to our environment, not to mention to the family budget through the use of research and technology. We need to work towards cars that can run on whatever energy source is available at the lowest cost be it electricity, gasoline, biofuel, hydrogen or some combination of these.
In addition, we need to find ways to make these diverse fuels readily available across the country.
It is clear that both technical and market obstacles remain to realizing the potential benefits of all of the advanced vehicle technologies or alternative fuels that we will be discussing. What are the technical or cost competitiveness issues related to the important components such as batteries, fuel cells or power electronics? What are major hurdles that stand in the way of the production or distribution of advanced biofuels? What technology challenges have not received sufficient attention? Or, are the hurdles not technical? Do consumer preferences or auto industry inertia present the highest hurdles? What about the infrastructure costs?
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I want to give the city Naperville credit for focusing on the demand side of this equation. As a founding member of the Plug-In Partnership Campaign, Naperville is one of 132 public power utilities in 43 cities, counties and local governments that have made soft purchase orders indicating a strong interest in buying flexible fuel, plug-in hybrid vehicles if they are manufactured. In one of these vehicles the average American who drives between 25 and 30 miles a day could complete his or her commute and run some errands without burning a drop of gasoline. That's good for energy security , not to mention the pocketbook.
As I see it, one of the most significant potential benefits of the plug-in hybrid is that it does not require a whole new refueling infrastructure. You can just pull into your garage at the end of the day and fill her up by plugging your car into a regular 120 volt socket in the garage. Imagine the convenience of recharging your car just as you recharge your cell phone, Blackberry or laptop every evening by simply plugging it in. The next morning unplug and you're ready to go.
The city of Naperville realizes that the best way to hasten the arrival of plug-in hybrids was to commit to buying one. You can do the same thing simply by going to wwww.pluginpartners.com, click on ''What you can do'' tab and fill-in the plug-in partner's petition. Let the automakers know that you'd be willing to pay a few thousand dollars more up front to buy a vehicle that would be much cheaper to operate, cleaner and could run on domestically produced electricity.
We are looking to our witnesses today to help us identify the most significant technical and market obstacles facing the widespread availability of the advanced fuel—advanced vehicle technologies and alternative fuels that will make our cars less dependent on imported oil. We need your help in determining what steps the Federal Government can take to remove those barriers, whether it's through focused research or tax incentives. Your input at this hearing is greatly appreciated and we look forward to your expert advice.
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But, first, I would like to recognize the Ranking Member Mr. Honda for his opening statement.
Mr. Honda.
[The prepared statement of Chairwoman Biggert follows:]
PREPARED STATEMENT OF CHAIRMAN JUDY BIGGERT
Good morning. I want to welcome everyone to this Energy Subcommittee hearing. Today we are going to examine how new technologies and advanced fuels for passenger vehicles could help end our nation's addiction to oil.
I want to thank my Ranking Member, Mr. Honda, for traveling here from his home in the Silicon Valley of California. I greatly appreciate the time he has taken to come visit my favorite part of Illinois. I also want to welcome my fellow member of the Illinois delegation, Dr. Lipinski, and thank him for joining us today.
I also want to thank our hosts, Mayor Pradel and the citizens of Naperville, for opening their Municipal Center to us today.
Finally, I hope you all got a chance to look at the advanced vehicles parked outside, many of which run on alternative fuels. If you didn't, not to worry; they will still be there after this hearing is over. We wouldn't be able to peek under the hood or kick the tires of these hybrid, plug-in hybrid, and flex fuel vehicles today if it weren't for the good people at General Motors, Argonne National Laboratory, the Illinois Institute of Technology, and Northern Illinois University.
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Transportation is always a major issue for suburban communities, whether they are in my district, Mr. Honda's, or Mr. Lipinski's. As a matter of fact, it was better roads, inexpensive vehicles, and cheap gasoline that allowed the suburbs to flourish.
We see that transportation and oil are becoming increasingly important to the growing populations in China and India. In addition, various studies suggest that we have reached peak oil production, or will very soon, meaning the gap between supply and demand will only grow larger. This will give countries with sizable oil reserves, many of which are hostile to the United States, and their cartels even more opportunities to manipulate the global market for oil.
The bad news is that this confluence of factors already is hitting the pocketbooks of American families, with oil over $70 per barrel. The good news is that there is nothing like a $3 gallon of gasoline to get everyone thinking about new and creative ways to make transportation more affordable, less polluting, and less susceptible to the vagaries of the world oil market.
More than anything else, Americans want to be able to hop into their cars and go. Very few care what makes their car go. They just want it to be inexpensive and easy to get. Our interest today is in retaining that convenience and minimizing its cost—to our national security, to our economic security, and to our environment, not to mention to the family budget—through the use of research and technology.
We need to be working towards cars that can run on whatever energy source is available at the lowest cost: be it electricity, gasoline, biofuel, hydrogen, or some combination of these. In addition, we need to find ways to make these diverse fuels readily available across the country.
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Plug-in hybrids or hydrogen-powered fuel cells would allow us to run our cars using renewable sources such as solar and wind, other clean and abundant sources like nuclear and even coal preferably from power plants employing advanced clean coal technologies that I hope will soon be the norm. Flex fuel vehicles running on renewable biofuels, such as ethanol and biodiesel made from all kinds of plant material—not just corn—can significantly decrease greenhouse gas emissions. And as demand for biofuels increases, we can simply grow more of the feedstock, whether that's corn, sugar cane, or switchgrass. And the benefit of these advanced vehicle technologies and alternative fuels will reduce our dependence upon imported sources of oil.
It is clear that both technical and market obstacles remain to realizing the potential benefits of all of the advanced vehicle technologies or alternative fuels we will be discussing. What are the technical or cost-competitiveness issues with important components, such as batteries fuel cells or power electronics? What major hurdles stand in the way of the production or distribution of advanced biofuels? What technical challenges have not received sufficient attention?
Or are the hurdles non-technical? Do consumer preferences or auto industry inertia present the highest hurdles? What about infrastructure costs?
I want to give the City of Naperville credit for focusing on this market or demand side of the equation. As a founding member of the Plug-In Partner Campaign, Naperville is one of 132 public power utilities and 43 cities, counties, and local governments that have made ''soft'' purchase orders indicating a strong interest in buying flexible fuel plug-in hybrid vehicles—if they are manufactured. In one of these vehicles, the average American, who drives between 25 and 30 miles a day, could complete his or her commute and run some errands without burning drop of gasoline. That's good for energy security, not to mention the pocketbook.
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As I see it, one of the most significant potential benefits of the plug-in hybrid is that they do not require a whole new ''refueling'' infrastructure. To think that you could pull into your garage at the end of the day and ''fill 'er up'' just by plugging your car into a regular, 120-volt socket in the garage is very appealing. Imagine the convenience of recharging your car just as you recharge your cell phone, blackberry, or laptop every evening—by simply plugging it in. The next morning, unplug it and you are ready to go.
The City of Naperville realized that the best way to hasten the arrival of plug-in hybrids was to commit to buying one. You can do the same thing. Simply go to www.pluginpartners.com, click on the ''What You Can Do'' tab, and fill in the Plug-In Partners petition. Let the automakers know that you'd be willing to pay a few thousand more dollars to buy a vehicle that would be cheaper to operate, cleaner, and could run on domestically produced electricity.
We are looking to you, our witnesses here today, to help us identify the most significant technical and market obstacles facing the widespread availability of advanced vehicle technologies and alternative fuels that will make our cars less dependent upon imported oil. In addition, we need your help determining what steps the Federal Government can take to remove those barriers, whether it's through focused research or tax incentives.
Your input at this hearing is greatly appreciated and we look forward to your expert advice, but first I would like to recognize the Ranking Member, Mr. Honda, for his opening statement. Mr. Honda.
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Mr. HONDA. Thank you, Madam Chair. And I'm very, very glad to be here in the great prairie State of Illinois. Having grown up in the south side and north side Chicago, I feel close to home.
And this podium is beautiful. So the city really ought to be very proud of their facility. But this bench up here makes me feel like I'm in a sushi bar. So if anybody wants to, you can just step right up.
So I want to also thank all the witnesses for being here today to testify, and to all of you who have come here to hear more about this very important subject.
I'm especially glad that we've got a panel that can talk about a wide range of vehicle and fuel options for the future. Because I suspect it is going to take some combination of a number of different approaches to truly end our addiction to oil. We will probably need to use different solutions at different points of time, and we will probably want to use multiple technologies at the same time depending on the application. And what do I mean by that? Well, I have a hybrid, a Toyota Prius. I recently had the opportunity also to drive a Honda hydrogen fuel cell car. And while I wasn't able to participate, there was a plug-in hybrid test drive near the Capitol. These are three different technologies at different states of commercial readiness. One is here today, the hybrid; one will be available fairly soon, the plug-in hybrid as our Chairperson said, and some really would say that it's ready to go and all you have to do is put the money, and; one still requires the development of technology and infrastructure to be viable.
At different points in time different technologies will make the most sense economically. When you think about applications, passenger car use in the city is very different than freight hauling over long distances. Different technologies are likely to prove most appropriate for the different uses, and so a single solution probably isn't the best way to go.
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That can be a good thing. Even if a traditional hybrid in use today gets bumped aside by plug-in hybrids for urban passenger use, we will still be able to use hybrids for other purposes.
Back in Washington we have had a few hearings over the last couple of years about particular aspects of this subject. Plug-in hybrids, prizes for development of hydrogen technology, hydrogen and the progress that is being made in addressing technical barriers to the use of hydrogen in vehicles, but because of the time constraints we have to work with there, we aren't able to get a broad group of people together in this time.
I'm glad that today we'll get to hear about many different technologies all in one hearing and we will have the opportunity to compare them to each other and see where they compliment each other. I know that in many cases there's still much basic R&D that needs to be done to overcome technical barriers, and I certainly want to hear about those so we can learn where we need to focus our efforts on the Subcommittee. And the barriers are both economical and technical. And perhaps if you have the will, you might want to also share with us some of the political barriers you may see in the development of these kinds of technologies.
But I also hope that we will hear about the value of demonstration projects which can serve to help identify some of the very technical barriers that an increased emphasis on research will aim to overcome. I fear that we might miss more obstacles until after we have made significant investments and time and resources if we stop working on demonstration projects. Back in my own District we are fortunate to have some projects such as the Santa Clara Valley Transportation Authority's Zero Emission Bus program and the use of natural gas vehicles at the Norm Mineta San Jose Airport, that have helped to demonstrate the feasibility of alternative fuel vehicles.
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Chairman Biggert, thank you for putting together an interesting and technologically diverse panel from whom I look forward to learning a lot today.
I yield back.
[The prepared statement of Mr. Honda follows:]
PREPARED STATEMENT OF REPRESENTATIVE MICHAEL M. HONDA
I'm glad to be here in the Prairie State today, and I thank Chairwoman Judy Biggert for inviting me to participate in this hearing.
Thanks to all of the witnesses for being here to testify and to all of you who have come to hear more about this very important subject.
I'm especially glad that we've got a panel that can talk about a wide range of vehicle and fuel options for the future, because I suspect it is going to take some combination of a number of different approaches to truly end our addiction to oil.
We will probably need to use different solutions at different points in time, and we will probably want to use multiple technologies at the same time depending on the application.
What do I mean? Well, I have a hybrid Toyota Prius, I recently had the opportunity to drive a Honda hydrogen fuel cell car, and while I wasn't able to participate, there was a plug-in hybrid test drive near the Capitol.
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These are three different technologies at different states of commercial readiness—one is here today (hybrid), one will be available fairly soon (plug-in hybrid, some would say it is here today!) and one still requires the development of technology and infrastructure to be viable. At different points in time, different technologies will make the most sense economically.
When you think about applications, passenger car use in the city is very different from freight hauling over long distances. Different technologies are likely to prove most appropriate for the different uses, and so a single solution probably isn't the best way to go.
That can be a good thing—even if a traditional hybrid in use today gets ''bumped aside'' by plug-in hybrids for urban passenger use, we will still be able to use hybrids for other purposes.
Back in Washington, we have had a few hearings over the last couple of years about particular aspects of this subject—plug-in hybrids, prizes for developments of hydrogen technology, hydrogen and the progress that is being made in addressing technical barriers to the use of hydrogen in vehicles—but because of the time constraints we have to work within there, we aren't able to get a broad group of people together at the same time.
I'm glad that today we will get to hear about many different technologies all in one hearing and we will have the opportunity to compare them to each other and see where they complement each other.
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I know that in many cases there is still much basic R&D that needs to be done to overcome technical barriers, and I certainly want to hear about those so we can learn where we need to focus our efforts on the Subcommittee.
But I also hope that we will hear about the value of demonstration projects, which can serve to help to identify some of the very technical barriers that an increased emphasis on research would aim to overcome. I fear that we might miss more obstacles until after we have made significant investments of time and resources if we stop working on demonstration projects.
Back in my own district, we are fortunate to have some projects, such as the Santa Clara Valley Transportation Authority' Zero Emission Bus program and the use of natural gas vehicles at the Norm Mineta San Jose Airport, that have helped to demonstrate the feasibility of alternative fuel vehicles.
Chairwoman Biggert, thank you for putting together an interesting and technologically diverse panel from whom I look forward to learning a lot today. I yield back the balance of my time.
Chairwoman BIGGERT. Thank you, Mr. Honda.
We don't normally have opening statements from the Members, but since this is a field hearing I will recognize Mr. Lipinski for three minutes.
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Mr. LIPINSKI. Thank you, Chairwoman Biggert.
I appreciate the opportunity to speak here today, and I appreciate you putting this together. It's certainly a critical problem that we're facing right now. Not just with the high gas prices, but all the other problems that are caused by our current energy situation. And I appreciate the work that you've done in terms of helping us in terms of research and development, and especially your work with Argonne Lab here. So you've done a lot of important work in the energy area.
So right now we're all being effected by high energy prices. But as I said, it's not just our pocketbooks that are hit by our current energy paradigm. Also our national security is threatened and our environment and public health are also threatened by the current burning of fossil fuels which we use now to fuel our vehicles. We really need to develop a new energy model and find solutions here at home, solutions that will strengthen our national security, boost our economy, and help protect our environment.
Now there are may possible alternatives, you know, ranging from the short-term such as conservation and increasing efficiency to long-term approaches such as the use of hydrogen, bottled fuels and batteries as well as other ideas that we'll hear about from our witnesses today.
I'm especially interested as a former mechanical engineer to hear ideas and suggestions that our witnesses have today for where they think we should go, what they think the possibilities are.
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Now some of these tools are already at use on our highways. I have a Ford Escape hybrid, which has served me very well, and this technology certainly has proven valuable. But it's not the solution to all of our problems. We really need to find and work, do the R&D on all these different areas.
One area that I'm particularly interested in is hydrogen, which has a great potential to provide much of our transportation energy needs and be environmentally friendly when the hydrogen is produced from renewable fuels.
I'm very pleased that a couple of weeks ago the House of Representatives passed legislation that I introduced along with Representative Bob Inglis to create the H–Prize. Now the H–Prize Act of 2006 creates different prizes for different advances in the use of hydrogen as a fuel since there are problems with creation, storage, transportation; all these must be overcome so that we can use hydrogen as a fuel, we could put a hydrogen car in everyone's driveway.
I drove a hydrogen car a couple of weeks ago. It drove fantastic. The only problem is the price tag, it's about $1.5 million. It's a little too high right now. So we need to do more work to bring down the price of this, but it's available, it's possible. And as we saw the cars out front, these technologies are there. The problem is making them efficient enough so that we can use this to give everybody a vehicle such as these in order to wean ourselves off of oil, which we use right now to move our vehicles.
Americans over the years have consistently faced monumental challenges, consistently have overcome them. And we did this with air travel, space exploration, just to name a couple, and now we have to do this with energy. We need to use our greatest resource, which is our ingenuity and creativity, which is on display right now from our witnesses. So I look forward to hearing from our witnesses and hear the testimony today.
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Thank you.
Chairwoman BIGGERT. Thank you, Mr. Lipinski.
I'd like now to introduce our witnesses.
If Members wish to submit further additions to their opening statements, your statements will be added to the record without objection.
First of all we have Dr. James Miller, who is the Manager of the Electrochemical Technology Program at Argonne National Laboratory, right here in the 13th District. Welcome.
Mr. Alan Weverstad, who is the Executive Director for Mobile Emissions and Fuel Efficiency at the General Motors Public Policy Center. Thank you for being here.
Mr. Jerome Hinkle, Vice President, Policy and Government Affairs, the National Hydrogen Association.
Dr. Daniel Gibbs, President of the General Biomass Company, which is located in Evanston.
Mr. Deron Lovaas, Vehicles Campaign Director for the Natural Resources Defense Council.
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And then Mr. Philip G. Gott, Director for Automotive Custom Solutions at Global Insight.
Welcome all of you.
As our witnesses probably know, the spoken testimony is limited to five minutes. After each witness, Members will have—after all of the witnesses, Members will have five minutes each for questions.
And with that, we will begin with Dr. Miller. You're recognized for five minutes, or about.
STATEMENT OF DR. JAMES F. MILLER, MANAGER, ELECTROCHEMICAL TECHNOLOGY PROGRAM, ARGONNE NATIONAL LABORATORY
Mr. MILLER. Chairman Biggert and Members of the Energy Subcommittee. Thank you for the opportunity to testify today and share my thoughts on the role that fuel cell vehicles and plug-in hybrids can play in reducing our nation's petroleum consumption. Let me start my testimony by recalling the benefits that fuel cell vehicles can provide to our nation.
Fuel cell vehicles offer the potential to provide operation on petroleum free fuel with a fuel economy significantly exceeding today's internal combustion engine vehicles while omitting only water vapor at the tailpipe. However, in order for fuel celled vehicles to achieve widespread market penetration, key technical problems must be solved. Cost and durability are the major challenges to fuel cell commercialization. Size, weight and thermal management are also key barriers.
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In order to have widespread market penetration, the cost of fuel cells needs to be reduced from their current cost, about $3,000 per kilowatt in small volume fabrication to a target cost of about $30 per kilowatt in mass production.
Independent studies have analyzed the cost of automotive fuel cell systems if manufactured in mass production levels of 500,000 units per year. The results show that the cost projections for mass produced fuel cells have been reduced by more than a factor of 50 percent since 2002. Further work at Argonne National Laboratory is directed toward reducing or eliminating the platinum content in the fuel cells, which if successful would have a direct effect on further reducing fuel cell costs.
Similar gains have been made in operating life. An operating life of at least 5,000 hours is required for automotive applications. During the last four years the durability of fuel cell systems has been extended from 1,000 hour or less to greater than 2,000 hours under real world cycling conditions. Much progress has been made, but additional research is needed.
The key to enhancing longevity is to understand performance degradation and failure mechanism so that new materials or engineering solutions may be devised to overcome them. This is another line of research at Argonne.
Let me now turn to plug-in hybrid vehicles. Nickel metal hydride batteries are used in conventional hybrid vehicles today. However, lithium-ion batteries are the most promising technology for use in this application due to their high energy density and high power density. It is only a matter of time before they replace nickel metal hydride batteries in hybrid vehicles.
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For the same amount of stored energy and power, lithium-ion batteries will be about two-thirds the size of a comparable nickel metal hydride battery. The current state of the art lithium-ion battery already possesses suitable power, energy, weight and volume for use in plug-in hybrids that could provide at least a 20 miles range capability on batteries only. The issues of ruggedness, by that I mean ability to withstand overcharging and extreme temperatures as well as long lifetimes and cost, remain barriers for this technology.
There exists numerous opportunities for reducing cost, extending life and further increasing the energy density lithium-ion battery technology. Currently there are worldwide R&D efforts focused on the development of advanced electrode materials that are less expensive and inherently more stable than those used in current state of the art lithium-ion batteries. And Argonne is one of the world leader in this area.
Several of the these advanced electrode materials offer the promise for: Simultaneously extending electric range through increased battery energy density; extending battery life through enhanced stability of materials, and; reducing battery cost via two mechanisms, lower battery materials cost and reduced complexity of the battery management and control system.
In conclusion, in my opinion there is no single solution. The future will include a mix of technologies that includes: Improved internal combustion engines; alternative fuels; hybrids; plug-in hybrids; electric vehicles and fuel cell vehicles. A range of technologies that will be needed to make fuel cell vehicles viable are the subject of ongoing research. These include light weight materials, advanced batteries, power electronics and electric motors.
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The vision of fuel cell vehicles and plug-in hybrids as solutions to foreign energy dependency, environmental pollution and greenhouse gas emissions is a compelling vision. We at Argonne are excited about the prospect of helping our nation in its transition to environmentally friendly, domestically produced sources of energy.
Thank you. And I will be happy to answer questions.
[The prepared statement of Dr. Miller follows:]
PREPARED STATEMENT OF JAMES F. MILLER
Chairman Biggert and Members of the Energy Subcommittee, thank you for the opportunity to testify today and share my thoughts on advanced automotive technologies. I will address the role that fuel cell vehicles and plug-in hybrids can play in reducing our nation's petroleum consumption and automotive emissions. I will discuss the major technical problems and research opportunities for each of these technologies, and provide an update on the recent progress that has been achieved.
Fuel Cell Vehicles
Let me start my testimony by recalling the benefits that fuel cell powered vehicles can provide to our nation. Fuel cell vehicles offer the potential to provide operation on petroleum-free fuel, with a fuel economy significantly exceeding today's internal combustion engine vehicles, while emitting only water vapor at the tailpipe. The Department of Energy (DOE) estimates that, if hydrogen reaches its full potential, the Hydrogen Fuel Initiative and FreedomCAR program could reduce our oil demand by over 11 million barrels per day by 2040—approximately the same amount of crude oil America imports today.
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However, in order for fuel cell vehicles to achieve widespread market penetration, key technical problems must be solved Cost and durability are the major challenges to fuel cell commercialization. Size, weight, and thermal and water management are also key barriers. Under the FreedomCAR and Fuel Partnership, a model of public/private collaboration, the Department of Energy is working closely with its national laboratories, universities, and industry partners to overcome critical technical barriers to fuel cell commercialization. The research program continues to focus on materials, components, and enabling technologies that will contribute to the development of low-cost, reliable fuel cell systems.
For automotive fuel cells, the two greatest problems are the cost and durability of fuel cells. In addition, on-board hydrogen storage and a viable supporting infrastructure of hydrogen production and distribution will also have to be established, but these issues have been addressed by previous witnesses today.
In order to have widespread market penetration, the cost of fuel cells needs to be reduced from their current cost (about $3,000/kW in small volume fabrication) to a target cost of $30/kW (in mass production). Independent studies, conducted by industry for the Department of Energy, have analyzed the cost of automotive fuel cell systems, if manufactured at mass production levels of 500,000 units per year. The results show that the cost projections for mass-produced fuel cells have been reduced by more than 50 percent since 2002 (from $275/kW to $110/kW) under the Hydrogen Fuel Initiative. This cost reduction was the result of increased power density; advancements in membrane materials; reductions in both membrane material cost and amount of membrane material required in the fuel cell; enhancement of specific activity of platinum catalysts; and innovative processes for depositing platinum alloys. Further work at Argonne National Laboratory (and elsewhere) is directed towards reducing or eliminating the platinum content in the fuel cells, which, if successful, would have a direct effect on reducing fuel cell costs. Similarly, other components of the fuel cell and system (e.g., polymer electrolytes, hydrogen storage) stand to achieve higher performance at lower cost by the development of new materials.
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Similar gains have been made in operating life. An operating life of at least 5,000 hours is required for automotive applications. During the last four years, the durability of fuel cell systems has been extended from 1,000 hours or less, to greater than 2,000 hours under real-world cycling conditions. Much progress has been made, but additional research is needed. The key to enhancing longevity is to understand performance degradation and failure mechanisms so that materials or engineering solutions may be devised to overcome them. This is another line of research sponsored by DOE at Argonne and other research organizations.
Plug-In Hybrid Electric Vehicles
''Plug-in'' hybrids (i.e., those that can be plugged in and recharged from the electric grid and which provide some driving range on battery power only) offer the potential to provide significant fuel savings benefits, particularly for commuter and local driving. Additional research and development is needed for cost-effective plug-in hydrids. Specifically, improved batteries and corresponding improvements to the electric drive systems (motors, power electronics, and electric controls) will be required. Needed battery improvements include reduced size and weight, greater durability and lifetime, and lower cost. Since 2002, however, the projected cost of a 25-kW battery system for hybrid vehicles, estimated for a mass production level of 100,000 battery systems per year, has dropped by more than 35 percent.
The plug-in hybrid vehicle is a demanding application for the on-board energy storage device (battery). Nickel metal hydride batteries are used in conventional hybrid vehicles today. However, lithium-ion batteries are the most promising technology for use in this application, due to their high energy density and high power density. It is only a matter of time before they replace nickel metal hydride batteries in conventional hybrid electric vehicles. For the same amount of stored energy and power, lithium-ion batteries will be about two-thirds the size of a comparable nickel metal-hydride battery. The current state-of-the-art lithium-ion batteries already possess suitable power, energy, weight, and volume for use in plug-in hybrids that could provide at least a 20-mile range capability on batteries only. The issues of ruggedness (e.g., ability to withstand overcharging and extreme temperatures), long lifetimes, and cost remain barriers for this technology.
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Various tradeoffs can exist in battery technology. For example, batteries with thick electrodes tend to have high stored energy but low power capability. On the other hand, batteries with thin electrodes tend to have high power density but lower energy density. This allows the battery developer the flexibility to design a battery with high power for a hybrid vehicle application, or one with high energy (and therefore high range) for an electric vehicle, or some intermediate combination that may be required for a plug-in hybrid. Similar tradeoffs between cost and life are also sometimes possible. However, in order for a battery to be successful, it must meet all the application requirements simultaneously. This can only be achieved through the development of new materials, components, and enabling technologies.
There exist numerous opportunities for reducing cost, extending life, and further increasing the energy density of lithium-ion battery technology. Currently, there are worldwide R&D efforts focused on the development of advanced anode and cathode materials that are less expensive and inherently more stable than those used in current state-of-the-art lithium-ion batteries (and Argonne is one of the world leaders in this area, via its DOE-funded R&D programs). Several of these advanced electrode materials offer the promise for simultaneously extending electric range (via increased battery energy density), extending battery life (via enhanced stability of materials), and reducing battery costs via two mechanisms—lower battery material costs and reduced complexity of the battery management and control system (due to use of these more inherently stable materials).
The issue of rapid recharge for plug-in hybrids is much more an infrastructure issue than it is a battery issue. With 220-volt, 20-ampere electrical service available in households, it will take more than two hours to charge a 10-kWh battery (the approximate size battery needed for a electric range of 20–40 miles). Even current state-of-the-art lithium-ion batteries are capable of accepting a one-hour recharge.
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Conclusion
In my opinion, there is no single solution—the future will include a mix of technologies that includes improved internal combustion engines, alternative fuels, hybrids, plug-in hydrids, electric vehicles, and fuel cell vehicles. A range of technologies that will be needed to make fuel cell vehicles viable are the subject of ongoing research. These include lightweight materials, advanced batteries, power electronics and electric motors. Considerable progress to overcoming the barriers associated with each of these advanced technologies has been achieved during the last four years. The rate of continued progress will certainly depend on future levels of public and private investment.
The vision of fuel cell vehicles and plug-in hybrids as a solution to foreign energy dependence, environmental pollution and greenhouse gas emission, is compelling. The challenges on the road to achieving this vision can be addressed with innovative high-risk/high-payoff research. Argonne National Laboratory, together with other national laboratories, has a number of significant programs that will contribute to these future automotive technologies. We are working with the DOE Offices of Science, Energy Efficiency and Renewable Energy, Fossil Energy, and Nuclear Energy to create useful processes for building a hydrogen economy. We at Argonne are excited at the prospect of helping our nation in its transition to environmentally friendly, domestically produced sources of power.
Thank you, and I will be happy to answer questions.
BIOGRAPHY FOR JAMES F. MILLER
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Dr. James Miller is currently the Director of the Electrochemical Technology Program at the U.S. Department of Energy's Argonne National Laboratory. He has over 33 years of research experience in developing advanced batteries for electric and hybrid vehicles, hydrogen storage materials, and fuel cells for automotive applications and distributed power. He has served on numerous review panels for the National Research Council and for the Department of Energy. He was the recipient of the 1998 Department of Energy Fuel Cell Program Award. He holds a Ph.D. degree in Physics from the University of Illinois, and an MBA degree from the University of Chicago.
Chairwoman BIGGERT. Thank you, Dr. Miller.
Next we have Mr. Weverstad. You're recognized for five minutes.
STATEMENT OF ALAN R. WEVERSTAD, EXECUTIVE DIRECTOR, MOBILE EMISSIONS AND FUEL EFFICIENCY, GENERAL MOTORS PUBLIC POLICY CENTER
Mr. WEVERSTAD. Good morning. My name is Alan Weverstad and I'm Executive Director for the Environment and Energy Staff at the GM Public Policy Center.
I'm pleased to speak to you today regarding GM's plans for development and implementation of advanced technologies into our future vehicles. This plan includes near-term steps such as continuing to make improvements to today's internal combustion engines and transmissions with increased E85 flex-fuel availability.
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Mid-term steps, which are beginning right now such as more affordable and flexible hybridization of vehicles and long-term steps such as fuel cell powered vehicles with hydrogen. The answer to today's energy issues are not simple, and we believe that all of these technology will play an important role in America's energy future.
GM is leading the effort on flex-fuel vehicles capable of running on gasoline or E85 ethanol. These vehicles offer a choice to consumers, a choice that has significant energy and economic benefits. Ethanol is renewable and in high concentration blends helps reduce greenhouse gas emissions. As E85 it helps reduce United States' dependency on petroleum, diversifies our sources of transportation fuel and reduces smog forming emissions. Ethanol usage provides great opportunities for the domestic agriculture industry and should help spur new job growth in other areas.
When gasoline prices spiked in the aftermath of the hurricanes that devastated the Gulf Coast, ethanol become more visible and GM recognized an opportunity to become part of this growing movement. Earlier this year General Motors launched a national advertising campaign to promote the benefits of this fuel and the fact that we have today vehicles capable of using E85. We followed up with the launch of our Live Green Go Yellow website to make this information even more widely available. Traffic to that website quickly rose to the millions as consumers wanted to know about E85, GM flex-fuel vehicles and station locations.
With nearly two million E85 capable vehicles already on the road at General Motors and a plan to offer 14 separate E85 capable models in 2007 we wanted to make sure our consumers knew when they were getting this flexible capability. So GM launched a labeling effort that included an external badge on the vehicle noting its flex-fuel capability and a yellow gas cap to remind customers that their vehicle is capable of running on E85.
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We have also embarked on—upon several significant partnerships to increase the availability of the ethanol fueling infrastructure. We have partnered with ethanol producers, fuel suppliers, State governments and others in Michigan, Indiana, California, Illinois, Minnesota and Texas with more to come.
For the United States, the growth of the ethanol industry raises enormous potential for displacing gasoline consumption in the transportation sector. If all of the five to six million flex-fueled vehicles on the road by the end of this year were fueled using E85, the United States could offset the need for 3.6 billion—that's with a B, billion gallons of gasoline annually. And for the individual consumer regularly filling a 2007 Tahoe with E85 would displace the use of over 600 gallons of gasoline each year.
These are impressive numbers so we need to find ways to increase availability of E85 in the marketplace.
Although E85 technology is generally well known, it is not costless to the manufacturers. E85 flexible-fuel capable vehicle requires fuel system materials with improved corrosion resistance. The fuel system parts involve include the fuel tank, the fuel pump and the fuel level sender, on board diagnostic pressure sensors and fuel injectors. Both the fuel pump and the injectors must be sized for significantly higher flow rates to compensate for E85's lower energy density. The cylinder heads and valve materials within the engines need to be able to withstand E85's different chemical properties. And finally, the fuel system software and calibrations must be tailored to recognized E85 or gasoline and adjust the fueling and spark timing accordingly.
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Effecting all of these changes across a range of vehicles will take time. Effecting all of these—especially for full line automakers like GM which have a variety of engines and fuel systems that will need to be modified. In some cases for low volume products the new—or the new direct injection technologies it may not be cost effective to add this technology, especially since ethanol will not be displacing gasoline across the board like unleaded gasoline did in replacing leaded gasoline.
On the hybrid technology front later this year we will introduce the 2007 Saturn View Green Line Hybrid powered by a new more affordable hybrid system with a fuel economy improvement of approximately 20 percent over the conventional engine. The Saturn View Green Line is expected to deliver an estimated 27 miles per gallon in the city and 32 miles per gallon on the highway, the best highway milage of any SUV. This new more affordable hybrid system is leading the way for GM to offer the all new two mode full hybrid Chevy Tahoe and GMC Yukon in 2007.
In addition, GM is evaluating the potential for and cost effectiveness of plug-in hybrid vehicles. Essential to make this technology a success are lower costs, lighter faster charging batteries that can be used to propel the vehicle in most local commuting and other trips of up 20 miles without needing to use the internal combustion engine. While extensive battery research is being done, we are still not at the point where this technology is ready for widespread implementation.
Looking to the long-term, General Motors has placed a very high priority on fuel cells and hydrogen as a power source and an energy carrier for automobiles. To accomplish this GM's fuel cell program is focused on lowering costs and increasing reliability of the fuel cell stack demonstrating the promise of technology through validation programs and collaborating with other parties on the infrastructure issues that need to be addressed. We have made significant progress in several of these areas, including fuel cell power density by a factor of seven while enhancing the efficiency and reducing the size of our fuel cell stack. It's now half the size it was before significantly increasing fuel cell durability, reliability, reliability and cold start capability developing a safe hydrogen storage system that approaches the range of today's vehicles and reducing costs through technology improvements and system simplification.
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With respect to collaboration, we are working with key partners on virtually every aspect of fuel cell and infrastructure technology. The FeedomCAR and the California Fuel Cell Partnership, and the Fuel Cell Partnership managed through the United States Department of Energy has proven to be an important forum for developing these issues and challenges.
Clearly huge challenges remain. Reliability of fuel cell stacks and storage of the hydrogen on board the vehicle must be resolved to draw American consumers to these vehicles. And the fueling infrastructure must be available so that owners of these vehicles have no concerns about where to get the hydrogen.
In conclusion, there is no one single solution to the challenges we face. We are concentrating our energies on a number of different fronts and believe that many of these technologies will coexist in the marketplace. General Motors has a rational advance technology plan that goes from the near-term focused on alternative fuels like E85 ethanol to the long-term hydrogen powered fuel cells. We are executing that plan. All of these will help to simultaneously reduce United States' energy dependence, remove the automobile from the environmental debate and stimulate economic and jobs growth.
Thank you.
[The prepared statement of Mr. Weverstad follows:]
PREPARED STATEMENT OF ALAN R. WEVERSTAD
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Good morning. My name is Alan Weverstad and I am Executive Director for Environment and Energy in the GM Public Policy Center. I am pleased to be able to speak to you today regarding GM's near- and longer-term plans for development and implementation of advanced technologies into our future vehicles.
GM has always been a leader in the development and use of technologies in vehicles. From the move away from hand-cranked starters—to the highly successful catalytic control technology for vehicle emissions—to efforts to produce an innovative electric vehicle in the 1990s, GM has been instrumental in the implementation of advanced technologies.
Today, we are continuing to focus on ways to advance vehicle fuel economy, safety and emissions. And GM is actively engaged in all of these activities. We have a plan to address both the needs of our customers and the critical public policy issues facing us. This plan includes near-term steps, such as continuing to make improvements to today's internal combustion engines and transmissions and increased E85 flex-fuel capability; mid-term steps, such as more affordable and flexible hybridization of vehicles; and long-term steps, such as fuel cells powered by hydrogen. The answer to today's energy issues is not simple, and we believe that all of these technologies will play an important role in America's energy future.
Today, I am here to speak about our work in these areas.
GM is leading the effort on flex-fueled vehicles capable of running on gasoline or E85 ethanol. These vehicles offer a choice to consumers—a choice that has significant energy and economic benefits. Ethanol is renewable and, in high concentration blends, helps reduce greenhouse gas emissions; as E85 it helps reduce U.S. dependence on petroleum, diversifies our sources of transportation fuel, and reduces smog-forming emissions. Ethanol usage provides great opportunities for the domestic agriculture industry and should help spur new job growth in other areas.
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Until last fall there was limited interest in the development of ethanol as an alternative fuel. But when gasoline prices spiked in the aftermath of the hurricanes that devastated the Gulf Coast, ethanol became more visible and GM recognized an opportunity to become part of the solution. Earlier this year, General Motors launched a national advertising campaign, beginning with the very visible 2006 Super Bowl, hosted in our own home city of Detroit. After the Super Bowl, we continued through the 2006 Winter Olympics, including launching our ''Live Green, Go Yellow'' website. Traffic to that website quickly rose to the millions—as consumers wanted to know more about E85, GM flex-fuel vehicles and station locations.
But that was just the beginning. With nearly two million E85 capable vehicles already on the road and a plan to offer 14 separate E85 capable models in 2007, we wanted to make sure our customers knew when they were getting this flex-fuel capability. So, GM launched a labeling effort that included an external badge on the vehicle noting its flex-fuel capability and a yellow gas cap to remind customers that their vehicle is capable of running on E85.
We have also embarked upon several significant partnerships to increase the availability of the ethanol fueling infrastructure. Most recently, GM partnered with Meijer, CleanFuelUSA, the State of Michigan and the State of Indiana to work toward approximately forty new retail outlets. We have previously announced similar partnerships in California, Illinois, Minnesota and Texas—working with a variety of energy companies, State agencies, and distribution outlets.
For the U.S., the growth of the ethanol industry raises enormous potential for displacing gasoline consumption in the transportation sector. If all of the five million flex-fueled vehicles on the road today were fueled using E85, the U.S. could offset the need for 3.6 billion gallons of gasoline annually. And for the individual consumer, regularly filling a 2007 Chevrolet Tahoe with E85 would displace the use of over 600 gallons of gasoline each year. These are impressive numbers, so we need to find ways to increase availability of E85 in the marketplace.
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Although E85 technology is generally well known, it is not costless to the manufacturers. Each E85 flex-fuel capable vehicle requires fuel system materials with improved corrosion resistance. The fuel system parts involved include the fuel tank, fuel pump, the fuel level sender, the on-board diagnostic pressure sensor and the fuel injectors. Both the fuel pump and the injectors must be sized for significantly higher flow rates to compensate for E85's lower energy density. The cylinder heads and valve materials within the engine need to be able to withstand E85's different chemical properties. And finally, the fuel system software and calibrations must be tailored to recognize E85 or gasoline and adjust the fueling and spark timing accordingly. Effecting all of these changes across a range of vehicles will take time—especially for full-line automakers like GM, which have a variety of engines and fuel systems that will need to be modified. In some cases—for low volume products or new direct injection technologies—it may well not be cost effective to add this technology—especially since ethanol will not be displacing gasoline across the board, like unleaded gasoline did in replacing leaded gasoline.
On the hybrid technology front, later this year, we will introduce the 2007 Saturn Vue Green Line Hybrid, the first GM vehicle powered by a new, more affordable hybrid system. With a fuel economy improvement of approximately 20 percent over the Vue's conventional engine, the Saturn Vue Green Line is expected to deliver an estimate 27 mpg in the city and 32 mpg on the highway, the best highway mileage of any SUV. This new, more affordable hybrid system reduces fuel consumption in five ways. First, the system shuts off the engine when the vehicle is stopped, to minimize idling. Second, the system restarts the engine promptly when the brake pedal is released. Third, fuel is shut-off early while the vehicle is decelerating. Fourth, vehicle kinetic energy is captured during deceleration (regenerative braking) to charge an advanced nickel metal hydride battery. And finally, the battery is charged when it is most efficient to do so. This new and more affordable hybrid technology is leading the way for GM to offer the all new two-mode full hybrid Chevy Tahoe and GMC Yukon in 2007.
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In addition, GM is evaluating the potential for and cost effectiveness of plug-in hybrid electric vehicles (PIHEVs). Essential to make this technology a success are lower cost, lighter, faster charging batteries that can be used to propel the vehicle in most local commuting and other trips (up to 20 miles or more) without needing to use the internal combustion engine. While extensive battery research is being done, we are still not at the point where this technology is ready for widespread implementation From GM's prior work on pure electric vehicle technology (especially production of the EV1) and through the company's broad work in hybrid technology, GM sees several challenges automakers will need to overcome to get this technology into the market.
The first is the significant cost challenge that is already present with hybrid vehicles, but then is amplified with the addition of plug-in capability. The increase in battery size is the most significant contributor to this additional cost.
Secondly, the additional battery mass and volume present considerable technical challenges to the vehicle design. With the pressure today to reduce vehicle mass and packaging space already at a premium for hybrid vehicles, this is a challenge that requires significant advances in battery mass and volume to accommodate.
Thirdly, the PIHEV will require advances in battery technology, specifically the development of a battery that has long life with high charge/discharge capabilities needed to propel the vehicle during EV operation. Promising results have been seen with next generation lithium ion battery technology, but this still requires study to know that the full range of vehicle performance characteristics can still be met.
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Looking to the long-term, General Motors has placed very high priority on fuel cells and hydrogen as the power source and energy carrier for automobiles. To accomplish this, GM's fuel cell program is focused on lowering cost and increasing reliability of the fuel cell stacks, demonstrating the promise of the technology through validation programs and collaborating with other parties on the infrastructure issues that need to be addressed. We have made significant progress in several of these areas:
In the last six years, we have improved fuel cell power density by a factor of seven, while enhancing the efficiency and reducing the size of our fuel cell stack.
We have significantly increased fuel cell durability, reliability, and cold start capability.
We have developed safe hydrogen storage systems that approach the range of today's vehicles.
We have made significant progress on cost reduction through technology improvements and system simplification.
With respect to collaboration, we are working with key partners on virtually every aspect of fuel cell and infrastructure technology. The FreedomCAR and Fuel Partnership, managed through the U.S. Department of Energy, has proven to be an important forum for addressing these issues and challenges.
Clearly huge challenges remain. Reliability of the fuel cell stacks and storage of the hydrogen on board the vehicle must be resolved to draw American consumers to these vehicles. And the fueling infrastructure must be available so that owners of these vehicles have no concerns about where to get the hydrogen.
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In conclusion, there is no one single solution to the challenges we face. We are concentrating our energies on a number of different fronts, and believe that many of these technologies will coexist in the marketplace. General Motors has a rational advanced technology plan that goes from near-term, focused on alternative fuels like E85 ethanol, to the long-term hydrogen-powered fuel cells. We are executing that plan. All of these will help to simultaneously reduce U.S. energy dependence, remove the automobile from the environmental debate, and stimulate economic and jobs growth.
BIOGRAPHY FOR ALAN R. WEVERSTAD
ALAN R. WEVERSTAD, Executive Director Mobile Emissions and Fuel Efficiency, Public Policy Center, General Motors Corporation. Mr. Weverstad began his career in 1971 in the engineering area with Pontiac Motor Division where he worked as a design release & development engineer in the chassis and engine development sections. In 1985 he became a part of the Chevrolet-Pontiac-GM of Canada team where he was involved in the emission certification of 77 engine families. He then joined the Marine Engine Division and in 1991 moved to the Environmental Activities Staff and GM Research working on vehicle emissions issues. He is now the Executive Director of the Environment & Energy Staff of the Public Policy Center.
Mr. Weverstad is the immediate Past Chairman of the California Fuel Cell Partnership and Vice President of the Engine Manufacturers Association. He is also on the Board of Directors for the Electric Drive Transportation Association and on the Board of Advisors for UC Riverside and California H2 Highway.
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Mr. Weverstad is a graduate of General Motors Institute and holds a Bachelor of Science degree in Engineering from Oakland University.
27854b.eps
27854c.eps
Chairwoman BIGGERT. Thank you very much.
Mr. Hinkle, you're recognized for five minutes.
STATEMENT OF JEROME HINKLE, VICE PRESIDENT, POLICY AND GOVERNMENT AFFAIRS, THE NATIONAL HYDROGEN ASSOCIATION
Mr. HINKLE. Chairman Biggert, Ranking Member Honda and Representative Lipinski and guests, good morning. The National Hydrogen Association welcomes the opportunity to discuss progress toward building the hydrogen economy. We would like to focus on those technical and policy challenges that will be most important to transforming our energy systems. Under your leadership, the Energy Subcommittee continues to help guide our country's search for critical energy alternative. We hopes—excuse me. We hope today's hearing will provide some insight gain in several key areas.
I notice that I'm slightly to the left of GM here, so I need to pick up my act.
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For 17 years, the National Hydrogen Association has promoted transition to a hydrogen economy. Its 103 members represent considerable diversity; large energy and automobile firms, utilities, equipment manufacturers, small businesses, transportation agencies, national laboratories, universities and research institutions. In partnership with the United States Government and each other, we are a key part of the wave front of technical and economic action on hydrogen in the United States and abroad.
Hydrogen is our nation's premier energy destination. We'll need an army of dedicated and talented people to solve all the technical and market-building challenges along the way. The stakes are high, and we've got a lot of tough homework to do.
I note here that the Energy Policy Act of 2005, which is an important document here that needs to be completely realized in the appropriations process, intends with the regard to the hydrogen title in particular, to accelerate the research, development and demonstration programs in DOE, make government a more durable partner in its industrial relationships, give permanent authorization to the hydrogen programs in DOE and broaden the Secretary of Energy's authorities and provide the Secretary more than triple the resources to accomplish this. It builds on the strong foundation of DOE's prior work on hydrogen and the President's Hydrogen Fuel Initiative.
Recently the House passed H.R. 5427 where they fully funded DOE's request for $246 million for these programs, but there's a policy lag in the hydrogen program. Less than half, 47.5 percent of the Energy Policy Act's authorized funding level of $518 million has been requested by DOE for fiscal year 2007. We don't want to see the many opportunities for enhancing DOE hydrogen technology programs slip away at a crucial time in their history. For FY 2008 we would urge their program managers, perhaps with the support of the Committee, to utilize a much higher share of their budget authority which grows from $517/518 million in FY '07 to $740 million in FY '08. These are all in the authorization levels.
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Nearly 53 percent of this funding is for R&D, including basic science which also needs to be expanded beyond its—beyond its $50 million in the current energy and water appropriation.
Adequate on-board storage is widely agreed to be a fundamental necessity for a successful light duty vehicle. Much progress has been made in resolving many of those technical issues since the Committee's last field hearing in 2002. As Mr. Weverstad mentioned GM and then Ballard also have made great strides in improving costs and energy density. And there's a—there's a—in the handout there is a combined set of graphs from the Department of Energy that shows how some of this improvement has transpired.
And I just want to note that this work, there's still lots to do but their work continues at an urgent pace.
And benefits have come with more orderly program planning that identifies a wide range of alternative approaches. And improving the program management in DOE has led to manageable gains in storage performance. So you can see how important that is.
We see real progress in storage but believe that smart full use of the increased resources for fuel cell technologies, Section 805 of the Energy Bill, could definitely improve program performance. We urge DOE to request full funding for that in their FY 2008 budget.
A systems view of storage—it takes on a different personality in a whole vehicle context. It's important to remember that a modern gasoline fueled automobile only utilizes less than 1.5 percent of the fuel's energy to propel the vehicle's payload. This leaves a lot of room for improvement.
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Extra mass is just ballast. With more intensive application of modern aerospace composite materials and high strength, lightweight steels and alloys, coupled to the new flexibility in vehicle design that fuel cells and electric drive subsystems offer, a much more efficient vehicle package can be designed.
GM in particular has—has worked on this and looked at the flexibility in purpose built composite vehicle design. And Section 808 of the Energy Policy Act, Systems Demonstrations, encourage combined—combined learning demonstrations with optimized advance composite vehicle design. We'd like to see DOE fund some of that activity.
And as Amory Lovins once remarked ''Why waste a fuel cell on a primitive platform.''
To storage and distribution. There are technical barriers in production and distribution that need to be overcome. With about 220 millions cars registered in the United States, and that number will grow and about 17 million sold per year, the National Academy of Science estimates that 25 percent of the fleet would be replaced within 12 years while GM sees about 20 years to replace the entire fleet with good superior products in the market. This makes it possible to evolve hydrogen supply infrastructure along with vehicle production. Shell and Ballard and GM, all in a Senate hearing on hydrogen R&D last summer, late last summer, concurred that we could see a manufacturable fuel cell vehicle by 2010–2012 that would be competitive with those cars then for sale. And GM, of course, has made it fairly plain what their targets are with regard to this in 2010.
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We've got in the handout packet there's some slides from Shell Hydrogen that you might find interesting with regard to where hydrogen production is right now. On a satellite picture of the United States at night, for instance, overlaid by a 100 kilometer circle surrounding today's refinery production sites for hydrogen, this covers over 100 of these cities and in urban areas and which puts about 60 percent of the U.S. population today within a 100 kilometers of a major source of hydrogen. And these are the places where the introduction of hydrogen fuel cell vehicles would likely to be focused starting with fleets of municipal and commercial buses and delivery vehicles and then evolving to fleets of cars and light trucks and finally to consumers
And we don't want to ignore the rule of stationary and portable fuel cells, and leading these transitions to providing high quality supplemental and distributed power to businesses and municipalities, and the early establishment of hydrogen supply networks.
New job growth and retention of existing jobs during a transformation to a hydrogen economy is going to be important. We'll see altered refinery and utility operations in producing hydrogen. In addition, we'd likely see considerable expansion in renewable energy production both for electricity and biofuels in widely dispersed agricultural regions of the United States some distance from the urban demand centers.
Also much of the hydrogen in the early years will likely be produced from widely distributed sources using electricity off the existing grid or natural gas in the existing pipeline system. These distribution networks, this infrastructure is large, it's reliable and it reaches all urban areas. In some places as the Hydrogen Utility Group says for decades we brought electrons to every home and business in the United States, why not protons? Well, that's a little different technical challenge, but the operations of these—this infrastructure is well understood and key investments have already been made. The smoothest stage of the supply transition will be made in this way.
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These are valuable and essential assets, but they will need to be adapted to new business models. Depending on the highly varied and unique regional mix of generating capacity, the relative production efficiencies and carbon footprint of the possible hydrogen fuel cycles will all be quite different. As has been said here and has been—and needs to be said often, no single production strategy will work for the United States and all feasible techniques and sources for making hydrogen will likely be needed.
Chairwoman BIGGERT. Mr. Hinkle, could you sum up?
Mr. HINKLE. Yes, ma'am.
Chairwoman BIGGERT. Thank you.
Mr. HINKLE. Well, we have in the written package a number of suggestions for public investments in this area. And as Dan Quayle once observed: ''the future will be better tomorrow.''
Thank you.
[The prepared statement of Mr. Hinkle follows:]
PREPARED STATEMENT OF JEROME HINKLE
Chairman Biggert, Ranking Member Honda, Representative Lipinski and guests, good morning. The National Hydrogen Association welcomes the opportunity to discuss progress toward building the Hydrogen Economy. We would like to focus on those technical and policy challenges that will be most important to transforming our energy systems. Under your leadership, the Science Committee continues to help guide our country's search for critical energy alternatives—we hope today's hearing will provide some insight gain in several key areas.
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For 17 years, the National Hydrogen Association has promoted a transition to a hydrogen economy through its extensive work in codes and standards, education and outreach, and policy advocacy. Its 103 members represent considerable diversity: large energy and automobile firms, utilities, equipment manufacturers, small businesses, transportation agencies, national laboratories, universities and research institutions. In partnership with the U.S. Government and each other, we are the wave front of technical and economic action on hydrogen in the U.S. and abroad—these are the people and organizations that are making great progress along a broad technical front, and will have a key role in implementing these technologies (please see the attached slides about the NHA).
Hydrogen is our nation's premier energy destination. We'll need an army of dedicated and talented people to solve all the technical and market-building challenges along the way. The stakes are high, and we've got a lot of tough homework to do.
The Committee has requested our views in several areas. We will comment on some of the key technical and deployment issues, and relate these to important provisions of the Energy Policy Act of 2005.
Energy Policy Act of 2005 (P.L. 109–58) and Fiscal Year 2007, 2008 Budget Action
Many of the provisions in EPAct 05 originated in S. 665, the Hydrogen and Fuel Cell Technology Act of 2005, introduced on March 17, 2005. Written in concert with industry and the Senate's Hydrogen and Fuel Cell Caucus, it became the heart of the Hydrogen Title (VIII) in the Senate's Energy Bill, S. 10, and subsequently a substantial part of the hydrogen language negotiated in the Conference Committee. It was signed into law by the President on August 8, 2005. Significant sections of the Act's Vehicle and Fuels Title (VII) also deal with early market transition for hydrogen and fuel cells.
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Section 802 of the Act establishes the purposes of the Hydrogen Title:
Enable and promote comprehensive development, demonstration and commercialization in partnership with industry
Make critical public investments that build links to industry and the research community
Build a mature hydrogen economy that creates fuel diversity in the massive U.S. transportation sector
Create, strengthen and protect a sustainable energy economy.
In Titles VII and VIII, the Act clearly intends to accelerate the research, development and demonstration programs in DOE, makes the government a more durable partner in its industry relationships, gives permanent authorization to the hydrogen programs in DOE, broadens the Secretary of Energy's authorities and provides more than triple the resources to accomplish this. It builds on the strong foundations of DOE's prior work on hydrogen and the President's Hydrogen Fuel Initiative, which has planned to devote $1.2 billion to this work from 2004 through 2008. The EPAct 05 authorizes $3.73 billion over Fiscal Years 2006 through 2011, and ''such sums as are necessary'' through 2020 (please see the attached slides about the EPAct 05).
The House recently passed H.R. 5427, the Energy and Water Development Appropriations Act for Fiscal Year 2007. It mirrors DOE's Budget Request for hydrogen—$246 million for those programs included in Titles VII and VIII (under the Energy Efficiency and Renewable Energy and Science offices of DOE).
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RD&D activity in the Government is fueled by these public investments. The level of funding requested by DOE is on a path established by the Hydrogen Fuel Initiative in early 2003. Much has changed since—by February 2003, we had already seen energy prices beginning their rise—the average world oil price was about $28/barrel, but by the end of May 2006 that price was nearly $64/b. The President and Congress have anticipated the need to seriously search for transportation fuel alternatives, but there is a policy lag in the hydrogen program—less than half (47.5 percent—$246 million) of the EPAct 05's authorized funding level of $518 million has been requested by DOE for FY 2007.
Action We don't want to see the many opportunities for enhancing DOE hydrogen technology programs to slip away at a crucial time in their history. Built on program success, Congress has given the Secretary extensive authority in the EPAct 05 to enhance Section 8o8 demonstration programs, particularly with respect to learning demonstrations, broader vehicle/fuel supply systems (including community systems), and the ability to have results from demonstrations revise the direction of R&D projects. DOE is well into planning for the FY 2008 budget cycle—we would urge their program managers, with the support of the Committee, to utilize a much higher share of their budget authority, which grows from $517.5M in FY07 to $739.5M in FY08. Nearly 53 percent of this funding is for R&D, including basic science, which also needs to be expanded beyond its $50M in the current Energy and Water appropriation. There are also significant opportunities in Title VII (Vehicles and Fuels) to have federal and State agencies take a leadership role in purchasing stationary and portable fuel cells and hydrogen supply systems as early adopters. This could be coupled, for instance, with DOE's Clean Cities program to demonstrate real systems in the urban areas where the first commercial deployments of vehicle fleets is most likely.
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Critical Technical and Economic Challenges
In its pacesetting report, The Hydrogen Economy: Opportunities, Costs, Barriers and R&D Needs (April 2004), the National Academy of Sciences summarized their four most fundamental technological and economic challenges:
Develop and introduce cost-effective, durable, safe and environmentally desirable fuel cell systems and hydrogen storage systems
Develop the infrastructure to provide hydrogen for the light duty vehicle user
Reduce sharply the costs of hydrogen production from renewable energy sources, over a time frame of decades
Capture and store the carbon dioxide byproduct of hydrogen production from coal.
Storage As the Committee has noted, adequate on-board storage is widely agreed to be a fundamental necessity for a successful light duty vehicle. Stationary storage can be just as important for the fueling stations supplying the vehicles. Much progress has been made on defining and resolving some of the storage issues since the Committee's last field hearing in 2002. Both on-board and stationary storage have seen considerable improvement, especially in concert with the industry/DOE Technology Validation program.
GM and Ballard, for instance, have greatly improved fuel cell power density—GM by a factor of seven in the last six years, while enhancing efficiency and durability and reducing the stack size. Ballard reduced the cost in four years by 80 percent to $103/kW, still about three times the DOE's 2010 goal of $30/kW to be competitive with current ICE powered cars, but on a path to achieve that goal. Durability increased ten-fold. Their work continues at an urgent pace.
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DOE and Department of Defense work, the President's Hydrogen Fuel Initiative of February 2003, and its support by industry and the Congress—all have led to more orderly program planning that identifies a wide range of alternative approaches to the materials and methods that could be used to store hydrogen. Improving the program management has led to measurable gains in storage performance (a summary description of the progress for 2005 is available on DOE's web site, www.hydrogen.energy.gov—the Annual Progress Report, pp. 459–462; see, also www.er.doe.gov for the DOE Science program, which has considerable work underway on fundamental science with regard to hydrogen storage).
(Note: please see the attached slide from DOE comparing the relative performance of several storage methods: Hydrogen Storage Technologies, which shows storage capacity and costs.)
From the graphs, it is clear that by the end of 2005, volumetric capacity (volume storage effectiveness) and gravimetric capacity (storage by weight) do not yet match the goals DOE has set for 2010 and 2015. Neither has system cost reached the targets, but all the 2010 goals are being approached in steady fashion. Can progress toward these goals be reached more quickly? We see real progress in storage, but believe that smart, full use of the increased resources for Fuel Cell Technologies (Sec. 805) included in the EPAct 05 could definitely improve program performance. We urge DOE to request full funding in their FY 2008 budget.
Associated graphs show how the cost curve for proton exchange membrane fuel cells is dropping with steady research effort, and also how hydrogen cost goals for fuel cell vehicles relate to gasoline/electric hybrids and gasoline/internal combustion engines, taking into account their relative efficiencies.
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Something missing from DOE's planning is direct combustion of hydrogen in advanced piston engines. This is a conscious program resources decision to focus on what they see as the highest payoff efforts. Two NHA members, BMW and Ford, have done considerable work with a variety of engines running on hydrogen. BMW plans to introduce a 7 Series with a V–12 bi-fuel engine, perhaps before the end of the year. It has remarkable emissions, and excellent performance. We would like to see DOE devote some funding to direct combustion, as it offers much earlier market introduction and a bridge to the hydrogen economy through the establishment of hydrogen supply stations for a wider variety of vehicles and collocated stationary fuel cells for electrical power.
A systems view Focusing on storage and achieving a 300 mile range as if they were separate from other vehicle design parameters may limit the search for solutions within a whole vehicle context. It is important to remember that a modern gasoline-fueled automobile only utilizes less than 1.5 percent of the fuel's energy to propel the vehicle's payload. This leaves considerable room for improvement.
Extra mass is just ballast. With more intensive application of modern aerospace composite materials and high strength, lightweight steels and alloys, coupled to the new flexibility in vehicle design that fuel cells and electric drive subsystems offer, a much more efficient vehicle package can be designed. Aircraft designers have been coping with these problems for a hundred years. A personal vehicle, however must be much cheaper and simpler.
There is a significant interaction between mass and the size of the fuel cell, the amount of hydrogen stored on board, and range. Although DOE has advanced materials, vehicles and manufacturing projects, it is unclear whether these have achieved a high level of integration. Hence Section 808 (b) of the EPAct 05, Systems Demonstrations, that specifically combine learning demonstrations with optimized advanced composite vehicle design. DOE already plans for second generation vehicles in their Technology Validation learning demonstrations. Again, this is a real opportunity for DOE to utilize some of their new authority and resources in advancing the art of whole vehicle design. General Motors, for instance, has built several vehicles that incorporate not only advanced hydrogen fuel cell electric drive systems, but totally different platforms. As Amory Lovins has remarked, ''Why waste a fuel cell on a primitive platform?''
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(Note: please see the attached charts from General Motors, which highlight what they see as the key goals and challenges.)
Of some note is the GM chart encouraging DOE to strengthen their hydrogen program, a ''bold new approach.'' By simply ratcheting up Corporate Average Fuel Economy standards, and achieving this through the use of hybrids of various types we do save oil, but only delay solving the critical transportation fuel diversity/security problem. The conclusion here is that we already know enough about the potential of a hydrogen economy, and the stakes are so high that we need to focus on total solutions rather than partial ones.
Technical barriers in production and distribution—where will the H2 Economy get built?
The Committee is concerned about the technical barriers in production and distribution that would need to be overcome to permit hydrogen to fuel a quarter of the cars on the highway. With about 220 million cars registered in the U.S., and about 17 million sold per year, it would take several years after a competitive vehicle was available for 25 percent of the existing fleet to be replaced. Since many owners have more than one registered vehicle, and there are somewhat fewer drivers than the entire vehicle stock, significant operational oil savings would occur well before 25 percent replacement. The National Academy study ''upper bound'' market penetration case assumes that competitive fuel cell vehicles enter the market in 2015 as part of the mix of hybrids and conventional internal combustion engine (ICE) powered vehicles. They estimate that 25 percent of the fleet would be replaced within 12 years, or by 2027.
GM and others see that within 20 years the entire fleet could turn over with a superior group of products, which makes it possible to evolve hydrogen supply infrastructure along with vehicle production. In testimony before the Senate last July, GM, Shell and Ballard all concurred that we could see a manufacturable fuel cell vehicle by 2010–2012 that would be competitive with those cars then for sale. GM's urgent target is to validate a fuel cell propulsion system by 2010 that has the cost, durability and performance of a mass produced internal combustion system.
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GM and others have estimated that an infrastructure for the first million vehicles could be created in the U.S. for $10–$15 billion, making hydrogen available within two miles for 70 percent of the U.S. population, and connecting the 100 largest U.S. cities with a fueling station every 25 miles. Others see broader deployment costing nearer $20 billion, not appreciably more than what the industry reportedly spends each year to simply maintain its current gasoline supply system.
Substantial oil savings would result when 25 percent of the fleet is replaced, resulting in lessening peak refinery capacity needs, as gasoline demand begins to shrink. Since much of the current industrial hydrogen production is utilized by oil refineries in making modern gasolines, some of this could now become merchant hydrogen supply. The attached Shell Hydrogen slides are suggestive.
The first of these shows a satellite picture of the U.S. at night, overlaid by 100 km circles surrounding today's refinery production sites for hydrogen. These are also the major urban, higher density gasoline demand areas—over 100 of them—meaning that at some 60 percent of the U.S. population is within 100 km of a major source of hydrogen today. And these are where the introduction of hydrogen fuel cell vehicles would likely be focused—starting with fleets of municipal and commercial buses and delivery vehicles, and then evolving to fleets of cars and light trucks, and finally to consumers. We would expect stationary and portable fuel cells to lead these transitions in providing high quality supplemental and distributed power to businesses and municipalities, and the early establishment of hydrogen supply networks.
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Shell's next few slides discuss how a transition needs to be managed—in terms of key ''Lighthouse'' projects—those sized correctly and smart enough to provide a beacon to lead the way to something larger. A critical component is the quality of public/private partnerships—something the EPAct 05 stresses. The coordination of ''Infrastructure Rollout'' is a critical aspect—if it is uncoordinated, excess retail and manufacturing capacity outruns demand, leading to high costs for hydrogen that further dampen demand and shrink profitability. They see that an excellent match between the rates of demand and supply growth optimizes investment in capacity, and a more orderly and rapid transition. Lighthouse Projects are the harbingers of commercial success, and primary showcases for how well public and private institutions cooperate in establishing the climate for growth—whether it be in North America, Europe or Asia.
It is interesting to speculate on how the industrial base for a hydrogen economy might evolve. As a result of a study called for in Section 1821 of the EPAct 05, Overall Employment in a Hydrogen Economy, DOE will soon have underway an economic development analysis that looks at different transitions to varied forms of a hydrogen economy, to accompany other such work on market and technology transitions. It is expected that both new job growth and retention of existing jobs during a transformation like this would center on the supply chain for new vehicles, and much altered refinery and utility operations producing hydrogen. In addition, we would likely see considerable expansion in renewable energy production—both electricity and biofuels—in widely dispersed agricultural regions of the U.S. some distance from urban demand centers.
Also, much of the hydrogen in the early years will likely be produced from widely distributed sources, using electricity off the existing grid or natural gas from the existing pipeline system. These distribution networks are large, reliable and reach all urban areas. The combined electrical grid is connected everywhere—as the Hydrogen Utility Group suggests, ''For decades, we have brought electrons to every home and business in the U.S.; why not protons?'' Their operations are well understood, and key investments already made. The smoothest stage of the supply transition will be made in this way.
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And since hydrogen does not lend itself to worldwide transport like oil and liquefied natural gas, it will not be as fungible internationally as oil—yielding domestic and regional markets where value can be based largely on market fundamentals and cost of production and transportation, unhooked from global volatility. This could also make the tools of government incentives—investment, production and use tax credits, loan guarantees, etc., more effective and predictable. Domestic production of hydrogen is the next wave of products for the energy industry, and promises considerable economic growth opportunities.
Depending upon how existing manufacturing capacity is converted and preserved in traditional areas, the automobile supply chain might have more inherent flexibility in locating new and old operations. The advanced fuel cell vehicle could have only one-tenth as many moving parts as today's cars, SUVs and pickups, and much of the rest of the vehicle would be different. Transformation would happen everywhere. True worldwide markets will evolve for components and vehicles, and manufacturing capacity is more mobile than hydrogen production.
Large export markets are expected to evolve for vehicles and components, and also for the technology surrounding hydrogen production and storage. Due to its particular appeal in improving the efficiency and shrinking the carbon footprint of conventional fuel cycles, hydrogen-related technologies will help create an even wider range of new export opportunities. International competition could be fierce.
Centralized and Distributed Hydrogen Production
As noted above, the U.S. has some of the basic infrastructure already in place that could be utilized in transitioning to a hydrogen economy—plants near oil refineries that manufacture hydrogen from natural gas and some byproduct plant fuel, and the nationwide electric power grid. These are valuable and essential assets, but they will need to be adapted to new business models. Depending upon the highly varied and unique regional mix of generating capacity (coal, hydroelectric, nuclear, renewable), and how effectively they can grow, the relative production efficiencies and carbon footprint of the possible hydrogen fuel cycles will be quite different.
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No single production strategy will work for the U.S., and all feasible techniques and sources for making hydrogen will likely be needed—but more uniform emissions, costs and oil savings criteria can be applied. There may be an important new role for the Federal Energy Regulatory Commission (FERC), especially with regard to enabling rule-makings for producing more renewable electricity if a national Renewable Portfolio Standard were to be adopted (in the Senate's Energy Bill, but defeated in the EPAct 05 Conference). Investment decisions selecting between alternative sources of hydrogen could vary considerably, and the Committee needs to encourage R&D investment that can make these distinctions.
In shaping possible regulations for greenhouse gas management in the U.S., emission allowances and credit valuations could be designed to favor system design and technology deployment that minimize carbon emissions across the entire fuel cycle, not just for a particular energy sector. Proposals for investing in advanced low carbon technologies, funded by the sale and trade of carbon credits, might be structured to assist the most promising hydrogen supply and use technologies. The EPAct 05 Hydrogen and Incentives Titles are reasonably clear on the intent to select those public investments in technologies that optimize their carbon footprint. The carbon characteristics of particular projects funded through the Indian Energy Title are likewise important system performance criteria.
Action So, where does the key technical work need to be done, and what is government's role? The above discussion of the EPAct 05 advocates fuller funding in FY08 of all the key components of the Act with regard to hydrogen and fuel cells for vehicles. The Act attempts to reach forward to give DOE the authorities it needs to be more aggressive in creating more technical solutions more quickly. Besides making the vehicle and drive package lighter, cheaper and more efficient, the supply infrastructure needs equivalent attention, and new legislation might be needed to help.
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Multiple sources of H2—the U.S. has enormous coal reserves, but some reluctance to move quickly on solving its fundamental problems at an equivalent scale. The EPAct 05 has an excellent Coal Title, but little of it has been funded. There needs to be some agreement forged on the scale of public investment, including projects like that in Section 411, which is a regional 200 mW Integrated Gasification Combined Cycle (IGCC) facility that would make hydrogen and electricity, used in a power park setting. Many unused opportunities exist in Title XVII, Incentives for Innovative Technologies, (loan guarantees) which could be applied very fruitfully in combination with Title V, Indian Energy (which has its own loan guarantee program), and Title VIII, Hydrogen. We need to build flexibly sized, innovative commercial scale plants that match the pace of the hydrogen technology program's accomplishments with vehicles. Additionally, Title XVI, Subtitle A, National Climate Change Technology Deployment, could readily be combined with the Coal, Indian Energy, Incentives and Hydrogen Titles to put some key projects in place that would provide substantial learning and commercial possibilities.
Although there is a uniform strategic plan for the climate program in DOE and other agencies, there are a very wide variety of projects across the government whose effectiveness in actually solving critical problems with coal, for instance, may be unlikely. It is unclear that the degree of fragmenting allows critical focus on solving key public problems, especially since they are located in so many separate agencies. A critical review and redeployment could be useful.
Very useful R&D can be planned at the front end of a small commercial scale demonstration, encouraging an iterative R&D evolution much like the Learning Demonstrations are employed to revise R&D agendas in the H2 programs. Full scale tests of new materials and processes could speed eventual commercial deployment. We would include consideration of how Title VI, Subtitle C, Next Generation Nuclear Plant Project, could be enhanced.
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There are significant opportunities, for instance, for advanced ceramic materials to be used in higher temperature applications for carbon capture from advanced coal gasification processes, and in nuclear hydrogen production. The American Competitiveness Initiative in the DOE Science program has an advanced materials program that could contribute fundamental knowledge in these areas.
DOE has been working to improve the efficiency and durability of electrolyzers, which are a critical component of early distributed generation strategies. More needs to be done in the area of materials, processes, manufacturing and validation.
Renewable H2—again, less innovative use of the EPAct 05 authority shrinks our horizons. The public investment in wind, biomass and solar production of hydrogen needs to grow, both with regard to fundamental science and learning demonstrations. For those technologies that have true commercial appeal, the suite of authorities in the Incentives, Climate Change, Indian Energy, and Electricity Titles offer some intriguing possibilities for R&D focused on solving real public problems. More exploratory work in the DOE Science program could speed the availability of direct biological and solar hydrogen production, perhaps teamed in their advanced stages in Learning Demonstrations in specific regions and cities.
Electrical grid—sizable renewable resources are often far away from urban load centers, but the Western Area Power Administration (WAPA) could be a key factor in bringing renewable electricity to high growth population centers in the Southwest and California. Significant planning studies have already been done on how to get more wind on the wires so renewable electricity from the Northern Great Plains—where the richest wind resources are—could be moved to high demand areas for hydrogen.
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Important work needs to be done on much more sophisticated control systems, composite materials and processes for enhancing transmission efficiency and high throughputs in corridors where there are significant siting problems. Much could be done to improve the potential for transmitting renewable energy to market.
Management organization—The Committee is considering versions of an ARPA–E bill, based on the quick and flexible management often used in the Department of Defense by the Advanced Research Projects Agency, and placing such an organization within DOE. Working directly under the Secretary of Energy, an ARPA–E would be able to identify promising technologies in an R&D stage, and nurture them through demonstrations and early market acceptance. They would have expedited personnel and procurement authorities, and be able to integrate all their necessary technical authorities into a single management structure. For instance, in the above examples of combining multiple authorities from the EPAct 05, it is unlikely that a traditional federal agency structure could accomplish blending the necessary functions, because they are often assigned to completely separate programs whose cooperation is incidental.
Some have described the quest for a hydrogen economy as needing an Apollo or Manhattan Project's urgency—symbolic models for sustained high levels of funding and commitment to results. An ARPA–E for DOE could do that—placing all hydrogen and carbon reduction enabling work under single directorates, and holding them to high standards of performance until critical results are achieved.
We greatly appreciate the opportunity to contribute to a discussion that is critical to our collective future. The National Hydrogen Association looks forward to working with the Committee in shaping and achieving our common goals.
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BIOGRAPHY FOR JEROME HINKLE
Vice President for Policy and Government Affairs, National Hydrogen Association. During 2003 to early 2006, Mr. Hinkle was a senior advisor to U. S. Senator Byron Dorgan on a Brookings Fellowship from the Department of Energy. His work focused on energy and environmental policy, especially with regard to the various energy bills considered by the Congress from 2003–2005. He was responsible for helping form and manage the Senate's Hydrogen and Fuel Cell Caucus, a hydrogen industry working group and drafting and negotiating much of the hydrogen legislation in the Energy Policy Act of 2005. Besides hydrogen, he worked extensively on other titles of the Act, including Energy Efficiency, Coal, Indian Energy, and Vehicles and Fuels.
He served for 28 years at DOE and EPA in various capacities, including prototype engines and alternative fuels, environmental policy, international energy security and most recently as the senior economist for the U.S. Naval Petroleum Reserves. His interests include carbon management and renewable energy. His career also includes aerospace engineering and research physics, with a varied education—degrees in mathematics and physics from Miami University and public policy from the University of Michigan, with extensive graduate work in international politics and sociology.
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Chairwoman BIGGERT. Thank you. And I'm sure we'll get to some of the other things in the questions.
STATEMENT OF DR. DANIEL GIBBS, PRESIDENT, GENERAL BIOMASS COMPANY
Dr. GIBBS. Chairman Biggert and Mr. Honda and Mr. Lipinski thanks for inviting me today.
Ethanol's here today and it fits our current infrastructure. The United States ethanol industry today produces about four billion gallons of fuel ethanol per year from corn grain. About 20 new plants will come on line this year adding another one billion gallons of capacity, and another billion is planned. Current ethanol production is about 300,000 barrels per day.
All United States' automobiles and light trucks can use ethanol today at 10 percent or E10 without any modification. In addition, about five million flex-fuel vehicles can use E85 or 85 percent ethanol gasoline or any mixture in between. So the infrastructure is there.
Flex-fuel technology is cheap. My figures of about $200 per car. Eight major auto manufacturers currently offer E85 vehicles.
To date the flex-fuel technology has been offered primarily in larger vehicles, I believe in order to obtain Clean Air credits. What we need to do is to put that technology together with hybrid technology, in my view, to give us E85 hybrids which could in principle get hundreds of miles per gallon of gasoline with the rest coming from ethanol.
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The central problem then becomes how do we make enough ethanol and other biofuels to fill the demand. The national necessity and desirability of a large cellulosic ethanol industry is not yet widely recognized. I believe there's a lack of national urgency to make it happen in the time frame needed.
To be clear, we need to make not only ethanol as a substitute for gasoline, but we need to make all the other hydrocarbons for diesel fuel, jet fuel and for industrial chemicals and plastics. The only realistic nonfossil source for these materials is biomass in all its forms. These include energy crops like switchgrass, agricultural waste, paper from municipal solid waste, which is about 40 percent paper, forest and wood waste. If we use these sources, we'll provide a more diversified fuel and chemical base and create thousands of jobs.
The United States has substantial cellulosic resources, as does Canada, which can be developed if determination resources are there.
Let me just say a quick word about carbon. Carbon is not a bad thing. Carbon enables us to make large molecules for liquid fuels like gasoline, jet fuel and diesel which have a high power density. That's why we use them, that's why we make them. The question is where does that carbon come from? Does it come from beneath the ground from Saudi Arabia at high cost or does it come from domestic biomass? And that's a choice that is before us. So carbon is not a bad thing. Carbon from the air is a good thing. Carbon from beneath the ground is going to cause us problems in the future.
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We're asked about the barriers to the cellulosic ethanol industry. Ironically, the great success of the corn ethanol industry constitutes a barrier to the development of the next phase for the cellulosic industry. And I hoped to show a slide, by the way, in the question and answer period.
The corn is cheap right now. Ethanol plants cost only a $1.50 per annual gallon of capacity. In contrast cellulosic ethanol plants with current technology cost about six times that much, and that is a severe barrier to the introduction of that technology.
In limited time, I won't go into the technology and logistical hurdles that are listed in the testimony, again just to give a couple of overview numbers here. The current corn crop is about 10 or 11 billion bushels a year, which is divided among ethanol, food products, animal feed, exports and carryover. Our probable limit for cellulosic ethanol or, I'm sorry, corn ethanol is about 11 billion gallons, which would be six percent of our 140 billion gallon gasoline supply. So we must go to cellulosic ethanol.
Biodiesel is a great fuel. This year it's only going to produce about 150 million gallons verses four billion for ethanol.
Let me just conclude by suggesting that there are a number of challenges. I think we need to collaborate with other countries. More than half the knowledge base is developed outside the United States. We need to collaborate with Canada. They've got a quarter of the boreal forest in the world. We need to have much more support for small business. And as indicated in the testimony, the support—federal support right now is very small.
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We need to train people for this new industry.
And thank you.
[The prepared statement of Dr. Gibbs follows:]
PREPARED STATEMENT OF DANIEL GIBBS
1. How widely available is ethanol today, and how many cars can use it?
The United States ethanol industry produces about four billion gallons of fuel ethanol per year from corn grain. About 20 new ethanol plants will come online in 2006, adding another one billion gallons of capacity. Current ethanol production is about 300,000 barrels/day.
All U.S. automobiles and light trucks can use ethanol at 10 percent (E–10) without modification. In addition, about five million flex-fuel vehicles (FFVs) can use 85 percent ethanol (E85), gasoline or any mixture in between.
Flexfuel technology is cheap, about $200 per car, consisting of improvements to the fuel injector, gas line and gas tank. Eight major auto manufacturers currently offer E85 vehicles. Ethanol has about two-thirds the energy per gallon (76,100 Btu/gal) as compared to gasoline (113,537 Btu/gal), but a much higher octane (100–105). To date, flex-fuel technology has been offered primarily in larger vehicles to obtain Clean Air credits. If flex-fuel technology and E85 were combined with hybrid technology, all available today, it would be possible to make E85 hybrids which could get hundreds of miles per gallon of gasoline, the rest coming from ethanol.
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2. What are the obstacles to expanding the variety of feedstocks available for conversion to ethanol? Are these hurdles mainly market failures and other economic barriers or are they technical in nature?
The national necessity for a large cellulosic ethanol industry is not yet widely recognized. There is a lack of national urgency to make it happen in the time frame needed. High oil prices and global warming have come upon us rather suddenly, and both markets and government institutions are slow to react.
Commercialization of any new technology, and building new industries takes time and investment. Many different technical elements must be discovered, tried and perfected in a context which results in profitable businesses. As an example, it has taken the corn ethanol industry about 30 years to develop from small experimental plants to today's situation of 25–50 percent growth over the next year or so from the current four billion gallons/year.
Ironically, the current success of the corn ethanol industry and the low price of corn are barriers to the investment and risk-taking needed to jump-start the new cellulosic ethanol industry. Corn is currently cheap ($2.50/bushel), and the engineering technology for corn ethanol plants is so good that new plants cost only $1.50 per annual gallon of capacity. In contrast, cellulosic ethanol plants using current technology cost about six times that much for the same ethanol capacity (Iogen estimates).
Specific technical and logistical hurdles include:
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(1) transportation of large volumes of low density biomass, e.g., 27 truckloads of switchgrass to make one truckload of ethanol;
(2) the need for safe, rapid pretreatments to process large volumes of raw biomass into cellulose and other components;
(3) large quantities of cellulase and other enzymes to convert cellulose to glucose for making ethanol. For example, a single 25 million gal/yr. ethanol plant would require 2,750 tons of cellulase enzymes. Adding just one billion gallons of cellulosic ethanol would require 40 such plants, with a total annual cellulase protein requirement of 110,000 tons/yr. For comparison, all U.S. industrial enzymes in 1994 amounted to about half that, 60,000 tons/year.
(4) new ways to solve the conflict between the need to build large plants for economies of scale, and the opposing need to transport low-density biomass over short (<30–40 mile) distances. Developing technology to enable smaller, cheaper cellulosic ethanol plants would have a large impact on lowering ethanol costs and promoting the widespread local development of biomass resources.
3. What is the largest technical hurdle for each of the following fuels: Corn ethanol, biodiesel, cellulosic ethanol? Does the current federal research agenda adequately address these technical barriers? What actions would most rapidly overcome these technical barriers?
Corn ethanol can be considered a fairly mature industry, in that there is good technology, reliable and experienced engineering firms and plant operators, and plenty of available capital for expansion. The problem for corn ethanol will be that its success will eventually raise the price of corn, and reach the limits of available corn supply. A typical U.S. annual corn crop is 10–11 billion bushels/year, divided among ethanol, food products, animal feed, exports and carryover. A probable limit for the ethanol fraction from corn is about four billion bu/yr., which would produce (2.8 gal/bu) about 11 billion gallons of ethanol, or about six percent of our current 140 billion gal gasoline supply.
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Biodiesel is a good fuel with standards, great customer acceptance and a small but growing production industry. That industry will double production in 2006 to 150 million gallons. The main problem for biodiesel is limited feedstock. Biodiesel is made from animal fat or vegetable oil feedstocks including soybean oil, rapeseed (Canola) oil, and waste cooking grease. The fats or triglycerides are combined with an alcohol, usually methanol or ethanol, to make biodiesel and glycerol. Because the feedstocks come from food products, they are usually expensive or in limited supply. Given the demand for biodiesel, it would make sense to support federal and private research to greatly expand the production of plant oils, probably through biotechnology.
Cellulosic ethanol is more difficult to make than corn ethanol, because cellulose and biomass are structural materials, unlike corn starch which is a food material. The components of biomass: cellulose, hemicellulose and lignin, have evolved to resist breakdown for many years. However, the abundance of plant matter has driven the evolution of many microorganisms and genes dedicated to breaking down cellulose and extracting the glucose and other sugars. We can harness these genes and organisms to make a variety of petroleum substitutes from biomass, as part of the growing field of industrial biotechnology.
The chemistry, engineering and biotechnology needed to build this industry are complex.
Some specific technical hurdles were listed in response to question 2. Researchers at federal labs, notably NREL, ORNL and NCAUR, and at U.S. universities have addressed many of these issues over the years.
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Much work has been done outside the U.S., in Canada, Sweden and Japan among other countries. More than half of the necessary knowledge base for biofuels has been and continues to be developed outside the United States. We need to find ways to use the best available technology from around the world, and not assume that our federal labs can provide all the answers, capable and dedicated as they are. We also need to foster training and international collaboration in developing alternatives to oil. Non-OPEC countries including the United States have a common need to develop cheap domestic fuel sources, or else face increasing economic costs and competition for scarce oil, as well as the effects of global warming.
Building a large and successful biofuels industry in the United States will require a sustained long-term commitment and adequate funding on the federal side. We need to leverage federal funds by making more federal support available to small business and commercialization efforts which can then attract venture capital and other nonfederal investment. In this way, we will build a healthy competitive industry with many players and different approaches.
DOE has wisely supported a number of important areas, including pretreatment research, enzyme development, and genomics, but still has a top-down central planning approach which needs to be augmented by more support of other innovative approaches developed outside the central plan. As an example, in 2005 the USDA/DOE Biomass Research and Development Initiative (BRDI) program received over 600 applications for $15 million of funding, or about 12 grants. The DOE SBIR program likewise offers minimal support for innovative projects in cellulosic ethanol and is inadequately funded. Outside grants in the range of $300,000 to $3 million would fill an important gap in enabling startups to demonstrate new technological approaches, and thereby attract the investment necessary for commercialization.
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4. Some advocates suggest that biofuels should substitute for 25 percent or more of the Nation's transportation fuel use. Are there market or other barriers that policy might overcome to accelerate realization of the 25 percent biofuels goal?
As indicated above, we need to make this a national priority. The U.S. has achieved economic success in part by using large amounts of fossil fuels per capita. The downside is that we are now particularly vulnerable to price increases and supply disruptions, as well as incurring an increasing energy trade deficit.
To be clear, we need to make not only ethanol as a substitute for gasoline, but all the other hydrocarbons for diesel fuel and jet fuel (Rostrup-Nielsen, 2005), and for industrial chemicals and plastics. The only realistic non-fossil source for these materials is biomass in all its forms. These include energy crops like switchgrass (Gibbs, 1998; Greene et al., 2004), agricultural wastes, paper from municipal solid waste, and forest and wood wastes. Using all of these sources will provide a more diversified fuel and chemical base, and create many thousands of jobs. The United States has substantial cellulosic resources which can be developed if the determination and resources are there (Perlack et al., 2005).
Federal support for university and private R&D is vital, as indicated above. Commercialization, pilot, and demonstration plant subsidies are needed to move toward the goal of smaller and cheaper cellulosic ethanol plants. The level of public and private funding should over time reflect its importance to the United States, which is on a par with curing cancer and the Apollo program. In this case, there will be substantial private funding, once initial efforts begin to show some success. This is part of the ''cleantech'' investment sector which is growing rapidly.
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Another barrier not discussed yet is developing trained people. Biomass research has heretofore been an arcane area pursued by a small number of scientists and engineers in academic and government labs. As with the biotechnology industry, growth brings the need for many people with specialized knowledge in the areas of biomass and biofuels. Dr. Lee Lynd et al. (1999) have recommended graduate programs in biocommodity engineering, including biotechnology, process engineering, and resource and environmental systems. Their paper provides a good overview of this emerging industrial area. Graduate and postdoctoral fellowships for study abroad in these areas would also be helpful in accessing the knowledge resources of other countries.
References:
Gibbs, D., 1998. Global Warming and the Need for Liquid Fuels from Biomass. BioEnergy '98, Madison, WI, pp. 1344–1353.
Greene, N. et al., 2004. Growing Energy: How Biofuels Can Help End America's Oil Dependence. Natural Resources Defense Council. www.nrdc.org/air/energy/biofuels/contents.asp
Lynd, L.R., Wyman, C.E., and Gerngross, T.U., 1999. Biocommodity Engineering. Biotechnol. Prog. 15:777–793.
Perlack, R.D. et al., 2005. Biomass as Feedstock for a Bioenergy and Bioproducts Industry: The Technical Feasibility of a Billion-Ton Annual Supply. ORNL/USDA. feedstockreview.ornl.gov/pdf/billion–ton–vision.pdf
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Rostrup-Nielsen, J.R., 2005. Making Fuels from Biomass. Science 308:1421–1422.
General Biomass Company
General Biomass Company is an Illinois corporation founded in 1998 to develop and commercialize biomass technologies. We develop biotechnology for renewable fuels, with a focus on cellulase enzymes which are essential for the conversion of abundant cellulose wastes and biomass crops to low-cost glucose for the production of cellulosic ethanol, other biobased chemicals, and plastics.
General Biomass Company is a member of the American Coalition for Ethanol and the Illinois Biotechnology Industry Organization.
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BIOGRAPHY FOR DANIEL GIBBS
Daniel Gibbs is President of General Biomass Company. His research interests are in cellulase enzymes, paper waste utilization and cellulosic ethanol production. He has over 20 years of experience in basic research in biological sciences at Stanford, the University of Washington, and DePaul University, and five years of experience in pharmaceutical and diagnostic R&D at Abbott Laboratories, including new technology development and evaluation, patent analysis and evaluation, bioinformatics and software development. He is the author of nine scientific papers including ''Global Warming and the Need for Liquid Fuels from Biomass,'' presented at BioEnergy '98, a paper on ethanol from switchgrass, a renewable energy crop. He was an invited speaker on biomass ethanol at the American Coalition for Ethanol annual meeting. At Abbott Labs, he worked in Pharmaceutical Division R&D on bioinformatics, genomics and gene sequence databases, and in Diagnostics Division R&D on software and patent support for process control of fluidic and chemical systems. He was previously Associate Professor of Biological Sciences at DePaul University and received an NIH grant for research on insect neuroendocrinology. He was an NIH Postdoctoral Fellow at the University of Washington and an NIH Predoctoral Fellow at Stanford. Dr. Gibbs received a B.A. in Biology from Wesleyan University and an M.A. and Ph.D. in Biological Sciences from Stanford University.
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Chairwoman BIGGERT. Thank you very much, Dr. Gibbs. Mr. Lovaas.
STATEMENT OF MR. DERON LOVAAS, VEHICLES CAMPAIGN DIRECTOR, NATURAL RESOURCES DEFENSE COUNCIL
Mr. LOVAAS. Thank you. Chairman Biggert, Ranking Member Honda, thanks for the opportunity to testify today.
America's addicted to oil, the President said in his State of the Union. Transportation drives this fact, accounting for more than two-thirds of U.S. oil demand. Our cars and trucks specifically account for 40 percent of total demand. If trends continue, our thirst for 21 million barrels a day of oil will grow by a third by 2030. Consequences include dependence on hostile regimes, a huge transfer of wealth overseas and global warming pollution.
Drivers and consumers on a roll price roller coaster. Not since marketplace turmoil in the '70s have prices increased as much as the early 2000's. Prices at the pump are approaching all time highs.
The EIA confirmed that high prices are here to stay in their 2006 Outlook. Their reference case projects that oil prices will drop from $70 levels of recent months to $47 in 2014 only to increase to $54 per barrel, $21 higher than their 2005 Outlook by 2025.
The last time prices spiked like this the effect was profound as described in a recent report by auto analyst Walter McMannis. Drivers began shunning large gas guzzling cars made by American automakers in favor of fuel efficient cars built in Japan and Germany. Between 1978 and '81 U.S. automaker sales dropped by 40 percent to a decline of about 5.2 million units. The second oil shock came six years after the first shock which prompted Congress in 1975 to adopt fuel economy standards. This law required a doubling in passenger car efficiency to 27.5 mpg between 1975 and '85. Some argue that the United States' big three share loss in this period would have been even worse had they not been forced to begin building at least some more fuel efficient cars to comply with the new law.
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History is beginning to repeat itself, unfortunately. Domestic automakers are suffering due to over reliance on fuel inefficient vehicle offerings. GM sales slide 12 percent in May compared to a year ago. The collective Detroit automakers share drooped to 52.9 percent. Meanwhile, they may only account for one to two percent of total United States' sales, but hybrid sales have doubled or nearly so for every year since the turn of the century. A variety of such technologies can break our old addiction.
First, off-the-shelf improvements to conventional vehicles such as four valve cylinders, variable valve timing, automatic engine shutoff, slicker materials for reduced drag, better tires and five and six-speed transmissions. The cumulative effect in an average SUV would yield at least a one-third improvement in fuel economy performance. So that's conventional technologies.
Hybrid electric vehicles, hybrids fueled by electricity and gasoline. They run the gambit from mild hybrids to full ones. Although costs of the technology have come down since the first one was unveiled in 1999, there is still a costly proposition. However, a recent analysis found that $3 per gallon changes everything. Opting for more efficiency is nearing cash flow neutrality for consumers. That's good news.
Three. Flex-fuel vehicles. They ran on alcohol fuel and/or gasoline. Alcohol fuel being a fuel like ethanol. This adds modest expense to manufacture of automobiles. One estimates places per vehicle cost at a modest $100 to $200. Draw backs include the fact that blending ethanol in low proportions to gasoline increases smog forming pollution. Ethanol also has lower energy content so for it to be a cost effective alternative, it must be at least 25 percent cheaper than gasoline.
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Also, less than 2.6 percent of American autos are flex-fueled and there is a infrastructure lag that's even great. Since 700 stations offer ethanol, less than one-half of one percent of gas stations.
Four, plug-in hybrids. Rely more heavily on electricity as a fuel, although they can also run on gasoline or both alcohol fuel and gasoline if they're flex-fueled, too. Batteries remain expensive and have limited ranges. A hybrid might cost as much as $4,000 more than a similar conventional vehicle. A plug-in with a range of 20 miles could cost $6,000 more. And one with a range of—20 that's 20 miles actually. One with a range of 60 miles could cost $10,000 more. Now the limited range itself may not be an issue since 31 to 39 percent of annual miles driven are for the first 20 miles of daily driving.
Plug-ins don't suffer from the chicken and egg problem that plagues hydrogen. They are powered by the existing electrical grid. So there are advantages. And if they use surplus power or the grid is powered by clean renewables, pollution would drop.
So, in summary, to set America free of oil we must invest in all of these technologies, a message you've heard before. Consumers appreciate choices and the cumulative effects are likely to be great. For example, as Dan mentioned, the combination of an E85 FFV and a hybrid vehicle like the new Ford Escape E85 FFV.
Two of the best ways to make sure that these choices are available to consumers are to:
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1. Enact H.R. 4409, the Fuel Choices for American Security Act, sponsored by Representative Kingston, Engel and Saxton; and
2. To enact the Boehlert Markey Amendment to increase fuel economy performance.
These bills boost new technologies like the ones I described and they're effective policy responses to oil addiction.
Thank you.
[The prepared statement of Mr. Lovaas follows:]
PREPARED STATEMENT OF DERON LOVAAS
''America is addicted to oil,'' the President said in his State of the Union. He was right. We're hooked. Why is that the case?
Transportation drives our addiction. For starters, we're taking more trips. More Americans rode trains and buses 80 years ago, and transit use spiked during World War II. Then it plummeted, leveling off at less than half of its peak level. Meanwhile vehicle miles traveled climbed steadily, and are at the three trillion per year mark.(see footnote 3)
Increasing travel by private vehicle is exacerbated by two other trends: An increasingly wasteful fleet of cars and trucks and pitifully small use of alternatives to fuels made from oil.
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Thanks largely to the proliferation of larger vehicles—particularly SUVs—improvements in fuel economy of the fleet stalled in 1988. The largest recent jump in performance happened in the late 70s, driven by policy and consumer choices in reaction to embargoes and price runups.(see footnote 4)
The third factor is alternative fuel use, or rather non-use, in transportation. We fill our tanks with fuel, and 97 percent of the time it's a petroleum-derived liquid, mostly gasoline.
Meanwhile, domestic production peaked and has been declining steadily since 1970. Currently, we produce about 8.9 million barrels a day but that's only enough to meet about 40 percent of America's daily consumption of 21 million barrels daily.(see footnote 5)
The Oil Price Roller Coaster
Not since the embargo and marketplace turmoil in the 1970s have prices increased as much as in the early 2000s. In fact, gasoline prices are approaching all-time highs (see graph below).
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Underpinning soaring prices are the oil markets, as shown in the graph below.
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The fundamentals underpinning the oil price trends are described in a recent report by NRDC, the Office for the Study of Automotive Transportation and the University of Michigan Transportation Research Institute:(see footnote 6)
Most analysts agree that market fundamentals of high demand and limited supply, and not speculation or market hysteria, are the primary reason for today's high oil prices. These prices can be explained, in part, by explosive growth in oil demand, especially from China. Oil demand has grown a robust five percent since 2003, despite a doubling of oil prices during that period. It appears likely that increased global oil demand and tight global oil supplies will keep fuel prices high for the next several years.
There is little spare oil production capacity to cushion a sudden loss in supply and the mix of easily extractable crude oil is moving away from ''light, sweet'' toward more ''sour'' grades that fewer refineries can handle. Considering these factors, oil prices may abruptly jump even higher, as happened during the first two oil crises of 1973–75 and 1979–81. But unlike these last two oil crises, important oil market fundamentals could favor a higher price lasting for much longer—and perhaps becoming a permanent feature of the environment.
One reason we can expect sustained high oil prices is that we have limited spare capacity. Historically, producers were accused of holding back supplies when prices rose. But most industry experts agree that the Organization of the Petroleum-Exporting Countries (OPEC) and other suppliers are now pumping at or near the upper limits of their capability. Indeed, there are concerns that rapid exploitation degrades the long-term viability of some oil fields.(see footnote 7) Spare capacity, often used to cushion oil price spikes, is essentially gone.
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The Energy Information Administration (EIA) confirmed that high prices are here to stay in the Annual Energy Outlook 2006 (AEO 2006). The reference case projects that oil prices will drop from the $60–$70 levels of recent months to $47 in 2014, only to increase to $54 per barrel—$21 higher than the 2005 outlook—in 2025. And the high price case actually flirts with the $100 per barrel level in 2030.(see footnote 8)
Déjà vu All Over Again: Prices Affecting Auto Sales
Of course, price fluctuations are not a new thing. The last time oil prices leapt to this level the effect was profound, as described again in the ''In the Tank'' report:
[D]rivers also began shunning large, gas guzzling cars made by American automakers in favor of fuel-efficient cars built in Japan and Germany. Between 1978 and 1981, U.S. automaker sales dropped by 40 percent, a decline of about 5.2 million units.(see footnote 9) The second oil shock came six years after the first shock, which Congress in 1975 to adopt fuel economy standards (under the Energy Policy and Conservation Act of 1975, known as ''EPCA''). This law required a doubling in passenger car efficiency to 27.5 mpg between and 1985. Some argue that the U.S. Big Three's share loss in this period would have been even worse had they not been forced to begin building least some more fuel-efficient cars to comply with the new law.
Employment plunged along with automobile sales. It dropped 30 percent from 1978 to 1982, for a total loss of more than 300,000 jobs in direct auto and part manufacturing jobs—and even more jobs were lost if auto-related jobs are considered. And the Detroit Big Three suffered record losses. In 1980, GM lost $762 million, Ford lost $1.7 billion, and Chrysler lost the most, $1.8 billion. Chrysler's situation was so bad that in 1979 Congress agreed to bail out the company with $1 billion in loan guarantees.(see footnote 10)
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Worse, when gasoline prices returned to pre-shock levels, U.S. automakers failed to regain their lost market share in passenger cars. Indeed, the three periods of sharpest growth in import market share, 1973–75, 1979–81, and 2003–present, coincide precisely with the largest increases in per gallon gasoline prices.
History is beginning to repeat itself. On the one hand, sales of larger vehicles, like the overall economy, have been remarkably resilient in the face of high prices: In 2003, the share of sales for large light-duty vehicles was 73.3 percent and it edged down slightly to 73.1 percent in 2005.(see footnote 11)
But slicing the data more finely yields a fundamental shift in auto sales. Based on data from the Planning Edge, the graph below shows tremendous growth in the crossover utility vehicle segment, while large SUV sales took a hit in 2005.
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And while they only account for one to two percent of total U.S. sales, the other trend that has received a great deal of press attention is soaring sales of hybrid-electric vehicles. In fact, hybrid sales have doubled or nearly so every year since the turn of the century:
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Biofuels
Biofuels are liquid, alcohol fuels derived from plant matter. The U.S. primarily uses ethanol using corn as a feedshock. While our transportation sector is 97 percent dependent on petroleum-derived fuels—especially gasoline—ethanol makes up for the remainder.
And it has been growing rapidly, as shown by the chart below (in millions of gallons per year of corn ethanol):
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Beyond corn, the next generation of biofuels is being developed. Specifically, ethanol derived from the cellulose of plants offers promise. The President referred to this emerging technology in his 2006 State of the Union speech when he talked of making ethanol from switchgrass. As explained in the NRDC report ''Growing Energy'':
Cellulosic biomass is basically all the parts of a plant that are above ground except for the fruit and seeds, such as corn, wheat, soybeans, and rapeseed. Technically, cellulosic biomass is the photosynthetic and structural parts of plant matter. Other examples of cellulosic biomass include grass, wood, and residues from agriculture or the forest products industry. Most forms of cellulosic biomass are composed of carbohydrates, or sugars, and lignin, with lesser amounts of protein, ash, and minor organic components. The carbohydrates, usually about two-thirds of the mass of the plant, are present as cellulose and hemicellulose—thus the term cellulosic biomass.(see footnote 12)
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Advantage of this process and its reliance on feedstocks besides corn include dramatic increases in energy and environmental benefits, including big reductions in carbon dioxide emissions.
Heartening Trends, But Slow Progress Overall
In percentage terms trends in hybrids and biofuels are impressive. But in absolute terms they barely make a dent in our oil addiction. A higher price plateau notwithstanding, current demand of about 21 million barrels per day is projected to increase by more than a third by 2030.(see footnote 13)
This has serious economic consequences. First, we're already transferring a huge amount of wealth overseas thanks to a ballooning trade deficit. The economic costs would be steeper, if not for the fact that our policy response to the energy crisis in the '70s helped to drive the oil intensity (a measure of barrels used to produce GDP) of our economy down by about one-third, providing better insulation from today's high prices. This is why demand has barely slackened and the economy hasn't slipped into recession.
However, these gains have slowed dramatically in recent years. It's clear why this is so in transportation—stagnating fuel economy and increasing travel. For electricity, it's due to the fact that there's just not much left to shift—we have pretty much weaned that sector off oil. This means that our economic shock absorbers are wearing thin once more.
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Spiky, high prices have been a hardship for U.S. consumers, but the pain is more deeply felt in the developing world. According to the World Bank, a sustained oil price increase of $10 per barrel will reduce GDP by an average of about 1.5 percent in countries with per-capita income of less than $300, compared to a loss of less than .5 percent for developed countries.
And of course the consequences for national security are alarming too, as described a joint NRDC–Institute for the Analysis of Global Security report ''Securing America: Solving Our Oil Dependence Through Innovation'' (attached).
Breaking the Oil Addiction Requires New Policies
Policy-makers must provide frustrated consumers with a means to react to persistent price signals. Thankfully, this doesn't require a 12-step program. It does require significant policy reforms.
Many of the necessary reforms are included in a bill supported by the Set America Free coalition. H.R. 4409, the Fuel Choices for American Security Act, currently has 75 co-sponsors and has four components:
A national oil savings requirement starting at 2.5 million barrels of oil per day within ten years and increasing over time, achieved through a menu of existing and new authorities and incentives;
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federal manufacturer retooling incentives for production of efficient vehicles and authority to set efficiency standards for tires and heavy duty trucks;
programs that increase fuel choice in the transportation sector; and
a national energy security media campaign to educate the public about oil dependence.
The targets can be achieved via oil savings from any sector, any technology. Much of the savings will come from transportation, which is responsible for about two-thirds of our oil consumption and is utterly dependent on petroleum.
Overview of Technologies
There are a variety of options available to reduce our oil dependence. Some of the advantages and challenges posed by each one are summarized below.
Off-the-shelf improvements to conventional vehicles: As summarized in the graphic below from NRDC's web site, these include improvements such as four-valve cylinders, variable valve timing, automatic engine shut-off, slicker materials for reduced drag, better tires and five- and six-speed transmissions. The Union of Concerned Scientists has calculated that making similar improvements to an average SUV yields at least a 31 percent improvement in fuel economy performance.(see footnote 14)
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Hybrid-Electric Vehicles (HEVs): These increasingly popular cars and trucks are fueled by electricity and/or gasoline. They run the gamut from mild hybrid models (for example, Chevrolet Silverado comes in a hybrid version) to full ones (Toyota Prius). Although costs of the technology have come down since the first hybrid was introduced in 1999 by Honda (the Insight, now discontinued), and prices of gasoline have come up, these fuel-sippers are still a relatively costly proposition for consumers.
Consumer Reports recently analyzed five-year costs (purchase, sales tax, insurance, maintenance, financing) and benefits (federal tax credits, lower fuel costs, higher resale value) of five hybrids and found that only two penciled out, barely: The Toyota Prius and the Honda Civic. Their analysis assumed gas prices rising over time to $4 per gallon.(see footnote 15)
On the other hand, a recent Consumer Federation of America report found that a threshold has been crossed with $3 per gallon gasoline. Their analysis shows that consumers no longer pay a premium for efficiency. Opting for a more efficient technologies including hybrid-electric engines should be ''cash-flow neutral'' for consumers, according to this analysis.(see footnote 16)
Flexibly-Fueled Vehicles (FFVs): These vehicles are capable of running on a mixture mixture of alcohol fuels such as ethanol and gasoline. This adds some expense to the manufacture of automobiles, specifically to ensure that tanks and fuel hoses are able to tolerate alcohol. One estimate places per-vehicle cost at a modest $100–$200.(see footnote 17) There are other challenges with displacement of gasoline with ethanol. When blended in low proportions to gasoline, smog-forming pollution (oxides of nitrogen and volatile organic compounds) increases compared to gasoline. Higher blends such as E85 (85 percent ethanol, 15 percent gasoline) yield a cleaner-burning fuel.
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Another drawback of ethanol is its lower energy content compared to gasoline. Due to the difference, for ethanol to be a cost effective alternative it must be at least 25 percent cheaper than gasoline.
Last but not least is the chicken-and-egg problem with this fuel: Precious few stations feature ethanol pumps. This is changing rapidly (see graph below) and resources for locating pumps are readily available (see http://afdcmap2.nrel.gov/locator/FindPane.asp). But the 710 stations currently offering this choice adds up to less than .5 percent of the total number of retail outlets.(see footnote 18)
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Plug-In Hybrid Electric Vehicles (PHEVs): These are vehicles which rely more heavily on electricity as a fuel, although they can also run on gasoline, or a blend of alcohol fuel and gasoline. Although Honda and Toyota remain skeptical due to marketing concerns (awareness has only recently become widespread that hybrids DON'T have to be plugged in), there is growing interest in these vehicles as a tool for breaking the oil habit. Significant challenges remain, however.
First among these is battery technology. Batteries remain expensive and have limited ranges. So in spite of cost savings due to a smaller internal combustion engine and electrification of other vehicle components too, while an HEV might cost $2,500–$4,000 more than a similar conventional vehicle, a PHEV with a range of 20 miles would cost $4,000–$6,000 and one with a range of 60 miles would cost $7,400–$10,000.(see footnote 19)
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Range may not be a troubling issue, since 31–39 percent of annual miles driven are the ''first 20 miles'' of daily driving.(see footnote 20) Therefore, the daily needs of many drivers would be satisfied with this range.
PHEVs would also save a great deal of fuel. One estimate found that while a conventional vehicle uses 523 gallons per year and a HEV uses 378, a PHEV with a 20 mile range would use 219. And a PHEV with a 60 mile range would use a miniscule 83 gallons annually.(see footnote 21)
There are other advantages to PHEVs. They don't suffer from the chicken-and-egg problems that plague biofuels and hydrogen, since an electrical grid already exists.(see footnote 22) If charged at homes at night, they would make use of surplus, off-peak electricity. And so long as the grid is powered by relatively clean fuels—such as natural gas, hydroelectric, wind or solar—air pollution would also be reduced.(see footnote 23)
Transit Use: In urban areas, providing alternatives to driving is another viable tool for curbing oil use. According to the American Public Transportation Association, public transportation now saves us almost 125,000 barrels of oil a day. But if we increased reliance on public transportation to, say, the level of our neighbors in Canada, we would save more oil than we import from Saudi Arabia every six months.
Conclusion
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Breaking our addiction, as the President called it, is a tremendous challenge. The costs to our security, our economy and our environment are terribly high. We meet this threat head-on, with similar determination that drove us to win World War II and to put a man on the Moon.
Fortunately we don't have to invent the key to our oil-soaked shackles. The technology exists, and the costs are coming down, especially in relation to the price of fuel.
To set America free, all of the technologies described above deserve greater investment and deployment. Consumers will appreciate the choice, and cumulative effects are likely to be great. For example, envision a more efficient car—whether a conventional vehicle with off-the-shelf improvements, an HEV, or a PHEV—that is also capable of running on E85. This could yield hundreds of miles per gallon of gasoline, as some have claimed.(see footnote 24)
One of the best ways to put us on the path to energy security is to enact H.R. 4409, the ''Fuel Choices for American Security Act'' sponsored by Representatives Kingston, Engel and Saxton. This bill specifies specific ends—oil savings of 2.5 million barrels per day in 2015 and five million barrels per day in 2025—and provides a host of means to achieve them. It doesn't pick winners, but gives a boost to the various technologies described above. I urge you to support it.
Thank you for your time and interest.
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BIOGRAPHY FOR DERON LOVAAS
Deron Lovaas is Vehicles Campaign Director at the NRDC. He currently directs the ''Break the Chain'' oil security campaign and was the chief lobbyist on the federal Transportation Equity Act for the 21st Century (TEA–21) reauthorization bill. A graduate of the University of Virginia, he has worked in the field of environmental policy and advocacy for more than a decade, in positions such as director of Sierra Club's Challenge to Sprawl campaign and specialist in transportation and air-quality planning at Maryland's Department of the Environment. He has authored or co-authored numerous articles and publications, most recently ''Taking the High Road to Energy Security'' in In Business magazine, ''From Gas Crisis to Cure'' on tompaine.com and NRDC's ''Securing America: Solving Oil Dependence Through Innovation.''
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Chairwoman BIGGERT. Thank you very much, Mr. Lovaas.
Mr. Gott, you're recognized for five minutes.
STATEMENT OF PHILIP G. GOTT, DIRECTOR FOR AUTOMOTIVE CUSTOM SOLUTIONS, GLOBAL INSIGHT, INC.
Mr. GOTT. Thank you, Chairman Biggert, Mr. Honda, Mr. Lipinski and others Members of the Subcommittee.
What would be required to lead automakers to apply technology advancements to improving fuel economy? The automotive industry will respond to increased demands for fuel economy from the consumer: Changes in consumer behavior that place a higher priority on fuel economy will result in the increased deployment of presently available technology such as hybrids, down size and turbo charged gasoline engines, displacement on demand, et cetera. A clear regulatory position on the future of emission standards beyond tier two will enable manufacturers to make an assessment of the likely future prospects for regulatory acceptance of the diesel, the one technology that meets all consumer expectations for performance while delivering a 20 to 30 percent improvement in fuel economy.
Changes in consumer behavior can be expected if and when the need for fuel consumption reduction better resonates with the core values of the consumers. The bulk of today's car buying public places high priority on the need for economic, physical and social survival. With current fuel prices and availability, fuel consumption on a lower priority than other vehicle attributes such as a high seating position which increases aerodynamic drag, faster acceleration which usually results in a engine that operates at off peak efficiency most of the time, and high perceived levels of mobility and safety that result in vehicles heavier than might normally be necessary.
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Policies in the United States have lacked from the very beginning any component that attempts to change consumer behavior. Emphasis has been placed instead on maintaining mobility and lifestyle in a business as usual consumer environment. What is needed is a series of coordinated efforts all aimed at conservation. Programs that sponsor the development of high risk technologies need to be continued simultaneously with public education programs that increase public awareness of the need to conserve and to make it in their best interests to do so.
It is likely that the high risk technologies will have some limitations or will change to some extent the normal expectations of today's vehicles with respect to range, refueling, convenience or performance. The core values of future consumer generations can be influenced by including in the education of current school age children the need to conserve in all forms so that they embrace the new technologies and their differences from vehicles of today.
Education programs need to be re-enforced with fiscal programs that are in alignment with conservation goals. Programs. Programs that tax excessive consumption and reward conservation for new vehicles as well as those in use will provide additional incentives to conserve.
What hurdles must hybrids, FlexFuel and hydrogen powered vehicles clear before the automobile industry analysts and the press accept these technologies and consumers buy them? Without a change in consumer values, transparency is the primary condition that must be met for the consumer to adopt a new technology in today's marketplace. Cost, reliability, durability, range, refuel time and convenience all need to be equal or better than the technology we seek to replace. Hybrids suffer from higher costs, both initial and life cycle as their fuel economy is generally insufficient to give a payback, at least with today's fuel prices, to the original purchaser during the first ownership period, and battery life issues cloud the resale value.
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Hydrogen vehicles present a host of range, refueling and access challenges in addition to the technical issues and uncertainty of a net benefit when well to wheel issues are considered.
Of these three technologies mentioned, Flex-fuel vehicles offer the one technologically transparent solution but only because ethanol-containing fuel is not required to run them. To make a difference in energy consumption, the six million FFVs produced to date must have accessed the E85 at competitive costs. At the moment there are less than 700 E85 stations nationwide versus 175,000 refueling sites for conventional fuels.
How more or less likely is it that these radically new technologies, fuel cells, electric drive trains or significant battery storage capabilities, for example, will be incorporated into cars rather than incremental innovations to internal combustion engines? Historically radical technologies like these have not been incorporated into the vehicle fleet primarily because they are not transparent to the consumer when assessed on the basis of one or more of their criteria of cost, utility or convenience. Incremental changes and innovations have been the experience; evolution rather than revolution. This will be changed by the marketplace if and when they can meet the expectations of the core values of the consumers. Concurrent achievement of competitive cost, initial and/or life cycle, range, refueling time, all weather performance, well to wheel efficiency and greening house gas emissions remain significant challenges. Demonstration and other education programs can help consumers understand the benefits and the trade offs. Because it appears likely that these technologies will be accompanied by changes in these characteristics, the likelihood that these technologies can be incorporated into cars can be increased by also working through public education programs to influence the formation of core values of future generations, thus changing the willingness of the consumer to accept the changes.
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In sum, regardless of how the end results are achieved, we forecast that increases in efficiency of the vehicles through available nondistruptive power train technologies will reach the point of diminishing returns once an improvement of approximately 30 percent has been achieved when compared to the baseline gasoline engine. In the absence of radical new technologies to obtain improvements greater than this will require the use of either alternative fuels or a move by the consumer to inherently more efficient and lighter vehciles.
Thank you very much.
[The prepared statement of Mr. Gott follows:]
PREPARED STATEMENT OF PHILIP G. GOTT
The following are the written answers to two questions posed by the Honorable Judy Biggert, Chairman, Subcommittee on Energy of the Committee on Science.
Question 1:
The auto industry in recent years has generally used technological improvements to increase performance instead of fuel efficiency. What would be required to lead automakers to apply technology advancements to improving fuel economy?
Commercially successful manufacturers design, develop, build and sell vehicles that resonate with the core values of the consumer and that meet the needs of their life stage in the current and expected future business and economic environment. The automakers will design, develop, produce and sell whatever vehicles the consumer will buy. Advanced technologies have been applied to date to hold the CAFE performance of the U.S. light vehicle fleet at or close to regulatory levels while providing increased acceleration, levels of safety and interior feature content. If large numbers of consumers were to demand instead, or in addition, greater levels of fuel economy, the manufacturers would be able to respond with a broader range of hybrids, diesels, downsized and turbocharged gasoline engines, displacement on demand, etc. At this point in time, however, it is our view that while fuel economy is increasingly important to many consumers, most still place a higher priority on other vehicle features and attributes. If and when fuel economy becomes a higher priority for the consumer, the vehicle manufacturers can and will respond.
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What will increase the consumer's demand for fuel economy?
Demand for fuel-saving technologies will increase when fuel conservation creates a greater resonance with the consumer's core values. Our research indicates that the Baby Boomers, the bulk of today's new car buying public, have core values that center around the need for economic, physical and social survival. They have an inherent need to prepare themselves to deal with any and all foreseeable adversities. The need for mobility itself is a key aspect of survival, and viewed as an unalienable right by virtually all Americans. The need to travel in perceived security under any adverse driving conditions gives rise to demand for four wheel drive. The need to command and control their driving environment gives rise to demand for a high seating position. The need to be better than the next person gives rise to demand for fast accelerating vehicles. The desire for perceived safety gives rise to demand for massive vehicles. Hence the demand for large, truck-based SUVs.
However, fuel prices are currently very high, at least when compared to historical levels. For the moment, the high fuel costs have not been assimilated into the family budgets of most consumers, and demand is shifting to vehicles with attributes similar to the SUV, but on more fuel efficient front-wheel drive-based passenger car platforms (so-called ''crossover utility vehicles'' or ''CUVs''). (It is interesting to note that small car sales are NOT increasing at the same time due to their lack of appeal to the core values of the consumer.) This momentum towards more efficient vehicles could be sustained if consumers cannot adjust to higher gasoline prices. It is our view, that if prices stay at these current levels and don't go higher, some of the momentum will diminish and consumers will go back to older buying patterns.
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It must be recognized that the consumer has so far had an amazing capability, over the longer-term, to assimilate high fuel prices into the family budget. On the policy side, artificially high fuel prices due to taxation have not been acceptable due to the repressive nature of such taxation and the negative impact on the popularity amongst the voters of those who support them. (In this area, Americans are unique compared to consumers in many other major consuming countries.) Therefore, we need to find other, lasting solutions. Let's take a look at some of the consumer core values and how they can be reached by advanced technologies.
The Baby Boomer consumer, as part of his/her value for survival, has a strong competitive ethic embodied in the need to be better than the next person. Hybrids, which do not provide a financial payback due to their inherently high cost and sensitivity to duty-cycles, are being re-engineered to return some fuel economy benefits while also offering high levels of acceleration. The diesel engine, which offers much higher levels of acceleration-producing torque as well as fuel economy when compared to a gasoline engine, can offer equal if not better acceleration than a gasoline hybrid while more reliably providing the fuel economy benefits desired by society.
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The need for survival also causes a person to seek a safe and secure environment. Conventional wisdom supports the notion that a safe vehicle is a heavy vehicle. Parents who want to ensure the safety of their children prefer to carry them around in a heavy vehicle such as an SUV. There is a current Country and Western song that even states ''I'm not going to sacrifice the safety of my family just to save a gallon of gas.'' The relationship between safe and heavy needs to be discredited before one can expect a large shift away from heavy vehicles.
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Another aspect of survival is to ensure the safety and security of one's self and one's children. This includes preparation of a safe and secure future. A fact-based public education program about the need to conserve all forms of energy, including but not limited to the energy consumed for mobility, would be expected to increase demand for fuel-saving technologies. Education programs have been successful in reducing smoking, seat belt utilization and reductions in drunk driving. Why not similar programs in the schools, on television and other media in support of energy conservation?
Successful education programs can include:
Fact-based propositions as to the net benefits to the individuals and society
Fact-based education as to the full costs of less efficient practices and preferences
Model behavior by role models, including movie stars, pop idols, politicians, corporate fleets
''Placement'' of strategic messages within popular culture and media: TV, movies, newspapers, etc.
Requirements for obvious energy saving measures in all aspects of life can provide a constant reinforcement of the need to conserve in everything we do. In Europe and China, the lights in hotel hallways are off unless the presence of a person is detected. When you walk down the hall, the lights follow you, turning on ahead of you and turning off a few minutes after you pass. In America, lights burn brightly, often 24 hours per day.
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Classroom instruction during the formative childhood years.
Each of these channels of influence should work to embed the message that the core value of ''survival'' in adverse conditions (whatever they may be) is enhanced through energy-conserving solutions. That is, the core value of survival needs to encompass reduced dependency on a single source of energy. Survival also needs to be linked to minimization of greenhouse gases just as people came to accept the need to reduce toxic and smog-forming emissions in the 1960s.
Such educational programs should be enhanced with feebate and registration-tax programs. Under a feebate program, fees on less fuel-efficient programs would be used to subsidize the purchase of more fuel efficient vehicles in a manner similar to what is done now in some states to reward safe drivers with a discount on insurance, the discount being funded by higher rates for unsafe drivers. Recurring carbon- or fuel-consumption based registration or ''circulation'' taxes, paid every year by the car owner, based on the fuel consumption rating of the vehicle, can also encourage the purchase of more fuel efficient new as well as used cars. Education programs coupled with cost savings through government managed stick and carrot programs can be effective.
Another way to reach the core values of the consumer is to change the perception of mobility itself. It will be futile to try to reduce the consumer demand for mobility. A successful strategy could be instead to offer virtual mobility as an alternative. High speed communications provided through fiber optic networks into every home will reduce the waiting time for Internet-based communications exchanges. Telecommuting and video conferencing can become an even more viable alternative to physical commuting and shopping with higher upload and download speeds. Perhaps even a system of rewarding corporations (as opposed to the individual) for establishing satellite offices or encouraging ''working from home'' would go a long way to reducing fuel consumption. What is required is to make the consumer realize that this is a convenient and effective alternative form of mobility.
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Question 2a:
What hurdles must hybrids, flex-fuel, and hydrogen-powered vehicles clear before the automobile industry, industry analysts, and the automotive press accept these technologies and consumers buy them?
The primary caveat associated with the adoption of any new technology is that any negative attributes should be totally transparent to the consumer. That is, there should be:
No cost penalty over the life of the vehicle
No reliability/durability penalty
No range penalty
No functional penalty
No convenience penalty.
Flex-fuel (FFV) vehicles have been accepted by the public for many years, and they are cost competitive and 'transparent' to the consumer in all aspects except range when fueled with the lower energy content E85. Since 1995, over six million have been produced and sold in North America. The incremental cost for their production is very small, and is largely associated with the use of a low-cost sensor and selection of fuel and intake system materials that are compatible with the fuel. The incentive has primarily been the CAFE credit given the vehicle manufacturer for selling such vehicles.
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In order for these FFV vehicles to make a difference in our national petroleum demand, the ethanol-based fuel E85 must be more widely available at a cost competitive with that of gasoline.
There is less energy per gallon of ethanol than gasoline or diesel, so the cost must be adjusted to give the consumer a cost-per-mile that is equal or less than gasoline in order to gain widespread acceptance of the fuel. It is well-known within the government that of the approximately 175,000 refueling stations in the U.S., there are only 4,992 alternative fuels stations reported by DOE, and of those, only 637 offer E85.(see footnote 25)
Hydrogen has greater challenges than FFV, although some are similar in nature. Ford and BMW have demonstrated that it is possible to offer hydrogen powered vehicles today, burning the fuel in an internal combustion engine. However, hydrogen fuel requires new fuel production, distribution and vehicle fueling systems. In addition, as hydrogen is currently understood, it would require some changes in consumer behavior to operate. On-board storage issues result in reduced range and some restrictions on the access of these vehicles to all public places. In addition to these challenges, the major hurdle to creating demand for them is the almost total lack of a hydrogen refueling infrastructure.
Technologically, there are a number of challenges to the production, distribution and storage of hydrogen so that there is a net benefit to society. Briefly stated, they are:
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Production: By most methods, the production and compression of hydrogen will create more greenhouse gas and use more energy than is saved by burning it in an engine. The theoretically high efficiencies of the fuel cell are needed to make a net gain possible with hydrogen fuel. Achievement of these high efficiencies at commercially viable cost levels is one of the major goals of fuel cell developers.
Distribution: Hydrogen is the smallest natural molecule known to man. It can therefore leak out of the smallest holes, even finding its way through the very small crevices and cracks that exist in many metals and joints that contain other liquids and larger gas molecules very well. The cost and technical challenges of setting up a distribution system that can hold such a molecule has led many to consider the deployment of decentralized refueling stations that generate hydrogen on-site. These are not cheap either, and without any vehicles on the road to use the fuel, there is no incentive to make the investment. The classic chicken-and-egg dilemma.
Storage: The energy density of hydrogen is very low. To give a vehicle a competitive range (distance between refueling stops) it is necessary to store it at very high pressures or other means of densification. Development of cost-effective tanks to provide such storage is underway, but making certain that they are safe in all foreseeable accidents is a major challenge. Also, most parking garages and many bridges prohibit vehicles with compressed flammable gases. The access of vehicles fueled by hydrogen and other gasses to these structures needs to be addressed before full acceptance of these vehicles can be expected.
Refueling practices associated with the various alternatives being explored for on-board storage would likely be different and more complex than those currently accepted for gasoline and diesel fuel. Standards for refueling systems and associated safe practices will need to be developed. With the current level of consumer expectations for self-service gasoline or diesel, refueling with hydrogen is likely to be anything but transparent to the consumer.
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Increasing emphasis should be placed on the solutions to these challenges: low-impact production of hydrogen, creation of a hydrogen refueling infrastructure and solving the on-board fuel storage and refueling challenges. If these issues are addressed and the manufacturers incented to produce, and the consumer incented to buy, hydrogen-fueled vehicles using internal combustion engine technology, a fueling infrastructure will evolve that will cause basic market forces to bring more efficient fuel cell technologies to market when their major hurdles have been overcome.
Hybrids are transparent to the consumer and offer significant fuel savings to a limited number of vehicle owner/drivers. There are three major ''rules'' that govern where hybrids can offer financial payback to those who buy them:
1. The duty cycle must be highly transient. In other words, there must be a lot of stop and start to really maximize the savings of the hybrid powertrain. Hybrids work by capturing energy normally expended in the brakes and recycling it to assist the engine as it accelerates the vehicle. If there is very little opportunity for energy capture, there is very little opportunity for energy savings with the hybrid.
2. Fuel use must be high. That is, the distance traveled in a year must be large so that there exists an opportunity for financial payback.
3. An opportunity should exist to offset high brake maintenance costs with the hybrid, adding to the financial incentives to adopt the technology.
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For most consumers, fuel prices will have to be much higher before there is payback for the extra cost of the hybrid technology. Indeed, it is generally accepted that hybrids present a poor financial case for the average consumer.(see footnote 26) As the cost of batteries declines with advances in technology and market volumes, we expect that this payback period will be reduced. However, used vehicle residual values due to questions about battery condition and the still high cost of mature replacement batteries (we estimate about $1,500 based on discussions with battery chemists) will curtail widespread adoption of hybrids. Moves by the manufacturers to alter the image of hybrids from purely ''green'' technologies to the position of a performance option (performance without guilt) are, in our view, attempts to put forth a more favorable value proposition, focusing on the competitive core value of the Baby Boomer population.
Plug-in hybrids alter these rules somewhat, but are still duty-cycle sensitive. Those who drive out of range of the charge provided from the grid will experience a penalty associated with the added weight of the additional batteries needed to store the grid power. Those who drive on pure-electric power close to the point of recharge are also driving less efficiently than possible because they are carrying around the unused internal combustion engine and related systems during the battery-only portion of the duty cycle. Questions of residual value due to battery issues are apt to be at least as acute as with non-plug-in hybrids. While most consumers may actually drive in duty cycles within the range afforded by the plug-in hybrid, their mindset is that they need a vehicle with a full 300 mile range, and have no good reason to give up or exchange this expectation with something else.
There are some arguments that hybrids offer fuel savings on the highway due to their downsized engine, and that the extra power needed for acceleration can be obtained from the batteries. This is indeed the case. However, those who actually drive on the highways most of the time, or those who think they do and hence evaluate their car accordingly, can receive an equal or larger fuel economy boost at much lower initial cost with a downsized and turbocharged gasoline engine, which is also of significant benefit in the city.(see footnote 27)
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In sum, hybrids make the most sense in urban commercial applications where many miles are accumulated each year in stop and go traffic. The most attractive application are on heavy vehicles such as refuse trucks and urban buses where the financial savings due to a reduction in brake maintenance costs can help provide a payback to the hybrid.
Their exists a viable alternative to the hybrid technology that is far less sensitive to the way it is driven, and that has much less of a residual value risk, yet offers an equal if not greater fuel economy and performance benefit: the diesel engine. The diesel has been challenged to meet the emission regulations. However, technology is advancing and we believe that there exists a high probability that further reductions in emissions beyond the current Tier 2 standards are possible.
There remains a great deal of uncertainty over the future of emissions regulations beyond Tier 2. We believe that the vehicle manufacturers are reluctant to invest in manufacturing facilities for these engines based on a business case for the U.S. market due to this uncertainty. Policy-makers could move the situation forward by giving a clear signal to the automakers as to the level of post-Tier 2 emission standards. Technology developments and investments could then be made based on calculable risks rather than a very uncertain future governed by the unknown future of emissions regulation.
Recent market acceptance of diesel-powered cars and light trucks suggests that the historic U.S. market reluctance towards the diesel no longer exists. The remarkable acceptance of diesel technology in Europe, where the diesel market share exceeds 50 percent of the new car fleet, further supports this view.
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Question 2b:
How more or less likely is it that these radically new technologies—fuel cells, electric drive trains, or significant battery storage capabilities, for example—will be incorporated into cars rather than incremental innovations to internal combustion engines?
Historically, 'radical' technologies like these have not been incorporated in the vehicle fleet, primarily because they are not transparent to the consumer when assessed on the basis of one or more of the criteria of cost, utility and/or convenience. Incremental changes and innovations have been the experience—evolutionary rather than revolutionary
These and other advanced technologies offer further incremental improvements in fuel consumption. They will be adopted by the marketplace if and when they can meet the expectations of the core values of the consumers. Each of these, and indeed other innovations, are challenged to equal the current end expected evolution of the performance of the internal combustion engine. Concurrent achievement of competitive cost (initial and/or life cycle), range, refueling time, all-weather performance, well-to-wheels efficiency and greenhouse gas emissions etc. remain significant challenges.
The likelihood that these technologies can be incorporated into cars can be increased by also working through public education programs to influence the formation of core values of future generations, as discussed above. The best chance of this happening long-term is via Generation Z and their Gen X parents (who tend to have a more altruistic bent than other generations). By definition, it is impossible to change the core values of the current generations of consumers, but one can possibly modify consumer behavior by putting the benefits and shortcomings, if any, of these technologies into proper juxtaposition with current consumer core values, again through education. Incorporation of the technologies into cars will occur as both the technology and consumer perceptions evolve towards each other.
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Regardless of how the end-result is achieved, we forecast that increases in efficiency of the vehicle through available or non-disruptive powertrain technologies will reach the point of diminishing returns once an improvement of approximately 30 percent has been achieved when compared to a baseline gasoline engine. To obtain improvements greater than this will require the use either alternative fuels or inherently more efficient lighter vehicles.
Summary:
What would be required to lead automakers to apply technology advancements to improving fuel economy?
The automotive industry will respond to increased demands for fuel economy from the consumer. Changes in consumer behavior that place a higher priority on fuel economy will result in the increased deployment of presently-available technologies such as hybrids, downsized and turbocharged gasoline engines, displacement on demand, etc.
A clear regulatory position on the future of emissions standards beyond Tier 2 will enable manufacturers to make an assessment of the likely future prospects for regulatory acceptance of the Diesel—the one technology that meets all current consumer expectations for performance while delivering a 20 to 30 percent improvement in fuel economy.
Changes in consumer behavior can be expected if and when the need for fuel consumption reduction resonates better with the core values of the consumer. The bulk of today's car buying public places high priority on the need for economic, physical and social survival. With current fuel prices and availability, fuel consumption has a lower priority than other vehicle attributes such as a high seating position (which increases aerodynamic drag), faster acceleration (that usually results in an engine that operates at off-peak efficiency most of the time) and high perceived levels of mobility and safety (that result in vehicles heavier than might normally be necessary).
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Policies in the U.S. have lacked from the very beginning any component that attempts to change consumer behavior. Emphasis has been placed instead on maintaining mobility and lifestyle in a business-as-usual consumer environment.
What is needed is a series of coordinated efforts, all aimed at conservation. Programs that sponsor the development of high-risk technologies need to be continued simultaneously with public education programs that increase public awareness of the need to conserve, and to make it in their best interests to do so. It is likely that the high-risk technologies will have some limitations, or will change to some extent the normal expectations of today's vehicles with respect to range, refueling, convenience and performance. The core values of future consumer generations can be influenced by including in the education of current school-age children the need to conserve energy in all forms so that they embrace the new technologies and their differences from the vehicles of today.
Education programs need to be reinforced with fiscal programs that are in alignment with conservation goals. Programs that tax excessive consumption and reward conservation for new vehicles as well as those in-use will provide additional incentives to conserve.
What hurdles must hybrids, flex-fuel, and hydrogen-powered vehicles clear before the automobile industry, industry analysts, and the automotive press accept these technologies and consumers buy them?
Without a change in consumer values, transparency is the primary condition that must be met for the consumer to adopt a new technology in today's marketplace. Cost, reliability, durability, range, refuel time and convenience all need to be equal or better than the technology we seek to replace.
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Hybrids suffer from higher costs, both initial and life cycle, as their fuel economy is generally insufficient to give a payback to the original purchaser during the first ownership period, and battery life issues cloud the resale value.
Hydrogen vehicles present a host of range, refueling and access challenges in addition to the technical issues and uncertainty of a net benefit when well-to-wheels issues are considered.
Of the three technologies mentioned, Flex-fuel vehicles offer the one technologically transparent solution, but only because the ethanol-containing fuel is not required. To make a difference in energy consumption, the six million FFVs on the road must have access to E85 at competitive costs. At the moment, there are less than 700 E85 stations nationwide, versus 175,000 refueling sites for conventional fuels.
How more or less likely is it that these radically new technologies—fuel cells, electric drive trains, or significant battery storage capabilities, for example—will be incorporated into cars rather than incremental innovations to internal combustion engines?
Historically, 'radical' technologies like these have not been incorporated in the vehicle fleet, primarily because they are not transparent to the consumer when assessed on the basis of one or more of the criteria of cost, utility and/or convenience. Incremental changes and innovations have been the experience—evolutionary rather than revolutionary.
They will be adopted by the marketplace if and when they can meet the expectations of the core values of the consumers. Concurrent achievement of competitive cost (initial and/or life cycle), range, refueling time, all-weather performance, well-to-wheels efficiency and greenhouse gas emissions, etc., remain significant challenges.
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Because it appears likely that these technologies will be accompanied by changes in these characteristics, the likelihood that these technologies can be incorporated into cars can be increased by also working through public education programs to influence the formation of core values of future generations, thus changing the willingness of the consumer to accept changes.
Regardless of how the end-result is achieved, we forecast that increases in efficiency of the vehicle through available, non-disruptive powertrain technologies will reach the point of diminishing returns once an improvement of approximately 30 percent has been achieved when compared to a baseline gasoline engine. To obtain improvements greater than this will require the use either alternative fuels or inherently more efficient lighter vehicles.
BIOGRAPHY FOR PHILIP G. GOTT
Phil Gott is a Director for Automotive Consulting within the Automotive Group of Global Insight, Inc. He specializes in identifying technical/competitive advantages, and creating and implementing technical, business and/or market entry strategies to exploit them and achieve targeted business results. He has served the automotive industry since 1975 and has conducted a number of technology and market assessments or developed market entry strategies for many light vehicle technologies, including powertrain, electronic and mechanical systems as well as advanced materials.
Phil has primarily helped automotive vehicle manufacturers and component suppliers deal with the continuing changes in the automotive industry, whether the changes have been driven by regulatory, competitive or market forces. He both manages and participates in market research projects in which he has identified new product and market opportunities for component suppliers in the powertrain, driveline, chassis and suspension areas. He has managed major programs for vehicle manufacturers, providing the foundation for their long-term powertrain strategy. His work has also provided input to EPA, DOT and NASA on programs that support the development of regulatory standards, or assessing their impact. He has identified the need for, and led major multi-client studies assessing the likely changes in vehicle powertrain and electrical systems. To accomplish these, Phil draws upon his quarter century of industry experience, his mechanical engineering training (BS from Lafayette College) and his hands-on experience which includes building and testing experimental vehicles; designing, managing the construction and operation of one of North America's most advanced engine development laboratories; and preparing and developing five race cars, four of which are national or regional champions. He is a member of the Society of Automotive Engineers and the honorary engineering fraternity, Pi Tau Sigma. He also holds an SCCA National Competition license, campaigning an Acura Integra in the Northeastern U.S.
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Phil has authored a number of industry publications including the award winning Changing Gears, a 400+ page history of the automotive transmission and how the industry responded to different market, societal and business forces to develop new transmission technologies. This hardbound book was published by the Society of Automotive Engineers in 1991.
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Discussion
Chairwoman BIGGERT. Thank you very much.
Now it's our turn, so each Member will have five minutes for questions. So the Chair recognizes herself for five minutes.
And this question, really, is for all of you and brief answers, please, so we can get through this. But which comes first, advanced fuels or advanced vehicles? It's the classic chicken or the egg question, I think.
How do we ensure that development and deployment of vehicles and fuels proceed in a coordinated fashion?
We'll start with you, Dr. Miller.
Mr. MILLER. In my view I think you're going to see advanced fuels before you see many of the long-term advanced technologies such as fuel cells or electric vehicles or even plug-in hybrid vehicles.
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Clearly we have to have a national strategy and a national plan to do this coordination. But I think that has been put forth in the President's Advance Energy Initiative how we would do that. So I think there is a plan for doing so.
Chairwoman BIGGERT. Thank you.
Mr. Weverstad.
Mr. WEVERSTAD. I believe that it depends upon the advanced technology what comes first the fuel or the vehicle.
Clearly E85, an alternative fuel, we've got an industry nearly six millions chickens on the road, we're just looking for some eggs. So that one we've got.
When it comes to hydrogen we'll probably have to work at centrally fueled locations first and then develop the infrastructure.
Chairwoman BIGGERT. Thank you.
Mr. Hinkle.
Mr. HINKLE. I think that the cooperation—this is an area, particularly with hydrogen, where the cooperation between government and industry is really critical. And I think that the—what the Department of Energy is learning with their learning demonstration, their fleet validation programs that hooks—that hooks fuel companies to auto companies and develops not only a consciousness but the technologies that will enable these things to happen. And that's a fundamental change, I believe.
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Chairwoman BIGGERT. Thank you.
Dr. Gibbs.
Dr. GIBBS. My view is that we simply need to make more of the fuels that we already know how to make. We need to make 50 billion gallons of ethanol and to make that a national priority, as I've indicated in my testimony. That does not exclude, of course, developing all these other technologies. But the demand certainly the beginnings of the infrastructure is already there for ethanol. We simply need to make more of it.
Chairwoman BIGGERT. Thank you.
Mr. Lovaas.
Mr. LOVAAS. Well, the first step that we can take actually before looking at the two fuels that we think offer a lot of promise, biofuels and electricity, is to improve the efficiency of conventional vehicles. So there's plenty of technology that can come right off the shelf and become a standard part of cars and trucks. And it will drive up efficiency. And then with biofuels you're probably going to have, since there are already substantial number of them out on the road, production of vehicles ramp up further before you have a ramping of the fuel. Because it's going to take a while for the ethanol industry to even make a dent in our transportation sector, which is 97 percent dependent on oil.
We all hear about ethanol and the substantial growth in ethanol in recent years. And it is impressive in percentage terms. In absolute terms it is a minuscule fraction of overall transportation fuel demand.
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So on electricity, I'm not sure which is going to come first. I mean, we already have the grid in place if you're talking plug-ins, and we need to drive down the costs and drive up the range of batteries for plug-ins.
Chairwoman BIGGERT. Thank you.
Mr. Gott.
Mr. GOTT. Thank you.
For most technologies I would think the fuel has to be in place to give the public the confidence that it—that it exists that the vehicles that they might be in the future or consider buying can be driven and conveniently refueled. The diesel is a good case in point.
With a growing diesel fuel refueling network, Jeep expected to sell 5,000 diesel Liberties in the first year. They actually sold 10,000. Mercedes-Benz expected 3,000 E320s to be sold in diesel, 4,100 were sold. Volkswagen expected in—to sell about 2,200 diesel vehicles and 4,500 had been sold.
So clearly if you have a fueling infrastructure in place, you can certainly give the public the confidence needed to go ahead and buy the vehicles.
Chairwoman BIGGERT. Thank you.
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Then, Dr. Gibbs and Mr. Weverstad, talking about there's about six million E85 fuel—flex-fuel vehicles on the road now and yet there's very few fueling stations for them. Why—why would the oil companies want to install facilities to encourage their customers to shift away from a product in which they have huge investments? And at one point I've heard that there's actually a contract with the distribution centers that prohibits some of them from putting in these stations. But why when they have these huge investment from the reserves in the ground all over the world to the refining and shipping capacity and even the standard gasoline pumps in the stations, why would they encourage that shift?
Dr. GIBBS. I can't speak to the oil company's motivation. I can only tell you that it costs about $30,000 to $50,000 to put a new ethanol pump. So it's not expensive. I think there might even be a subsidy in the Energy Bill.
Right now we have a temporary situation where there's a shortage of ethanol because of the switch to MTBE. The spot price of ethanol today is $3.50 a gallon. A year ago it was $1.30 a gallon. So we have enormous volatility in that market because of basically the lack of ethanol production capability. And I'm not defending the oil companies here. I'm just trying to describe the market.
Virtually all of the 90 some ethanol plants are concentrated here in the midwest. There are virtually none in California, none in central and east coast. That's the importance of cellulosic ethanol because we could begin to make it in other places.
But the answer is it's not that hard or expensive to put in an ethanol infrastructure. And there's an intermediate level of blenders, some of whom belong to the oil companies and some of whom are independent.
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Chairwoman BIGGERT. Mr. Weverstad.
Mr. WEVERSTAD. I think that, you know, the oil companies would have to answer clearly for themselves. But from our perspective we are—we understand a company wouldn't want to make a large investment in an alternative fuel. They did it with methanol and it didn't work out well for them. So we were trying to create some customer pull. That's what our Live Green Go Yellow campaign was about.
We've actually worked with Shell and Chevron here in Illinois and in California. And a remarkable number of independents like Kroger and Meijer and many others to do demonstration projects to show them there really is a market for their fuels. We've had great results in the Chicago area at the—at the Shell stations and the Gas City stations actually selling more than they had anticipated.
It isn't while $30,000 may be higher than converting a pump, if they have to dig a new hole to put a new pump in, it can be quite expensive. So I think what—what the Congress can do to help them is to help provide some tax incentives for them to, indeed——
Chairwoman BIGGERT. I believe that there was one for the installation.
Mr. WEVERSTAD. Yes.
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Chairwoman BIGGERT. It was in the Energy Bill to pass it on.
Mr. WEVERSTAD. And we need to continue that. That's—that's really what we need. We will try to create some customer pull. And if they can get some incentives, I think we can make it happen.
Chairwoman BIGGERT. Okay.
Then just a follow-up to Mr. Hinkle, the refueling infrastructure problem is even greater for hydrogen. What lessons from ethanol from E85 can we apply to the potential shift to hydrogen?
Mr. HINKLE. Well, you want to make sure you've got the molecules. That's—that's essential. But you need—you need a great deal of cooperation in advance, and that's—that's what I mentioned earlier. There's—the way that these things are—are rolled out is extremely important so that you don't build—so you don't build over capacity and don't build in prices with low demand over a long period of time.
So—and—and part of the earlier question that oil companies, certainly the oil companies that we work with most closely, I mean there's a simple and complex survival aspect of this. What business do you want to be in in 15 or 20 years? And so the—and you don't have to believe in peak oil to see that the constant development of new products is really important. So I think that cooperation with—with the needs of the—of the using device with—with a vehicle and the cooperation between the—the producer of the fuel is exceedingly important.
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Chairwoman BIGGERT. Thank you.
And I have exceeded my time. So I will apologize and now yield to Mr. Honda.
Mr. HONDA. You're the Chair, Madam, and you don't have to apologize to anybody, especially in your home. And thank you very much for this opportunity.
Let me just make a real quick reaction or statement from what I heard this morning.
I heard that folks need to hear, the consumers need to have been challenged in terms of their core values. I think that's already been done at $3 plus per gallon.
The comment about having to exceed 30 percent efficiency in future cars in order for the consumers to consider alternative vehicles, that's been reached. My hybrid went from what I had in the car before is 20 miles to the gallon, which is a foreign car, to a hybrid, it went up to 42 miles on the highway and 50 in the city. So we've exceeded that.
The size of the vehicle was described to mean high seated and all the other stuff, which is nice. I had that in my van. But the hybrid technology has the ability to couple gasoline engines and hybrid engines together to be—to be put on a larger platform of a car. That is—that can be accomplished. So I think that what the consumer is looking at is when you all going to get started on this and what are we going to be doing in terms of providing that leadership in forcing—or having not the automobile industry to move forward, which is usually driven by consumers as we saw back in the '70s, but also I believe that the oil companies need to be put to task in terms of them providing the infrastructure. They have done that in the past and they can do it in the future because the amount of money they've earned over these past couple of years with the increase in gas is phenomenal. I think they can reinvest that money back into infrastructure that will provide the kind of services that consumers want.
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Having said all of that, I believe we're on the right track and I think that a hearing like this is good because the community needs to hear what it is that we're talking about and what the experts are saying, and what's really available. The automobiles already available you say six million. That's six million here against over 220 plus million available vehicles in this country. What people don't know is the conversion kits cost between $200 to $500. I'd be willing to spend that because I spent that much in two months with the increase in gas.
Brazil has almost their entire fleet of cars out there are on flexibility fuel, E85. Most of those cars come from this country. And so the technology and the ability to do all that is ready. So the question really is what's our obstacle. And I ask the question that there are technological—there are barriers of economics and the barriers of political barriers.
And so my question back to you is I would like a candid response in terms of the barriers that you do see. And coupled with that question let me ask the other question: With hybrid plug-ins, I think it's great everybody's going to be able to do that if you have a garage. You have a lot of urban dwellers who park in the streets. How do you—how do you perceive how we deal with and provide that kind of service using plug-ins for those who are city dwellers who have to park their cars out in the streets?
I would appreciate a quick answer. It was a long question. Mr. Gott and Mr. Lovaas?
Mr. GOTT. In all due respect, Mr. Honda, while the numbers you quote are—are accurate for particular vehicles, the vast majority of the public isn't as forward thinking as you are. The most recent report from the EPA on trends in light duty motor technology suggests that the minimum weight of vehicles was around 1982. It's been getting heavier ever since. We show no—this is a sales weighted average. We show no change in that trend.
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Acceleration time was minimal at about the same time, 1980. It's interesting we had minimum weight and minimum acceleration time or maximum acceleration time at the same point. It's gone from about 15 seconds down to 10 on a sales weighted average.
So the consumer hasn't gotten the message. And I don't think policy based on the assumption that the consumer has gotten the message is going to work. Yes, you can buy vehicles that are more efficient that have the advanced technologies. But the vast majority of the consumers are not yet buying them. And I think, you know, we need to address that issue.
Mr. LOVAAS. I would agree with my colleague if I hadn't read about the May sales figures for the automakers and seen just how much Toyota and Honda have jumped in terms of their market share, much to GM's mostly but also to Ford's costs. So I think consumers are getting it. Prices have not just spiked, but stayed high on a sustained basis. And EIA, even EIA which is very conservative in its Outlook traditionally, forecasts high prices as far as the eye can see. And I think consumers are realizing that.
Now in terms of what's needed, you have the price signals. But in terms of consumers being able to respond to those price signals, you have a lack of choices in terms of fuel and vehicles because our oil dependencies are hard wired into the county, so to speak. And we need to look back at two responses in the 1970s. You mentioned Brazil. There's another response in the 1970s that was successful. We adopted fuel economy standards here doubling the fuel economy of cars, driving down the oil intensity of the economy by about a third, which is part of the reason it's so resilient and in spite of the pain at the pump the consumers are feeling, the economy has not slipped into recession partly because oil intensity has dropped. And if we hadn't adopted those fuel economy standards, gasoline consumption—this is according to the National Academy of Sciences in a 2002 report, would be about 40 percent higher. And we would be all the more dependent on foreign sources of oil.
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So we did—we did something then and we can do something similar now.
We can also look at Brazil. Right now, as you referred to, 70 percent of the vehicles sold in Brazil are flex-fuel vehicles. There's a mandate that ethanol be blended with gasoline at 20 to 25 percent. So that's about a quarter of the transportation demand fueled by ethanol derived from sugar cane in Brazil's specific case. Here it's just under three percent. Brazil prodded things along with policy in the 1970s in reaction to the last turmoil we faced in the marketplace because of oil embargoes and we adopted higher fuel economy standards in response to the same thing.
Both approaches have been pretty successful. And legislation that we consider to address this problem, policy responses that we consider should learn from those lessons.
Mr. HONDA. Thank you.
Dr. GIBBS. Did I hear in there that you'd like to hear about the hurdles to things like—let me just go over that from the testimony.
If you think about something like oil or gasoline, what you have is a liquid that has a very high energy density. So if there's an accident or something, if you see an oil fire or a gas fire you see a lot of energy being released. In contrast, biomass is very low density matter. So think big diesel trucks full of hay or corn stalks.
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And the challenges in turning that material into a higher density fuel like ethanol involve solving this density problem.
For example, in building ethanol plants we would like to build them as large as possible to achieve economies of scale, but that would mean hauling all this low density biomass a large distance with diesel trucks and having the trucks come back empty. So we need new technology to resolve that conflict, that inherent conflict between the need to build larger plants and the need to deal with low density biomass.
The low density problem is a good thing in the sense that it creates lots of local jobs because you essentially have to build your plant wherever the biomass is.
We need critical components for converting that biomass. One of those is cellulase, the enzymes. Just one billion gallons of cellulosic ethanol would require an amount of enzyme that is about twice the annual production for all industrial enzymes in 1994. And that's just one billion gallons. And I am advocating that we produce 50 billion or more.
So we need to find ways to solve those problems.
There's another problem known as pretreatment. Essentially we've got to—to process very large amounts of low density material into the higher density fuel. And that's the hurdle and the expense.
Mr. HONDA. Thank you.
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Mr. MILLER. I'd like to address the issue raised about plug-in hybrids and what do people who do not have a garage and must park their car on the street do for recharging those plug-in batteries.
I think there's a perception out there that plug-in hybrid batteries would require overnight charging, a period of six to eight hours. That simply is not the case. Hybrid batteries are much different than the old electric vehicle batteries in a sense that they can be charged much, much quickly, as little as one hour. So I think the solution to the problem that you raised is to install, for example, public charging stations at places where you may, for example, go to a restaurant and be there for an hour, you could plug in or charge. Or in parking lots, that would be another example. Presumably it would be much lower in cost to install an electric charging station than it would a fuel gas refueling station for alcohol or hydrogen, whatever. So I think that's one potential solution.
Mr. HONDA. If you have a suburban model in terms of how we think about recharging these kinds of cars?
Mr. HINKLE. I think there's many—many approaches to this.
Mr. HONDA. Okay.
Mr. HINKLE. And we realize that the decisional calculus of the consumer is not like that of fleet operators. And, after all, we're sort of a bunch of noble savages with regard to this. So who knows what—how much gasoline—how much the gasoline prices have to rise. And that's why fleets are so important, not only with respect to demonstrating the viability of these things, and this is true for any fuel not just—not just hydrogen.
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Another thing with hydrogen, and it's also true with some of the biofuels, not so much with alcohols, but if you—if you don't have—and hydrogen is one of these things that's going to have even isolated national markets and regional markets for these things where the pricing is going to be a function of—it's going to be cost based and it's going to be a function of transparent market fundamentals. So the likelihood that government incentives, the tools that government has to deal with both the demand and supply side could actually—you could actually experiment with them and see—see how they work. Because hydrogen is not going to fungible worldwide, but it might be from region to region. It's like the electricity grid. I mean there—actually there is not one grid, as we know. There are several of them. So electricity prices vary considerably. And I would expect for a while hydrogen would do that, but it gives you the opportunity in combination, say, with things like with individual states and regions with a renewable portfolio standard, you would see some interesting phenomena there. So that's a speculation about what the markets might do.
Mr. WEVERSTAD. I'd like to answer many of the questions that I heard there. And if I've missed something, poke me and I'll try to come up with something.
But I'd like to start out by letting you know that actually GM has the most models of vehicles that get over 30 miles per gallon. And we lead in most of the categories in which we compete. Unfortunately, the world doesn't necessarily know that and that's a shame on us. We need to do a better job of explaining that.
I would also point out that the Toyota Prius that you speak of is a wonderfully engineered vehicle. But if you wanted to save gallons of gasoline, you could drive a new Chevrolet Impala with E85 and you'd actually save nearly 200 gallons more gasoline gallons in a year of operation. And you could drive a four-wheel drive Yukon and compare that to your Prius, you'd save 133 gallons of gasoline.
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Mr. HONDA. I'd agree with you, except that the infrastructure is not there yet.
Mr. WEVERSTAD. That's—yes. That's our challenge and we need——
Mr. HONDA. Well, that's the point of my comment
Mr. WEVERSTAD. Right. We need—we need—we need to develop that and we—and we're doing what we can to make that happen.
As far as plug-in hybrids go, we don't want to throw away any technology. We need to look at all of them. But I will tell you as an engineer simple is better. Plug-in hybrids are the most complex. It has a complete electric system plus a complete gasoline system which makes it more complex and more difficult to engineer.
I would also point out that the lithium-ion batteries that we talk about today as the most promising, if you had a volume of the same size as a 20 gallon fuel tank, which is what most of our vehicles are, that would be equivalent to one quart of gasoline.
So there are some challenges and we're working on them.
Our problem with E85 is clearly engineers to calibrate and validate in more models; that's what's happened in Brazil. They don't have nearly as stringent emission standards or onboard diagnostic requirements. We don't want to give that up. E85 is cleaner and we want to keep—we want to keep that. And we need to develop the infrastructure.
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Mr. HONDA. Could I just ask a real question that somebody in my District asked me, I didn't know my answer. Butanol versus ethanol, what's the distinction? Is there an advantage? Is that more dense or what?
Dr. GIBBS. Butanol is a four carbon alcohol and it is denser. It smells pretty awful. You can make it from biomass, but ethanol is a commodity today. We have futures being traded here in the Chicago Commodity Exchange. And I think that although Butanol could be an additive, ethanol really is going to be the central fuel in the infrastructure.
Mr. HONDA. Thank you, Madam Chair.
Chairwoman BIGGERT. Mr. Lipinski, the gentleman from Illinois is recognized.
Mr. LIPINSKI. Thank you, Madam Chairman. I'd again like to thank you for putting this hearing together. One of the most interesting hearings I've actually been to, not just because of the topic but also because of the quality of the witnesses. So I appreciate all the wisdom that you've shared with us today.
There's a couple of things. Well, one problem I was going to say, is I could go on forever, which none of us want to do here. Can go on forever with questions tapping into your knowledge here. But let me start here and let the Chair stop me when—when she's tired of hearing me. Hopefully, not right now.
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Dr. Gibbs, I'm—I've been a big supporter of ethanol. And I think the Chairwoman has also been a big supporter of ethanol. The critics and I personally have come under attack, I think the Chairwoman has also, for supporting ethanol. The critics are—say that well it is really useless because you use more—you consume more energy the more fossil fuels, usually, in creating ethanol than you would if you were just using the oil to run the cars. So ethanol is really worthless. I want to put that to you and explain to me why ethanol is worthwhile.
Dr. GIBBS. That argument has been refuted. I'm blanking on the name of the professor who put that forward. Professor Pimentel's.
There are probably three different recent studies which are compendiums or studies combining, let's say, six or eight other studies to examine them on an equal bases, the most recent of which Professor Kammen from Berkeley. And what they've done is to simply plot the results from all these different studies. Pimental's which was negative, and all the others which were positive for ethanol. And show that in fact that is basically sort of an urban myth. Those early studies did not account for all the energy value that you get from ethanol and then made assumptions like we have to include the value of the lunch that the farmer eats, and things like this.
At any rate, and I could provide to the Committee if you'd like, the papers of Professor Kammen. On our website there's a link to Michael Wang, Dr. Wang at Argonne which essentially makes the case that there is a positive value.
Let me just very quickly——
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Mr. LIPINSKI. How much of an increase?
Dr. GIBBS. You get about—about 25 percent more with—energy with corn. With cellulosic ethanol you get absolutely the best performance. And the reason for that is that you're able to use the other parts of the wood. The brown here and the brown in the wood is something called lignin. And so when you separate that out you can burn that. You get an additional process of energy instead of burning coal or natural gas. And then use the sugar to make ethanol. And the grams of CO per mile and the energy balance are excellent for cellulosic ethanol.
Mr. LIPINSKI. Okay. It would be very good for you to provide us with that. Because, as I said, there's been—there's one particular media outlet who has an editorial saying that we were wrong because ethanol just is worthless. So it's important to have good information when making any of these public policy arguments.
I want to move on to Mr. Hinkle. I'm—certainly as I've—as I've talked about I was one of the individuals who introduced the H–Prize Act. I'm a big supporter of hydrogen.
The first question I have is our hydrogen internal combustion engines, has basic—have they been put aside? I've actually heard BMW, I believe, has a car coming out that is supposed to be hydrogen internal combustion engine. I'm not sure that's true. But from most of what I hear that technology has been abandoned. Has it?
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Mr. HINKLE. Well it's been abandoned by the Department of Energy, which is different than being abandoned by industry.
BMW certainly is ready. They've made—they've had some announcements here recently that they may have a seven series V12 that's a biofueled vehicle that will—that will be able to use hydrogen and some others. And the emissions are remarkable and there's no loss in performance. I mean, it's the control system.
I mean, you can make these. You could—with hydrogen because of the enormous range of—of mixtures with air that it will tolerate, you could tune with the proper control system. You could tune one of these engines to do almost anything you wanted. It gives you—there's no other fuel that—that gives you that possibility. And, of course, you still have to have the supply. But BMW has done some pretty remarkable technical things, and they've also perfected a high pressure direct injection in the combustion chamber, which is a bit of a trick here. And people worked on that—they worked on that with the Formula 1 engines. Cosworth worked on that 30 years ago for Formula 1 cars and it wouldn't have fit into the rules. But they got some pretty dramatic horsepower increases. So—and Ford has done some—some good work on this.
So it's—you know, for the Department of Energy it's a resource constraint. You know, you got to work on the things that have the highest strategic value and you—without large amounts of money. And—and—but BMW, there's some—there's some smart people that have not abandoned this.
Mr. LIPINSKI. Do you think it's a mistake that DOE has abandoned it?
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Mr. HINKLE. Well, given the resource limitations and—and their—their devotion to the—to the President's Initiative rather than what the expansive authorities allow in the—in the Energy Policy Act, there's a transition here. Perhaps there will be some—some thoughts about that. I don't know how much of a strategic mistake that is, but certainly the—a hydrogen fuel combustion—you know direct burn car offers a bunch of bridge opportunities just like hybrids do because of the drive system.
Mr. WEVERSTAD. Could I offer one of the reasons that we at GM have reduced our effort in internal combustion hydrogen engines is primarily due to the lack of energy density in hydrogen and the—the—you have all of the infrastructure problems that you needed with a fuel cell vehicle. And a fuel cell is twice as efficient to start with. So we wanted to take advantage of that efficiency. In order to get a—the BMW to operate like a regular car, they put a much larger engine and super charge it, which adds to the cost considerably. So we went for simple is better, and the fuel cell itself, the efficiency improvements help.
Mr. LIPINSKI. Okay.
Dr. Miller.
Mr. MILLER. Let me—let me clarify the record here. DOE has not abandoned hydrogen and internal combustion engines. And in fact, we are currently today doing research in our labs with hydrogen and internal combustion engines that is sponsored by the Department of Energy.
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Mr. Hinkle is correct that it is a much smaller program than that for the fuel cell program. But as he correctly pointed out the Department does view hydrogen and internal combustion engines a transition technology, one that will allow us to get experience with hydrogen refueling stations, hydrogen in the marketplace and eventually be ready when the time that fuel cell vehicles are ready.
Mr. LIPINSKI. Thank you.
And one more question, the big question for Mr. Hinkle. I mean there are—in the H–Prize Act we give a prize for advances made in the production, distribution and storage and utilization of hydrogen. That's because there are major hurdles in all four of those areas.
Why do you believe that hydrogen has the potential—has such a great potential to be the fuel for—for vehicles in the future?
Mr. HINKLE. Well, the combination of strategic values at a 30,000 foot level are very important. The carbon aspects, the—the import, the wealth transfers from the imported oil bill. And then—and the efficiency gains. And so—and is it worth the complexity to—to evolve in this—in this fashion. It's an end point that combines, that essentially attempts to achieve the optimization of all those kind of features. And we're going to—as prices rise with gasoline and we're looking for alternatives and we—and—and the market mix evolves, we're going to have to from a policy standpoint make a lot of compromises with regard to how valuable is energy security? How valuable is a low carbon footprint and how valuable is—is high efficiency in—in achieving those things?
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The H–Prize is—is—had a remarkable vote and just the—the political aspects of that are pretty—are pretty amazing. We'll see what it does in the Senate. And we were—we participated quite a bit with Representative Inglis's staff on—on inputs to that. It's a good bill. It's got some—and we're helping out Senator Dorgan and Senator Graham with that in the Senate.
But as—as the—and sorry, as the guys assured you in your hearing on this, it's not about the technology, it's about the human drama associated with this. And it lifts the—it tends to—these contests tend to lift the—the picture and the view and—and the—and the spirit of these—of these—of the technology and bring it into the—into focus for a lot of people who would otherwise not—not understand what this is.
Hydrogen is a very complex business, and it's—but it can't afford to be a geek's paradise. It's—it's got to be—it's got to get—it's got to be practical.
Mr. LIPINSKI. Well, since we're at the high note right there, I think I'll—I'll give my time.
Chairwoman BIGGERT. Thank you, Mr. Lipinski.
I wanted to—since this is a field hearing, I wanted to divert a little bit from what we normally do in the hearing. I would like to know, since we have all these people out in this audience, how many of you have hybrid cars raise your hands. High. Okay. How many of you would like to have a hybrid car? Ah. Okay. How many of you have the FlexFuel car? And there's some here. Great. And how many of you would like to have a hybrid plug-in when they become available? Okay. And how many would like to have a hydrogen car, which we have driven? Great.
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Well, I think we have a great audience here and it's probably why you're here because you really believe in—in what we're trying to do here, and that is to, you know, cut down on the use of fossil fuels and really find alternatives.
I just wanted to say a couple of things. First of all, I don't know if you can answer, but I've talked to a lot of people that say they want a hybrid and they go to the car dealers and they're not available. There's a long waiting list, it's a lot more expensive than a regular car even though there's a tax credit. And you must know that there is a tax credit now. Some of you bought your hybrids probably before—before the last Energy Bill, but there is a tax incentive for you to buy a hybrid car. And then—but still it's more expensive.
And—and I also had received something from—from a member, I think a member of the audience that—that says that they noticed that the price for E85 at a local retail gas station fluctuates in direct proportion with the price of gasoline. It says if gasolines increases 20 cents, then E85 increases 20 cents. And he's saying that it should—the only commonality between these two products is 15 percent gasoline, which then should represent only a three percent increase for the 20-cent example.
So this is the cost of—and right now has been talked about, we only have—or we're really using mostly ethanol and the price seems to have gone up when suddenly ethanol has been very popular for use in ethanol—or the price of corn, I should say. The bushel of corn has gone up so much.
So why, if you can give me an answer, why the price of ethanol goes in direct proportion to the gasoline? I would like to hear that.
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And also do you know, and particularly Dr. Gibbs and maybe Mr. Weverstad, with the cars—one other thing about the car, too, I'd like you to come back to is you talk about you have 14 models that all feature good gas mileage. But are these cars—you know, we—we in the United States have a love affair with the SUV. And I think what has happened is cars—manufacturers have tried to take that into account in making cars that have low—lower gas mileage and are hybrids. And that's a good thing. But are the models of your car the kind that, you know, the car that has all the bells and whistles on it and has as well as the good gas mileage? So if we want to start with maybe Dr. Gibbs?
Dr. GIBBS. The price of ethanol is—should be tied to the price of gas and the current value normally would be that whatever the price of—of wholesale unleaded is plus the federal subsidy, which is about 51 cents. Right now that premium is running probably $1.50. As I mentioned, spot ethanol is $3.50, which is of course out of sight. A year ago it was a $1.30.
I think the answer is as we make more ethanol, the price will come down. But in the short-term ethanol is more expensive that gasoline on a—on an energy basis. And so the hope is as we make more and more of it. And right now we're in a crunch because the eastern states have had to drop MTBE. So they're actually probably taking ethanol out of our gas in the midwest and sending it to the east coast.
Chairwoman BIGGERT. So how soon do you think that that will happen? You talked about ethanol now is a product on the exchange, which I think is going to change the way that we think about ethanol.
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Dr. GIBBS. Well, again, it's production capacity. I mean our total capacity is only about five billion gallons out of, you know, versus 140 billion gallons of gas. When we get up to tens of billions of gallons, and just as a benchmark if we were just to go to E10, that is forget E85 and just go to E10, we need 14 to 21 billion gallons of ethanol to do that. We cannot do that from corn.
Chairwoman BIGGERT. So it's back to the old supply and demand?
Dr. GIBBS. Right. So supply and demand. And I think that the cellulosic, the cheaper technology is hoped for, DOE has always projected it, but it's always five years away. So we have to get there.
Chairwoman BIGGERT. Thank you.
Mr. LOVAAS. Well, one of the more interesting components or experimental provisions, shall we say, of H.R. 4409, the Fuel Choices for American Security Act, is removing the tariff on imported ethanol. We do not apply a tariff to oil imports and yet we——
Chairwoman BIGGERT. That's Dr.—or Representative Kingston's Bill?
Mr. LOVAAS. Kingston's Bill, exactly. So—and this would—if this were enacted, it would provide an immediate spike in supply and help to remedy the fact that, you know, you do have this price problem, that is it's a product of economics, supply versus demands. So——
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Chairwoman BIGGERT. Even those in Illinois where the corn producer will have to look at that bill.
Mr. Weverstad.
Mr. WEVERSTAD. To answer your question on our over 30 mile per gallon vehicles, they're not just small stripped down vehicles. You can buy a full size Chevrolet Impala that gets over 30 miles a gallon on the highway. It's—and what we're maybe most proud of is our full size sports utilities that are brand new this year. The combined average 55 city/45 highway on that full sized sport utility vehicle now exceeds 20 miles a gallon, which is a first in the industry for a vehicle that size to give that much utility and that much—people need those vehicles if they pull trailers or there are plenty of uses for those vehicles and they need good fuel economy as well.
With regard to why the ethanol prices are—are—follow gasoline, I can't answer that. I don't—I don't know how they set prices on gasoline. I just know they seem awfully high.
Chairwoman BIGGERT. Thank you.
Mr. Honda.
Mr. HONDA. Thank you, Madam Chair.
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I was just going to make another comment. If the—if the goal is to be more independent of fossil fuel, what we haven't talked about is the utilization of solar on individual homes where individual homes will have what we call smart meters or net metering where you can use the static position of homes all across this country. And it'll vary based upon our climate. But it seems to me that coupling another technology with the technologies we're talking about relative to vehicles should be something that we should be including in our conversation. And so I was wondering in terms of electricity and plug-ins and all that sort of stuff, I think we depend upon two percent of our electricity is from petroleum, eliminate that. And we're trying to move away from carbons, even though carbons are our good friend that come from water and air rather than from petroleum or from the ground, it makes good sense.
I was curious what other ideas you might have in conjunction with the mix and matching of our technologies? You may have to be brief because we only have a few minutes.
Mr. LOVAAS. Oh, we don't.
I'm—I'm not that much of an expert on electricity. But as you said, two percent of our electricity comes from oil. So whatever we do in this sector with solar renewables, such as wind, isn't going to have much of an impact on our oil dependence. But shifting to those technologies will help and it will also help to displace the use of coal which is, frankly, a concern of NRDCs if we do using electricity more and more as a fuel in transportation. Unless we use surplus capacity, which is possible because a lot of people are going to be fueling up at night at their homes using off peak surplus capacity, and we don't have to build new plants, you know, that's okay. But if we have to build new plants, if we're concerned about the environment and about climate, then we have to make sure that we're cleaning up the grid and shifting away from coal to renewables.
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Chairwoman BIGGERT. The gentleman yields back.
Mr. Lipinski for a quick question.
Mr. LIPINSKI. Following up on that—on that use of renewables, I want to ask Mr. Hinkle about the use of renewables to produce hydrogen and how—how far you think that is a way to have maybe where you can produce hydrogen at your own home through a—maybe a solar? Because—I mean, this is something that's seen. There is a future of hydrogen, use solar energy at home, produce electricity with the solar, produce the hydrogen and how far away do you think something like that is?
Mr. HINKLE. Well, Honda of course makes—makes a device now, it's not based upon solar, but it's—and it's a—but it's a bite size piece, it's a home sized piece that generates hydrogen.
There needs to be just like on a very large scale with electrolyzers, there's a bunch of work still needs to be done on those even those there's been a commercial—a commercial technology for a long time. But the thing about hydrogen, it's scalable from very small to very large. And there still needs to be plenty of thinking and engineering and science that goes into that. But renewables, we did a lot of work when I worked for Senator Dorgan on wind on the wires in the Northern Great Plains. And wind on the wires for hydrogen could be very important, especially with the Western Area Power Administration, which is part of DOE. And that goes from the northern great plains into the great southwest and into California.
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Hydrogen in those high growth urban areas from renewable sources is going to be important, but you've got to do a bunch of stuff with the grid, you've got to invent some different control mechanisms and management for those and you've got to build things and you've got to do some things with extra materials to increase the throughput, the power throughput in the corridors where siting is a problem.
So there's a big system problem associated with lots of renewables for hydrogen. But for solar, there's some interesting things and I hope California is able to—and Arizona are able to do things like that.
Mr. LIPINSKI. Thank you.
Chairwoman BIGGERT. Thank you very much.
Thank you all. We've great panel of witnesses today. Thank you for your expert testimony and I think that we've all learned a lot and appreciate you being here.
If there's no objection, the record will remain open for additional statements from the Members and answers to any follow up questions from the Committee. Without objection, so ordered.
With that, this hearing is now adjourned.
[Whereupon, at 12:02 p.m. the Subcommittee was adjourned.]
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Appendix:
Additional Material for the Record
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(Footnote 1 return)
The Science Committee and its Subcommittees have held numerous hearings on the use of hydrogen since the announcement of the FreedomCAR Initiative by then-Secretary of Energy Spencer Abraham on January 9, 2002. The FreedomCAR program was centered on fuel cell vehicles that use hydrogen as fuel. The Full Committee held the following hearings:
(Footnote 2 return)
See http://www.eere.energy.gov/afdc.
(Footnote 3 return)
Based on Federal Highway Administration and American Public Transportation Association figures.
(Footnote 4 return)
U.S. EPA, ''Light-Duty Automobile Technology and Fuel Economy Trends: 1975 Through 2003.''
(Footnote 5 return)
Energy Information Administration (EIA), Department of Energy.
(Footnote 6 return)
''In the Tank: How Oil Prices Threaten Automakers' Profits and Jobs,'' July 2005.
(Footnote 7 return)
Simmons, Matt. Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, John Wiley & Sons (2005).
(Footnote 8 return)
EIA, AEO 2006.
(Footnote 9 return)
The second oil shock came six years after the first shock, which Congress in 1975 to adopt fuel economy standards (under the Energy Policy and Conservation Act of 1975, known as ''EPCA''). This law required a doubling in passenger car efficiency to 27.5 mpg between and 1985. Some argue that the U.S. Big Three's share loss in this period would have been even worse had they not been forced to begin building least some more fuel-efficient cars to comply with the new law.
(Footnote 10 return)
Doyle, J., Taken for a Ride, the Tides Center, 2000, p. 173–4.
(Footnote 11 return)
Ward's Automotive Reports, 2003–2006, monthly.
(Footnote 12 return)
Greene, et al., ''Growing Energy: How Biofuels Can Help End America's Oil Dependence,'' December 2004.
(Footnote 13 return)
EIA AEO 2006.
(Footnote 14 return)
Union of Concerned Scientists, ''Building a Better SUV,'' http://www.ucsusa.org/clean–vehicles/cars–pickups–suvs/building-a-better-suv.html
(Footnote 15 return)
Consumer Reports, April 2006, ''The Dollars and Sense of Hybrids.''
(Footnote 16 return)
Cooper, Mark, ''50 by 2030: Why $3.00 Gasoline Makes the 50 Mile per Gallon Car Feasible, Affordable and Economic,'' May 2006.
(Footnote 17 return)
''Ethanol Fact Sheet,'' American Petroleum Institute, March 23, 2006.
(Footnote 18 return)
According to the National Petroleum News (May 2005) as quoted by EIA there are 168,987 gas stations in the U.S.
(Footnote 19 return)
EPRI, 2001 as quoted in Plotkin, Steven, ''Grid-Connected Hybrids: Another Option in the Search to Replace Gasoline,'' TRB 2006 Annual Meeting.
(Footnote 20 return)
1997 Nationwide Personal Transportation Survey, U.S. DOT, as quoted in Plotkin, Steven, ''Grid-Connected Hybrids: Another Option in the Search to Replace Gasoline,'' TRB 2006 Annual Meeting.
(Footnote 21 return)
Plotkin, Steven, ''Grid-Connected Hybrids: Another Option in the Search to Replace Gasoline,'' TRB 2006 Annual Meeting.
(Footnote 22 return)
Luft, Gal, ''Plug in for America: California should encourage electric cars,'' San Francisco Chronicle, May 26, 2006.
(Footnote 23 return)
Plotkin, Steven, ''Grid-Connected Hybrids: Another Option in the Search to Replace Gasoline,'' TRB 2006 Annual Meeting.
(Footnote 24 return)
Zakaria, Fareed, ''Imagine: 500 miles per gallon,'' Newsweek, March 7, 2005.
(Footnote 25 return)
http://www.eere.energy.gov/afdc/infrastructure/station–counts.html
(Footnote 26 return)
Peter Valdes-Dapena, Best cars with great gas mileage, CNNMoney.com, May 8, 2006: ''We've selected five—a luxury car, family sedan, sports car, crossover SUV and a subcompact—that are smart buys and easy on fuel. For each category, we've also mentioned two alternatives. None of the top cars are hybrids. That's because, with their added cost, hybrids aren't really a good value from a purely economic standpoint. But we've provided a hybrid choice in some categories for those who are willing to pay more to burn less fuel.''
(Footnote 27 return)
Global Insight Inc. and TIAX LLC, Future Powertrain Technologies, 2008 to 2020, published 2001. Downsized and turbocharged gasoline engines yield about a 20 percent reduction in fuel consumption, or about the same benefit as a mild hybrid, when modeled over the FTP–75 test cycle.