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80–341PS
2003
FREEDOMCAR: GETTING NEW TECHNOLOGY
INTO THE MARKETPLACE
HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY
COMMITTEE ON SCIENCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
JUNE 26, 2002
Serial No. 107–84
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
LAMAR S. SMITH, Texas
CONSTANCE A. MORELLA, Maryland
CHRISTOPHER SHAYS, Connecticut
CURT WELDON, Pennsylvania
DANA ROHRABACHER, California
JOE BARTON, Texas
KEN CALVERT, California
NICK SMITH, Michigan
ROSCOE G. BARTLETT, Maryland
VERNON J. EHLERS, Michigan
DAVE WELDON, Florida
GIL GUTKNECHT, Minnesota
CHRIS CANNON, Utah
GEORGE R. NETHERCUTT, JR., Washington
FRANK D. LUCAS, Oklahoma
GARY G. MILLER, California
JUDY BIGGERT, Illinois
WAYNE T. GILCHREST, Maryland
W. TODD AKIN, Missouri
TIMOTHY V. JOHNSON, Illinois
MIKE PENCE, Indiana
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FELIX J. GRUCCI, JR., New York
MELISSA A. HART, Pennsylvania
J. RANDY FORBES, Virginia
RALPH M. HALL, Texas
BART GORDON, Tennessee
JERRY F. COSTELLO, Illinois
JAMES A. BARCIA, Michigan
EDDIE BERNICE JOHNSON, Texas
LYNN C. WOOLSEY, California
LYNN N. RIVERS, Michigan
ZOE LOFGREN, California
SHEILA JACKSON LEE, Texas
BOB ETHERIDGE, North Carolina
NICK LAMPSON, Texas
JOHN B. LARSON, Connecticut
MARK UDALL, Colorado
DAVID WU, Oregon
ANTHONY D. WEINER, New York
BRIAN BAIRD, Washington
JOSEPH M. HOEFFEL, Pennsylvania
JOE BACA, California
JIM MATHESON, Utah
STEVE ISRAEL, New York
DENNIS MOORE, Kansas
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MICHAEL M. HONDA, California
Subcommittee on Energy
ROSCOE G. BARTLETT, Maryland, Chairman
DANA ROHRABACHER, California
KEN CALVERT, California
VERNON J. EHLERS, Michigan
GEORGE R. NETHERCUTT, JR., Washington
JUDY BIGGERT, Illinois
W. TODD AKIN, Missouri
MELISSA A. HART, Pennsylvania
SHERWOOD L. BOEHLERT, New York
LYNN C. WOOLSEY, California
JERRY F. COSTELLO, Illinois
SHEILA JACKSON LEE, Texas
DAVID WU, Oregon
JIM MATHESON, Utah
NICK LAMPSON, Texas
RALPH M. HALL, Texas
GABOR J. ROZSA Subcommittee Staff Director
TOM VANEK, TINA M. KAARSBERG, JOHN DARNELL Republican Professional Staff Members
CHARLES COOKE Democratic Professional Staff Member
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TOM HAMMOND Staff Assistant
C O N T E N T S
June 26, 2002
Hearing Charter
Opening Statements
Statement by Representative Roscoe G. Bartlett (MD–06), Chairman, Subcommittee on Energy, Committee on Science, U.S. House of Representatives
Written Statement
Statement by Representative Vernon J. Ehlers (MI–03), Chairman, Subcommittee on Environment, Technology, and Standards, Committee on Science, U.S. House of Representatives
Statement by Representative Sherwood L. Boehlert (NY–23), Chairman, Committee on Science, U.S. House of Representatives
Statement by Representative Lynn C. Woolsey (CA–06), Member, Subcommittee on Energy, Committee on Science, U.S. House of Representatives
Written Statement
Prepared Statement by Representative Jerry F. Costello (IL–12), Member, Subcommittee on Energy, Committee on Science, U.S. House of Representatives
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Witnesses
Mr. Amory B. Lovins, Chief Executive Officer, Rocky Mountain Institute (RMI)
Oral Statement
Written Statement
Biography
Financial Disclosure
Dr. J. Byron McCormick, Executive Director, GM Fuel Cell Activities, General Motors Corporation
Oral Statement
Written Statement
Biography
Mr. Doug Rothwell, President and CEO, Michigan Economic Development Corporation
Oral Statement
Written Statement
Biography
Dr. Roger Saillant, President and CEO, Plug Power Inc.
Oral Statement
Written Statement
Biography
Financial Disclosure
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Mr. Robert J. Templin, Member, Board of Directors, Paice Corporation
Oral Statement
Written Statement
Biography
Discussion
Japanese Effect on the Economic Value of Hybrid Cars in the U.S.
Amount of Education Needed to Accomplish FreedomCAR's Goals
Estimated Timeframe for Technology Application
Government Involvement in Technology Application
Necessary Steps to Assure a Stable Energy Future
Discussion of the Merits of the Hypercar
Practicality of ''Feebates''
Establishing a Hydrogen Infrastructure
Uses for Parked Hydrogen-Ready Cars
Necessary Role of Government Partnerships With the Auto Industry
Effects of Precious Metal Content on Fuel Cell Costs
U.S. Automobile Market
Timetable for Hyperdrive
Appendix 1: Additional Material for the Record
NextEnergy
FREEDOMCAR: GETTING NEW TECHNOLOGY INTO THE MARKETPLACE
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WEDNESDAY, JUNE 26, 2002
House of Representatives,
Subcommittee on Energy,
Committee on Science,
Washington, DC.
The Subcommittee met, pursuant to call, at 10 a.m., in Room 2318 of the Rayburn House Office Building, Hon. Roscoe G. Bartlett [Chairman of the Subcommittee] presiding.
HEARING CHARTER
SUBCOMMITTEE ON ENERGY
COMMITTEE ON SCIENCE
U.S. HOUSE OF REPRESENTATIVES
FreedomCAR: Getting New Technology
into the Marketplace
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WEDNESDAY, JUNE 26, 2002
10:00 A.M.–12:00 P.M.
2318 RAYBURN HOUSE OFFICE BUILDING
1. Purpose
On June 26th, 2002, the Energy Subcommittee of the House Committee on Science will hold a hearing titled FreedomCAR: Getting New Technology into the Marketplace. This hearing is a follow-up to the Science Committee's February 7, 2002 hearing titled The Future of DOE's Automotive Research Programs, which sought information from the Department of Energy (DOE) and academic and industry experts on the newly announced FreedomCAR program, which replaces the Partnership for Next Generation Vehicles (PNGV) as the principal federal program to spur innovation in automotive energy efficiency research, development and demonstration.
In the February 7th hearing, the Committee heard that automotive research has yielded ''garages full of prototypes,'' but has not always produced results that are put into use. For the June 26th hearing, the Committee will take testimony from witnesses outside of the Federal Government on how to accelerate the transition of high-tech concepts from the lab to the production line. In addition, the panel is expected to discuss the FreedomCAR program structure and direction, broader hydrogen and fuel cell RD&D priorities, and what infrastructure changes are required to accommodate hydrogen. The hearing will also address the following questions:
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1. How do the results of basic research in automotive technology get incorporated into production vehicles? What can the automobile industry and government do to accelerate the adoption of leading edge technologies and increase their public acceptance? How do we ensure that small businesses with innovative ideas are able to gain access to the program?
2. Does the FreedomCAR program's emphasis on hydrogen fuel cell vehicles strike an appropriate balance between the need for more fuel-efficient short-term solutions and the need for a revolutionary long-term change in transportation options?
3. Should the FreedomCAR program have specific goals and timetables, as did the PNGV program?
4. For fuel cell vehicles to gain consumer acceptance, hydrogen safety, availability and ease of use will need to be addressed. What can government and the private sector do to overcome these hurdles and ease the transition to hydrogen as a transportation fuel?
2. Issues
The federally funded FreedomCAR program will focus primarily on basic research, leaving most applied research to the private sector. The new program has also replaced the integrated system goals of PNGV (e.g., the development of an affordable mid-sized family sedan that achieves up to 80 miles per gallon at reduced emissions) with more technology-specific goals (such as improved power density and reduced cost per kilowatt of the fuel cell stack). DOE's current approach envisions that automobile manufacturers will apply these technologies to produce vehicles that significantly reduce our dependence on foreign oil and reduce or eliminate emissions using hydrogen, a new, and potentially more efficient fuel source. As a result, there are questions about whether the program strikes the right balance between short- and long-term research and whether the highly technical technology goals of the FreedomCAR program should be replaced with broader, more easily communicated programmatic, consumer acceptance and market integration goals, similar to the PNGV program.
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A number of companies and organizations have developed or are developing innovative or revolutionary technologies that could be incorporated into new and existing vehicles to improve efficiency, reduce emissions and diversify fuel choice. Many of these technologies are created by small businesses, which have trouble gaining acceptance for their ideas from vehicle manufacturers or the government. The Committee would like to hear from some of these small business innovators about what participation in the FreedomCAR program could mean for them and for achieving the Nation's energy efficiency and emissions reduction goals and how leading edge technologies are incorporated into the program.
In addition to advances in automotive technology, the evolution of fuel cells for future transportation systems depends on the development of a new fuel supply infrastructure. Today, energy companies provide the oil, natural gas, petroleum and other hydrocarbon fuels used by the American people. These same companies may provide hydrogen fuel sources tomorrow. However, greater reliance on hydrogen will require modification of existing infrastructure to ensure a readily available supply of this new fuel source. New energy infrastructure combining distributed generation of electricity with hydrogen production is another possibility. This distributed approach may allow us to power our houses and generate hydrogen for our cars from hydrogen-based energy systems located in or near our homes.
The promise of fuel cells or hydrogen-based economy has lead to innovation and experimentation at the state level. Some states are already taking steps to an alternative fuel and hydrogen infrastructure. For example, on April 18, 2002, Governor John Engler of Michigan announced an economic development plan to put Michigan at the forefront of next generation fuels designed to reduce this country's dependence on imported oil.(see footnote 1) While Michigan is known for its auto industry, it has decided to go beyond the transportation sector and this initiative will also focus on developing stationary applications such as power generation. Similarly, the California Fuel Cell Partnership is planning to have 60 fuel cell cars and buses on the road by 2003.(see footnote 2) They plan to demonstrate the feasibility of fuel cell vehicles under real-world conditions, while starting to develop the hydrogen-fueling infrastructure necessary to support these vehicles. The Partnership consists of state and federal agencies, energy and automobile companies, and hydrogen and methanol suppliers.
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3. Background
Additional background on the FreedomCAR program is contained in the attached Hearing Charter for the Committee on Science' February 7th hearing (Attachment A). The Committee heard from witnesses that FreedomCAR will continue much of the research that began under PNGV, will focus on hydrogen fuel cells, and, while dropping vehicle-specific goals will create technical milestones for components and subsystems.
Witnesses at the earlier hearing were: the Honorable David K. Garman, Assistant Secretary for Energy Efficiency and Renewable Energy, US Department of Energy; Dr. Vernon P. Roan, Vice Chair, National Research Council (NRC) Panel on the Partnership for a New Generation of Vehicles and Professor and Director, Fuel Cell Laboratory, Mechanical Engineering Department, University of Florida at Gainesville; Dr. Daniel Sperling, Director, Institute of Transportation Studies and Professor of Civil & Environmental Engineering, University of California at Davis; and, Mr. Ross Witshonke, Vice President of Electrics and Power Electronics, Ballard Power Systems.
Assistant Secretary Garman gave the committee some details about the FreedomCAR program. He suggested that the appropriate role for government was higher risk, longer-term basic research as opposed to the more applied research efforts that he said were taking place under the PNGV program. He testified that hydrogen fuel cells fit the Administration's view that the Nation needs to move away from reliance on petroleum-based fuels. Dr. Roan discussed the NRC panel's findings that PNGV was largely successful in achieving its goals, but would have fallen short in producing a pre-production prototype at a reasonable cost by 2004. Dr. Sperling agreed with the change of emphasis from defined vehicle-based technology goals in PNGV to the component and subsystem emphasis in FreedomCAR. He testified that incentives and regulations will be essential to the future of hydrogen and drew attention to the need to increase hydrogen-related engineering training in universities and resolve hydrogen infrastructure questions. Mr. Witshonke discussed Ballard's role in PNGV and was very upbeat about the potential for FreedomCAR. He also indicated that the government should avoid duplicating private sector fuel cell research and focus instead on hydrogen supply and infrastructure questions.
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Hearing questions focused on the broad themes of defining research needs and goals, the appropriate role for government and industry research and the fate of PNGV research. Chairman Boehlert asked the witnesses how DOE could maintain research focus without strict goals. Assistant Secretary Garman responded that FreedomCAR will have goals, but they will be on the component level and will be applicable to all vehicles. He added that the private sector is better at integrating the components into the end product and DOE should focus instead on developing breakthroughs in components, material, subsystems, and manufacturing improvements. The witnesses discussed the difficulty of bringing new technologies to market in response to a question from Congressman Nick Smith. Dr. Roan stated that, short of advancements in fuel cells, there have been no real breakthroughs in vehicle technology. Dr. Sperling spoke several times about Detroit having plenty of innovation and research—''garages full of prototypes''—but indicated that little of that automotive innovation actually made it to production. Mr. Witshonke said that many good ideas fall short in the ''real world'' of production constraints and costs.
In response to questioning from Congresswoman Woolsey, Assistant Secretary Garman indicated that the initial investments in new technology demonstration may well take place in a fleet vehicle setting which would allow for use of a centralized fueling station used by numerous vehicles. Congressman Vern Ehlers asked where the hydrogen will come from, and, if it derived from hydrocarbons, what could be done with the resulting carbon. Assistant Secretary Garman responded that there are several DOE programs looking at sequestering carbon from the production of hydrogen.
4. Witnesses
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Witnesses expected to appear before the Committee include:
Mr. Amory B. Lovins, Chief Executive Officer (Research) of the Rocky Mountain Institute who will describe the role of small, innovative companies in the development of state-of-the-art automotive prototypes.
Dr. Byron McCormick, General Motors Corporation who will describe the role of the large automobile manufacturers in the development and application of advanced technology.
Mr. Doug Rothwell, President and CEO of the Michigan Economic Development Corporation who will describe the State's program to develop the infrastructure for conversion to a hydrogen-based technology.
Mr. Roger Saillant, President, Plug Power, Inc. who will describe Plug Power's recently announced initiative with Honda Motors that combines a stationary, home power source with the capability to produce hydrogen for a fuel cell powered car.
Mr. Robert Templin, Member of the Board of Directors, PAICE Corp., which is developing advanced transmission systems that could allow the automobiles of the future to use power sources more efficiently.
Attachment A:
HEARING CHARTER
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COMMITTEE ON SCIENCE
U.S. HOUSE OF REPRESENTATIVES
The Future of DOE's
Automotive Research Programs
THURSDAY, FEBRUARY 7, 2002
10:00 A.M.–12:00 P.M.
2318 RAYBURN HOUSE OFFICE BUILDING
1. Purpose of Hearing
On February 7, 2002, the Committee on Science will hold a hearing titled The Future of DOE's Automotive Research Programs. This hearing will address the Administration's newly announced FreedomCAR program, including how it is similar to, and where it differs from, the Partnership for a New Generation of Vehicles (PNGV) program. PNGV was established and operated as a joint cooperative research and development (R&D) program between the Federal Government and the United States Council for Automotive Research (USCAR), which was formed by the ''Big Three'' auto manufacturers (Chrysler [now Daimler Chrysler], Ford and General Motors).
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2. Background
President Clinton and Vice President Gore launched the PNGV program on September 29, 1993. PNGV's major goal was to design and build pre-production mid-sized sedan prototype vehicles by 2004, which would achieve efficiencies of up to 80 miles per gallon without sacrificing size, safety, and comfort or increasing vehicle emissions. The PNGV program set three main objectives to achieve these goals:
1) Improved Manufacturing Competitiveness: Significantly improve national competitiveness in manufacturing. Improve the productivity of the U.S. manufacturing base by significantly upgrading U.S. manufacturing technology, including the adoption of agile and flexible manufacturing and the reduction of cost and lead times, while reducing the environmental impact and/or improving product quality.
2) Accelerated Acceptance of Advanced Technologies into Vehicles: Implement commercially viable innovations from ongoing research in conventional vehicles. Pursue technology advances that can lead to improvements in the fuel efficiency and reductions in the emissions of standard vehicle designs, while pursuing advances to maintain safety performance. Research will focus on technologies that reduce the demand for energy from the engine and drive train. Throughout the research program, the industry has pledged to apply those commercially viable technologies resulting from this research that would be expected to significantly increase vehicle fuel efficiency and improve emissions.
3) Production of Fuel-Efficient Vehicles: Develop vehicles that can achieve up to three times the fuel efficiency of comparable 1994 family sedans. Increase vehicle fuel efficiency to up to three times that of the average 1994 Concorde/Taurus/Lumina automobiles with equivalent cost of ownership adjusted for economics.(see footnote 3)
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PNGV's federal activities involved cooperation among eight agencies and departments (Departments of Commerce, Energy, Defense, Interior and Transportation, the National Science Foundation (NSF), National Aeronautics and Space Administration (NASA), and Environmental Protection Agency (EPA)), and were coordinated by the Department of Commerce. An Operational Steering Group (comprised of senior officials from the federal agencies and departments, plus representatives from the Offices of the Vice President, Science and Technology Policy, Environmental Policy, and Management and Budget, the National Economic Council, and USCAR) and a Technical Task Force (comprised of federal and ''Big Three'' representatives) provided guidelines and coordination, respectively.
The PNGV program schedule included three major milestones: 1997 for the selection of the most promising technologies; 2000 for completion of ''concept'' vehicles; and 2004 for the completion of the first production prototypes. In 1997, the research areas were narrowed to those technologies that showed the most promise for the 2004 timeframe. In 2000, the auto companies produced concept cars demonstrating technologies that they expected to use in their 2004 production prototypes. These vehicles all achieved mileage of around 70 miles per gallon using hybrid drive trains, lightweight materials and other fuel efficient technologies.
In its seventh report on PNGV, issued in 2001, the National Research Council (NRC) stated that PNGV had met many of the goals set out at its inception. The NRC found that the PNGV/USCAR consortium has achieved several advancements in materials and manufacturing technologies under Goal 1. The NRC cited automakers' moves to produce hybrid electric vehicles as evidence that technologies developed under PNGV were being rapidly adopted on production lines, as called for under Goal 2. Based on information received from automakers, NRC reviewers questioned whether the ''Big Three'' would be able to move from the concept phase to cost effective, pre-production prototype vehicles by 2004, as set out in Goal 3.(see footnote 4)
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3. Recent Developments
Energy Secretary Spencer Abraham unveiled the FreedomCAR program at the Detroit Auto Show on January 9th, 2002. The ''CAR'' in ''FreedomCAR'' stands for ''Cooperative Automotive Research.''
While full details of the new program have not yet been announced, Secretary Abraham stated that, ''FreedomCAR replaces and greatly improves upon the Partnership for a New Generation of Vehicle program.'' (The full text of the speech is attached to this hearing charter.) The purpose of the FreedomCAR program is to move beyond PNGV and emphasize development of longer-term vehicle technologies, fuels (primarily hydrogen for fuel cells) and infrastructure. The President's FY 2003 Budget request contains $150.3 million for the FreedomCAR program. The following are significant program shifts in transportation research programs as proposed for FY 2003:
Supersede and build upon the successes of the Partnership for a New Generation of Vehicles (PNGV) with new cooperative public/private research partnership, entitled FreedomCAR.
Accelerate research and development of vehicle fuel cell technologies.
Reduce support for battery research and development accomplished in conjunction with the U.S. Advanced Battery Consortium.(see footnote 5)
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The FreedomCAR program is, in part, an outgrowth of findings presented in the President's National Energy Policy Development Group (NEPD) report, released in May 2001, which emphasized the potential for hydrogen:
In the long run, alternative energy technologies such as hydrogen show great promise. Hydrogen is the most common element in the universe and can be made from water. Converting hydrogen into energy is compatible with existing energy technologies, such as fuel cells, engines, and combustion turbines. The energy for extracting hydrogen could come from existing, traditional fuels, or it could be derived from renewable energy sources, such as solar, nuclear, and fossil, to achieve the cleanest possible energy cycle. Hydrogen can be converted into useful energy forms efficiently and without detrimental environmental effects.(see footnote 6)
The FreedomCAR program will build on some of the technologies developed under PNGV, but will operate under a different philosophy. While FreedomCAR sets a longer-term goal of implementing hydrogen as a transportation fuel, PNGV set a number of specific technology goals and deadlines.
4. Issues and Questions
The Committee expects to receive testimony on the following questions during the course of the hearing:
1. How do the research components and budget for FreedomCAR compare with those of the Partnership for a New Generation of Vehicles (PNGV)?
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2. Does the FreedomCAR program have specific goals and timetables? What were the advantages and disadvantages of PNGV having an explicit goal of a deliverable product integrating a variety of technologies, i.e., a mid-size sedan that would get up to 80 miles per gallon? How important is it that government-industry partnerships have a concrete, integrated deliverable product as a goal, regardless of whether the particular goal of PNGV was appropriate?
3. Did PNGV focus too much on shorter-range research on technologies that were already in reach? If so, what areas of research were neglected? What is the appropriate balance between shorter- and longer-term research in a government-industry partnership?
4. By what means is government best able to accelerate the development and commercialization of new automotive technologies? To the extent that research programs should be part of a government strategy, which aspects of the transportation system should the government focus on? (For example, to promote a ''hydrogen economy,'' should the government focus on vehicles, or on other areas such as fuel distribution?)
3. Witnesses
Witnesses scheduled to appear before the Committee include:
The Honorable David K. Garman, Assistant Secretary for Energy Efficiency and Renewable Energy, U.S. Department of Energy
Dr. Vernon P. Roan, Vice Chair, National Research Council Panel on the Partnership for a New Generation of Vehicles and Professor and Director, Fuel Cell Laboratory, Mechanical Engineering Department, University of Florida at Gainesville
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Dr. Daniel Sperling, Director, Institute of Transportation Studies and Professor of Civil & Environmental Engineering, University of California at Davis
Mr. Ross Witschonke, Vice President of Electrics and Power Electronics, Ballard Power Systems
80341a.eps
80341b.eps
Chairman BARTLETT. Subcommittee will come to order. As I drove my 50 miles in this morning, reflecting on the hearing that I was going to chair and noting all of the traffic, those big SUVs, most of them only one person in them, reflecting on the fact that we use 25 percent of the world's oil and have only two percent of the known reserves of oil in the world, I wondered if a disinterested observer might characterize what I saw on the road this morning as wanton profligacy in the use of this scarce resource. Well, we are going to be addressing that in today's hearing.
Today, the Subcommittee on Energy will resume consideration of issues surrounding the future of automotive technology, focusing on the recently announced FreedomCAR Program and the role of fuel cells in the transportation systems of tomorrow. This is the third in a series of hearings this year held by the Science Committee on these issues. On February 7, the full Committee took testimony from federal and outside witnesses on the Administration's recently announced FreedomCAR Automotive Research Initiative. Earlier this week, the Energy Subcommittee held a field hearing in Naperville, Illinois, chaired by our Subcommittee colleague, the gentlelady from Illinois, Mrs. Biggert, on the role of fuel cells and hydrogen in our future.
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DOE Secretary Abraham announced a new direction in federally funded automotive research at the Detroit Auto Show in January of this year. The new program named FreedomCAR supplants the earlier program, the Partnership for a New Generation of Vehicles, PNGV, as a focus of federal support for greater efficiency and innovation in automotive technology.
In our February 7th full Committee hearing, we heard from the Administration and others about the role of PNGV in advancing automotive technology and also about how some of PNGV's successes might be incorporated into the new FreedomCAR Program. However, we also heard from one witness that Detroit has plenty of innovation and research, ''Garages full of prototypes,'' but that little of that automotive innovation actually made it to production.
A number of companies and organizations have developed or are developing exciting technologies that if incorporated into new and existing vehicles would improve efficiency, reduce the emissions, and diversify fuel choice. However, many of these technologies are created by small business, which can have trouble gaining acceptance for their ideas from the auto manufacturers or from the government. Ensuring that these technologies are adopted in the marketplace should be a major part of the overall challenge of the FreedomCAR Program and will be a focus of today's hearing.
The Committee will take testimony today from some of the top automotive innovators and from major manufacturers on the subject of how the new FreedomCAR Program can help achieve the Nation's energy efficiency and emissions reduction goals. We will also hear about the many barriers that need to be overcome before we reach a true hydrogen economy. Issues such as fuel cell costs and power density need to be addressed as do the critical issues of hydrogen production in establishing a distribution infrastructure. Several of today's witnesses will testify about these and other issues. And I will be particularly interested in the panels' opinions on what we in Congress can do to help.
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Our witnesses today include Mr. Amery Lovins, chief executive officer the of Rocky Mountain Institute. Mr. Lovins has numerous degrees and credits to his name and was named by the Wall Street Journal to their list of people most likely to change the course of business in the 90's and by Car Magazine as one of the most powerful persons in the global automotive industry. He will be followed by Dr. Byron McCormick, the executive director of General Motors fuel cell activities who will describe at least one of the major U.S. manufacturers sees as the future of automotive technology and the role of fuel cells. Our third witness is Mr. Doug Rothwell from the Michigan Economic Development Corporation. And at this point, I would like to yield to Mr. Ehlers of Michigan for an introduction.
[The prepared statement of Chairman Bartlett follows:]
PREPARED STATEMENT OF CHAIRMAN ROSCOE BARTLETT
We will now convene the hearing. The hearing will come to order.
Today the Subcommittee on Energy will resume consideration of issues surrounding the future of automotive technology, focusing on the recently announced FreedomCAR program and the role of fuel cells in the transportation systems of tomorrow. This is the third in a series of hearings this year held by the Science Committee on these issues. On February 7th, the Full Committee took testimony from Federal and outside witnesses on the Administration's recently announced FreedomCAR automotive research initiative. Earlier this week, the Energy Subcommittee held a field hearing in Naperville, Illinois, chaired by our subcommittee colleague, the gentle lady from Illinois, Mrs. Biggert, on the role of fuel cells and hydrogen in our future.
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DOE Secretary Abraham announced a new direction in federally funded automotive research at the Detroit Auto Show in January of this year. The new program, named FreedomCAR, supplants the earlier program, the Partnership for a New Generation of Vehicles (PNGV), as the focus of Federal support for greater energy efficiency and innovation in automotive technology.
In our February 7th Full Committee hearing, we heard from the Administration and others about the role of PNGV in advancing automotive technology and also about how some of PNGV's successes might be incorporated into the new FreedomCAR program. However, we also heard from one witness that Detroit has plenty of innovation and research—''garages full of prototypes''—but that little of that automotive innovation actually made it to production.
A number of companies and organizations have developed or are developing exciting technologies that, if incorporated into new and existing vehicles would improve efficiency, reduce emissions and diversify fuel choice. However, many of these technologies are created by small businesses, which can have trouble gaining acceptance for their ideas from the auto manufacturers or the government. Ensuring that these technologies are adopted in the marketplace should be a major part of the overall challenge of the FreedomCAR program and will be a focus of today's hearing.
The Committee will take testimony today from some of the top automotive innovators and from major manufacturers on the subject of how the FreedomCAR program can help achieve the Nation's energy efficiency and emissions reduction goals. We will also hear about the many barriers that need to be overcome before we reach a true ''hydrogen economy.'' Issues such as fuel cell cost and power density need to be addressed, as do the critical issues of hydrogen production and establishing a distribution infrastructure. Several of today's witnesses will testify about these and other issues and I will be particularly interested in the panel's opinions on what we in Congress can do to help.
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Our witnesses today include:
Mr. Amory B. Lovins, Chief Executive Officer (Research) of the Rocky Mountain Institute. Mr. Lovins has numerous degrees and credits to his name and was named by the Wall Street Journal to their list of people most likely to change the course of business in the 1990's and by Car Magazine as one of the most powerful persons in the global automotive industry.
He will be followed by Dr. Byron McCormick, the Executive Director of General Motors' Fuel Cell Activities, who will describe at least what one of the major US automotive manufactures sees as the future of automotive technology and the role of fuel cells.
Our third witness is Mr. Doug Rothwell, from the Michigan Economic Development Corporation. At this point, I yield to Mr. Ehlers, of Michigan, for 30 seconds to introduce Mr. Rothwell:
For our fourth witness, Dr. Roger Saillant. I yield 30 seconds to Chairman Boehlert, for a brief introduction.
Finally, I want to personally welcome Mr. Robert Templin, Member of the Board of Directors, PAICE Corp of my home state of Maryland. PAICE is an innovative company working to find new ways to increase fuel efficiency through advanced transmissions and other technologies.
I look forward to hearing today's testimony and pursuing these subjects in greater detail.
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Mr. EHLERS. Thank you, Mr. Chairman. I am very pleased to introduce Doug Rothwell who is from the State of Michigan. He has done an outstanding job there as president and chief executive officer of the Michigan Economic Development Corporation. He has been very active in this entire area as well as in much of State government. He has been given the Outstanding Economic Developer of the Year Award by the American Economic Development Council, the Distinguish Service in State Government Award by the National Governors Association, and the President's Award for Outstanding Public Service by the University of Delaware. He has worked at the Federal, State and local levels of government and in the private sector and has vast experience in all areas. He has been an outstanding assistant to the Governor of Michigan, has become at times the most feared but also the most able member of the Governor's staff and has contributed tremendously to economic development in Michigan. I am pleased to have him participate here.
Chairman BARTLETT. Thank you. Our fourth witness, Dr. Roger Saillant, and I yield now to Chairman Boehlert for an introduction.
Mr. BOEHLERT. Thank you very much, Mr. Chairman. First of all, let me say I am very proud of the lead role this committee is taking in developing a national strategy for hydrogen and fuel cells. I think it is critically important. And I am particularly pleased that the president and CEO of Plug Power has agreed to appear before us today and give us the benefit of his experience, which is extensive in the automotive industry and in the area of fuel cells in particular. Plug Power is located in Latham, New York. And that is very close to my home district. And he is the president and CEO of this very distinguished corporation.
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Dr. Saillant joined Plug Power in December of 2000 after a long and very productive career at Ford and Ford spin-off Vistion. He has got a strong background in chemistry including a Ph.D. from Indiana University as well as a post-doctorate degree in Organometallic Chemistry from the University of California. He is one of the doers in the industry, one of the great innovators. And it is a pleasure for me to welcome him here. Thank you, Mr. Chairman.
Chairman BARTLETT. Thank you very much. Finally, I would like to personally welcome our fifth witness, Mr. Robert Templin, member of the board of directors PAICE Corporation of my home state Maryland. PAICE is an innovative company working to find new ways to increase full efficiency through advanced transmissions and other technologies. Mr. Templin has 50 years of experience in the automotive industry. He has come out of retirement to help as a member of the board of directors of PAICE Corporation and I look forward to his testimony. We had a PAICE reception this morning and this is an exciting new technology. And if the promise is realized, there will be major, major changes in efficiency and reduction of pollutions. I will look forward to hearing today's testimony and pursuing these subjects in greater detail.
Before we get started, however, I would like to remind the Members of the Subcommittee and our witnesses that this hearing is being broadcast live on the Internet so please keep that in mind during today's proceedings. I would also like to ask for unanimous consent that all Members who wish might have their opening statements entered into the record. And I am very pleased now to yield, very timely entry, to my colleague for her opening statement.
Ms. WOOLSEY. I am sorry I am late. We were in a meeting and I am here now though. Thank you for this hearing. Thank you witnesses for coming. I look forward to what you have to say. In February, this Subcommittee received testimony on the possibilities for the future of automotive transportation and it was exciting then. And the Assistant Secretary Garman, for one, laid out a very imaginative and aggressive research and development program that would play a major, major part in development of fuel cell vehicle. Earlier this month we had an exciting milestone in this arena with the NECAR5 when it became the first fuel cell vehicle to complete a drive across the United States. And there is so much potential in this regard and I so look forward to your testimony. So thank you very much.
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[The prepared statement of Ms. Woolsey follows:]
PREPARED STATEMENT OF REPRESENTATIVE LYNN WOOLSEY
Mr. Chairman, thank you for holding this hearing today, and thanks to our witnesses for sharing their expertise with us today.
In February this subcommittee received testimony on the exciting possibilities for the future of automotive transportation. Assistant Secretary David Garman, for one, laid out an imaginative and aggressive research and development program that would play a major role in the development of fuel cell vehicles.
And earlier this month, we had an exciting milestone in this arena when the ''Necar 5'' became the first fuel cell vehicle to complete a drive across the United States from California to the U.S. Capitol. The DaimlerChrysler vehicle was fueled with methanol, using an on-board reformer that converted the methanol to hydrogen for use in the fuel cell.
While I'm no fuel cell expert, this demonstrates two things to me. . .
One, that automotive fuel cells may be closer than we imagine to widespread commercial use, and second, that there are technologies out there, such as the reformer in the DaimlerChrysler car, that can help deploy fuel cells until a hydrogen infrastructure is in place to deliver hydrogen directly to the vehicle.
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Mr. Chairman, I am enthusiastic about the future of hydrogen vehicles. but, we must also recognize that the ''FreedomCAR'' program is a high-risk, long-term, high payoff endeavor. That's why we can't lose sight of the short- to mid-term technological priorities for automotive research—like finding ways to increase fuel economy and reduce emissions.
There's no doubt that there's more R&D to do on technologies that can make significant contributions to improving the current generation of automobiles.
That's why we also need to examine what's the appropriate federal role to get these short- and mid-term technologies into the vehicles, and the vehicles on the road as soon as possible.
I have great hope that hydrogen can be an answer for the long-term. But in the meantime, we can't disregard that there are many, many vehicles that will be built and put on our highways between now and the time the ''FreedomCAR'' technologies hit the road. I hope our witnesses can comment on how we can keep this type of R&D balance in our automotive research program.
With that, Mr. Chairman, I yield back the balance of my time.
[The prepared statement of Mr. Costello follows:]
PREPARED STATEMENT OF REPRESENTATIVE JERRY F. COSTELLO
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Good morning. I want to thank the witnesses for appearing before our committee to discuss how the Federal Government can help promote the transfer of high-technology concepts from the lab to the production line. The new, federally funded FreedomCAR initiative works jointly with the private sector, with the government working primarily on basic research and private companies doing applied research. The program is technology specific and can reduce our dependence on foreign oil and eliminate emissions by using hydrogen.
A greater reliance on hydrogen requires modification of our existing energy infrastructure to ensure greater availability of this new fuel source. There are a number of issues that need to be overcome before hydrogen fueled fuel cells can be commercially viable, including range, cost, incompatibility with current liquid fuel distribution systems, and safety issues involving highly compressed gases. Similar issues do not exist with liquid fueled fuel cells, such as the methanol-fueled fuel cell. I am interested to learn if liquid fueled options should be pursued as well as gaseous hydrogen, especially since methanol-fueled fuel cells can be brought on line more readily while the various challenges posed by hydrogen are addressed.
In addition, our transportation sector is 95 percent dependent on petroleum and it consumes 67 percent of the petroleum used in the United States. As a result, the Nation needs to make improvements in energy efficiency, to diversify our use of energy resources, and to expand energy supplies. I look forward to learning how the FreedomCAR program will help in this endeavor. I am particularly interested in hearing from our witnesses the benefits of this new program and a timeline or target goal for expecting results.
I again thank the witnesses for being with us today and providing testimony to our committee.
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Chairman BARTLETT. Thank you very much. Without objection, the full written testimony of the witnesses will be entered into the record so that we can have adequate time for questions and answers. And can assure you that you will be able to expand on any of the facets of your presentation, which during that time we would encourage you to summarize your testimony so that we can more quickly get to our question and answer period. I want to thank all the witnesses very much for coming and we will begin now with Mr. Lovins.
STATEMENT OF MR. AMORY B. LOVINS, CHIEF EXECUTIVE OFFICER, ROCKY MOUNTAIN INSTITUTE (RMI)
Mr. LOVINS. Thank you, Mr. Chairman. Is that as far down as the lights go? Have to—here we go. Thank you. Thank you for the honor of appearing here to introduce some ideas based on the old Kenneth Golding line that whatever exists is possible. I am going to assume for this conversation that we have a common set of development goals for automobiles. We want uncompromised cars of diverse kinds at competitive prices with new value propositions. We want them to have radically improved fuel economy and if possible get off oil all together using secure domestic fuels that we can deploy with a smooth and profitable transition, cars that will emit nothing, do no harm, not hurt the climate, be recyclable, offer decisive manufacturing advantages and better jobs, be available to all makers competing freely in a business model based on value to the customer and competitive advantage to the maker rather than on government intervention, oil price or any other random variable.
Now, I have been involved in developing such a car for about a dozen years, which I previewed for the Academy in '91. Spent a couple of years exploring with GM and others to see if it made sense, and on figuring that it did started publishing widely in '93 when it received the Nissan prize. We spent about $3 million at our non-profit Rocky Mountain Institute incubating this concept through '99 and publishing very widely on it. So much so that on the order of $10 billion has been committed to this general line of development, ultra-light, ultra-low drag hybrids through 2000.
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In '98, we joined with 17 industrial partners, mainly Tier 1's, to conduct an independent feasibility study at Lotus Engineering, and liked the results so much that in '99 we spun off a company called Hypercar Inc., which I also chair, to support the industry's transition. And that is funded entirely by private equity using an IP-based business model. I want to say a bit about a concept car that Hypercar Inc. with internal funding designed in eight months in 2000 for a few million dollars with a Tier 1 partner and other consultants, because I think this sheds a lot of light on what is possible when one thinks about cars in a different way. And we are actually discussing joint development of licensing with OEM's on these lines.
What encouraged us to do it is partly that at the Lockheed Martin Skunk Works in the 90's, Dave Taggert led a team designing and advance tactical airframe that was 95 percent carbon fiber and it ended up g lighter but h cheaper than its 72 percent metal predecessor because it was designed to round optimal manufacturing methods for carbon, not metal. It was so radical he had trouble finding a customer so we got him and he has been doing the same for cars ever since. It is quite amazing what happens when cars are designed less like tanks and more like aircraft. Though the illustrative concept car we ended up with, which is production costed and manufacturable, is a quintuple deficiency mid-sized SUV using no oil. It seats five comfortably, carries up to 69 cubic feet of cargo, can haul half a ton up a 44 percent grade. It weighs less than half as much as a normal car of this class because it is made not of metal but of carbon composites. They are so strong that the simulations say the car can hit a wall head on at 35 miles an hour without damaging the passenger compartment or can hit head-on a steel SUV twice its weight, each going 30, and still protect you from serious injury. It goes zero to 60 in 8.2 seconds and gets the equivalent of 99 miles a gallon, but it doesn't actually use any gasoline. It goes 330 miles on 7b pounds of safely stored compressed hydrogen gas.
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The reason it needs so little is that it is so light and slippery it can cruise at 55 on the same energy that an SUV normally uses just for its air conditioner. The only emission from the fuel cell is hot water, so I want to put a coffee machine in the dashboard. It is very stiff and sporty with all-wheel digital traction control, very reliable, software rich and flexible. Can be designed for a 200,000-mile warranty. The body doesn't fatigue or rust and shouldn't dent in a six-mile an hour collision. We believe it can be made at competitive cost in mid-volume with decisive advantages including very large reductions in capital, space, assembly and parts count, and production would be feasible to start in 2006 with aggressive pursuit by OEM's.
Now, the virtual design, which is sitting on the super computers near Oxford looks like this. And I should emphasize it can look like whatever you want, the platform concept is extremely flexible in size, segment, styling and so on. It is quite cavernous inside, especially when you fold down the rear seats or you can put in two adults and two surfboards. The way we would prefer to guide it is with a right or a left side stick rather than wheel and pedals. It is all steered by wire. The Europeans are finding that is a lot safer. And there are many technological conservatisms and fallback positions. But however the details work out, I think what we are here to talk about is mainly the public benefits of quintupling light vehicle fuel economy.
It is as if in the United States we have gone drilling in the Detroit formation and found a Saudi Arabia down there, eight million barrels a day of potential savings. Worldwide it is like saving as much oil as OPEC now sells. A full fleet of such vehicles of various shapes and sizes could decouple driving from climate change, profitably relieving up to two-thirds of it, and from air quality, though not from congestion, it makes possible a fast transition to a hydrogen economy in a way that is profitable at each step starting now. My written testimony summarizes how. And that is being rapidly taken up. Also, there is a new value proposition. Cars are parked about 96 percent of the time. And this sort of car can be designed to be plugged in when parked as a power plant on wheels, selling back to the grid enough electricity to earn back most of the cost of owning the car. A full fleet doing that would have six to 12 times as much generating capacity as all the power companies now own.
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Now, this simplified table shows that because our SUV would need only 35 kilowatts of fuel cell instead of the much larger numbers for many others that have been discussed by OEM's, it would have a better range and cost a lot less, assuming only $100 a kilowatt for a fuel cell system, not counting a lot of associated costs and mass compounding. We would save many thousands of dollars just on the fuel cell costs because we don't need that big of one. In fact, the fuel cell is this little thing back here with an X on it. You can see how small it is because the car, again, needs only a third the normal power to make it go because it is light and slippery. Moreover, the hydrogen tanks for a 330 mile driving range or closer to 600 miles with the latest tanks of the same volume are small enough to package conveniently so there is plenty of room left for people and cargo. And you can see just from the packaging how much more convenient this is. Of course with the small size and capacity of the fuel cell comes a much lower cost or if you like, a tolerance of higher price. You could start adopting fuel cells many years earlier than if you needed at least three times as much capacity of them. So here we have made the car ready for the hydrogen.
Now, the questions put to me by staff before the hearing asked for perspectives on a few matters, which I will summarize very briefly. I think PNGV notably succeeded in its tacit goals, namely changing the game on the culture. Some of it is psychological development and mainly stimulating black programs within the auto makers. Why would one expect them to do their best work in front of their competitors? All the interesting stuff went behind the curtain exactly where it belongs. I think in that way the key technical goals were met and exceeded.
Now FreedomCAR, as an extension of that effort, could be a bust if fuel cells were simply dropped into today's inefficient cars or it could be a triumph of extraordinary importance if thoroughly integrated with the best that we have learned from PNGV and the in-house OEM programs based on low-tractive load vehicles and if we used modern integrated approaches to the hydrogen transition. So it could be extraordinarily important to national success and national security if and only if it is done right. It also faces the political barrier that if not combined with policies meanwhile to capture near-term conventional fuel economy gains, it might be interpreted as stalling or diversion to the long-term, ignoring short-term options. And that, I think, would waste a lot of energy, political and otherwise.
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Now, the FreedomCAR goals posted on the Website have, I think, a good vision emphasizing vehicles, markets, and the hydrogen transition. But when they get translated into goals, most key elements except the power train drop out. The power train goals emphasize on-board reformers, which I think are unnecessary and the industry is moving away from them for good reasons. It is unclear what the role would be of direct hydrogen designs although there is a somewhat odd inclusion of a hydrogen-fueled IC engine. I don't know why one would want to do that. Most of the technology goals look useful. Some like hydrogen storage may already have been achieved. There is an important ambiguity in the wording about hydrogen price. The right way to measure it is not per giga-joule but value at the wheels of the car where it produces traction. And there is a target to have the mass of vehicle structure and subsystems, but that is not the same as curb mass and there is no reference to reduce drag as a development goal. Vehicle affordability and emissions standards are similarly undefined. There are no technical or system goals for the hydrogen transition and there is no integration and stationary fuel cell applications.
Most importantly, though, I think the key vision and intention of FreedomCAR has already been achieved in the sort of concept car design I have described, which was completed in November 2000. So I think we ought to move beyond that and revise the goals to emphasize vehicle performance rather than component performance and aim for highly integrated, radically simplified software-rich design and manufacturing for ultra-light, ultra-low drag, direct hydrogen fuel cell vehicles that just happens to be fuel cell versions of Hypercar vehicles. I think if this were done aggressively we could see well driving prototypes of 100-mile a gallon midsized SUVs without compromise and makeable and competitive price on the road in 2004. Obviously, I have an interest in this matter as founder and minor equity holder in a company that has designed such a prototype although—or designed such a concept car although we cannot yet afford to make a physical prototype of it. So all the results I showed you are from the virtual design based on industry standard simulation tools done by the people that I am sure my colleagues on the panel would expect as accurate simulators.
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I think one could aim for initial production ramp up starting around 2007 or 2008 and then rapid diversification of platforms and markets. That ought to come with an aggressive and broadly based hydrogen transition integrating mobile and stationary applications. So each makes the other happen faster by
building volume and cutting costs.
I was asked what I think about automakers. Well, I think they are extraordinary institutions. There has never been anything like them in the history of the world in their size, their capability, their complexity. I have also noticed certain disadvantages that they labor under. They are superbly skilled in metals but far less in advance composites. They tend to focus on cost per part of per pound rather than per car and to treat some costs as unamortized assets using accounting, not economic principles. Their deep design integration is improving but I think needs to be even better. There is a lot to be learned from aerospace in that regard. And I think they are often ill-served by their lobbyists. They have many really excellent engineers awaiting mobilization and leadership. It is very hard to OEM's to make the kinds of leapfrogs I have described. It is very risky for them not to make those leap frogs because other OEM's in a big world, major suppliers and new entrants could compete. The real barriers to these leapfrogs are mainly cultural and vaulting them will determine the fate of the American auto industry.
This means we have critical national opportunities. One would be creative Federal action to shift the automakers risk-reward perceptions in radical innovation. I think the most interesting win-win way to do this would be accelerated scrappage feebates, which actually let Detroit sell more cars. This is likely to come up anyway soon at the state level. It can command broad consensus. It is technology neutral, technology forcing and integrative; all the things I think we need right now. Well-managed major energy companies could agree that this is a good thing. Small business could make vital contributions, including whole vehicle engineering, which is not the exclusive domain of the OEM's that DOE is used to working with. Many elements of civil society would also get on board and there are very important military applications and spin-offs. I think it could amount to a bold, visionary, unifying, practical, can-do national project vital to national and global security. But foreign competition is emerging rapidly and this may be a make or break decision for the U.S. auto industry.
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Churchill once said that ''People in nations behave wisely once they have exhausted all other alternatives.'' We seem to have been working our way well down the list. He said, ''Sometimes one must do what is necessary.'' I particularly like a remark recently attributed to the Hopi elders that ''We are the people we have been waiting for.'' Thank you for your kind attention.
[The prepared statement of Mr. Lovins follows:]
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BIOGRAPHY FOR AMORY B. LOVINS
Amory Lovins, 54, is cofounder and CEO of Rocky Mountain Institute (www.rmi.org)—a 20-year-old, 50-person, independent, nonpartisan, entrepreneurial, market-oriented, nonprofit applied research center in Old Snowmass, Colorado. RMI fosters the efficient and restorative use of natural and human capital to create a secure, prosperous, and life-sustaining world.
A consultant experimental physicist educated at Harvard and Oxford, he has received an Oxford MA (by virtue of being a don), seven honorary doctorates, a MacArthur Fellowship, the Heinz, Lindbergh, World Technology, and Hero for the Planet Awards, the Happold Medal, and the Nissan, Mitchell, ''Alternative Nobel,'' Shingo, and Onassis Prizes; held visiting academic chairs; briefed 16 heads of state; published 28 books and several hundred papers; and consulted for scores of industries and governments worldwide, including many major electricity, oil, gas, and car companies.
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In the 1990s, Mr. Lovins founded, led, spun off as E SOURCE (www.esource.com), and sold to the Financial Times group in 1999 a team that conducted perhaps the world's deepest examination of advanced techniques for the efficient use of electricity through integrative design. This later expanded into a broad approach to making very large resource savings cost less than small or no savings. He also cofounded and led the most detailed utility experiment in this area (PG&E's ACT); developed most of the methods now in use for making markets in saved energy; codified the 200+ ''distributed benefits'' that can typically increase the economic value of decentralized generators by an order of magnitude; and shaped much of the electricity policy agenda since the mid-1970s. His 1976 Foreign Affairs paper ''Energy Strategy: The Road Not Taken?''—widely credited with having redefined the energy problem in end-use/least-cost terms—suggested a level of year 2000 U.S. energy consumption that is within two percent of its actual value. In 2000–01, he convened the National Energy Policy Initiative (www.nepinitiative.org).
In 1990–91, Mr. Lovins invented the Hypercar® concept—a new way to design and build cars, integrating ultralight, ultra-low-drag platforms, hybrid-electric drive, and radically simplified, software-rich design. He led RMI's Hypercar Center in a $3 million exploration and incubation of this concept until 1999, advising many automakers and suppliers worldwide on how to take advantage of it. He put the concept into the public domain in 1993, contributing to the rapidly spreading transformation of the automotive industry and the commitment of private capital thousands of times RMI's R&D investment. In 1999, he spun off a small technology development company, Hypercar, Inc. (www.hypercar.com)—which he chairs and in which (to declare an interest) he holds minor equity options-to develop Hypercar designs and technologies and bring them to market.
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The Wall Street Journal's Centennial Issue named him among 39 people in the world most likely to change the course of business in the 1990s; Newsweek, ''one of the western world's most influential energy thinkers''; Dr. Alvin Weinberg, former Director of Oak Ridge National Laboratory, ''surely the most articulate writer on energy in the whole world today''; and Car magazine, the 22nd most powerful person in the global automotive industry. Dr. John Ahearne, then Vice President of Resources for the Future, remarked that ''Amory Lovins has done more to assemble and advance understanding of [energy] efficiency opportunities than any other single person.'' His technical work focuses on transforming the car, real estate, electricity, water, semiconductor, oil, chemical, and several other sectors of the economy toward advanced resource productivity. His latest books are Natural Capitalism: Creating the Next Industrial Revolution (with Paul Hawken and L. Hunter Lovins, 1999, www.natcap.org) and Small Is Profitable: The Hidden Economic Benefits of Making Electrical Resources the Right Size (RMI, August 2002).
His national security work includes devising the first logically consistent approach to nuclear nonproliferation (technical papers and two books, 1979–1983); performing for DOD the definitive unclassified study of domestic energy vulnerability and resilience (Brittle Power: Energy Strategy for National Security, 1982, www.rmi.org/sitepages/pid533.php, with L.H. Lovins and a foreword by former JCS Chairman ADM Tom Moorer and former Under Secretary of the Navy, later DCI, Jim Woolsey); co-developing a ''new security triad'' comprising conflict prevention, conflict resolution, and nonprovocative defense (summarized by H. Harvey & M. Shuman, Security Without War, 1990–93); lecturing at NDU and NWC on least-cost security and on how new technologies will transform missions and force structures; leading for ADM Lopez the overhaul of NAVFAC's design process; supporting similar facilities efforts by USMC; technical discussions with SECNAV, C3F, and COMNAVSEA; hosting seminars for CNO's Strategic Studies Group and VADM McGinn's study of network-centric warfare; VADM Cebrowski's 2002 military-transformation workshop at NDU; exploratory collaboration at NPS; a 2000–01 ONR-funded analysis for SECNAV and C3F of how to save nearly $1 million a year worth of hotel-load electricity aboard a typical surface combatant (USS Princeton CG–59); and 1991–2001 service on a Defense Science Board panel, chaired by VADM (Ret.) Richard Truly, that reported in January 2001 on Enhanced Warfighting Capability Through Reduced Fuel Burden.
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Mr. Lovins can be reached at Rocky Mountain Institute, 1739 Snowmass Creek Road, Snowmass CO 81654–9199, USA, 970–927–3129, fax 970–927–4178, ablovins@rmi.org.
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Chairman BARTLETT. Thank you very much for your testimony. Dr. McCormick.
STATEMENT OF DR. J. BYRON MCCORMICK, EXECUTIVE DIRECTOR, GM FUEL CELL ACTIVITIES
Dr. MCCORMICK. Mr. Chairman, Members of the Committee, good morning and thank you for the opportunity to testify today on behalf of General Motors. I am Byron McCormick, executive director of GM's Fuel Cell Activities. I lead the team that is responsible for developing fuel cell systems to power the GM vehicles that people will want to drive and own. Last year I had the privilege of testifying before the Senate Committee on Energy and Natural Resources. At that time, I described the benefits of hydrogen fuel cells and outlined a few of GM's extensive initiatives in this field. Today I will describe some examples of our recent progress and highlight the challenges ahead.
There are many potential feed stocks for producing hydrogen. Eventually we all hope to use methods that are renewable and have no adverse environmental impact. Until then hydrogen can be derived from a mix of energy sources including hydrocarbons, nuclear, and very importantly any source of electricity. During this period of development, government should sponsor or incentivize research in pilot production of multiple means of hydrogen generation including clean coal, hydrogen distribution as well as work on carbon sequestration.
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Building on the success of our Hydrogen I Fuel Cell vehicle, last fall we unveiled in Tokyo the Hydrogen III vehicle with an improved electric drive and optimized fuel system architecture. It is the first fuel cell vehicle to dispose of the heavy and expensive buffery battery that was previously needed to handle the high-performance demands. And I think if you look at that, you will notice that there is no demands on the packaging that going to the area where an internal combustion engine wouldn't have. So this is now a conventional vehicle with no excuses.
In January of this year, we introduced our Autonomy Concept vehicle as a vision of the fuel cell automotive transportation for the future. With interchangeable bodies, software driven control systems, and dramatically fewer parts, the Autonomy concept will enable new design manufacturing and business paradigms while making clean, safe vehicles more compelling and affordable and profitable. This concept was on display here in Washington a couple weeks ago and, very importantly, a drivable version of this with a different body style will be revealed later this year.
We have also developed stationary fuel cells because we see distributed generation of electricity by fuel cells powering homes and business as a way as making the electrical grid more robust and accelerating the development of the hydrogen infrastructure. Such units can provide hydrogen for fuel, for automobiles, as well as electricity for the grid.
These rapid accomplishments are encouraging, but great challenges remain. Hydrogen storage is the key on-vehicle challenge to achieving technical feasibility and market viability. And continuing an expanded government R&D in this area we think is critical. And automobiles must, of course, be affordable and be commercially viable. General Motors is working these issues with our research partners as part of our core business. And earlier today we talked about the supply base. We are working with over 300 partners to bring the technology up to make this vision a reality.
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In addition, the hydrogen infrastructure must be created and become commercially viable. Leadership of this task is outside of GM's core and we rely on other industries with multi-agency governmental involvement and guidance at both the Federal and state level.
We automotive companies are developing vehicles, but that by itself is insufficient for commercial viability. In addition to collaboration with energy companies and others, the active participation and support of the government is critical. The government's role must be to provide the financial and regulatory environment which will hasten the development of the technology and infrastructure. This role includes coordinating and catalyzing the infrastructure development, providing R&D for codes and standards suitable to new technology in commercial viability, incentivizing R&D and pilot scaled deployment of vehicles and infrastructure to speed learning and offset the high risk of being either an introducer or an early customer of early stage commercialization. And in setting regulations which incentivized continued technological development while preventing premature technology freezes that could slow the pace of development.
The FreedomCAR Initiative demonstrates that the Federal Government is ready to step up to the plate with a mutual commitment to vision to accomplishment of R&D targets in the schedules and commitment by DOE to work on the complimentary infrastructure issues.
In order to sustain commercial viability, four constituencies must simultaneously benefit. The customer must get superior performance, safety, functionality and value and new kinds of vehicles that inspire their passion that they want to buy and that they can afford. Society must benefit through increased energy efficiency, reduce carbon dioxide in vehicle emissions and diversification of energy sources that allow reduction in petroleum dependence. And finally the energy companies and the automotive companies and their supply base of smaller businesses must also achieve business cases.
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In conclusion, I believe that leading the change to the hydrogen economy and a cleaner world of sustainable mobility is a legacy that we must leave to our children and grandchildren. Our initiatives taken today will be as far reaching in their effects as the invention of the auto mobility, the creation of the interstate highway system, or the launching of the space age.
Hydrogen is the future and we are not the only nation that recognizes that. We must be the leaders in this new energy age. The more that governmental policy is aligned with industry to encourage investment in hydrogen and fuel cell research, development and deployment, the faster fuel cell vehicles will become available.
We at General Motors are ready to work with you to see this vision realized. Thank you.
[The prepared statement of Dr. McCormick follows:]
PREPARED STATEMENT OF J. BYRON MCCORMICK
Mr. Chairman, and Members of the Committee:
Good morning and thank you for the opportunity to testify today on behalf of General Motors. I am Byron McCormick, Executive Director of GM's Fuel Cell Activities. I lead the team that is responsible for developing the fuel cell systems to power the GM vehicles that people will want to drive and own. I had the privilege of testifying before the Senate Committee on Energy and Natural Resources one year ago, to describe the benefits of hydrogen and fuel cells, and to outline GM's extensive history of initiatives in this field. In my testimony today I will describe some examples of our progress to date, and highlight the challenges ahead.
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GM is excited about the prospects for fuel cells in a variety of applications. But no matter what use you are considering, there must be an affordable, reliable and safe supply of hydrogen to power fuel cells. There are many potential feedstocks for producing hydrogen, and each source requires different levels of energy expenditure and capital investment. Eventually, we all hope to use methods that are renewable and have no adverse environmental impact. Until then, hydrogen can be derived from a mix of energy sources, including hydrocarbons, nuclear, and any source of electricity. During this period of industry development, Government should sponsor or incentivize research and pilot production of multiple means of hydrogen generation. It is too early to pick ''winners'' and ''losers.''
As important as the hydrogen fuel and the infrastructure to deliver it are to this process, the fuel cell and its potential applications are where GM's activities are concentrated. Building on the success of our HydroGen 1 vehicle, last fall we unveiled the HydroGen 3, with an improved electric drive and optimized fuel cell system architecture. It's the first fuel cell vehicle to dispense with the heavy and expensive buffer battery, which was previously needed to handle high performance demands.
In January of this year, we introduced our Autonomy concept vehicle, as the vision of fuel cell transportation for the future. With interchangeable bodies, software driven control systems and dramatically fewer parts, it will enable new design, manufacturing and business paradigms, making clean, safe vehicles more compelling, affordable and profitable. This concept vehicle was on display here in Washington two weeks ago, and a newer, drivable version will be revealed later this year.
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In addition to automotive units, we've developed stationary fuel cells, because we see distributed generation of electricity by fuel cells—powering homes and businesses—as a means of making the electrical grid more robust, and of accelerating the development of the hydrogen infrastructure. Our current prototype has been providing power at our facility in Rochester, NY, for more than a year.
These rapid accomplishments are encouraging, but great challenges remain before we can realize the vision of hydrogen and fuel cell-based sustainable mobility. Hydrogen storage is the key on-vehicle challenge to achieving technical feasibility and market viability. And, products must be affordable to be commercially viable. General Motors is working on these issues, with our research partners, as part of our core business. In addition, the hydrogen infrastructure must be created, and also be commercially viable, and the Nation's installed base of industrial supply and production must begin the transition to the energy source of the future—hydrogen. Control of this task is outside of GM's core, and we rely on other industry leadership and involvement, with guidance at the federal and state level.
The automobile companies are developing the vehicles, but that, by itself, is insufficient for commercial viability. In addition to collaboration with energy companies and others, the active participation and support of government is critical. The government's role must be to provide the financial and regulatory environment, which will hasten the development of technology and infrastructure. This role includes:
Coordinating/funding infrastructure development
Providing R&D for codes & standards suitable to new technology and commercial viability
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Incentivizing R&D and pilot-scale deployment of vehicles and infrastructure to speed learning and offset high risk of being an early introducer in early stage of commercialization
Preventing premature technology freeze that stifles pace of development (premature regulations, mandates, standards)
The FreedomCAR initiative demonstrates that the Federal Government is ready to step up to the plate—with mutual commitment to vision, to accomplishment of R&D targets and schedules, and commitment by DOE to work on complementary infrastructure issues.
In order to achieve the commercial viability we seek, four constituencies must benefit. The customer must get equivalent or superior performance, safety, functionality and value—new kinds of vehicles that inspire their passion, and that they want to buy, and that they can afford. Society must benefit through increased energy efficiency, reduced CO and vehicle emissions, and diversification of energy sources that allow reductions in petroleum dependence. Finally, the energy companies and the automobile companies, and their supply base of smaller businesses, must all see positive business cases.
In conclusion, I believe that leading the change to the hydrogen economy and a cleaner world of sustainable mobility is a legacy that we can all leave our grandchildren. The task is as monumental, and as far reaching in its effects, as the invention of the automobile, or the creation of the interstate highway system, or the launch of the space age.
Hydrogen is the future, and we are not the only nation who recognizes that. We must be the leaders in this new energy age. The more that governmental policy is aligned with industry to encourage investment in hydrogen and fuel cell research, development and deployment, the faster fuel vehicles will be available.
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Thank you.
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BIOGRAPHY FOR J. BYRON MCCORMICK
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In November 2001, Dr. J. Byron McCormick was appointed Executive Director of GM Fuel Cell Technology & Commercialization. In 1997, Dr. McCormick was appointed Director of GM's Global Alternative Propulsion Center. The primary mission of this worldwide GM center with participation from all units of GM is to develop fuel cell technology as a potential propulsion source for future generations of General Motors vehicles.
From 1994 to 1997, Dr. McCormick was Managing Director of Delco Propulsion Systems (DPS), which coordinated the development, manufacture and marketing of electric and hybrid vehicle systems and components to customers worldwide. DIPS was a joint effort among three General Motors units: Delphi Energy and Engine Management Systems, Allison Transmission, and Delco Electronics Corporation. DPS was responsible for the propulsion system and batteries for GM's EV1 and electric S–10 trucks.
Dr. McCormick joined Delco Electronics in 1986 as Chief Engineer for Advanced Technologies at Delco Systems Operations in Santa Barbara, California. In this position, he was responsible for the Advanced Computer and VLSI departments, Computer Aided Engineering Department, Advanced Software and Advanced Systems Concepts. He was named General Director of Programs in 1991 and was responsible for all business and programmatic initiatives at Delco Systems. He was later appointed Chief Engineer of Chassis Controls Integration for the General Motors Chassis Systems Center in Brighton, Michigan. At the Chassis Center, Dr. McCormick's team developed and introduced a series of closed loop yaw control and chassis control systems (Cadillac Stabilitrak, 1998 Corvette yaw control system and Delphi Traxxar system).
Before coming to Delco, Dr. McCormick spent 1975–1986 at the Los Alamos National Laboratory in the Electronics Division where he managed the Division's Advanced Development specializing in advanced electron devices and integrated circuit processes and materials, and electro-optic devices and materials. He also expanded this group with the creation of a research group dedicated to fuel cell based automotive propulsion, including basic fuel cell and fuel processor R&D as well as fuel cell propulsion system evaluation. The focus of this group was on PEM fuel cell technology. He then became Deputy Division Leader serving as chief technologist, strategic planner, and manager of the marketing organization. Prior to 1975, Dr. McCormick was at Hughes Aircraft in the Missile Systems Group working on missile control systems design.
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Dr. McCormick earned a B.S., M.S. and Ph.D. in Electrical Engineering from the University of Arizona.
Chairman BARTLETT. Thank you very much. All those bells going off are not a fire drill. I think that simply means that we are recessing on the floor. Mr. Rothwell.
STATEMENT OF MR. DOUG ROTHWELL, PRESIDENT AND CEO, MICHIGAN ECONOMIC DEVELOPMENT CORPORATION
Mr. ROTHWELL. Good morning, Mr. Chairman and Members of the Subcommittee. I believe that everyone who will testify before you today is going to agree that a transition in the automotive industry from the internal combustion engine to the use of hydrogen fuel cells is well underway and poised for explosive growth. Such a transition holds tremendous ramifications for our nation's economy. In Michigan alone about 200,000 direct jobs and $10 billion in private investment could be impacted from this transition. For this reason, I would like to share with Committee Members how Michigan is working aggressively to position our state as a leader in this emerging industry and how Congress can assist us with achieving that goal.
Before I begin to discuss Michigan's plans, however, I would like to congratulate energy secretary Spence Abraham for his leadership and vision in promoting new petroleum free, emission free choices for American drivers. The FreedomCAR Initiative will help give consumers real alternative energy choices while reducing our nation's dependence on foreign oil imports. As a partnership between the Federal Government and the automotive industry, FreedomCAR is very complimentary to our initiative, which is called NextEnergy.
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NextEnergy is a comprehensive set of programs and incentives designed to position Michigan as a center for the alternative energy research and development, education and manufacturing activities. I would like to highlight the most significant features from your standpoint as congressional leaders. The physical element of the NextEnergy Initiative will be a NextEnergyZone, approximately 700 acres of prime real estate that the State is contributing toward this effort in Ann Harbor, Michigan. The site is located strategically near the University of Michigan and Detroit Metropolitan Airport. Funds will be dedicated for necessary site improvements, construction and incubator space, and the development of an alternative energy micro-grid to power the entire site with new energy systems. Any company locating within the zone will also operate free of all state and local taxes for 20 years and receive a rebate based on the amount of payroll taxes generated by their employees. The core of this zone will be the NextEnergy Center, a campus composed of laboratories, business incubator space, collaborative meeting space and other facilities because a recent report prepared for the Michigan Economic Development Corporation indicates that there is no critical concentration of private or government research centers, alternative energy companies, suppliers or industry support groups really anywhere in the world.
The NextEnergy Center's goal is to fill this void and thereby accelerate the industry's commercial impact. Among other things, the center will facilitate and fund industry-university collaborative research and commercialization projects, administer industry support services and develop higher education and technical degree programs in alternative energy technologies.
The Michigan legislature has already approved all of the bills pertaining to the NextEnergyZone and the NextEnergy Center. The Michigan Economic Development Corporation has committed over $50 million of direct funds to the next energy initiative and the NextEnergy Center is expected to be completed in 2003.
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You might ask why are we making such a substantial investment. From an economic development perspective, we believe it is vital to preserve Michigan's and the Nation's automotive leadership as the transition to fuel cell technology occurs. With government-like programs and companies in Europe, Asia, Canada and many other nations targeting this technology we believe it would be a huge mistake for the United States to take a passive approach. I also believe it is in our national interest for Congress to help state and regional initiatives like NextEnergy because they compliment Federal programs and leverage Federal dollars. In particular, they focus additional resources on commercializing the basic and applied research that Federal programs tend to focus on.
To that end, we are proposing the establishment of a federally designated and funded underwriters laboratory within the NextEnergy Center. The U.S. Department of Energy and other Federal agencies have a number of alternative energy research efforts underway across the country. However, there does not appear to be a single entity whose role it is to serve as a systems integrator that takes an interdisciplinary approach toward certifying the products that will use these technologies.
In addition to the need for a certification facility, there are educational gaps not addressed by current Federal initiatives that could be very well filled by NextEnergy. Such an effort is in the national interest as it would support consistent curricular and credentialing standards for this emerging industry. Federal assistance could also take the form of seed money through direct Federal appropriations and grants to programs like NextEnergy that commercialize new alternative energy technologies. NextEnergy, for example, will seed venture capital funds, provide working capital and/or finance the construction of new facilities for alternative energy companies that are commercializing their products into full production.
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NextEnergy was created by the alternative energy industry, by the automotive manufacturers and by utility companies in collaboration with a host of others. It is my hope that after considering this testimony and hearing from other experts on the subject that you will support an active Federal role in growing the alternative energy industry in the United States. In so doing, you will further America's opportunity to grow a new industry sector and continue to lead in the development of critical new technologies.
I thank you in advance for your consideration and of course we would be happy to answer questions later. Thank you.
[The prepared statement of Mr. Rothwell follows:]
PREPARED STATEMENT OF DOUG ROTHWELL
Good morning, Mr. Chairman and Subcommittee Members. I come before you today to testify about an issue that has tremendous ramifications for our nation's economy, and the economy of the State of Michigan in particular. I am speaking of the impending transition toward fuel cells as a source of power for vehicles and other everyday applications. After decades of research in universities and scientific facilities, certain alternative energy solutions are poised for explosive growth worldwide. That growth will have a direct and profound impact on the U.S. economy, affecting billions of dollars in sales and thousands of workers. Michigan's number one industry is the automotive industry, and it is the automotive industry that is likely to be most impacted as this new technology takes hold in the marketplace.
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For this reason such a transition offers tremendous opportunities and tremendous challenges for our state and for the automotive industry. No region in the world is more recognized than Michigan as the global automotive center. According to a recent study, there are currently 27,000 people employed at engine and transmission plants across Michigan, and many more are employed at suppliers who manufacture components such as pistons, valves and camshafts that are tied to the traditional internal combustion engine powered automobile. Michigan has nearly 35 percent of engine manufacturing and more than 39 percent of automatic transmission manufacturing in North America. The advent of a new power system that would supplant the internal combustion engine puts as many as 200,000 Michigan jobs at risk and would result in the loss of $10 billion to Michigan's economy in the first year alone.
Development, of a cost effective fuel cell for use in vehicles will likely make many of these plants and jobs obsolete. These facilities will be replaced by others specifically designed for the construction of fuel cell components and systems.
A visit to this year's International Automobile Show in Detroit provided a glimpse of what is on the horizon. General Motors' prototype fuel cell vehicle, the Autonomy, does not use the transmission, pistons, valves and other parts that nearly the entire automotive industry is now dependent upon.
Someone might say, 'But these are just concept and prototype vehicles that are fun to look at but never see widespread production.'' I will let Bill Ford, Jr., the Chairman and CEO of Ford Motor Company, respond to that. Mr. Ford is on record as saying:
''I believe fuel cell vehicles will end the hundred-year reign of the internal combustion engine as the dominant source of power for personal transportation.''
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Rick Wagoner, CEO of General Motors, echoed a similar outlook:
''The 20th century was the century of the internal combustion engine. The 21st century will be the century of the fuel cell.''
The automotive industry has already invested $4.5 billion in the development of fuel cells. While that is a significant figure, industry prospects point to the wisdom of their investments. Experts estimate that the market for fuel cells will grow from a very modest $220 million in 2000 to a staggering $95 billion by 2010.
There is, in fact, a danger in that decades of talk about alternative fuel prospects has lulled people into a state in which they will not recognize when a genuinely feasible alternative fuel source is imminently upon them. Despite years of development, solar powered vehicles have not advanced beyond what I would call the ''gee-whiz'' stage of experimentation. Compare those to DaimlerChrysler's NECAR, which just a few weeks ago became the first fuel cell powered vehicle to travel from coast to coast. This is a Mercedes-Benz A-Class vehicle that is completely powered by a hydrogen fuel cell. Inside and out it looks like a normal car—something that we might drive to and from work every day. And in the not-too-distant future, we will.
Ladies and gentlemen, in the next 10–20 years energy-efficient fuel cells will be powering many of our vehicles. And, because the technology is highly scalable, fuel cells can be used to power anything from a laptop computer to a hospital. Therefore, fuel cells will also be powering many of our homes and a host of other day-to-day products.
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There are a number of factors driving a move to alternative fuel solutions. At least since the energy crisis in the 1970s we have been acutely aware of a need to reduce our dependence on fossil fuels, particularly imported fuels. Passenger vehicles alone consume 6 million barrels of oil every day in the United States—equivalent to 85 percent of the oil we import. In recent decades there has also been a steadily growing demand for alternative fuels that will not pollute the world we live in. Both of these demands place political pressure on Federal and State governments to come up with an acceptable alternative fuel strategy and back it up with substantive actions. The day has finally arrived in which a major alternative energy technology is maturing to the point where it can meet these economic, environmental and political demands.
I very much appreciated the fact that at this year's auto show Energy Secretary Spence Abraham announced that the Federal Government will be embarking on a new partnership with the automotive industry to accelerate the refinement and production affordable hydrogen fuel cell powered vehicles, as well as create a national hydrogen supply infrastructure. This represents a significant shift in policy and strategy. For decades the emphasis has bean on getting more gas mileage from internal combustion engines, most notably through the Corporate Average Fuel Economy (CAFÉ) standards adopted by Congress. This new policy recognizes that the future of internal combustion engines is short, and that fuel cells represent the quantum technological leap that will diminish our reliance on foreign oil and reduce or eliminate emissions that are harmful to our environment.
As a partnership between the Federal Government and the automotive industry, the FreedomCAR program is a welcome step in the right direction toward developing a fuel cell operating system for tomorrow's cars and trucks. The State of Michigan has simultaneously developed a partnership, known as NextEnergy that will provide a central physical location for such activities to take place in an atmosphere conducive to the acceleration of the alternative energy industry.
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As I mentioned, the shift to alternative energy powered vehicles will have a tremendous impact on the state of Michigan. From an economic development standpoint, we recognize the opportunities and challenges presented. That is why Michigan has created the NextEnergy initiative. NextEnergy is a comprehensive set of actions and incentives designed to position Michigan as a center for alternative energy technology research and development, education and manufacturing. There are rune major components to NextEnergy, but I would like to highlight what I consider the most significant from your standpoint as Congressional leaders.
The first major component of the NextEnergy initiative will be the NextEnergyZone, approximately 700 acres of prime real estate that the state is contributing towards this effort. The site is located near Ann Arbor, strategically near the University of Michigan and Detroit Metropolitan Airport. Funds will be dedicated for necessary site improvements, construction of incubator space and development of an alternative energy microgrid to power the entire site with new energy systems such as fuel cells. Any company within the NextEnergyZone will operate virtually free of all state and local taxes. The state will also provide a refundable Single Business Tax Credit for companies located within the Zone based on the number of employees they hire.
The core of this Zone will be the NextEnergy Center, a campus composed of laboratory facilities, business incubator space, collaborative meeting space and other facilities that will support the alternative energy industry. A recent report prepared for the Michigan Economic Development Corporation indicates that there is no critical concentration of private or government research centers, alternative energy companies, suppliers or industry support groups anywhere in the world. Our goal is to position the NextEnergy Center as a site that will fill this void by incorporating a wide range of activities to accelerate the development of the alternative energy industry. Among other things the Center will facilitate and fund industry-university collaborative research and commercialization projects, develop industry support services and develop higher education and technical degree programs in alternative energy enabling technologies.
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We will also establish a Michigan NextEnergy Development Fund to seed venture capital funds, provide working capital and/or finance the construction of research, development and manufacturing facilities for alternative energy companies. By this means we will be able to provide key, targeted assistance to startup companies and others who are working toward the commercialization and production of alternative energy products.
As of today the Michigan Legislature has approved all of the bills pertaining to the NextEnergyZone and NextEnergy Center. The Michigan Economic Development Corporation has committed $50 million to the NextEnergy initiative, and the Center is expected to be completed in 2003. As a state we are intent on taking advantage of the new opportunities that the transition to alternative fuel technologies will bring in the very foreseeable future.
Although Michigan has been the automotive capital of the world for more than a century, we cannot take for granted that it will remain so in light of the transition from internal combustion engines to fuel cells. We must work to continue our leadership as the new generation of vehicles unfolds. Likewise, as a nation we cannot assume that the United States will automatically be crowned the leader of alternative energy technology and manufacturing. Companies in Europe, Asia and Canada are already major players, and many other nations are sparring to take the lead.
The NextEnergyZone and NextEnergy Center, although located in Michigan, represent a goal of helping to put the United States at the forefront of alternative energy development and commercialization. At the same time we believe that it is important to create synergies by partnering with other global experts in this field. Thus we have already begun discussions with Fuel Cells Canada and the Stuttgart Economic Development Region in Germany to explore ways to share information and best practices, as well as develop joint programs to advance the industry.
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With so much at stake in terms of jobs and our economy, I believe it is vital for Congress to see alternative fuel technologies as worthy of greater attention and investment from the Federal Government.
To that end, we are proposing the establishment of a federal certification facility within the NextEnergy Center. The U.S. Department of Energy and other federal agencies have a number of alternative energy related research efforts underway across the country. However, there does not appear to be a primary systems integrator that is taking an interdisciplinary approach towards certifying the products that will use these new technologies. In addition to the need for certification, we also believe that there are some educational gaps not addressed by current federal initiatives that would be filled very well by the NextEnergy Center and its activities.
The study I referred to previously suggests that there will be a need in the near future to develop a common certification process for stationary and mobile fuel cell technology to facilitate mass manufacturing and public acceptance. The federal facility that we envision at the NextEnergy Center would meet these needs. The facility would serve the following functions:
Act as an Underwriters' laboratory to develop industry certification systems and identification of industry gaps and needs;
Include a collaborative testing facility to offset investment and permitting burdens;
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Fund collaborative industry-university research and development programs;
Sponsor national conferences and workshops to build visibility for the industry and share knowledge; and
Develop core curriculums in alternative energy technologies for colleges and universities.
I believe it is in our national interest for Congress to help state and regional initiatives like NextEnergy that compliment federal programs and leverage federal dollars. By continuing to provide tax credits the Federal Government will encourage businesses and consumers to adopt alternative energy products. Providing matching funds for complimentary initiatives will accelerate commercialization of new technologies. Funds for additional demonstration projects, technology transfer and industry support services will get these products manufactured at reasonable costs for the public.
NextEnergy was not created by state government alone. It was created by the alternative energy industry, automotive manufacturers and utility companies in collaboration with other companies, higher education representatives, and a host of others. We have learned that the best way to help is to listen to our customers. When the heads of the Big Three automakers talk about fuel cells as the future of their companies, we listen. We have found over the past decade that by bringing together key players we are able to react quickly to the changing demands of the marketplace. It is one reason why we have been so successful in attracting new and expanded business facilities to our state, and in creating new initiatives like NextEnergy and the Michigan Life Sciences Corridor.
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It is my hope that after considering this testimony, and hearing from other experts on the subject, you will be inclined to take an active role in furthering the alternative fuel industry in the United States. We in Michigan have a lot at stake in how this transition unfolds in the coming years, and I trust you can appreciate how important it is for us to position Michigan as a leader in this emerging industry—especially as it applies to the development and production of fuel cell powered vehicles. But we also see our state providing America with an opportunity to grow a new industry sector and continue to lead in the development of critical new technologies.
I thank you in advance for your consideration of this matter that is so vital to our national economic interests and to the thousands of families whose livelihoods are tied to the automotive industry.
If you have any questions I would be happy to do my best to answer them for you.
BIOGRAPHY FOR DOUG ROTHWELL
Current Focus
Doug Rothwell is the President and Chief Executive Officer of the Michigan Economic Development Corporation (MEDC). This public corporation was established through a partnership between the state and local Michigan communities to serve as the state's one-stop economic development organization. The MEDC is one of America's newest state economic development organizational models and has been named best state economic development organization by Site Selection Magazine.
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Doug has been the leader of Michigan's economic development programs since April 1993, when Governor John Engler appointed him to lead the Michigan Jobs Commission, a state department whose economic development duties have since been spun off into the MEDC.
The agency won Site Selection magazine's Governor's Cup in 1997, 1998,1999 and 2000 for leading the Nation in new or expanded site locations. Coopers and Lybrand has named Michigan as having the best business attraction program in North America, and Deloitte & Touche has recognized Michigan as also having the largest and best business retention program in the U.S.
Michigan economic development programs developed under Doug's leadership, have received numerous awards for innovation, including those issued by the Innovations of American Government, and the National Association of State Development Agencies and Council for Urban Economic Development. The MEDC has also been named the top state economic development agency by Site Selection Magazine
Doug was personally given the Outstanding Economic Developer of the Year award by the American Economic Development Council; the Distinguished Service in State Government Award by the National Governors' Association and the President's Award for Outstanding Public Service by the University of Delaware.
Professional Background
Doug has worked at the federal, state and local levels of government and in the private sector. Previously, Doug served as Chief of Staff and State Planning Director to the Governor of Delaware, as Executive Vice President with MBNA America Bank, the Nation's second largest issuer of bank credit cards, and was a Presidential Management Intern in Washington, D.C.
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Education
Doug graduated with a Bachelor of Arts degree in Political Science from the University of Delaware and a Master of Public Administration from the University of North Carolina at Chapel Hill. He attended the John F. Kennedy School's Program for Senior Executives in State and Local Government at Harvard University. Doug also serves as an adjunct faculty member of the University of Michigan's Business School.
Chairman BARTLETT. Thank you very much. Dr. Saillant.
STATEMENT OF DR. ROGER SAILLANT, PRESIDENT AND CHIEF EXECUTIVE OFFICER, PLUG POWER INC.
Dr. SAILLANT. Good morning, Mr. Chairman and Members of the Committee. My name is Roger Saillant, president and CEO of Plug Power, Incorporated, a developer of on-site energy generating systems using proton exchange membrane fuel cells for stationary power applications. As a 30-year veteran of Ford Motor Company, I am particularly pleased about the opportunity to comment on the FreedomCAR Initiative. Plug Power, a Latham-based, New York company was founded in 1997 as a joint venture of DTE Energy from Michigan and Mechanical Technology, Incorporated. Plug Power's fuel cell systems for residential and small commercial stationary applications are expected to be sold globally through a joint venture with the General Electric Company, one of the world's leading suppliers of power generation technology and energy service.
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For the record, we submitted testimony to your committee after the FreedomCAR hearing in February and have an additional statement for today's record. We will therefore speak this morning to your specific questions about the synergies between the stationary and transportation fuel cells and the ability to leverage a hydrogen infrastructure.
The first question was can hydrogen fuel cell vehicles be tied into a distribution generation system that produced hydrogen to provide electricity for homes and store hydrogen for vehicles. The answer is simple. Yes. In addition to electricity for the home and hydrogen for the cars, these systems can also provide heat and hot water to the homes. We have entered into a joint agreement with Honda to do this over the next several years.
Second question is such a system practical. These systems are technically feasible today. The economic practicality will come in time and will be determined by how large a system view you take.
What role can Plug Power play in advancing the Nation's distributed hydrogen infrastructure? As I already stated, we are collaborating with Honda to develop a home refueling system. We are delivering and installing combined heat and power systems on Long Island right now. The Long Island Power Authority will operate these 17 systems for 18 months. At the same time, we are collaborating with Valiant, the largest heading appliance company in Europe, to develop home heating and hot water systems based on PEM technology with electricity as the byproduct. Our next step is to combine these technologies and complete the loop for the home refueling station.
Is natural gas the only hydrogen feed stock plan or does Plug Power have plans to use renewable feed stocks in the future? Fuel cell systems are complex. Natural gas is readily available and we continue to improve these systems and we conduct developmental research with LPG. We are proposing a demonstration in the Adirondacks based on electrolysis of water and existing electricity capability. As we become more familiar with technological challenges and identify solutions, we plan to integrate our systems with wind and solar.
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How do you envision the transition to the hydrogen economy? First, it starts with education. I think the people need to believe that it is safe and there is ample documentation that hydrogen as a fuel is at least as safe as natural gas or gasoline. Second, I think the people need to understand a distributed generation is a practical alternative to central station power generation. In part, that is what we are doing with the PEM fuel cell systems based on natural gas. Third is the use of bottled or chemical hydrogen that is already readily available for UPS, uninterruptible power supply or backup power. This strategy is already part of our market engagement and market adoption plan. Next, I believe that linking automobiles to stationary hydrogen sources, first with the home refueler and then through captured fleets and ultimately into the general public would bring about the needed acceptance and economic feasibility to make the hydrogen economy a reality. This is where the government can play a major role.
Aside from continued and accelerated research, development and demonstration and incentives funding, the Federal Government could adopt a renewables and hydrogen based energy strategy for their own buildings and fleets. This could be similar to the policy adopted in New York where they are committed to have 10 percent of the government facilities powered by renewables in five years, an additional 10 percent after 10 years and so on. A similar program would work in Federal facilities and buildings. The economic weight of the Federal Government spending in this way I believe would truly accelerated the development and adoption of renewable technologies.
Japan and the European economic union have already committed to similar plans and even China has made a public commitment to have 2,750 buildings in Hong Kong powered by hydrogen by the year 2008. Coincidentally, this is the same year as the Olympics will be held in China.
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As for universities, I believe that they could adopt the same transition strategy for vehicles and buildings as the Federal Government. But more importantly, they should require all secondary teachers who will teach science to be certified in sustainability principles.
In conclusion, other countries are hard at work putting the hydrogen economy ideas to the test. Some are significantly ahead of the United State. These countries will export their technologies over time and we will be a consumer, a net importer of their technologies rather than a net exporter. We must do our technological work now to have the economic, environmental, and security benefits that they bring.
The hydrogen economy is coming and the opportunity to lead is now. Thank you.
[The prepared statement of Dr. Saillant follows:]
PREPARED STATEMENT OF ROGER SAILLANT
My name is Dr. Roger Saillant, President and Chief Executive Officer of Plug Power, Inc., a developer of on-site energy generating systems utilizing proton exchange membrane (''PEM'') fuel cells for stationary power applications. As a 30-year veteran of Ford Motor Company, I am particularly pleased about the opportunity to comment on the Freedom Car initiative. Plug Power, our Latham, NY based company was founded in 1997, as a joint venture of DTE Energy Company and Mechanical Technology Incorporated. Plug Power's fuel cell systems for residential and small commercial stationary applications are expected to be sold globally through a joint venture with the General Electric Company, one of the world's leading suppliers of power generation technology and energy services.
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We are very enthusiastic about the attention being paid to fuel cell technology and the interest level in Washington. The announcement of the Freedom Car program and its focus on fuel cell vehicles, along with this committee's interest, is reason for excitement. We urge you to translate this into action, such as funding and policies to benefit the technology and our society. Funding for stationary fuel cell research, transportation fuel cell research, and hydrogen infrastructure development are all vital and valuable to any large-scale fuel cell R&D effort.
I believe that we as a nation currently have an opportunity to make a great difference to our economy, to our world position, and to the environment. As a former auto company executive who participated in improving auto emission, safety, and fuel economy, I understand the challenges we face. First, the auto company transition costs were enormous, but were forced by regulation. Although we are trying to make the energy transformation through incentives, not incentives, the transition costs will be comparably high. Second, this upcoming change in our energy situation is related to worldwide problems of natural resource depletion rates and global environmental degradation. Third, going from a centralized distribution model to a mosaic of centralized and distributed generation based on fossil fuels, wind, biomass, solar, nuclear and so forth will require inspired leadership from our government over an extended period of time. The U.S. must be the technological leader in the emergence of this global economic opportunity, to ensure the security of the energy resources that are vital to our economic growth and standard of living, and to build an industry that could generate hundreds of thousands of jobs.
Development of a hydrogen economy is vital for our society's economic well being. For years, we have relied on central station energy generation and transportation derived from finite natural resources and have thereby both depleted those resources and degraded environmental quality. A hydrogen infrastructure that supports both stationary and transportation fuel cells is the bridge to an energy system that values our ''natural capital'' and moves towards a sustainable energy economy.
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STATIONARY FUEL CELL DESCRIPTION
A stationary fuel cell is an on-site power generation system that electrochemically combines hydrogen with oxygen in the air to form electricity. The hydrogen fuel can be obtained from readily available fuels, such as natural gas or propane, or from biomass fuels. Hydrogen can also be generated by electrolyzing water with low-cost off-peak electricity, or with electricity obtained from renewable sources such as solar, wind, or biomass. Fuel cell systems located on site in residential, commercial or institutional applications, not only provide electricity, but also heat that can be captured and beneficially utilized in these applications for combined heat and power (CHP). This makes such fuel cell systems highly efficient as well as environmentally friendly. The heart of the stationary PEM fuel cell system is the stack, which is comprised of the same technology as is used in most fuel cell vehicle applications.
Plug Power Inc. is demonstrating both natural gas-based fuel cell systems and direct hydrogen systems. We are moving to a design that contributes to environmental sustainability through recycling of components; and utilization of fuels from renewable sources. My vision has been, and continues to be, a sustainable energy future in which renewably generated hydrogen, from wind, solar, water and other means, powers on-site generation equipment such fuel cells.
STATIONARY FUEL CELL BENEFITS
Our traditional central generation model for supply of power in the U.S. is failing to meet the needs of a growing economy. The need for more power generation and transmission and distribution infrastructure can best be met with distributed generation: placing the generating assets on site, where the energy is needed. Fuel cells will be an important technology component of our nation's distributed generation portfolio.
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Stationary fuel cells using reformers emit less than half the CO (a primary ''greenhouse gas''), of a traditional, coal-fired power plant when operating on a fossil fuel such as natural gas. When fueled by hydrogen from a renewable energy source such as solar, wind, or hydropower, or if the fuel source is bio-fuel like ethanol from plant wastes, CO emissions are net zero.
Fuel cells, as a distributed generation technologies, increase our national security by providing fewer central station power generation targets for terrorism and by reducing dependence on foreign fuels.
Fuel cells can provide highly reliable electricity. Studies estimate that power quality and reliability issues cost our economy between $150–$400 billion per year in lost materials and productivity (source: Bear Stearns, April 2000 Distributed Energy, p. 8).
Fuel cells can use any hydrogen rich fuel, or direct hydrogen. This allows fuel cell products to be ''customized'' for customers' available fuel and provides the option of renewably generated hydrogen for zero emissions energy system.
Siting the fuel cells at the point of consumption also avoids the line losses (up to 15 percent) inherent in moving electricity and provides an alternative to costly and unattractive traditional power lines.
Because fuel cells make both electric and thermal energy where it is needed, the heat can be recaptured in combined heat and power applications to attain combined efficiencies of over 80 percent.
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Fuel cell systems are quiet.
SYNERGIES BETWEEN TRANSPORTATION AND STATIONARY FUEL CELL R&D
Fuel Cell Stack: Because the fuel cell stack for a PEM fuel cell is similar for both transportation and stationary applications, basic technology improvements assist development of both. Design approach, materials, catalysts, assembly/fabrication, instrumentation, controls and supporting pumps and blowers are similar, if not the same, in stationary and transportation use. Differences arise in the needs for system life, weight, size, and unit cost.
Fuel Processor: Given that most auto makers would prefer to use hydrogen as the fuel for mass-production fuel cell vehicles, stationary fuel-processing technology will be quite synergistic with the transportation infrastructure. Some automotive companies, such as Ford Motors, are now saying that fuel cell cars in the future will run on hydrogen obtained at a ''hydrogen station.'' Such hydrogen stations may well use natural gas as the preferred hydrogen source, employing fuel processors to extract the needed hydrogen. The fuel processors needed in such hydrogen stations are identical to those we use in stationary fuel cell systems, except perhaps with respect to size and duty cycle. In fact, the hydrogen stations might use complete stationary fuel cell systems, using the reformer to produce hydrogen for vehicle refueling, as well as for generating power and heat for the hydrogen station and convenience store.
Integration and Application Specific: The integrated design for the major fuel cell system components including supporting subsystems (i.e., cooling, water management, etc.) depends on the application. However, there are specific synergies in the subsystems that can be utilized beneficially. Systems for both applications can only be tested and evaluated in their fully assembled integrated state. This is especially true for the control system and its logic.
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A HYDROGEN ECONOMY
Both stationary and mobile fuel cell systems are the ideal technologies to transition to a fully sustainable energy future based on hydrogen. Vehicular and stationary fuel cells, taken together, provide the impetus for development of a hydrogen infrastructure in the United States and move us to natural capitalism. This technology, like other innovative transportation options, is cursed with the ''chicken or the egg'' question. That is: what comes first, the infrastructure or the fuel cells? By developing both stationary and transportation applications with the ability to refuel on a small scale, demand can be generated by multiple product applications and provide a stronger incentive to develop a full-scale hydrogen infrastructure. By way of example, our company is exploring a home refueling station that would fuel, via hydrogen, the family automobile as well as provide the electricity and heat for the home.
HOME-BASED HYDROGEN VEHICLE REFUELING SYSTEM
I mentioned earlier the concept of a vehicle refueling station. Perhaps even more interesting and exciting is the possibility of a home-based vehicle refueling system. The home refueling system is conceptually a residential fuel cell system with a natural gas fuel processor, and added components for storage and delivery of hydrogen to a vehicle. This system would provide hydrogen fuel for a fuel cell vehicle, while also providing heat and electricity to the home. The product is attractive because it allows an increase in the utilization of the fuel processor, thereby lowering the cost of energy provided by the system.
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Home refueling systems also help address the typical ''chicken and egg'' debate that accompanies any discussion of massive change in infrastructure. No one will build the fuel cell cars if there is no place to refuel them, and no one will build the commercial hydrogen refueling stations if there are no fuel cell cars to serve as customers. With the home refueling system, a piece of infrastructure is sold with each vehicle, so that the roll-out of cars and infrastructure is better matched. The government will still need to play a significant role in facilitating the build-out of infrastructure, as commercial hydrogen stations will be necessary in any scenario to enable long trips.
GOVERNMENT ROLE IN MOVING TO A HYDROGEN ECONOMY
We have heard repeatedly over the past several months about an ''Apollo Project'' for fuel cells, and frankly, we at Plug Power are thrilled to hear it. We feel that there is a vital role for the U.S. Government, and specifically the Department of Energy, to work with industry on pre-competitive research. There is much yet to be done in the area of basic research that is applicable to both transportation and stationary fuel cells. These efforts begin with a fundamental understanding of fuel cell membranes, catalysts and plates, as well as reformer fundamentals as they relate to contaminant resistant catalysts and hydrogen storage technology. For example, this work may result in: advanced high temperature membranes which improve overall efficiency and costs, better ways to apply catalysts, fundamental materials improvements that increase the life and reduce the cost of multi-layer membrane electrode assemblies or less costly ways of cleaning up hydrogen reformate. The results of all these efforts are universally applicable to both transportation and stationary fuel cell power systems, speed their commercial introduction and move the U.S. closer to energy independence.
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Pre-competitive research is tough for industry. When I first became CEO of Plug Power, I wrote to many of the PEM fuel cell developers with a plea that we work together on fundamental research issues that are vital to all our interests. This is not something a competitive industry will readily undertake. Rather, the government has to take the lead in bringing us all together, ensuring that no one's rights are infringed upon. I feel very strongly that there are ''leapfrog'' technologies out there that will help all of us in the fuel cell industry, while helping the U.S. become a global technology leader in this field. We need to work together, with the DOE taking the lead, to find those leapfrog advancements.
Additionally, it is vital that the Government take the lead in developing a hydrogen infrastructure and we are pleased that the DOE is undertaking a plan to develop a hydrogen roadmap this year. This will provide a pathway to developing both the infrastructure and the technology the move us away from our reliance of foreign and fossil fuels and towards an efficient, renewable and domestic energy system.
To reiterate, the U.S. fuel cell industry does indeed value the role of government in providing research, development and demonstration opportunities, as well as policy initiative to help bring both stationary and vehicular fuel cells to market. Without this private-public partnership, the U.S. industry will fail to develop and will allow another country to win the race to lead this industry.
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Chairman BARTLETT. Thank you very much. Mr. Templin.
STATEMENT OF MR. ROBERT J. TEMPLIN, MEMBER, BOARD OF DIRECTORS, PAICE CORPORATION
Mr. TEMPLIN. Thank you, Mr. Chairman, Members of the Committee. Thank you for your invitation to address the Committee regarding our project, the Hyperdrive. I'm a registered professional engineer with over 50 years experience in automotive development and manufacturing as well as a member of the board of directors of the Paice Corporation at Silver Spring, Maryland. It is my privilege today, because of my half-century background in the automobile business, which included launching several new engines and being personally responsible for about a $100 billion worth of automotive products to give you my perspective on the Hyperdrive.
The quest for a zero emission, maximum efficiency automobile has challenged the worldwide industry for at least a decade. Up until now not any of the other approaches being pursued looked like they were going to be practical, marketable, or cost effective for many more years. We decided at the Paice Corporation, why wait? Let us see what we can do to improve the old internal combustion engine. The unique Hyperdrive is the breakthrough we have all be seeking.
It is the first automotive drive to meet all the objectives, yet have the capability for successful introduction and to high volume production and sales using available lowest cost fuel. It provides emission so low as to be immeasurable. They are at the level of surrounding air and therefore cannot be detected. This will dramatically impact future emissions regulations. CO is reduced 30 to 50 percent.
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The Hyperdrive will reduce our demand for imported oil more and sooner than any other known approach. It operates on the theoretical limit of fuel efficiency and cannot be improved for a given size car or truck. Those of you that remember your freshman thermodynamics, it is limited only by the carnol cycle. We should also dramatically impact the corporate average fuel economy debate. Yet if our petroleum supply falters, the Hyperdrive can be designed to run on any of the renewable fuels now under investigation. It provides the automotive customer with all the safety, features, convenience, performance rang and comfort that he or she has come to demand, yet at a price and operating cost equal or better than today, thus assuring good market acceptance.
Because of its highly practical manufacturable design and freedom from dependence on any critical materials, it can go into high volume production sooner and with less cost and investment than any other known system. Because the components are similar to present automotive parts and are manufacturable in present automotive supplier plants, the jobs and plant rearrangements can be planned with minimum disruption. Our written testimony provide details of the system, our test data, and our engineering calculations of what Hyperdrive can achieve in terms of improving fuel economy.
Using the automotive industry's standard test procedures, we have successfully proven the concept of the Hyperdrive power train in tests of a full-size prototype system on a dynamometer. Using this data, we were able to model and calculate the fuel economy and performance that can be expected from Hyperdrive in all other size vehicles. Our modeling results indicate that we can, on the average, increase the fuel efficiency of all vehicles subject CAFÉ regulation by roughly 50 percent. Significantly in a large SUV, the Hyperdrive can achieve a combined EPA rating of 26 miles per gallon, this compared to 16 in the conventional SUV. And yet, this can be achieved with better acceleration and equal trailer towing capability.
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The Hyperdrive development has been funded for the last 10 years with private capital from the Able Foundation of Baltimore and we're grateful for their support. We are currently in discussions with automakers in the U.S., Europe and Japan. Several of these OEMs are evaluating the technology to justify the massive investment it will take to bring it to market. We are also already starting work on programs with some OEMs, but we are operating under non-disclosure agreements so we cannot identify them. We are presently putting together further funding to build demonstrable automobiles for independent test and demonstration to OEMs and to government labs. This should be done in 18 to 24 months.
Similar components to the ones used in the Paice Hyperdrive system are available today. They just need to be modified to fit into specific vehicles that incorporate our system. We are developing a team of suppliers to make these components for a Hyperdrive demonstration vehicle. If all goes well, we could look for a limited volume test fleet in two to four years and high volume production in less than six years.
In addition, the Paice Hyperdrive system has important implications for the FreedomCAR Program. There are numerous technical challenges that need to be overcome to validate any use of fuel cells in automobiles. Until these challenges are overcome, it will be advantageous to have an advance hybrid electric system available to support the renewable fuels activity. In this respect, all of the components of the Paice Hyperdrive system can be demonstrated and put into production now. In this way, the Hyperdrive can act as a technical bridge between the available HEV technology today and the division of sustainable renewable fuel system of the future. Thank you for this opportunity to talk about our relative technology. We would be pleased to answer any questions.
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[The prepared statement of Mr. Templin follows:]
PREPARED STATEMENT OF ROBERT J. TEMPLIN
Mr. Chairman,
Thank you for the opportunity to testify before your Subcommittee regarding Corporate Average Fuel Economy (CAFÉ) issues. I serve as a member of the board of directors of Paice Corporation. We are an American company (our offices are in Livonia, Michigan and Silver Spring, Maryland) with an American technological solution to the challenge of increasing fuel efficiency in passenger cars and light trucks. Paice is an acronym for power amplified (battery and traction motors) internal combustion engine. Paice Corporation has designed, patented(see footnote 7),(see footnote 8),(see footnote 9),(see footnote 10),(see footnote 11) and tested a hybrid electric vehicle (HEV) powertrain system called the HyperdriveTM. I come before you today to explain how the Hyperdrive system works, to describe our estimates of its potential impact on fuel economy of automobiles subject to CAFÉ regulation, and to project the potential impact our technology will have on dependence on foreign oil and gaseous emissions.
The Hyperdrive System, a unique series/parallel hybrid electric powertrain for automobiles and light trucks, delivers a previously unattainable combination of fuel efficiency and vehicle performance at cost premiums that are reasonable when compared to conventional powertrains. Moreover, the Hyperdrive is well suited for a wide range of passenger vehicles, including SUVs, light trucks, and minivans. While other HEV designs can improve fuel economy or reduce emissions, no such design can produce these benefits in as wide a class of vehicles or at costs as favorable as the Hyperdrive. For these reasons, Paice Corporation believes that it has developed the only HEV powertrain system, to date, capable of being profitably produced on a large scale.
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Paice Corporation has successfully demonstrated the benefits of the Hyperdrive System on a full-scale prototype powertrain on a dynamometer with funding from The Abell Foundation of Baltimore, Maryland, and is raising additional funding to incorporate the Hyperdrive into vehicles intended for large-scale production. The Company is currently in discussions with automakers throughout the world regarding production-intent vehicle prototype programs.
Paice is a small company that has attracted a unique group of highly experienced automotive industry officials for its development efforts. For example, Dr. Alex Severinsky, Chairman and Chief Executive Officer and founder of Paice Corporation, has been granted 21 U.S. patents, including three (3) on the Hyperdrive. He has unique technical knowledge of operations of electric motors, electronic power converters, electric storage batteries, and control of electro-mechanical systems. Ted Louckes, Chief Operating Officer, was with General Motors for 40 years, including a four-year military leave to participate in the Korean War, and retired as Chief Engineer of the Oldsmobile Division. Among other programs at GM, he was responsible for the development of the first overhead cam, 4-valve engine for American passenger cars and the introduction of the world's first air bag system.(see footnote 12) Another of our staff, Nathanael Adamson, Executive Vice President, served Ford Motor Company for 32 years and gained domestic and international experience in product development, program control, marketing, and business management of consumer and industrial products in the automotive industry.
On our board of directors, we have several former auto industry officials. For example, I am a retired GM Executive with over forty years of experience in the design, development, and production of automobiles and powertrains. Over the years, I have held such GM positions as Technical Director of the Research Laboratories, Chief Engineer of the Cadillac Motor Car Division, General Project Manager of Special Product Development, and Special Assistant (Engines) to the President of GM. In addition, George Kempton has over 40 years of management experience in automotive and industrial products, including powertrain components for commercial vehicles and most recently he left Kysor Industrial Corporation where he was Chairman and Chief Operating Officer. Finally, Robert Oswald who recently left his position as a member of the Robert Bosch GmbH's Board of Management, and Chairman, President and CEO of Robert Bosch's North American subsidiary Robert Bosch Corporation, after serving there for more than a decade.
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Our testimony today is divided into several topics: first, an overview of the characteristics of the Hyperdrive powertrain system; second, modeling results that demonstrate the Hyperdrive powertrain system's potential for reducing fuel consumption in three selected vehicles (a compact car, a full-size car, and a large SUV); third, a discussion of why the Hyperdrive powertrain makes it possible to profitably commercially mass produce an HEV (and thereby deliver the fuel economy and emissions results that HEVs make possible); and fourth, a discussion of the implications of the Hyperdrive system for fuel consumption. It is important to note that powertrain developments at Paice Corporation continue at a rapid pace. What we present here is a current overview of our development effort that will change as we make further improvements and refinements to our system.
As will be discussed in greater detail below, the Hyperdrive system can increase fuel efficiency in the selected vehicles modeled for this testimony by approximately 50 percent. Paice Corporation would welcome the opportunity to work with automakers and/or the Federal Government to produce a demonstration vehicle that can be tested to reconfirm the conclusions discussed here today and to more precisely determine the cost of producing such a system.
In addition, the components of the Paice Hyperdrive system, all of which are available today, has important implications for the FreedomCAR program. There are numerous technical challenges that need to be overcome to hasten the use of fuel cells in automobiles. When those challenges are overcome, it will be advantageous to have an advanced hybrid electric system available to support the fuel cell energy conversion device. In this respect, all of the components of the Paice Hyperdrive system can be demonstrated and then put into production now while the technical issues with fuel cells are resolved. In this way, the Hyperdrive can act as a technical bridge between the available HEV technology today and the vision of a sustainable transportation system of the future.
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I. The Paice Hyperdrive System
Fundamental Principles
An auto industry executive was recently quoted as saying: ''we can't dictate customer choice, nor should we try to.''(see footnote 13) This statement is widely accepted as a governing axiom in automotive marketing. To compete against current and future powertrains, any HEV system as well as the Hyperdrive must be at least equal, and even superior to existing powertrains in all respects. Only this will result in market forces choosing the adoption of fuel saving powertrain technology. Accordingly, our development of the Hyperdrive was guided by the following fundamental considerations:
The system should run on readily available gasoline or diesel fuel.
The internal combustion engine (ICE) should be used to convert liquid fuel chemical energy into mechanical energy, as it is the most efficient means yet discovered.
The system should use the ICE only in its most efficient operating region; that is, under those load conditions in which Brake Specific Fuel Consumption (BSFC) is minimized. In Figure 1 we present graphically how the ICE is used in the Hyperdrive in comparison with current powertrains.
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Use of the ICE in this way will result in increased fuel efficiency as well as improvements (i.e., reductions) in exhaust emissions. Emissions can also be reduced by use of advanced computer control of the engine air-fuel ratio, catalyst preheating and a simplified engine operating cycle (eliminating ICE transients). While a number of current production vehicles are already meeting California's Ultra-Low Emission Vehicle (ULEV) requirements, the Hyperdrive can assist in achieving this level in the full range of vehicles and at lower cost.
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Sophisticated software control algorithms must be employed to control powertrain components, without any need for an increase in driver skills or driver awareness.
Customer expectations must be satisfied without compromise. Present levels of acceleration, convenience of operation, and operating/ownership cost must be equal to or be better than those offered by present powertrains.
Manufacturing raw material requirements must be satisfied by using the same readily available materials already used in present high-volume automotive production, i.e., iron, lead, copper, aluminum and silicon. Special material needs, such as catalytic agents, must be no more critical than they are today.
System flexibility and cost must be applicable over a wide range of vehicle weights and sizes to allow the benefits to be achieved over the entire passenger vehicle market.
Current restrictions imposed on design flexibility by vehicle space, weight, drag and architecture requirements should be reduced to allow more freedom for design variations.
Physical size and arrangement of the drive components must be flexible enough to allow installation in existing body and chassis concepts to avoid the costs, lead times and investments in plants and equipment that radical new vehicle programs would require.
Vehicle, powertrain and fuel system service requirements must be compatible with the skills, training and diagnostic capability available at the retail level.
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Testing and Test Results
Based on these principles, Paice Corporation built and tested the Hyperdrive system (Figure 2) on a dynamometer load representing a typical 4,250 lbs. large passenger car. In Figure 2, we present arrangements and rating of components in the Hyperdrive powertrain system as tested and in Figure 3 we present some photographs from the testing.
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Table 1 presents a summary of the fuel economy test results. To verify these results, we have measured energy losses in all parts of the Hyperdrive together with energy applied to the load, and compared this with the energy coming from the fuel. These results coincided within tolerances of measurements. This allowed us to calibrate our control software model, which we have used to determine the expected results of using the Hyperdrive system in other vehicles discussed below (a compact car, a full-size car, and a large SUV).
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Key Technical Principle
The key technical principle underlying the Hyperdrive system is that it employs a unique method of control (use of the engine) that optimizes the operation of the internal combustion engine in hybrid electric vehicles.1B,,,,= This method of control results in the achievement of operational thermodynamic efficiencies1B of 32–34 percent as compared to the recognized maximal attainable efficiency of 35 percent for spark-ignition internal combustion engines. By way of comparison, the internal combustion engine in conventional vehicles typically operates at overall efficiencies of around 20 percent. Our improved overall operating efficiency is supported by the configuration of components in the Hyperdrive, including a lead-acid battery system that stores the energy generated by the engine (and regenerated while braking), and high-power electric motors that propel the vehicle when the engine cannot be used in its most efficient operating region. Recent advancements in high voltage power semiconductors, coupled with extensive positive experience in new lead-acid battery applications, have provided the practical basis for the commercialization of our technology.
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How the Hyperdrive System Works
The internal combustion engine (ICE) of a conventional vehicle is required to deliver power under a wide range of loading as a function of driving condition. This is an inefficient way of producing mechanical power from the energy in gasoline or diesel fuel. If the ICE were allowed to operate only in its optimal operating region, fuel efficiency improvements of roughly 50 percent would be possible (depending on the size and type of vehicle and its intended application). This is the fundamental principle behind the Hyperdrive as is illustrated in Figure 1.
Paice achieves this high level of performance and fuel economy by introducing a battery system that captures the energy output of the ICE (which is operated only in its most efficient range) and an electric motor that uses this electrical energy to power the vehicle when the ICE cannot be used efficiently or when power requirements are higher than can be delivered by the ICE alone. The motor also acts as a generator to recover energy from the vehicle during deceleration. (There are other significant features of the Hyperdrive, but the foregoing is illustrative of the basic concept that results in the dramatic improvements in fuel economy.)
The operation of all of these components and their function is managed by the Paice Control Module, a multiprocessor with associated control software and embedded proprietary control algorithms. Through this patented method of control of the drive components, the Hyperdrive system improves powertrain efficiency by roughly 50 percent over conventionally powered vehicles (depending on vehicle type and application). Other than the Paice Control Module, the various hardware components in the Hyperdrive system already exist in one form or another in conventional vehicles. The differences lie in the relative sizes of components, their functional relationships and, most significantly, the software incorporating Paice's patented method of control, which enables the components to function as a highly efficient system. Thus, the Hyperdrive represents an evolutionary step in automobile technology, and does not require advanced development efforts or dramatic changes in manufacturing infrastructure.
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Modes of Operation
There are four typical modes of operation that illustrate the basic functionality of the Hyperdrive: city driving, recharging during city driving, acceleration, and cruising on the highway. In addition to these four, there are a number of other modes defined in the control algorithm.
The Hyperdrive system includes a clutch—essentially a device that is either engaged or disengaged. The clutch must be engaged for the mechanical power from the engine to be delivered directly to the driving wheels. The most frequent condition controlling whether the clutch is engaged or disengaged is vehicle road load reflected on the engine shaft. If this load is sufficient for the engine to be used near its maximum efficiency, then the clutch is engaged. Otherwise, it is disengaged. Generally, the clutch is not engaged during low speed city driving and is engaged during rapid acceleration and highway driving.
In Figure 4, below, the clutch is disengaged in low speed city driving. In part A of Figure 4, the battery is above its minimum state of charge and the traction motor drives the vehicle. At this point, the vehicle is operating like an electric car. The battery is used in a narrow range of the state of charge, normally in 50 percent to 70 percent under partial state of charge (PSOC) condition, to assure long operating life. The amount of energy used in this electric-only mode is far below the PNGV definition of ''dual mode hybrid.'' The Hyperdrive system operates like an electric car upon initial starting of the vehicle and during the intervals between times in which the battery is being charged.
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Part B of Figure 4, shows a time period in city driving after the battery has been used to power the traction motors. Once the battery has reached its minimum state of charge, 50 percent or so, the starter/generator motor starts the engine. Upon starting the engine, a load is applied by the starter/generator motor (now operating as a generator) so that the engine runs close to its minimal BSFC operating condition. The power produced by the starter/generator is split. One part of it is delivered to the traction motor, making the Hyperdrive operate as a serial hybrid. The balance of the power is used to recharge the battery. Upon reaching the maximum level of battery charge, about 70 percent, the engine is stopped.
In Figure 5, the clutch is engaged to accelerate onto and cruise on the highway. When time-averaged road load on the Hyperdrive is sufficient to place the engine in a region close to its minimum BSFC, the clutch is engaged. If the engine was off, it is started and synchronized by the starter/generator motor. At this point the engine begins to provide the average power demands of the vehicle. In this mode, the Hyperdrive acts as a conventional powertrain with its transmission in the direct drive position. This is depicted in Part A of Figure 5.
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For vehicle acceleration or deceleration, all motors are used in a manner that minimizes energy loss in all electrical and electronic components. The Paice Control Module can assure this on a millisecond-by-millisecond basis. Acceleration with only the traction motor is shown in Part B of Figure 5. This is parallel hybrid mode. Engine torque is controlled to lag motor torque to assure operation with the most efficient air/fuel mixture. This allows for material reduction of engine-out emissions, not only for EPA test purposes but also under any driving conditions. Because electric motors provide excellent torque response to the driver's command, optimized levels of car responsiveness become possible, even varying the shape of this response as a function of the driver history and driving condition.
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II. Modeling of Selected Vehicles
Effect of the Hyperdrive System on the Fuel Economy of a Fleet of Vehicles Subject to CAFÉ
Paice Corporation has modeled three vehicles (a compact car, a full-size car, and a large SUV) to provide benchmark data on expected fuel economy improvements in vehicles that can be produced in large volumes utilizing the Hyperdrive. The selection is limited to vehicles subject to CAFÉ regulation; that is, with Gross Vehicle Weight (GVW) under 8,500 lbs.
In Table 2,(see footnote 14) we present a summary of composition of vehicles subject to CAFÉ regulation that were sold in year 2000, along with the fuel economy average for each class. By combining sales volumes with combined fuel economy values, we calculated the overall combined fuel economy to be 24.6 mpg.
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On the following pages, we show the results of our modeling for three particular vehicle classes represented in Table 2. These are a compact car, a full-size (large) car, and a large SUV.
Using the Hyperdrive system:
a compact car exhibits an increase from 31 to 45 mpg (a 45 percent improvement);
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a full-size car exhibits an increase from 27 to 39 mpg (a 44 percent improvement); and
a large SUV exhibits an increase from 16 to 26 mpg (a 62 percent improvement).
We believe that these modeling results represent the type of increase that all vehicles subject to CAFÉ can produce using our powertrain.
Compact Car
In Figure 6, we present the configuration of components in the Hyperdrive in a compact car. Given this configuration, in Table 3, we present a comparison of performance between a conventional compact car and a similar car with the Hyperdrive. For this comparison, we specifically selected a top performer in both driving characteristics and fuel economy.
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It is important to note that combined fuel economy is improved from 31 to 45 mpg, or 45 percent. The passing performance is better with the Hyperdrive, accelerating from 55 to 75 mph in 5 seconds versus 6.7 seconds. Gradeability with the Hyperdrive on a continuous basis is better at 80 mph and otherwise meets requirements of the auto industry.(see footnote 15)
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While the Hyperdrive car is a little heavier than its conventional counterpart (125 lbs. in total), this difference is already factored into the fuel economy results. We believe that implementation of the Hyperdrive in a compact car will meet or exceed customer expectations for performance and provide 45 percent improvement in fuel economy.
Full-Size (Large) Car
Next, in Figure 7, we present the configuration of components of the Hyperdrive in a full-size (large) car. Again, we specifically selected a top performer in fuel economy. In Table 4, we present a comparison of performance between a conventional full-size car and a similar car with the Hyperdrive.
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As shown here, combined fuel economy improves from 27 to 39 mpg, or 44 percent. Again, passing performance is better: 4.4 seconds versus 5.7 seconds. The weight of the Hyperdrive vehicle is 125 lbs. greater than its conventional counterpart and this has been factored into our findings. We believe that implementation of the Hyperdrive in a full-size (large) car will meet or exceed customer expectations for performance and provide 44 percent improvement in fuel economy.
Next Hearing Segment(2)
(Footnote 1 return)
http://www.nextenergy.org/default.htm
(Footnote 2 return)
http://www.fuelcellpartnership.org/index.html
(Footnote 3 return)
PNGV Program Plan, 1995, http://www.ta.doc.gov/pngv/goals/pp–es.htm
(Footnote 4 return)
Review of the Research Program of the Partnership for a New Generation of Vehicles: Seventh Report, National Research Council (2001), p. 77
(Footnote 5 return)
Department of Energy, FY 2003 Congressional Budget Request, Energy Efficiency And Renewable Energy, Energy Conservation, Transportation Sector, p. 6.
(Footnote 6 return)
Report of the National Energy Policy Development Group, Chaired by Vice President Dick Cheney, released May 2001, Chapter 6, p. 10.
(Footnote 7 return)
United States Patent number 5,343,970, Severinsky, Hybrid Electric Vehicle, issued September 6, 1994. Available at http://www.paice.com/patents/.
(Footnote 8 return)
United States Patent number 6,209,672, Severinsky, Hybrid Vehicle, issued April 3, 2001. Available at http://www.paice.com/patents/.
(Footnote 9 return)
United States Patent number 6,338,391, Severinsky and Louckes, Hybrid Vehicles Incorporating Turbochargers, issued January 15,2002. Available at http://www.paice.com/patents/.
(Footnote 10 return)
United States Patent Application number 09/822,866, Severinsky and Louckes, Hybrid Vehicles, published November 8, 2001. Available at http://www.paice.com/patents/.
(Footnote 11 return)
World Intellectual Property Organization PCT Patent Application, PCT/US99/18844. Published March 23, 2000. International Publication number WO 00/15455. Title page available at http://www.paice.com/patents/.
(Footnote 12 return)
Louckes, Ted and Timbario, Tom, The Hybrid: A Challenge and an Opportunity for IC Engines, Proceedings of the AVL International Congress on Internal Combustion Engine versus Fuel Cell—Potential and Limitations as Automotive Power Sources, Graz, Austria, September 2001. pp. 145–160. This and other technical presentations are available at http://www.paice.com/library.html.
(Footnote 13 return)
Fuel Targets for Sport Utilities Pose Difficulties for Automakers, The New York Times, November 23, 2001, p. C1.
(Footnote 14 return)
This data is based on a study conducted by Oak Ridge Laboratories. Davis, SC 2001. Transportation Energy Data Book: Edition 21, ORNL–6966, available at <http://www.ornl.gov/webworks/cppr/y2001/rpt/111858.pdf>.
(Footnote 15 return)
As an illustration of the significance of gradeability standards, climbing even a 10 percent grade at 45 mph for five minutes will elevate the vehicle by approximately 2,000 feet, or as high as a 160-story building.