How Hydrogen Can Save America
The cost of oil dependence has never been so clear. What had long been
largely an environmental issue has suddenly become a deadly serious
strategic concern. Oil is an indulgence we can no longer afford, not
just because it will run out or turn the planet into a sauna, but
because it inexorably leads to global conflict. Enough. What we need is
a massive, Apollo-scale effort to unlock the potential of hydrogen, a
virtually unlimited source of power. The technology is at a tipping
point. Terrorism provides political urgency. Consumers are ready for an
alternative. From Detroit to Dallas, even the oil establishment is
primed for change. We put a man on the moon in a decade; we can achieve
energy independence just as fast. Here's how.
By Peter Schwartz and Doug Randall
Four decades ago, the United States faced a creeping menace to national
security. The Soviet Union had lobbed the first satellite into space in
1957. Then, on April 12, 1961, Russian cosmonaut Yuri Gagarin blasted
off in Vostok 1 and became the first human in orbit.
President Kennedy understood that dominating space could mean the
difference between a country able to defend itself and one at the mercy
of its rivals. In a May 1961 address to Congress, he unveiled Apollo -
a 10-year program of federal subsidies aimed at "landing a man on the
moon and returning him safely to the Earth." The president announced
the goal, Congress appropriated the funds, scientists and engineers put
their noses to the launchpad, and - lo and behold - Neil Armstrong
stepped on the lunar surface eight years later.
The country now faces a similarly dire threat: reliance on foreign oil.
Just as President Kennedy responded to Soviet space superiority with a
bold commitment, President Bush must respond to the clout of foreign
oil by making energy independence a national priority. The president
acknowledged as much by touting hydrogen fuel cells in January's State
of the Union address. But the $1.2 billion he proposed is a pittance
compared to what's needed. Only an Apollo-style effort to replace
hydrocarbons with hydrogen can liberate the US to act as a world leader
rather than a slave to its appetite for petroleum.
Tronic Studio
Money can do more than ease the pain of lost income. It can turn oil
companies into the hydrogen economy's standard bearers.
Once upon a time, America's oil addiction was primarily an
environmental issue. Hydrocarbons are dirty - befouling the air and
water, possibly shifting the climate, and causing losses of
biodiversity and precious coastal real estate. In those terms, the
argument is largely political, one of environmental cleanliness against
economic godliness. The horror of 9/11 changed that forever. Buried in
the rubble of the World Trade Center was the myth that America can
afford the dire costs of international oil politics. The price of the
nation's reliance on crude has included '70s-style economic shocks,
Desert Storm-like military adventures, strained relationships with less
energy-hungry allies, and now terror on our shores.
George W. Bush arrived in Washington, DC, as a Texan with deep roots in
the oil business. In the days following September 11, however, he
transformed himself into the National Security President. Today, his
ambition to protect the United States from emerging threats overshadows
his industry ties. By throwing his power behind hydrogen, Bush would be
gambling that, rather than harming Big Oil, he could revitalize the
moribund industry. At the same time, he might win support among
environmentalists, a group that has felt abandoned by this White House.
According to conventional wisdom, there are two ways for the US to
reduce dependence on foreign oil: increase domestic production or
decrease demand. Either way, though, the country would remain hostage
to overseas producers. Consider the administration's ill-fated plan to
drill in the Arctic National Wildlife Refuge. For all the political
wrangling and backlash, that area's productivity isn't likely to offset
declining output from larger US oil fields, let alone increase the
total supply from domestic sources. As for reducing demand, the levers
available are small and ineffectual. The average car on the road is
nine years old, so even dramatic increases in fuel efficiency today
won't head off dire consequences tomorrow. Moreover, the dynamism at
the heart of the US economy depends on energy. Growth and consumption
are inextricably intertwined.
There's only one way to insulate the US from the corrosive power of
oil, and that's to develop an alternative energy resource that's
readily available domestically. Looking at the options - coal, natural
gas, wind, water, solar, and nuclear - there's only one thing that can
provide a wholesale substitute for foreign oil within a decade:
hydrogen. Hydrogen stores energy more effectively than current
batteries, burns twice as efficiently in a fuel cell as gasoline does
in an internal combustion engine (more than making up for the energy
required to produce it), and leaves only water behind. It's plentiful,
clean, and - critically - capable of powering cars. Like manned space
flight in 1961, hydrogen power is proven but primitive, a technology
ripe for acceleration and then deployment. (For that, thank the Apollo
program itself, which spurred the development of early fuel cells.)
Many observers view as inevitable the transition from an economy
powered by fossil fuels to one based on hydrogen. But that view
presupposes market forces that are only beginning to stir. Today, power
from a fuel cell car engine costs 100 times more than power from its
internal combustion counterpart; it'll take a lot of R&D to reduce that
ratio. More daunting, the notion of fuel cell cars raises a
chicken-and-egg question: How will a nationwide fueling infrastructure
materialize to serve a fleet of vehicles that doesn't yet exist and
will take decades to reach critical mass? Even hydrogen's boosters look
forward to widespread adoption no sooner than 30 to 50 years from now.
That's three to five times too long.
Adopting Kennedy's 10-year time frame may sound absurdly optimistic,
but it's exactly the kick in the pants needed to jolt the US out of its
crippling complacency when it comes to energy. A decade is long enough
to make a serious difference but short enough that most Americans will
see results within their lifetimes. The good news is that the technical
challenges are issues of engineering rather than science. That means
money can solve them.
How much money? How about the amount spent to put a man on the moon:
$100 billion in today's dollars. With that investment, the nation could
shift the balance of power from foreign oil producers to US energy
consumers within a decade. By 2013, a third of all new cars sold could
be hydrogen-powered, 15 percent of the nation's gas stations could pump
hydrogen, and the US could get more than half its energy from domestic
sources, putting independence within reach. All that's missing is a
national commitment to make it happen.
It'd be easy - too easy - to misspend $100 billion. So the White House
needs a plan. The strategy must take advantage of existing
infrastructure and strengthen forces propelling the nation toward
hydrogen while simultaneously removing obstacles. There are five
objectives:
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Peter Schwartz (peter_schwartz@gbn.com) is a partner in the Monitor
Group and chair of Global Business Network, a scenario-planning firm.
Doug Randall (doug_randall@gbn.com) is senior practitioner at GBN.
Schwartz, a former futurist for Shell Oil, is an investor in two
companies developing hydrogen power technologies.
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