Hydrogen Economy

Speech concerning the Hydrogen Economy, given by Alexander Karsner, Assistant Secretary for Energy Efficiency and Renewable Energy, at Hydrogen Program 2006 Annual Merit Review

May 16, 2006

I won't speak long today; you have extraordinarily important work to do and after all, my voice pales next to the enthusiasm of our Commander-in-Chief for the future hydrogen economy that he has spoken to at length, most recently on Earth Day. Not much can be added to the forcefulness and commitment and leadership that have been demonstrated by the President of the United States to support the ultimate onset of a hydrogen economy.

Let me begin in the obvious place with the President's pragmatism, sense of urgency, and moral clarity: AMERICA IS ADDICTED TO OIL.

Accepting the premise that addictions are unhealthy and counterproductive and a danger to our vitality is the first step to addressing the unacceptable long-term over-reliance on petroleum that threatens our country's prosperity, security, and environmental well-being.

We are a nation at war — and America's energy dependence on foreign sources of oil is a growing source of national security concern.

We inhabit a world that is warming — and the potential repercussions from excessive global dependence on conventional fossil fuels is no less a source of trepidation.

In addition to the problems of the present petroleum transportation economy that Hydrogen seeks to tackle, 70 percent of all electric power in the United States is obtained from fossil fuels using traditional combustion, which contributes to air pollution and greenhouse gas emissions, impacts human health and the environment.

You all understand the problem, and though you may have varying perceptions on the degree of its impacts or the depth of our oil addiction, it is clear that we have an obligation to aggressively seek to get beyond it. Because of the efforts of the people in this room, we can confidently pursue a very positive angle on our evolving national energy story.

As the leaders who will ultimately induce the Hydrogen Economy to which we all aspire, you've committed to making this attractive technology a mainstay of this nation's (and indeed all developed nations') economic and environmental well-being.

If we project into the future, to the finish line for the race to achieve a full national (and potentially global) commercialization of the Hydrogen economy, it will not likely be characterized by single-mindedness and linear progress at a constant pace, but rather by multifaceted angles of approach, adaptation, agility, and perseverance interacting with an evolving landscape of economic opportunity.

Full commercialization of the Hydrogen Economy IS our national energy destination; Assuring that we accurately understand and intelligently manage its course is, in fact, our duty.

It is important therefore to credibly measure both our progress and our prospects, not only now, as we embark upon the fourth year of the President's historic commitment, but for years (and perhaps decades) to come, with sufficient frequency to learn from the technology's intrinsic requirements, institutional and logistical challenges, and market-based applications.

We must not see the course to victory, and the ultimate emergence of a hydrogen economy as a short term "sprint" that will be concluded with a singular event or decision or close series of seminal events that delineate a petroleum past from a virtuous hydrogen future.

We should anticipate the potential, rather, for a protracted period of developmental overlap, interaction, and co-existence with multiple emerging alternative fuel sources and energy technology prime movers, and welcome the diversification of post-petroleum possibilities.

In all probability, most of us who believe in the ultimate beneficence of a Hydrogen Economy understand that we must be committed to the marathon of market transformation that lies ahead.

We do not control and cannot foresee all of the factors that imminently impact the length of the journey to a Hydrogen economy, and we do a disservice to our cause if we delude ourselves (or others) into believing that macro-economics, global energy price volatility, and nearer term, petroleum displacement alternatives have no bearing on our timing.

We can and we must soberly account for all factors that help us understand and manage the road to a hydrogen economy better, but none of these factors shall dissuade us from traveling this road and reaching our ultimate energy destination.

To this end, we shall continue to expand and enhance the beneficial cooperation with the Department of Transportation, and our colleagues in the offices of Science, Nuclear Energy, Fossil Energy, and across the government, to help us navigate the way. Such cooperation supports the exponential expansion of ethanol and biofuels currently underway, and this is a positive development in addressing our addiction to oil. The Department of Energy continues to aggressively encourage and support these trends to maximize homegrown, sustainable resources.

In my judgment, the burgeoning domestic biofuels industry is not a competitor to the hydrogen future that we envision, but rather an improved pathway, both heralding and paving its arrival.

By comparison to the planning and execution of commercialization for the hydrogen economy we seek, very minor manufacturing technology and infrastructure modifications to the petroleum economy are necessary for biofuels to gain significant market share.

And so we are presented with the fortunate opportunity to monitor and measure in "real time" the rate of early policy pressures and economic progress.

We also will benefit from understanding the economic realities underlying the resistance to alter historically imbedded patterns of vehicle production and fuels distribution.

These lessons can only serve us to be more agile and pragmatic and poignant in our projections. And, accordingly, to plan the future better.

The Hydrogen community (many of whom also participate in the biofuels arena) should follow the progress of near term petroleum alternatives with an eye towards incorporating lessons learned on efficacy and efficiency of market penetration processes, and the market obstacles encountered.

By doing so, even when technology readiness is imminently at hand, we will have a more seamless understanding of (and preparation for) the forces shaping the potential and rate of commercialization.

Biofuels has the potential to become a valuable regulatory, policy, and economic "sherpa" to clear a path and ease the way for hydrogen's ultimate arrival, it should also increasingly be regarded as an excellent carrier fuel for transition to the hydrogen economy as commercial and technical milestones are reached and the fuels marketplace continue to evolve.

I don't need to elaborate this morning in great detail about the substantial technology and infrastructure pitfalls, obstacles, and challenges that remain to be resolved before scale economics can be considered for the transportation sector. You are aware of the problems the Department has been pursuing, and your attendance here is testament to your willingness to contribute to the solutions.

I know from the extraordinary dedication of Steve Chalk and Joanne Milliken, and the many distinguished, and devoted, and hardworking members of the Hydrogen team in our office, that Thomas Edison's maxim about the necessary mix of both inspiration and perspiration is as true today as ever.

I am privileged to serve alongside these fine people as they serve this nation and this community and this cause with distinction; and as your time here in Washington progresses, I want to encourage you to get to know them (if you don't already) not just for their scientific and technical and managerial talents, but for their fine character, their patriotism, and slavish devotion to doing the right thing; to serve and better this nation; to clean up our world.

Many of you too grind away daily on the sometimes seemingly intractable obstacles that lie on the road ahead. Perhaps your focus is the difficulties of hydrogen storage and delivery. Others of you may concentrate on means of production, with an aspiration to assure that we come to produce hydrogen free of emissions or new sources of carbon dependency.

On which-ever facet you are devoting your labors and attention, it is certain that the product of your research and development and deployments will ultimately produce the crowning jewel of America's energy future.

A rich source of abundant domestic energy, without emissions, that transforms the way we power our homes, offices, cars, and trucks, and fundamentally changes the global energy economy.

While the Department of Energy remains grateful for its partnerships with some of the world's largest multinational corporations with whom we pursue this endeavor, we especially want to reach out frequently, and recognize with a renewed sense of appreciation the small and medium sized risk-takers that form the entrepreneurial engine of creativity, propelling us into the future, in ways that the best designs of government could never imagine.

The companies that are producing stationary fuel cells today for example, privately developing technology, creating jobs, posturing themselves in the markets, and pacing themselves appropriately for the duration, are heroic in my judgment and I am requesting a full review of how our program might better connect with these champions and utilize available policy tools to further catalyze their market-driven growth.

In this respect, we welcome your contributions of ideas and ingenuity, as we ascend to a new planning plateau for market applications of hydrogen, and view the horizon with an even clearer perspective.

We have not yet begun, for example, to cultivate the possibilities of utilizing Title XVII Loan Guarantees, where they might enable and accelerate commercial transactions and innovative uses of hydrogen fuel cells; but we will...in our search to support the forces of free enterprise that will ultimately determine the rate of the Hydrogen economy's arrival. And I encourage you to use this meeting to help us consider such new ideas.

In the bigger picture, you know that many have become resigned to the idea that in the name of global economic interdependence, we have no choice in the matter our oil addiction. Indeed, they might argue that our children are destined to have their economic fate tied to the reliability of unstable regimes and ideologies.

I am not a believer that this great nation's fate must be bound to the present energy paradigm of petroleum's diminishing returns, and I am grateful that America's great energy pioneers were not stuck on the present either; however compelling the status quo may seem.

Franklin and Edison and Einstein and Oppenheimer never accepted that the status quo, which served them well in their lifetimes, was the only course for the future; and thankfully neither do the pioneers in this room. And that is why I believe, knowing many of you as I do, that more than all the government plans and federal contracting, your creativity and agility matter.

The President and Secretary Bodman are challenging you and me and the entire nation, in the great tradition of bringing America together around a common cause, to exercise your professional experience for this national purpose; and to dedicate yourselves to continuous pursuit of economic viability of a Hydrogen Economy that will displace our dependencies and addictions with a new era of economic growth, international security; environmental health; and personal freedom.

Our obligation to you is to be committed, candid, and credible public servants; to work with you openly in the face of the practical realities, great technological and economic challenges that, in fact confront us.

We seek to be catalytic, iterative, and relevant to your efforts and bring the best of public-private partnerships and cooperation to the fore.

We will not in the next 32 weeks, or 32 months remaining in this administration, be able to fully unwind more than 35 years of growing dependency and oil addiction; But we will work, with urgency, as never before, and exert federal leadership in this collaboration with you, so that my children and yours may say:

At the dawn of the third American Century, in the wake of greatest attack our nation has ever suffered at home; people of all professions, people of all parties, and people of goodwill came together in a determined way, inspired to dream that which never was; and then worked relentlessly to bring it into being.

On behalf of Secretary Bodman and a President who advocates your dreams, and a nation that awaits your results; thank you for who you are, what you do, and what you will do strengthen America and better our world.

Good luck in your meetings.