A rift has opened between the Department of Energy and Congress as Washington players place their bets on alternative fuel sources for automobiles. Energy Secretary Chu wants to cut programs that fund hydrogen fuel cell research and says funding could be better used to improve current combustion and plug-in technologies. Some members of Congress argue cutting such funding is short-sighted and a job killer.
But what doesn’t seem debatable is the fact that hydrogen fuel cell vehicles will have a hard time hitting American highways without help from the government.
In a March 2009 RFF Weekly Policy Commentary, Joan Odgen of the University of California, Davis and Edward S. Rubin of Carnegie Mellon University, don’t sugarcoat the challenges that lie between the present and a future of hydrogen fuel cell automobiles. In their commentary the authors, both contributors to a 2008 National Research Council Report—Transitions to Alternative Transportation Technologies--A Focus on Hydrogen, note that fuel cell technologies are far from ready for commercial use:
Any significant market penetration of hydrogen vehicles in the next decade or so will require substantial, sustained, and coordinated public support, according to the NRC report. First, there must be continued support for research and development (R&D), amounting to some $16 billion through 2023. About a third of this would be government funding of basic and applied research, with the remaining funds from the private sector, similar to current public-private spending for hydrogen and fuel cell R&D, which totals about $1 billion per year.
Second—and far more challenging—is the need for government support of fuel cell vehicle production during the transition period when hydrogen cars cost more than gasoline counterparts. Historical experience shows that mass production of new vehicles is essential for lowering unit production costs, but manufacturers will not mass produce a new vehicle unless they ultimately expect to profit. This would require an estimated $40 billion in government support for incremental vehicle costs (for example, through vehicle purchase subsidies) until FCVs become competitive around 2023.
Read Odgen and Rubin’s, “The Outlook for Hydrogen Cars.”
