Eco Soul, Inc.

National Fuel Cell Education Program Pilot Project Spring 2002 Santa Barbara, California

Prepared, Co-Authored, and Edited by: Jim Dalton, MBA, MESM President: Eco Soul, Inc.

Executive Summary Introduction In spring 2002, Eco Soul, Inc. initiated its National Fuel Cell Education Program (NFCEP) Pilot Project. An instructor, Jim Dalton, at UCSB worked with twelve undergraduate students facilitating a hydrogen education outreach effort. A factual onehour presentation establishing the role hydrogen can play as an appropriate renewable technology was given to four hundred plus students. The twelve undergraduate students who facilitated these presentations gained, as a result of their participation, the experience to replicate this outreach effort independently. The Eco Soul, Inc. Hydrogen Fuel Cell Demonstration Kit was used to demonstrate PEM electrolysis and to get a hands-on experience of the operation of a PEM Fuel Cell. It is the mission of the NFCEP to: proactively advocate a hydrogen and renewable energy future through the mechanism of education and outreach. The NFCEPs work will expedite the public acceptance of hydrogen as an appropriate renewable technology using PEM electrolysis, resulting in a more rapid cultural adaptation and transition to a hydrogen economy. The National Fuel Cell Education Program (NFCEP) The NFCEP was created as an educational outreach effort of Eco Soul, Inc. in 1999. Eco Soul, Inc. has been a California based not- for-profit corporation for over ten years. Environmental education and the establishment of demonstration projects to complement our education efforts have been our focus for much of our existence. Currently, facilitating the rapid switch to a Hydrogen based global economy is our goal.

Effectiveness of the NFCEP Presentation The development of a one-hour presentation to complement the Eco Soul, Inc. Fuel Cell Demonstration Kit (Kit) allows for a quick and effective learning experience. The Kit allows an individual to realize very quickly the fundamental molecular process operating within a fuel cell. The hands-on nature of the Kit, plus its durability and simplicity make it an ideal teaching tool. When used in conjunction with a one- hour presentation given in a classroom setting, the synergy of the combination of lecture and lab is demonstrated. This NFCEP pilot project validated the contribution this coupling of lecture and Kit can make to the education of High School students in understanding the coming shift to a Hydrogen economy. Opportunity for Pilot Project The opportunity for this pilot project presented itself spring 2002. An Instructor at UCSB, an enthusiastic group of 12 undergraduates and the loan of 12 Kits from Eco Soul, Inc. combined synergistically to provide an outstanding educational experience. The willingness of several Santa Barbara High School teachers, school administrators, and the interest in the subject matter by the students made for a simple and direct program. The new state and industry public information campaign has created a ready market for the outreach efforts of the NFCEP. Description of Pilot Project There were three components of the NFCEP pilot project. The first was the UCSB undergraduate component. The Honors Section of a class at UCSB, consisting of twelve students, was selected to participate. Each student was required to write a research paper on a unique aspect of the emerging Hydrogen economy. Further, nine of the students

were separated into three groups of three and subsequently went to local High School classes with the Instructor and acted as assistants for the hands on phase of the presentation, facilitating the understanding of the direct experience gained from the manipulation of the Kit. The remaining three students acted as editors for the integration of the individual papers into the document following this summary. The second component was the High School presentations. The basic format was as follows: A fifteen minute lecture, a five minute videotape, fifteen minutes of hands-on operation of the NFCEP Kit, and fifteen minutes remaining for questions and answers. This format was followed for each of the fifteen High School presentations. The third and final component of the NFCEP pilot project was a short presentation in an undergraduate class with an enrollment of 248 students at UCSB. The results of each of these aspects of the project exceeded the expectations of Eco Soul, Inc. Results and Conclusions The NFCEP pilot project was a clear success and far exceeded the original goals. The active engagement of the honors students, the teachers contacted, the administrators of the schools, and the students educated combined to create a beneficial experience for all those participating. The participants now possess an enriched understanding of the benefits of a Hydrogen based economy, many of the obstacles to its realization, and the necessity of overcoming those obstacles. It is the position of Eco Soul, Inc. that this program should be expanded to include as many students as possible. In conc lusion, an educated population will more rapidly adopt this inevitable shift to a Hydrogen economy.

Table of Contents Executive Summary .......................................................................................................... 2 Introduction.................................................................................................................... 2 The National Fuel Cell Education Program T M (NFCEP TM) ......................................... 2 Effectiveness of the NFCEP Presentation...................................................................... 3 Opportunity for Pilot Project.......................................................................................... 3 Description of Pilot Project............................................................................................ 3 Results and Conclusions ................................................................................................. 4 Paper Introduction and Acknowledgments .................................................................... 7 Pilot Project Presentation................................................................................................. 8 Objective ........................................................................................................................ 8 Presentation Materials .................................................................................................... 9 Procedure...................................................................................................................... 10 Results .......................................................................................................................... 12 Hydrogen Solutions ......................................................................................................... 13 Introduction.................................................................................................................. 13 Current Challenges ....................................................................................................... 13 Fuel Cell Types ............................................................................................................ 14 Energy Efficiency and Distribution.............................................................................. 15 Market Strategies.......................................................................................................... 16 Conclusion.................................................................................................................... 19 Petroleum and Pollution................................................................................................. 21 Introduction.................................................................................................................. 21 Oil Spills and Pipeline Links........................................................................................ 22 Atmospheric Pollution.................................................................................................. 23 Conclusion.................................................................................................................... 26 Globalization and the Emerging Hydrogen Economy................................................. 27 Introduction.................................................................................................................. 27 Hydrogen Use in Iceland .............................................................................................. 27 Hydrogen Use in Europe.............................................................................................. 31 Hydrogen Use in Developing Countries ...................................................................... 32 Hydrogen Use in the United States .............................................................................. 33 Conclusion.................................................................................................................... 34 State Incentives: Hydrogen Fuel Cells and Zero Emission Vehicles.......................... 35 Introduction.................................................................................................................. 35 Hydrogen Fuel Cell Vehicles ....................................................................................... 35 National and State Requirements for the Institution of ZEVs ..................................... 36 Auto Manufacturer Reactions to Government Requirements...................................... 37 Government Incentive Programs.................................................................................. 37 The FreedomCAR Program ......................................................................................... 39 ZEVs and LEVs Currently in Development ................................................................ 39 Conclusion: The Future of Hydrogen Fuel Cell Vehicles............................................ 41 Economic Ramifications of a Hydrogen Economy: The Caspian Sea Region .......... 42 Introduction.................................................................................................................. 42 The Necessity of Development .................................................................................... 43

Obstacles to Oil Development and Export ................................................................... 44 Development of a Post-Oil Economy........................................................................... 48 Conclusion.................................................................................................................... 49 Hydrogen: Infrastructure Needs ................................................................................... 51 Introduction.................................................................................................................. 51 Hydrogen Production ................................................................................................... 51 Hydrogen Storage ......................................................................................................... 53 Hydrogen Transportation ............................................................................................. 55 Hydrogen Distribution.................................................................................................. 56 A Business Example: Shell Hydrogen Inc. ................................................................... 60 Introduction.................................................................................................................. 60 Current Projects ............................................................................................................ 61 Technological Innovations ........................................................................................... 64 Fuel Cell Innovations ................................................................................................... 65 Conclusion.................................................................................................................... 66 Energy Security and the Hydrogen Economy .............................................................. 67 Introduction.................................................................................................................. 67 Petroleum Risks............................................................................................................ 67 Nuclear Risks ............................................................................................................... 70 Hydrogen: The Solution............................................................................................... 71 Conclusion.................................................................................................................... 72 Hydrogen: Challenges to Implementation.................................................................... 74 Introduction.................................................................................................................. 74 Technological Issues .................................................................................................... 74 Economic Issues ........................................................................................................... 76 Political Issues .............................................................................................................. 76 Environmental Issues ................................................................................................... 78 Social Issues ................................................................................................................. 79 Conclusion.................................................................................................................... 81 Works Cited..................................................................................................................... 82

Paper Introduction and Acknowledgments Eco Soul, Inc. would like to thank those students whos participation made this project such an overwhelming success. Their enthusiasm, effort, and encouragement are very much appreciated. A special thanks to R. Wynne for her work in coordinating the school presentations and also to my many colleagues who assisted in this project. The following paper is a combination of their work and a good introduction to many of the issues that must be addressed to facilitate the transition to a Hydrogen based economy. This paper is a review of the primary literature and as such is an excellent example of what is available for the interested student if directed to research this topic. Eco Soul, Inc. encourages other Instructors to replicate this National Fuel Cell Education Program effort and is willing to offer assistance or create similar programs for other interested parties.

Authors: J. Dalton, D. Atkins, C. Baleix, B. Buckman, T. Bulich, B. Gahan, B. Gonzales, K. Poole, L. Quick, T. Simson, N. Verner, J. Wilson, R. Wynne

Pilot Project Presentation Objective The goal of the National Fuel Cell Education Program (NFCEP) pilot project was to introduce Santa Barbara County High School students to the operation of hydrogen fuel cells and their potential applications. Considering that these 14 to 18 year olds will have more buying power than any generation before them, we know that they will be the ones aggressively purchasing cars, homes, and other energy using products in the future. It is important that this generation be educated on the reality of hydrogen fuel, its ease and availability, as well as the repercussions to the environment if this eco- friendly alternative is not implemented soon. Although fuel cells have been around since 1839, most people dont think of them as a viable energy option. Some of the reasons for the lag of implementation are politics, costs, and the lack of public awareness. The NFCEP pilot projects objective is to educate the local High School students on the principles, commercial potential, performance characteristics, reliability, durability, low cost, and environmental benefits of hydrogen fuel. Additionally, the presentation inc luded discussion of the potential for better national security utilizing alternative fuels, as opposed to the dependence on foreign oil and the hazards of nuclear power plants such as leaks, waste and terrorist attacks. It is our thesis that as the public becomes more aware of the power and potential of hydrogen fuel cells, the demand for them will increase and they will be integrated quickly into mainstream society. While there is much work that needs to be done to optimize the fuel cell system, hydrogen fuel cell vehicles are already on the road. Commuters living in Chicago and Vancouver ride on fuel cell buses and in London

passengers ride in fuel cell taxis (Thomas, 3). Every major automobile manufacturer in the world is currently working on the development of fuel cell vehicles. The fuel cell is an electrochemical energy conversion device. It is two to three times more efficient than an internal combustion engine in converting fuel to power (Thomas, 4). A fuel cell produces electricity, water, and heat using fuel and oxygen in the air. Water is the only emission when hydrogen is the fuel. The potential of fuel cells to provide near zero emissions has been a significant force in the development of the technology over the past 30 years. Polymer electrolyte membrane or proton exchange membrane (PEM) fuel cells are well suited to transportation applications because they provide a continuous electrical energy supply from fuel at high levels of efficiency and power density. As there are more than two hundred million vehicles on the road in the US alone, it is important that we aggressively seek methods to decrease our dependence on fossil fuel and become more environmentally friendly. Presentation Materials 10 Eco Soul, Inc. Fuel Cell Demonstration Kits (Contents: solar panel, rechargeable fuel cell (RFC), battery pack, electric motor) Videotape (5 minutes in length) 1 lecturer 3 undergraduate students

Procedure By contacting each High School in the area we were able to find which teachers and classes would best be suited for our presentation. We were directed to physics and science departments and their respective department chairs. The department chairs were the individuals whom decided to which classes we would present. After several phone calls, voice mails and e- mails, we made contact with the available teachers to explain the NFCEP, what the presentation would entail, and how much time would be needed for each class. Although all of the teachers were very enthusiastic about the education project, there were schedule restrictions due to the year-end State Exams in the public school system. Limited time slots were offered at each school within a two-week period. We accepted whatever time slots were offered at each High School and then, within our group, decided which schools and class times would work for each presenter. As we each had our own school schedules and midterm exams, this was no easy task. We made our team selections based upon availability. To prevent these tight schedule restrictions in the future, we will avoid giving the presentations at the end of the school term. We arranged to meet at a given time before each presentation in order to go over the material, the procedure, and format. We rode together to the campuses checking in either directly with the teacher or with the main office. The following timeline was followed for each presentation: -Fifteen minutes of lecture -Five- minute videotape -Fifteen minutes of individual student work with the Eco Soul, Inc. Fuel Cell Demonstration Kit -Fifteen minutes of student questions

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The presentation began by explaining that hydrogen is the most abundant element in the universe, then followed with a discussion about the production of hydrogen. This process is called electrolysis during which water splits to form hydrogen and oxygen independently. The function of the Unitized Regenerative Eco Soul, Inc. Fuel Cell Demonstration Kit is to split the two elements, re-converge them, and through this process stores and releases energy. It was explained to the students that within the fuel cell there is a polymer electrolyte membrane or proton exchange membrane (PEM). During the process of electrolysis, the hydrogen protons migrate across the membrane while the electrons are unable to pass through. Due to the migration of the hydrogen proton, the associated electrons must travel through an external circuit to the other side of the cell in order to maintain homeostasis within the enclosed chamber. Once charged in this fashion by an external energy source, the natural attraction of hydrogen and oxygen to a lower energy state exploiting the electrons passage through the external circuitry of the chamber, forces the two elements to re-converge, releasing the stored energy. This energy can be used as electrical power to run a car, a power plant or in the circumstance of our demonstration, a small fan. Models of this process were drawn on the blackboard. A five- minute video was shown that discussed the effects of CO2 in the environment and the need for eco-friendly alternatives such as fuel cell cars. At the end of the presentation the students manipulated the Eco Soul, Inc. Fuel Cell Demonstration Kit viewing the electrolysis of water, the production of hydrogen, and the power generated to run the small fan. The length of our presentation was based upon the allotted class time at the High Schools and modified by our lecturer depending on the academic level of the students.

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Results The presentations developed and evolved with each lecture and we were asked to return by every school. There were many requests by the teachers for model fuel cell kits. The project resulted in the following results: 12 undergraduates trained to give a hydrogen presentation using the Eco Soul, Inc. Fuel Cell Demonstration Kit, 4 High School Teachers trained to give a hydrogen presentation using the Eco Soul, Inc. Fuel Cell Demonstration Kit, 400 High School Students educated about the potential Hydrogen Economy, 286 UCSB Undergraduates educated about the potential Hydrogen Economy. But the project results went far beyond these numbers. In just ten weeks a small group of enthusiastic participants were able to educate a substantial percentage of the High School students in Santa Barbara County about the potential benefits of a Hydrogen based economy. The optimism, excitement, and hope for a more peaceful and cleaner world, resulting from this simple introduction to the reality of the benefits from a hydrogen based economy, is beyond measurement. This impact on the next generation exceeds numbers and qua ntification. The hopes and dreams of a better world for those to follow are the foundations of our society.

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Hydrogen Solutions Introduction Hydrogen fuel cells will be the renewable fuel of choice for consumers, whose energy demands are expected to increase. Many individuals anticipate hydrogen fuel cells replacing nonrenewable fuel sources such as coal, oil, natural gas, and nuclear energy (Golob xii). However, the ultimate hydrogen fuel cell challenge will be to measure up to tests that increase consumer confidence relative to consumer energy demands. Therefore, theres an increasing effort for industries, specifically auto manufacturers, to make hydrogen fuel cells available to society. Theres a race for market share to bring us safe and efficient fuels, while customers need the primary reassurance of lower costs. Governmental researchers and top innovators are providing consumers with economic incentives in favor of fuel cells primarily through hydrogen extraction. Therefore, when considering some of the many implicated costs, timing is a critical factor in market development. Current Challenges As evidence of the competitive market, a major challenge for fuel cells is deciding which fuel to use for the production of hydrogen. Fuel competitors are many, they include: gasoline, natural gas, methanol, bio-gas, propane, and sodium borohydride (Truett, Lawton, Eisenstein, Online). For example, Daimler-Chrysler and Ford, both leaders in fuel cell research, prefer methanol (Eisenstein, Online). Because local regulators are unfamiliar with the consequences associated with the use of methanol, some regulators can be very lenient, yet others require extreme measures, adding to the current costs and delays of major companies that cant buy time (Lawton, Online). On

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the contrary, the inverse may also prove true. Fuel type constraints and governmental regulations can also serve as a conditional incentive for faster chemical and technical innovation. On the other hand, unlike Daimler-Chrysler GM prefers petroleum because it offers the advantage of making use of the existing infrastructure and a more gradual transitional approach (Eisenstein, Online). GMs somewhat conservative transitional approach cuts costs by making only one major change to its refueling infrastructure (Truett, Online). According to both scholarly and popular press sources, a consensus exists; it will be best to turn to pure hydrogen as fuel (Truett, Eisenstein, Online). Therefore, the faster researching industries agree on a fuel source for hydrogen extraction, the faster a consolidated infrastructure can be established to meet the expected demand for fuel cells and fuel cell powered vehicles (Eisenstein, Truett, Online). Fuel Cell Types In addition to the choice of fuels for hydrogen extraction, meeting the unique challenge of various fuel cell types has also become part of the commercialization process. Fuel cells differ in their electrolytes (Hairston, Online). For example, phosphoric-acid fuel cells (PAFCs), molten carbonate fuel cells (MCFCs), solid oxide fuel cells (SOFCs), and Polymer Electrolyte Membrane (PEMs) are several of the available choices (Hairston, Online). PEMs are mainly considered in the transportation industry because of the benefits of smaller size, operating temperature, and their lightweight characteristics (Hairston, Online). Most of the U.S. government and R&D subsidies are directed toward cells that are in the earlier stages of development, which would include MCFCs, SOFCs, and PEMs but exclude PAFCs (Hairston, Online). These subsidies provide current short run incentives, that is, a pool of capital in the

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establishment of reliable and cost effective energy supply. However, even though PAFCs operate on fuels such as natural gas, propane, and biogas, they have already been installed in locations such as military bases, hotels, hospitals, sewage-treatment and composting facilities (Hairston, Online). PAFCs widespread market induction also allows them to also compete in the fuel cell race, perhaps offsetting subsidy loss. In short, these varied types of fuel cells also indicate that an increasing supply of fuel cell manufacturing should lead to lower costs, making the quest for fuel efficiency the next critical challenge to fuel cell commercialization. Energy Efficiency and Distribution One of the main challenges for alternative fuel infrastructure is energy efficiency relative to energy loss (Golob 199, Lawton, Online). Energy efficiency is lost when fuel cells have to convert other fuel sources into hydrogen because the reformers used in the process consume some of that energy (Lawton, Online). Energy efficiency is also lost when the fuel is driven across a purifying membrane and when energy is converted from alternating energy to direct current (Lawton, Online). Therefore, increases in energy utilization, that is waste heat recovery becomes an efficiency variable to the affordability claims companies will attempt to market (Lawton, Online). Furthermore, Freedman of Technology Review argues that because utility companies incur the majority of their costs in distributing energy, the majority of the costs of fuels cells will depend on the distribution process, as another factor in calculating efficiency (Freedman, Online). Naturally, reducing costs is critical to any competing industry, especially industries competing for time. Therefore, cost reduction for those consumers who, instead of the power grid for energy supply, favor fuel cells can also be measured

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by costs per kilowatt/hour (Lawton, Online). In conclusion, the incentive to invest and support fuel cells for major industries also depends on the increase of efficiency to ultimately reduce costs and lower prices. Market Strategies Timing becomes critical in the renewable fuel race because rapid advances in technology reduce costs and improve the efficiency of energy conservation devices (Golob X). The urgency of the matter has become a market force since some economists estimated that the United States spends between $21 billion and $125 billion per year to support its oil habit, including the costs of protecting its oil supplies, maintaining its strategic petroleum reserve[s], and living with the risk of oil supply disruptions (Golob Xi, 225, 226). In response to a recent poll taken this spring by Roper Center for public opinion and research, adults were questioned on the topic of the costs and sacrifices related to protecting the environment. As a pressing example of consumer power, they were asked whether they would support reducing the amount of oil the U.S. buys from countries in the Middle East even if it were to cause higher gas prices, and 62% agreed (Protecting the ). Therefore, if consumers are willing to pay more for a stable energy supply now, they also aware and anticipate that paying more now could be equivalent to savings directly associated with increase fuel cell production. The frailty of our current situation is exacerbated by the fact that our dependence on petroleum has resulted in a price inelastic structure (Gallagher, Online). This inelastic demand structure signifies that small increases in price could have adverse effects because demand does not change or respond much to change in prices, restricting to some degree consumer market power. In retrospect after the oil price shocks of the 1970s

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resulted in an industrial development crisis, the U.S. government began its quest for renewable and efficient energy research and development (Golob X). Numerous historic references prove our current energy infrastructure ineffective. Therefore, companies are competing to provide alternative solutions, specifically hydrogen solutions. In other words, providing renewable fuels sources may likely restore lost consumer market power. In providing hydrogen leverage, companies have realized that the opportunity costs are too high to pass up. In the automotive industry for example, companies such as General Motors, BMW, and joint ventures such as Daimler-Chryslers have been engineering with fuels cells, benefiting from large-scale investments (Freedman, Online). Even though the process has been slow, they are being forced to innovate by continual pressure to lower polluting emissions (Freedman, Online). In other words, they have to apply additional efficiency standards to their manufacturing. A major challenge the auto industry faces is found in comparing the fuel efficiency of fuels cells to that of the internal combustion engine which has been retooled for decades to improve performance and efficiency standards and also has a supporting infrastructure (Freedman, Online). However, the prospects for hydrogen fuel cells appear optimistic when companies such as GM make claims that in the long run the entire fuel-cell drive system will prove less expensive than comparable internal combustion powertrains (Eisenstein, Online). As a result, other companies in adjacent industries also have incentives. For example, International Fuel Cells and Ballard have an incentive to compete and bring prices down by introducing fuel cells to the electrical power ge neration market (Freedman). This industry is seen as a less challenger resistant market, and so

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companies have prospects to bring out units for residential and portable application (Freedman). For instance, Ballad is saving on costs by using the same basic fuel cell (PEMs) for both transportation and power plant; thus increasing production in two markets (Hairston). The predicted result of this strategy is greater than mere market take off; its about increasing consumer confidence. In other words, this current strategy has been to get fuel cells introduced and understood by consumers. Consequently, other mass- market manufacturing companies of fuel cells for individual and home appliances can and are following this strategy (Freedman Online). The current market targets those who are willing to pay a price premium or need more utility power than can be obtained from the grid such as Data Centers (Freedman, Lawton, Online). Big cities, Americas power vacuums that have reached their ability to provide more power, can also benefit from the use of fuel cells (Freedman Online). In fact, utility companies can also be benefactors because fuel cells could serve those who live in an area where the distributed generating systems high capital costs would be offset by the reduced energy loss over distribution lines (Lawton Online). Furthermore, in the commercialization of renewable energy, one must consider the particular benefits that offset current costs. For example, production of renewable energy within our country and on actual company sites can make the prices of fuel less dependent, thus less volatile to wars and embargos than conventional fuels (Golob Xii). Price volatility has become a preeminent concern, especially within the U.S. In addition, fossil fuel competitors to fuel cells are only concentrated in few nations, so scarcity of energy resource becomes a major economic factor in understanding price fluctuations in a market that has been conditioned to over consumption since the takeoff of industrial

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capitalism (Golob xii). Consequently, the take off of renewable energy sources and alternative fuels correlates with them being available over much of the Earths surface, and essentially inexhaustible (Golob Xii). In fact, hydrogen is found in 75% of all known matter, a representative case of abundant supply (Freedman, Online). Aside from the abundant supply of hydrogen, a major incentive to fuels cell innovation includes the release of almost no emissions (Freedman Online). With increased popular demand, the possibility of eliminating the need for fossil fuels exists (Freedman, Online). Therefore, alongside major companies, the federal government has been spending $90 million a year on Fuel Cell research (Freedman, Online). Regulators manufacturers and consumers are factoring some of the environmental costs that have been bypassed in the past. In other words, companies are currently responding and taking on some of the responsibilities. For example, if one considers the hidden costs associated with our oil habits, that is the use of fossil and nuclear fuels on the environment, then one would be paying more than reflected in the price of current energy sources (Golob Xii). Therefore, many have begun to realize that the current prices, inclusive of the implicated hidden costs, are also too high. In a market economy, consumers have the last word. Conclusion Because of increasing environmental costs associated with fossil fuels along with the economic instability due to our reliance on petroleum and natural gas, hydrogen is increasingly seen as the solution. Every time costs are involved and considered, competitive forces provide sufficient incentives to reduce external social costs. The environmental costs of Petroleum have placed demands on a market that is consequently

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ready and waiting for the prospective incentives of stability and security. This stability and security to our current global economy is expected to derive from renewable and reliable fuel cells produced in mass quantities.

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Petroleum and Pollution Introduction As we enter the twenty-first century, many ideas once accepted as irrefutable are being brought forward for reevaluation and analysis. While some of these ideas, such as the idea of a non-globalized world, have been antiquated through the rise of such tools as the Internet and an increasing economic interdependency between nations, other old concepts die harder. One such concept is that fossil fuels are the only realistic source of energy, to be replaced only when the supply of them dwindles to nothing. Such a concept has truth in it, but is becoming more and more outdated as time goes on. Some alternatives to fossil fuels, such as wind and solar power, are currently unable to produce the amounts of energy needed to power many areas and are subject to such variables as windless days or clouds and nighttime, while other alternatives, such as hydrogen fuel cells, are not yet cost effective enough to warrant widespread use. However, the time when these and other alternative forms of energy production will be ready for effective use is closer than many in the government and big businesses would have us believe, and beginning a gradual switch from fossil fuels to renewable forms of power now would be beneficial in a number of ways. Though there are many advantages to using alternative forms of energy production, such as a reduction of our dependence on other countries for Petroleum, this paper will focus on the environmental problems caused by the use of fossil fuels. Fossil fuels, such as oil and coal, damage the environment in a number of ways that could be avoided if alternative forms of energy production were in more widespread use.

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Oil Spills and Pipeline Links Many environmental problems can arise when oil is transported from country to country aboard large boats. Oil spills, whether caused by a mechanical error onboard the boat, navigational errors by the crew, or obstacles in the water, cause enormous damage to both the areas in which they occur and the surrounding hundreds of miles. Aquatic life is poisoned or suffocated, beaches are destroyed, and the area can remain tainted by the chemicals for years after the event. An excellent example of the dangers that oil spills pose to the environment is the Exxon-Valdez oil spill at the Prince Williams Sound in Alaska. The spill, which occurred March 24, 1989, is widely considered to this day to be the number one spill worldwide in terms of damage to the environment, though it does not even rank within the top 50 of oil spills in terms of the amount of oil released into the water. The timing of the spill, the remote and spectacular location, the thousands of miles of rugged shoreline, and the abundance of wildlife in the region combined to make it an environmental disaster well beyond the scope of other spills. Approximately 1,300 miles of shoreline were affected, with 200 miles heavily or moderately oiled and 1,100 miles lightly oiled. Exxon claims to have spent $2.1 billion on the cleanup. (www.oilspill.state.ak.us) More recently in Alaska, a single irate hunter was able to bring about a massive environmental disaster with a single shotgun. On October 4, 2001, a bullet punctured a hole in the Trans-Alaska oil pipeline in Livengood, Alaska, and more than 277,000 gallons had spilled by the next day, when it was discovered (Carlton, www.alaskaforum.org). The motivation of the hunter to damage the pipe, which was that the caribou usually found in area of the pipe had migrated elsewhere, is not the concern

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here, but rather the vulnerability of the pipes themselves and the immense ecological damage caused when a pipe is punctured. Because it is virtually impossible to watch and protect hundreds of miles of piping, they are particularly susceptible to attacks by people who want to damage American interests, and represent a weak point in Americas energy framework and defense, if not a potentially devastating blow to the environment. Jet skies, which have been quite popular in America for the last decade or so, also create oil spills of a kind. The 2-stroke engines that power most jet skies run on a mixture of oil and gasoline, one-third of which goes into the water unburned as the Jet Ski is operated. Furthermore, most jet skies burn eight to twelve gallons of gas per hour, and the California Air Resources Board reports a two-hour ride on a 100 horsepower jet ski produces the same amount of air pollution as 139,000 miles driven in a 1998 passenger car, and would dump as much as 2.5 gallons of gas and oil into the water (www.arb.ca.gov). Because of the pollution that jet skies cause, whether it is the chemicals they deposit in the air and water or the noise pollution, they have been banned from many national parks and other portions of nature set aside for preservation. Atmospheric Pollution The transportation of fossil fuels has its risks to the environment, but these are dependent upon chance. Use of fossil fuels, however, undeniably damages the environment whenever it occurs. Global warming is the most serious problem caused by atmospheric pollution, since the changing of the earths climate can have repercussions ranging from agricultural problems to the rising of the oceans overall level. Energy from the sun drives the earths weather and climate, and heats the earths surface. The earth in turn radiates this energy, or heat, back out into space. Atmospheric greenhouse gases,

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such as water vapor and carbon dioxide, trap some of this outgoing energy, retaining heat somewhat like the glass panels of a greenhouse. Without these greenhouse gases, which are produced naturally as well as by man, the earths temperature would be too cold to sustain the life it presently does. (www.epa.gov/globalwarming). The problem is that when massive amounts of greenhouse gases are put into the atmosphere, they trap the earths releasing heat and retain it. Since its creation in 1998 by the Meteorological Organization and the UN Environment Programme, the Intergovernmental Panel on Climate Change (IPCC) has established itself as the most authoritative source of information on global warming. One clear finding that the IPCC has determined is that carbon dioxide, which is released into the atmosphere from the burning of fossil fuels, is the single most important greenhouse gas in contributing to the warming of the Earths surface (www.ipcc.ch). This is an important statement, and findings such as this led to the Kyoto Treaty, an agreement between countries to limit the amount of carbon dioxide they release into the atmosphere. Although 144 countries signed the treaty, the United States declined. The US cooperation in the treaty would have been momentous, since it alone produces about 1/5 of the worlds carbon dioxide emissions (Rabbe, www.commondreams.org). The IPCC also found an increasing body of observations (that) gives a collective picture of a warming world and other changes in the climate system, including widespread decreases in snow cover and ice extent and a rise in sea level of 0.1-0.2 meters during the twentieth century. Based on measurements in the Northern Hemisphere, the average global surface temperature rose more during the twentieth century than during any other century in the last 1,000 years. (Dunn, Flavin, 180).

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In the United States, approximately 6.6 tons of greenhouse gases are emitted per person every year. And emissions per person have increased by about 3% between 1990 and 1997. The majority of these emissions, 82%, are from burning fossil fuels to generate electricity and power automobiles, and these emissions are steadily increasing. For example, the emissions from cars and light trucks rose by 13.9% between 1990 and 1998, and continue to increase (www.icta.org). The remaining emissions consist of methane from landfill waste, raising livestock (cows are natural producers of methane), natural gas pipelines, and coal, as well as from industrial chemicals and other sources (unstats.un.org). The repercussions of the gradual warming of the earth are numerous. As the heat increases, the evaporation of water accelerates, leading to storms that are more frequent and severe. The heating of the earths surface also affects the growth of food, damaging crops and usable soil, and melts the ice found in the Arctic and elsewhere, which causes the level of the ocean to rise. All of the consequences of global warming can be and are harmful to human, plant, and animal life. Another environmental problem caused by the use of fossil fuels is acid deposition. Acid deposition, better known as acid rain, is caused by emissions of sulphur dioxide and nitrogen oxides, which accumulate in the atmosphere, where they are converted into secondary pollutants such as nitric acid and sulfuric acid, both of which, dissolve easily in water. These secondary pollutants can travel long distances in the form of acidic precipitation, and the acid precipitation, whether rain, fog, or snow, can cause harm to the area they affect (www.epa.gov). Crops and aquatic life like plankton can be damaged or killed by exposure to too much acidic precipitation, and animals can be

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harmed by the changes in the ecosystem and food chain acid deposition causes. It is estimated that acid rain causes $197 million in damage to commercial forests in Canada each year (www.iclei.org). People can be harmed by acidic precipitation as well, for it has been shown to increase the levels of toxic metals such as aluminum, copper, and mercury in drinking water supplies by causing these metals to leech into water supplies. Conclusion As can be seen above, the dependence on fossil fuels for the production of power carries with it many negative repercussions. The damage to life on earth caused by oil spills, global warming, and acid rain is substantial, but complete servility to countries that own the deposits of fossil fuels is also not good business. Recently there was concern that Saudi Arabia would use oil as a weapon of economic warfare against the United States because of Americas support of Israel. Though such an action would undeniably damage Saudi Arabias economy, the damage to the United States would also be quite substantial. Decreasing dependence on countries such as Saudi Arabia and Iraq for oil would increase the amount of political leverage that the United States has at its disposal, and can be brought about by producing more power through alternative forms of production. In decades past, coal was the primary fossil fuel used for the production of energy. Before the supply of coal expired, however, the United States had enough good sense to switch to oil as a primary source of power. Similarly, it would be good sense if the United States began a gradual switch to renewable power sources and hydrogen fuel cells before the supply of fossil fuels are totally consumed, for both the political and environmental benefits that such a switch would bring into existence.

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Globalization and the Emerging Hydrogen Economy Introduction Companies and governments worldwide are utilizing the hydrogen fuel cell and hydrogen energy to solve problems ranging from air pollution to energy independence. No matter what the reasoning for the switch from carbon-based energy to hydrogen energy, the results can be used for inspiration and innovation in the United States. From Iceland and Germany, to Mexico and Brazil, countries are using hydrogen energy to fuel their cars, and their economies. Hydrogen Use in Iceland Iceland is influenced by three major global trends, that Seth Dunn, a research associate at the Worldwatch Institute, believes are developing in the world in his article Iceland Sees the Futurein Hydrogen. The fact that the future of oil is uncertain greatly affects Iceland because it is extremely isolated, with very few natural resources: With no fossil fuel resources of its own, the country relies on imported oil to power all its cars, buses and fishing trawlers, which provide 70% of its income (Hirsch, 1). This dependence creates the urgent need for energy independence. Dunn also thinks that developments in hydrogen energy are a second trend in the international economy influencing Iceland. Iceland has used these developments, adopting a plan to one day have a hydrogen economy, an economy that relies primarily on renewable resources for energy and on hydrogen as an energy carrier, producing electricity with only water and heat as byproducts (Dunn, 1). The last trend necessitating a hydrogen economy is the accelerating worldwide movement to combat climate change by reducing carbon emissions from fossil fuel burning. Considering Iceland produces more greenhouse gas

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emissions per capita than any other country, there is immense pressure on the country to lower its emissions or face a major disadvantage in the international economy (Hirsch, 1). However, Iceland is not completely energy deficient. The abundance of renewable energy allows it to derive virtually all of its electricity and heating from hydroelectric power and the geo-thermal water reserves (Hirsch, 1). This is an excellent starting point for the creation of an economy based on hydrogen energy because it can use its pollution- free, cheap electricity to split water into its component parts of hydrogen and oxygen through the process of electrolysis, generating hydrogen that can be harnessed as energy (Hirsch, 1). This energy carrier can then be substituted for petroleum, which is now being used. One key element to all of these steps is that they are all performed within Iceland, making it totally energy independent. The major area where energy independence is needed is in its fishing industry. According to Maria Maack, project director of Icelandic New Energy Ltd., Iceland is so reliant on our fisheries, and the fisheries are totally dependent on oil. So we have a chance to be quite independent of this (Hirsch, 1). This will allow Iceland to not be economically bound to oil producing countries, while maintaining an important sector of its economy. Another positive aspect is that the amount of greenhouse gas emissions will be drastically lower. This is pertinent to Icelands economic stability because the increase in CO2 emitted from cars and marine fleets has led to a situation where it is difficult to comply with international regulations of greenhouse gas emission guidelines (Icelandic, 1). Iceland will have to reduce its emissions to comply with these regulations. The question remains of how the hydrogen energy will be integrated into the economy.

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The government of Iceland has teamed up with a three energy companies for the purpose of converting both the public and private transportation sectors, including fishing vessels. Work will also be carried out on the effective production, storage and distribution of hydrogen and hydrogen carriers (DaimlerChrysler, 1). The Icelandic New Energy Ltd. consists of DaimlerChrysler, Norsk Hydro, and the Royal Dutch/Shell Group, who are currently researching, testing, and developing hydrogen technology so that Iceland can one day have the worlds first hydrogen economy (DaimlerChrysler, 1). Icelandic New Energy, Ltd. has set up a plan for how, where, and when the hydrogen energy will be used. The company has created a plan with five phases that began in 1999, and is expected to be completed by 2030-2040. The first phase is the PEM fuel cell bus demonstration project, consisting of three buses in public transportation in Reykjavik (Icelandic, 1). Then, the Gradual replacement of the Reykjavik city bus fleet and possibly other bus fleet by PEM fuel cell buses is the second phase. Thirdly, PEM fuel cell passenger cars will be introduced for private transportation. Next a fuel cell vessel demonstration project will be started with one research vessel with hydrogen or a hydrogen carrier stored on board. The last phase is the gradual replacement of the present fishing fleet by fuel cell powered vessels. Once this is completed, then Iceland will have a hydrogen-based economy. The impact of this groundbreaking experiment will not only have effects in Iceland, but worldwide. The success -- or failure -- of the project, according to Daniel Howes of the Detroit News, could signal whether the world's auto industry can ever wean customers from fossil- fuel based engine technology which has dominated the past century (Howes

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1). Countries all over will be able to use this experiment of switching to a hydrogen economy, if it is a success, as an example of what strategies they can use to follow suit, if it is a success. Iceland has already attracted international attention: Many experts are watching Iceland closely as a planetary laboratory for the anticipated global energy transition from an economy based predominantly on finite fossil fuels to one fueled by virtually unlimited renewable resources and hydrogen, the most abundant element in the universe (Dunn, 1). Even if the outcome is not ideal, or fails all together, the mistakes and faults in Icelands planning and experimenting could be altered and ameliorated to create better policies and technologies. Whether Iceland succeeds or fails, the information will be a valuable tool for governments and businesses in all areas of the globe. This exponent is not without risk of failure. Problems have already shown themselves in Icelands attempted transition. Some of these problems come from the lack of acceptance of the hydrogenpowered cars and other hydrogen energy uses from the citizens of Iceland. A few problems facing Icelandic New Energy Ltd. vary from hydrogen fuel-cell vehicles remain too expensive, to being too susceptible to cold weather and too tricky to refuel (Howes, 1). These flaws are still prominent enough to prevent wide public acceptance anytime soon, even in Iceland (Howes, 1). However, the new research and technology may, in fact, benefit from these problems. By having to overcome these difficulties, Icelandic New Energy Ltd. will have to work harder, creating greater advancements in the evolution of hydrogen energy.

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Hydrogen Use in Europe Iceland is not the only country that is using its renewable resources to generate hydrogen to power hydrogen fuel cells. European countries are harnessing their cheap wind-generated electricity to power fuel cell engines (Brown, 1). This energy can be produced during the night when electricity demand is low and then be used to power fuel cells all through the day (Brown, 1). Countries such as Germany, who already have offshore wind farms, and the United Kingdom, who in April granted 18 offshore wind farm developers leases to build on the sea bed, are on a course to using wind energy to power fuel cells. Like Iceland, the shores of Europe can provide the countries with large amounts of renewable energy: European seas present a huge resource for indigenous, emissions free electricity generation (Winds, 1). Another similarity between Europe and Iceland is that both are vulnerable to global problems. Issues such as the security of energy supplies and tackling climate change are major influences on the need for cleaner energy independence (Winds, 1). One plan for using hydrogen energy is being applied throughout Europe. Although not all of Europe can or will use wind energy to power fuel cells, nine European cities are giving fuel cells a chance (First, 1). Amsterdam, Barcelona, Hamburg, London, Luxembourg, Porto, Stockholm, Stuttgart, and Reykjavik are the cities that have ordered a total of 30 hydrogen fuel cell powered buses for practical trials in passenger service (First,1). Information will be gathered about the workings of hydrogen infrastructures, in order to develop the use of hydrogen energy and fuel cells, especially hydrogen fuel cell powered buses. The use of fuel cells and cleaner energy is not restricted to developed Western countries in Europe.

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Hydrogen Use in Developing Countries Fuel cell use has gained popularity in developing, highly populated cities worldwide. Large, urban centers suffering from extremely high air pollution are prime candidates for this clean alternative. In October of 2001 six of the world's smoggiest cities are to benefit from the introduction of fuel-cell powered buses. The five- year, $60 million program announced by the Global Environment Facility will provide 46 buses powered by fuel cells for Mexico City, Sao Paulo, Cairo, New Delhi, Shanghai, and Beijing. (Cleaner, 1) by representatives from both donor and recipient countries, World Bank and U.S. Treasury officials and representatives This program has been negotiated, planned, and approved from various foreign affairs ministries (United, 1). The Global Environmental Facility is the worlds largest multilateral aid agency, providing incremental resources to eligible countries in four areas: biodiversity, climate change, international waters, and phase out of substances that deplete the ozone layer (United, 1). International attention is drawn to these cities because the emission of greenhouse gases, which is extremely high in these areas, is a global concern. The concern for lowering global carbon dioxide emissions brings together developing mega-cities and international organizations like the Global Environment Facility who said the buses would help satisfy the demand for urban transportation while cleaning the air by reducing emissions of greenhouse gases (Cleaner, 1). Both the developing countries and international concerns are being addressed because bringing fuel-cell buses to these cities . . . will hopefully spur the development of fuel-cell industries while . . . improving local air quality, according to

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the acting executive coordinator of the United Nations Development Program and Global Environmental Facility (Cleaner, 1). The positive effects from switching to these clean buses are anticipated by the United Nations Development Program whose studies indicate that if all diesel buses in developing countries were replaced by 2020 with fuelcell buses operating on hydrogen produced from natural gas, 440 million tons of carbon dioxide emissions could be cut each year. Additionally, up to 40 percent of dangerous airborne particulate matter would be eliminated (Cleaner, 1). This possibility is enough encouragement to inspire the transferring of new technology, which is considered more challenging than the transfer of established technologies (Cleaner, 1). Studies indicate that greenhouse gas stabilization can be achieved only through early investments in new technologies, according to Richard Hosier, the United Nations Development Program/Global environmental Facilitys principle technical adviser on climate change (United, 1). Hosier believes that the risks are potentially large. But studies indicate that greenhouse gas stabilization can be achieved only through early investments in new technologies because the returns are potentially larger (United, 1). The possibility of massive greenhouse gas emissions and better air quality are obviously enough to inspire international approval of a possibly risky program. Are the prospects large enough to inspire the United States to adopt the new technologies in hydrogen energy? Hydrogen Use in the United States The United States has already adopted a program to test the uses of hydrogen fuel cells. The Fuel Cell Transit Bus Program, sponsored by the Federal Transit Administration and the U.S. Department of Energy has deployed three 30- foot test bed

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fuel cell buses in Chicago (Fuel, 1). These buses that are currently part of Chicagos public fleet are zero-emission buses, powered by fuel cells (Ghazi, 1). If research comes back positive, then perhaps the United States will begin to consider switching to a hydrogen economy. Iceland could possibly be inspiration for such a process. The incentives in the United States are similar to those in other countries. Needing to reduce carbon emissions, as well as energy independence are important issues for the entire world. A specific example of why fuel cells would be beneficial, and perhaps necessary is in California. Californias clean-air laws, and its requirements that at least 10 per cent of new vehicles sold in the state must achieve zero emissions from 2003, have had a major impact within the U.S. and in the world because it pushed the worlds car manufacturers into intensifying development of cleaner engine technologies (Ghazi 2). Companies like Ford, DaimlerChrysler, Volkswagon AG, and Honda Motor Co., along with oil companies have come together with California regulators and created the California Fuel Cell Partnership, which will develop fuel-cell vehicles for the mass market (Icelandic 1). This cooperation is a sign that the world is coming together, learning, and helping one another in the goal of maintaining a sustainable world. Conclusion The future of hydrogen fuel cells in the international economy is promising and an innovative program for uniting developed, as well as developing nations worldwide. Countries like Iceland that are committed to exploring the possibilities a hydrogen economy, along with developing countries like Mexico are all contributing to the development and integration of a global hydrogen-based economy.

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State Incentives: Hydrogen Fuel Cells and Zero Emission Vehicles Introduction The need to switch to zero-emission vehicles is growing everyday, as more and more pollutants and greenhouse gases, emitted from our cars and buses, fill the air. According to Philip Quinn for The Financial Post, the auto race of a lifetime is under way (Quinn, 4), and a race to find and create the most popular alternative fuel vehicles of the future. Hydrogen Fuel Cell (HFC) technology is leading the race and is now being used to power everyday vehicles. The catalytic reaction, which occurs inside hydrogen fuel cells, produces electricity that can be used to power cars, buses and has even been powering space shuttles for years. HFC vehicles run much like the electric cars already on the market, except that the y produce the electricity to run the car from a reaction within a fuel cell and do not need to use batteries. Hydrogen Fuel Cell Vehicles Hydrogen fuel cell vehicles are classified as zero-emission vehicles (ZEVs) because they use only oxygen (from the air) and hydrogen fuel to run, producing nothing but pure water vapor as an emission. Hybrid and other low-emission cars available today are a step in the right direction, but where we're heading for in the long run is zero emissions, not low emissions" (Ring, online). Hydrogen fuel cell cars may be the answer for the future, in meeting ZEV requirements and promoting greener energy. Furthermore HFC vehicles provide a solution to other problems, including the worlds current oil dependency, as Dr. Roger E. Billings points out: The fuel cellis the best technology available today that offers promise of a solution (Billings, online). According to Billings, hydrogen fueled vehicles can help us to escape oil dependency and pollution

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problems. The promise of HFC vehicles and their increasing demand has caused nearly all of the major automotive manufacturers [to develop] fuel cell vehicles for introduction sometime in the next decade (U.S. Dept. of Energy, online). Without an increase in investment, most experts predict that fuel cell cars will not be ready for the mass market until 2010. (Garsten, online) National and State Requirements for the Institution of ZEVs In his discussion of the race to cleaner cars, Philip Quinn also points put that in charge of the race are officials from the California Air Resources Board (CARB) setting a timetable for zero emission vehicles (Quinn, 4). The CARB has been committed to cleaning up vehicle emissions since at least 1990 and says that [z]ero emission vehicles (ZEVs) and near-zero emission vehicles are a key element of California's plan for attaining health based air quality standards (CARB, online). On January 25th of last year, CARB upheld its decision to mandate that10 percent of the one million cars and light-weight trucks sold in California every year be zero-emission or near zero-emission vehicles by 2003 (Murray). CARB also mandated that of the 10 percent, 2 percent must be electric vehicles, and the other 8 percent can be hybrids, fuel cell and very clean gasoline cars (Quinn). The 10 percent mandate will increase every few years, reaching 16 percent by 2018. (ARB Fact Sheet, online). CARBs regulations are sparking other states to adopt similar standards for their new car sales. New York is mandating that 10 percent of the vehicles sold there be ZEVs by 2005 (press release 1/04/02, online). Maine, Massachusetts and Vermont have also adopted the California standards (MDEP, online). However, the federal standards are more lenient compared to the California Standard. The National Low Emission Vehicle

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program, which began in 1999, uses the California standards, but allows current pollution levels for SUVs and pickup trucks to remain unchanged and has no quotas for the number of LEVs or ZEVs to be sold each year (UCS, online). Auto Manufacturer Reactions to Government Requirements Although many of the most prominent United States automakers are now developing HFC and other zero-emission vehicles for the American market, their initial reaction to Californias ZEV laws was quite negative. The January 25th CARB decision was considered a huge setback for automakers (Murray, 1) who had been lobbying to get the standards reduced. The auto industry has also been accused of holding back on the technology to produce ZEVs in the interest of profits: Calling the U.S. automakers the "can't do" Big 3, the Sierra Club's director of global warming and energy programs charged they are purposely dragging their feet in bringing fuel-cell vehicles to market (Garsten, online). Car companies are mainly worried about the cost of further development and production of electric vehicles, which has so far failed miserably on the market. According to David Hermance for Toyota, [t]he fact is that pure electric vehicles are hideously expensive and consumers dont want them unless someone else subsidizes them (Murray). In light of the problems with pure electric vehicles, many automakers have been funding the research and development of HFC cars in order to meet the vehic le emission standards for the 2003 model year. Government Incentive Programs The California Air Resources Board also mandated some incentive programs in order to encourage consumers to purchase ZEVs even before the 2003 requirements take

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hold. The CARB has set up a program including $68 million to offset the cost of ZEVs. Grants of up to $9,000 over three years are available for ZEVsprior to 2003 and grants of up to $5,000 would be available after that (CARB Fact Sheet, online). Recently, Georgia had a conflict over their tax code incentive program. Georgias tax code allows for a tax credit of up to $5,000 to anyone who purchases a zero-emission vehicle and a $2,500 credit for a low-emission vehicle (Howard, 4D). Unfortunately for consumers, the state had in mind the high range and high speed electric cars which are available now, such as the electric Toyota Rav 4, cars that generally cost several thousand dollars more than comparable gas vehicles. Not realizing this, several hundred Georgians bought smaller, low speed, golf cart type vehicles, expecting government reimbursement. The Georgia Department of Motor vehicles and Safety decided that these smaller ZEVs could not qualify because of their questionable road safety, and until the issue is resolved they have stopped registration of these vehicles. Now many Georgians are left with a car they cannot register and without the money they were promised (Howard). Other states have recently implemented tax incentives in hopes of increasing the purchase and use of alternative fuel vehicles (AFVs) many of which are classified as ZEVs. In Arizona, an alternative fuels law provides increases from $1,000- to $2,000individual and corporate income tax credits for purchase, lease, or conversion of a dedicated AFV, or alternative fuel delivery system (USDE, online). A separate incentive provided by The Arizona Clean Air Fund Program can provide grants up to $100,000 for publicly accessible alternative fueling sites (USDE, online) which will be increasingly important if people begin to use AFVs regularly. Colorado is providing

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rebates as an incentive to ZEV and AFV purchase, the rebates range from 50% to 80% of the alternative fuel vehicle incremental price on a new vehicle or on the cost of converting a vehicle (USDE, online). With so many states following Californias lead, the purchase of ZEVs should, in the near future, become less expensive and more popular. The FreedomCAR Program The FreedomCAR program (CAR stands for Cooperative Automotive Research) was initiated in last years national energy plan to promote research into hydrogen fuel cell powered vehicles. Freedom CAR is replacement of the 1993 Partnership for a New Generation of Vehicle program that called for increased gas efficiency by 2004. Freedom CAR goes beyond gas, seeing hydrogen as the fuel of the future and putting funds into the development of HFC vehicles and the development of the infrastructure for delivery of hydrogen fuel. The $1.5 billion from the PNGV program has been reallocated to Freedom CAR (PRweb, online). United States Secretary of Energy Spencer Abraham described the goals of the program in January: to promote the development of hydrogen as a primary fuel for cars and trucks, as part of our effort to reduce American dependence on foreign oil (Abraham, online). Although most involved in Freedom CAR maintain that the vehicles in development will not be ready for at least another decade (Chediak, online) [h]owever, some manufacturers claim they will have fuel cell cars available for the public by 2004 (Keese, online). ZEVs and LEVs Currently in Development Honda announced that it will be producing hydrogen fuel cell vehicles by 2003. The FCX-V3 is a pure HFC vehicle and can seat four, it also has a 112 mile range on a

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100 liter tank stored in the trunk, reaches a top speed of 80 mph, and takes only 5 minutes to refuel (RMI, online). With the success of its Insight, Honda is offering a hybrid (gaselectric) version of its popular Civic (RMI, online). Toyota Motor Corporation has also unveiled a fuel cell car, the FCHV-3, which can recapture power during breaking (RMI, online). Daimler Chrysler came out with a fuel cell powered minivan last year, [t]he minivan has a range of 300 miles, the best for a fuel cell vehicle (ODell, 2). In 2000, Ford introduced a prototype of its Focus FCV, a direct hydrogen fuel cell version of its popular Focus (RMI, online). GM saysthat within a few years it will be selling hybrid-electric versions of its full-sized pickup trucks (RMI, online). Although there are many hybrid and electric vehicles, which are ZEVs and LEVs, on the market right now, most HFC vehicles are still in the development and prototype stages. Many people in the vehicle manufacturing business think that fuel cell vehicles may be the technology of the future. However, a lot of work will have to be done to make fuel cell vehicles perform well enough to replace the type of vehicles we use today (Keese, online). Fuel cells may very well power the cars of the future, but there are many kinks to be worked out first. Most fuel cell vehicles cannot run as fast or as far as traditional cars and there is public misconception that hydrogen is unsafe to carry in a car. In recent test of fuel tank safety where cars with pressurized carbon-fiber storage tanks were dropped from heights or crashed at high speeds, the cars generally were demolished while the tanks still held all of their pressure--an effective indicator of tank safety (Walter, online). Despite minor problems, the public can expect to see HFC cars on the market in the next few years.

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Conclusion: The Future of Hydrogen Fuel Cell Vehicles Many experts have predicted that hydrogen fuel cells will power the cars of the future, but not without making some adjustments first: For the consumer to embrace this technology, it has to be affordable and offer the same level of performance, comfort and flexibility as their current vehicles (Quinn, 4). The average car buyer does not want to spend more money for the purchase of a worse vehicle. The fuel cell car does offer a lot of promise though, [w]ith a hydrogen economy, we have a major opportunity for sustainable economic development, which respects the environment and creates the path to non-petroleum and renewable energy sources without constraining economic growth (Wagoner and Burns, online). There has recently been development of the unitized regenerative fuel cell (URFC) for use in vehicles. The regenerative fuel cell recycles hydrogen within the fuel cell, and so can, in theory, produce electric power indefinitely. Some small loss does occur in the regeneration process requiring infrequent recharging. With their long life, low maintenance requirements, and good performance, URFCs hold the promise of someday supplying clean, quiet, efficient energy for many uses (Walter, online). Will URFCs or HFCs be the winner in the future of vehicle technology? That is yet to be seen, but one thing is for sure, as Quinn explains: [they] will determine the winner[c]onsumers and their purchasing power (Quinn, 4). The fuel of the next era and the popularity of hydrogen fuel cell vehicles will be decided by the auto buyer of tomorrow and their preferences. According to Larry Burns of GM: The 20th century was the century of the internal combustion engine. The 21st century will be the century of the fuel cell (Wagoner and Burns, online).

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Economic Ramifications of a Hydrogen Economy: The Caspian Sea Region Introduction Although the Hydrogen fuel cell presents us with myriad possibilities to secure energy independence around the globe in an environmentally friendly manner, there are a variety of conditions that we must consider in marketing the fuel cell in too short a period of time. Oil is largely perceived as big business that will lobby extensively to pursue its own interests despite the environmental impacts and the distribution of wealth created thereby. However, there is a much larger context within which we must consider the oil economy. For ma ny countries, particularly those in the Middle East and, more specifically, in the Caspian region, oil is the sole marketable commodity. Exploitation of oil resources is the only way these countries can develop and integrate them into the global economy. The Caspian nations that resulted from the breakup of the Soviet Union in 1991 Kazakhstan, Azerbaijan, Turkmenistan, Uzbekistan, and Russia that border the Caspian Sea collectively control what has been estimated to be 40-60 billion barrels of oil, both discovered and projected, which they could conceivably bring to market over the course of the next half century (Ruseckas, 13). The development of these resources must be pursued very carefully due to the geographic and geopolitical problems that exist in this region. Moreover, it is imperative that this region exploits its oil resources in order to develop both economically and politically. To do so correctly would lead these states to greater independence and sovereignty. To do so incorrectly could lead them to fall again under the wing of a regional hegemon, most likely Russia, or, in the worst case, the region could suffer a complete economic collapse.

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This paper will proceed in three sections. The first will assess why the Caspian is a desirable region for future oil development for export. The second will analyze the obstacles the region faces in its path to full-scale oil development and export. Finally, the third will assert a position as to what steps should be taken to develop the regions resources in a way that ensures the Caspian nations can compete in a post-oil economy. The Necessity of Development The Caspian Sea region is a desirable location for future export targeted oil development for a variety of reasons. The proven oil reserves in the region are estimated at 25-30 billion barrels (Ruseckas, 15). Considering that much of the offshore supply of oil has not been explored as yet, geologists, Ruseckas asserts, predict that there will ultimately be between 40-60 billion barrels that can be extracted. The Caspian Sea is also relatively close to Asia. As Asia continues down its path of development, its demand for oil will increase exponentially, according to Ms. Nanay, the director of the Petroleum Finance Company (31). Perhaps the most influential reason for turning to the Caspian is that there is a relative dearth of multilateral and US sanctions that would interfere with investors profits. Middle Eastern countries like Saudi Arabia, Kuwait and Iran are all enmeshed in US and multilateral interference. Russia poses similar problems, and Mexicos inclusion in NAFTA ensures US protection of its oil resources. Thus, foreign investors see the Caspian as a relatively free region in which to trust their money (Ibid. 32). Another advantage that this region presents is that of the current infrastructure. Baku has traditionally been an oil-exporting entity, both before and during the Soviet Empire. Much of the oil production dropped off during Soviet rule when they discovered

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oil in Serbia that was easier to extract (Ibid. 31). As such, there is a great deal of infrastructure, albeit somewhat antiquated, currently in place for the extraction and movement of oil. There are still plentiful reserves both on and off shore in Azerbaijan. Both Kazakh and Turkmeni oil present the similar opportunities, although the former is lower quality and the latter less plentiful (Stauffer, 33). Moreover, considering that in the last twenty-five years, according to Dr. Starr, the Caspian is the only region that boasts any amounts of oil deposits comparable to or exceeding those of the North Sea, development of these resources is inevitable. Obstacles to Oil Development and Export There are a variety of problems in the Caspian region that discourage investment. The first of these is the legal status of the Caspian Sea itself. Secondly, Russia persists in its attempts to maintain its stronghold in its near abroad, as Moscow likes to refer to the former Republics. In addition, the US and Israel advocate strongly against the inclusion of Iran in any plans for the development or transportation of oil. Finally, there are many historical geographic considerations and ethno-political conflicts that could undermine attempts to build pipelines and establish trade relations with Western and Asian investors. The countries that surround the Caspian Sea are at odds with each other as its legal status (Croissant, 46-55). Because it is an isolated body of water, Russia and Iran assert that all five countries have an equal claim in the oil found offshore, regardless of the proximity to any individual nation. However, Azerbaijan, Kazakhstan, and Turkmenistan advocate a position that would include economic spheres of influence, wherein each state would have sole exploitation rights of resources within a certain distance from their shores. This precedent was set by the UN Convention on the Law of

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the Sea in 1994, which establishes a 200-kilometer sphere of influence offshore for all states that border oceans. Russia and Iran do not stand to gain nearly as much in this type of arrangement, due to the distribution of known and predicted offshore oil resources. Iran stands with the Russians currently because Azerbaijan has chosen to find alternative export routes to Iran, due to pressure from the US. However, cooperation from Azerbaijan could lead Iran to support a less equitable division of the Sea. Moreover, Russia is likely to accept an arrangement of that type as long as its interests are taken into account. The second problem facing the region is that of Russian policy. There are, according to Dr. Starr, attempts by segments of the former Russian empire to again solidify its imperial hold. As such, Moscow is largely against Caspian oil development because it would increase sovereignty in the former Republics. In addition, after 1930, the southern border of the USSR was completely closed off (Starr, 28). All roads, rail and air routes, and communication lines went through Moscow. Therefore, there is a considerable lack of infrastructure on the borders of Azerbaijan and Turkmenistan that currently affects the export capacities of the Caspian states. Finally, the vast majority of existing pipelines in the area are part of the larger Russian pipeline grid. Therefore, Moscows objective is to include these pipelines in any export plans of the Caspian states, especially due to potential high tariff revenues. Russian pipelines, as we will see, are further undesirable because they are older and have high maintenance costs. But Russia holds the most clout in the region. In fact, according to Croissant, there is mounting evidence that Russian intelligence has been involved in inciting rebellions to

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thwart oil development and attempted assassinations on foreign leaders deemed unfriendly, such as Azerbaijani President Aliyev (Croissant, 43-44). The status of Iran, as regards the United States, also presents a problem in the region. In 1979 the Shah, who was friendly towards the West, lost power to the current Islamic fundamentalist regime. In response, the US enacted an embargo against Iran, which stipulates that there can be no US aid or economic presence in the country. Washingtons policy, therefore, has been to object to oil development projects that include Iran. Pipelines and transit routes through Iran to the Persian Gulf are currently the most cost-effective options for Caspian exports. However, US pressure and lack of US investment in projects involving Iran, have dissuaded the Caspian nations from involving themselves more extensively. The Caspian nations need US investment, but they also need a world hegemon on their side to oppose the Russian threat. However, Iranian transit routes and pipelines to the Mediterranean Sea will ultimately be necessary to transport oil to Asia as demand grows significantly in the coming years (Stauffer, 35). The last problem is that of geographic considerations and current ethno-political conflict in the Caspian. The terrain is largely mountainous, which limits the options for oil development and, especially, transport. Moreover, ethnic strife further inhibits those options the geography permits. There are currently three viable options for pipelines to lead out from Azerbaijan. One crosses southern Russia and thus runs through the volatile Chechen area. Armed conflict there has prevented current pipeline operation since 1999. Another would cross Georgia to the Black Sea. The problem here is that the proposed pipeline would be within 25 kilometers of the Nagorno-Karabakh region, which was the primary site of the conflict between Armenia and Azerbaijan. Although there is a cease-

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fire in place, there is no peace agreement, and the potential for conflict persists (Croissant, 63-72). The final route that has been proposed is one that would go through Georgia to the Black Sea then cut down through Turkey to the Mediterranean port of Ceyhan. This eliminates some of the problems that both of the above options face. First, tankers that pass through the Bosporous Straits in Turkey must be smaller than average because of the width of the passage. Second, it lessens the threat of pipeline damage due to conflict or ideological reactionaries. The largest problem that this option faces is that of its cost. Unlike the other options, there is little infrastructure currently in place to support a pipeline through Georgia and the North of Turkey. Luckily, according to Nanay, capital investment is a minor problem if the anticipated economic returns are sufficient. The question that now faces the Caspian region is how to develop oil resources most effectively given the current challenges. Obviously there are a variety of considerations that they must take into account as they make this decision. First, they must realize that the oil market in the West will not grow nearly as rapidly as that of Asia and Africa. Currently the US imports 10 million barrels per day of the worlds oil for approximately 286 million people. Asia imports less than 2 million barrels per day for over a billion people (Nanay, 30). According to Nanay, the demand will increase rapidly in Asia in the near future. Countries that previously used coal for their energy needs are beginning to turn to oil as they become wealthier (Ibid.). Moreover, as the West becomes more environmentally conscious, many people begin to desire technologies that reflect this mentality. That is, many Westerners want to see better gas mileage in new cars and the inclusion of electric cars and, ultimately, fuel cell cars. It is therefore likely that the

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demand for oil in the West will rise slower than in Asia. The Caspian nations must realize that any development strategies will have to include export to the Asian market. This means that export routes through Iran will be necessary, despite US objections. At this point one could counter that the market in the West over the next twenty years will be sufficient to accommodate Caspian export, especially as the US wishes to wean itself off of Middle East oil. This is in fact the case, but it would not be beneficial for the newly formed nations that wish to democratize and become independent (Starr, 29). These nations cannot succumb to the pressure and wishes of any single world power. As history demonstrates, when the US heavily invests in any particular country, especially with export to the US in mind, there tend to be dire consequences for that country. One only has to point to Chile, Argentina, or any number of African countries to make this argument. Moreover, those nations that export to the US have found an increasing hegemonic presence within the exporting country. Saudi Arabia is the primary oil exporter to the United States (OPEC) and has a significant US military presence. Despite this US presence, Saudi Arabia has not developed into a free democracy with any semblance of equitable distribution of wealth. Russia also wishes to exploit the oil resources in its near abroad. As such, export development oriented heavily towards the Western market could provoke conflict with Russia, which sees itself as having a claim in that area. Development of a Post-Oil Economy The only way that the Caspian nations could develop into independent democracies that are relatively self- reliant is by diversifying export markets. Development options including transportation through Iran to the Mediterranean will be

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necessary for export to Asia. The countries must also pursue options including the US and other Western markets because of the vast amount of resources the West has to offer, especially in the short term. Moreover, the West is very powerful and can make life difficult for countries that do not comply with its wishes. The Caspian nations must also take potential Russian actions into account. Russia has a far superior power base than other states in the region. It has the ability to interfere with political processes and spark conflict if it becomes discontented with its share of the profits and oil exploitation rights. It is inevitable that export to and through Russia will occur, even if it is to a limited extent because of unreliable pipelines and high tariffs. The Caspian nations should be compelled to develop with all of these export options in mind so that the individual nations control their own resources. By creating an environment of competition between several different interests and regions, the countries themselves will have more influence in exactly how they develop. Diversification of oil export markets is not only good for the Caspian region, but also for the world as a whole. As demand rises in Asia and slows in the West, the Caspian nations can develop and the West can begin to implement more environmentally friendly technologies. If the Caspian nations develop with export to the West as their primary objective, grand scale marketing of the fuel cell in the West would devastate Caspian economies. However, if the Caspian nations increasingly export to Asia as it develops, the West can conceivably pursue the fuel cell technology without harming the Caspian region. Conclusion The oil economy will not continue forever. Modest estimates range from 40 to 80 more years before oil resources become depleted. Moreover, with renewable

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technologies on the rise, the oil economy may last for an even shorter period of time. Therefore, the Caspian states must develop to the point where they can compete in a postoil economy. They need to invest especially in future generations. Because oil, and natural gas to a much lesser extent, is the sole competitive advantage in the region, they need to invest in education and communication infrastructure so that over the course of the next twenty to forty years they can develop alternative means of economic welfare. Exploitation and exploration of current and projected oil reserves in the Caspian region is increasingly necessary for its development. In a future where hydrogen is the primary source of energy, the Caspian nations will loose their strategic advantage and fall further and further behind. Considering this future hydrogen economy, these nations must exploit and market oil quickly to take full advantage of current and near future oil demand. In order to be economically stable in the future, these states must use their oil resources not just to develop economically and politically in the short term, but also to speed the transition to renewable energy technologies and the integration of a hydrogen economy.

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Hydrogen: Infrastructure Needs Introduction It is assumed that vehicle- manufacturing companies are already making hydrogen powered cars and what needs to be done is to create an infrastructure for the production, storage, transportation, and distribution of hydrogen. It is important for this infrastructure to produce and supply fuel to run zero-emission vehicles that will be powered by hydrogen fuel cells, and for it to be independent of other nations for energy resources, as well as decentralized power generation to provide further national independence and greater flexibility. Hydrogen Production Hydrogen is an abundant element that is found in every living thing. It can be extracted into pure form by steam reforming raw fossil materials, the partial oxidation of crude oil (Peschka 5), or the electrolysis of water. The electrolysis of water is the most preferred method due to its environmentally friendly characteristics, specifically when done using solar or wind energy. Also, since there are no moving parts, they work virtually trouble-free once they are up and running, and only need to be serviced every couple of years for small adjustments such as the exchange of corroded electrodes (Hoffmann 61). In the form of water, hydrogen is bonded with oxygen quite closely, and unfortunately requires electricity to break up the two molecules, therefore requiring energy to create energy. This has made the production of hydrogen not very appealing in the past. However, advancements in technology of the materials used as well as the design have improved the outlook on hydrogens future. The efficiency of converting electricity into hydrogen has improved in just the last decade from about 70-75%, to

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about 80-90% for present day (Hoffmann 61). Research done by the International Journal of Hydrogen Energy shows that it is possible to reduce the cost of water electrolysis to half that value at room temperature (Bockris). In 1995, an environmental group called Clean Air Now in conjunction with Xerox created a system in which solar panels were used to capture the suns energy. This was converted into electricity that produced hydrogen by electrolyzing water. The hydrogen then went through a series of steps that extracted out excess water and air to achieve a more concentrated and pure hydrogen supply. With each fill up, the trucks that were manufactured to use the hydrogen could travel about 140 miles (Hoffmann 55). However, the electrolyzer that was used in this demonstration project did not have enough capacity to supply all three trucks, and required assistance from a hydrogen production facility to compensate for the deficiency. With the trucks covering about 100 miles a week, it would take about 5-7 days to produce enough hydrogen for the three trucks for about 7-9 days (Hoffmann 55). This example shows the greater system on a small scale that needs to be set up in order to produce enough hydrogen to support a nation of hydrogen vehicles. Further research to improve the efficiency of the creation of hydrogen can make this become a reality. Liquid hydrogen is produced with the compression of the gas and at very low temperatures. It must be cooled down to its boiling point of 20.3K, the temperature at which the gas most efficiently condenses (Peschka 17). This process can be sped up using what is called magnetocaloric refrigeration, or the use of magnets to quicken the cooling process. Since it requires energy to produce and keep cool, it can be an expensive way to use hydrogen.

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Perhaps the best way to use hydrogen to create energy for cars to run is in hydrogen fuel cells. Hydrogen fuel cells are devices that take in hydrogen and oxygen to make electricity. The fuel cell is composed of an anode and a cathode separated into two chambers filled with water by a platinum- covered membrane. The hydrogen enters the system through the anode, and the platinum causes the gas to split into protons and electrons (Internet2). The electron cannot pass through the PEM membrane, and is forced to run around an electrical circuit, causing an electrical current. When oxygen enters the through the cathode, it combines with the electrons and protons creating only water as a byproduct. Unlike direct combustion where the fuel is burnt off at a high rate and energy (in the form of heat) is lost, and with the electrolysis of water where there needs to be energy spent on the splitting of hydrogen and oxygen, all of the fuel in a hydrogen fuel cell system is converted directly into electricity. This creates great efficiency in the production of energy. Hydrogen Storage Past and current methods to store hydrogen include: Underground storage, compressed hydrogen in gaseous form, liquid hydrogen, and metal hydride storage. Improvement of the storage of hydrogen has improved remarkably in the last couple decades, following are some of the pros and cons about storage systems that are, and have been used. Hydrogen was first discovered as a gas in non-compressed state as part of molecular compounds. Large quantities of the gas have been found in underground caverns, depleted natural gas mines, and in hard to reach aquifers. However, these storage methods are not very reliable because the gas can escape relatively easily, it takes

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up a lot of space for a relatively small amount of hydrogen, and is easily mixed with many other gases, making it hard to extrapolate pure hydrogen (Carpetis 255). It was then discovered that you could store hydrogen and other gases more efficiently under compression. However, compressed hydrogen in gaseous form still takes up a good deal of space and still requires a substantial amount of pressure to house it in a storage container. Gaseous hydrogen is inefficient to store in small quantities due to the need for large and sturdy containers that can hold the pressure needed to keep the gas from escaping. Therefore, storage of hydrogen as a gas in large quantities is most widely used method. Development of the storage of liquid hydrogen originated in the USSR in the 1960s, in conjunction with the missile and space systems (Domashenko). Compression tanks such as the one developed by Berlin Gas Works in the late 80s could pressurize hydrogen at 230bar (Carpetis 254), a high pressure, which decreased the amount of space needed to store the gas. Some leaking did occur, resulting in a minor loss of hydrogen. This liquid hydrogen storage is expensive due to the superinsulation, (255) which is thirty or so aluminum foil layers separated by mats, required to keep the liquid from leaking. In 1992, technology had come much further, but still the storage of liquid hydrogen was expensive. The largest tank to store liquid hydrogen was located at NASA. Vacuum insulation, with a combination of a steel outer layer, and a silver inner layer, prevented the excess boiling off of hydrogen. Other than its fairly expensive storage costs, liquid hydrogen is a good form of storage. Tests conducted show that the liquid dissipates very quickly, and that liquid hydrogen would not be worsethan gasoline or

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liquid propane gas when weighing its advantages and disadvantages, (Peschka 225) making it a potentially reliable fuel to use. Another form of hydrogen storage is the use of metal hydrides, such as the storage tank made by Chevron Texaco Ovonic Hydrogen Systems. Their product works by trapping the hydrogen inside a metal alloy in a clean and solid form. The storage is particularly safe because the hydrogen atoms in the solid state can interact and bond to the metal, making it stable due to the variety of temperatures under which it can function. Since the hydrogen is stored in solid form in these hydride storage containers, it is very stable. Due to this remarkable stability, ease of storage and less pressure required to keep it in its solid state, it is cheaper to store (Internet1). According to W. Peschka, compared to electricity, in this form of storage, hydrogen has excellent storage and transport properties, and can be converted efficiently into other forms of secondary energy without any significant formation of noxious products (Peschka, 148). The storage of hydrogen in metal hydrides is relatively expensive due to the metal alloys needed. However, despite that fact, metal hydrides are a good form of hydrogen storage. Both liquid hydrogen and metal hydride storage have the potential for use in the hydrogen infrastructure of the near future. Hydrogen Transportation Transportation methods used to move hydrogen in large quantities are by tanker trucks, train, and cargo ship and through pipelines. Hydrogen is expensive to move as a liquid. It needs to not only be greatly pressurized, but also kept very cold during transport. In 1995, the methods of pressurization that was required to keep hydrogen in liquid state caused it to be easily evaporable and about 2% per day was lost when stored

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in a vehicle tank (Pohl 76). These vehicle tanks also require a special heat insulation material, which raises the cost of transportation. However, if a truck takes three days to transport the hydrogen to its destination, only 6% would be lost. The hydrogen would then be stored in a more efficient holding facility. Also, technology has come a long way, and developers will find ways to decrease the leakage. According to the International Journal of Hydrogen Energy, the TB-45/1.0 is the largest road carrier in the business, and loses less than one percent of its total load per day. Railway is another form of transportation. Cargo ships are a little more efficient, simply due to the larger capacity they have for carrying the liquid. It is an especially good method when transport is needed over long distances of open water or ocean. Transporting hydrogen as a gas through pipelines is the most efficient method. There are already several lines linking plants together in the US. Also, since 1988, there has been a shortening of the availability of methane and question to its reliability in the future. The natural gas industry has expressed interest as using existing pipelines to transport the hydrogen gas. (Domashenko, online) This would save a tremendous amount of work. Hydrogen Distribution Hydrogen gas and liquid is distributed by boat, train and truck, and through pipelines to a central location for people to get their hydrogen. A network that includes all states is necessary to ensure maximum immersion in the getting hydrogen a foothold in the economy. A pipeline in Germany covers the entire Ruhr conurbation and extends as far as Dsseldorf and Cologne (Pohl 75). A large network of pipes like this allow for large quantities of hydrogen to be distributed to many different areas. Hydrogen fueling stations exist in Germany where people who have the BMW 750hi can fill up one of their

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tanks with hydrogen. If liquid hydrogen is being distributed, the station must have a pump that can keep a good seal with the tank of the car to prevent leakage, which is important since the liquid is under high pressure, and a cooling agent to keep the hydrogen in its liquid state. If it is a gas, less pressure and energy directed towards cooling is required. In Los Alamos, CA, there was a system that tested out the distribution of hydrogen with a small group of cars. A total of three stations were set up and tested in these experiments. The vehicles were BMW 735is that were retrofitted with tanks for the hydrogen. It took an average of 4-5 minutes if the car was cool, or closer to 15 minutes to fill the tanks if the vehicle was still hot (Peschka, 223). A hydrogen fueling station was recently created and tested in West Sacramento in a joint effort by Shell, Air Products and Chemicals, Texaco, and Praxair formed into a group called the California Fuel Cell Partnership. The fueling station has the following components: One 4,500 gallon liquid hydrogen storage tank, a vaporizer to convert the liquid hydrogen to gaseous hydrogen, a compressor to raise the hydrogen gas pressure to 6250 psi, hydrogen storage tubes, and two dispenser systems to deliver the gas to vehicles at either 3600 psi or 5000 psi (Partnership, online). Hydrogen is delivered to the facility by tanker truck, the same way that gasoline is currently delivered to gas stations. To fill up, the driver just connects the electrical and computer cable to the vehicle. This ensures that the safety systems are established and functioning properly. The information transferred by this process to the computer, and includes details of the vehicle fuel tank, the vehicle manufacturer and specific conditions set by the manufacturer that must be met to begin fueling, such as confirming the car ignition is off. After that, the driver connects the

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nozzle and fills the vehicle. Efforts like this group that is a collaboration of governmental, corporation, and other interests, have been going through this process, and it is becoming easier and more common to see such things happen. Conclusion In order for a nationwide system to be set up, there are a few factors that are vital to the effectiveness of the infrastructure. One, that the government be involved to require that each state come up with a plan that includes hydrogen distribution facilities, so that the maximum amount of people can have access to hydrogen. There needs to be extensive research into every aspect of effects of hydrogen and hydrogen fuel cells into the economy similar to a report put out by the Hawaii Natural Energy Institute at the University of Hawaii- Manoa and a company called Sentech (Hawaii, Appendix E). They evaluated and researched the feasibility of a hydrogen economy. The energy production and use of hydrogen must be environmentally friendly; in that no harmful byproducts are created, such as using the electrolysis of water, solar power, and the implementation of hydrogen fuel cells. The monitoring over these hydrogen production and distribution facilities needs to be done in part by environmental groups, state and city council, and perhaps local college access for research and development purposes. The creation and distribution of hydrogen is largely deregulated. However, this does create problems. A transference to a hydrogen based economy cuts off our need for gas, coal, and other sources of energy that many people make their living from. The government has even set up task forces to try to establish out the parameters of this problem. One such committee called the Subcommittee on Advanced Energy Technologies and Energy Conservation Research, Development, and Demonstration met

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and discussed societal aspects, barriers, incentives and impacts of hydrogen economy in the future. They concluded that more research and development be conducted, and that the use of solar and other inexhaustible energy sources be implemented (Government, 11). For more on this topic, see sections on problems that will arise from the transference to a hydrogen economy. Although companies have been capitalizing on energy distribution for as long as it has existed, steps need to be taken to prevent the sole creation and distribution of hydrogen by one entity or even just an elite few entities. It needs to be stated and maintained at the start that the hydrogen economy be as deregulated and de-capitalized as possible. As technology permits, the ideal goal is for each family/home to be able to have their own independent source of hydrogen for at least half of their energy uses. The more energy independent the stronger our nation will be. This gives us increased political and economic control, and allows us to have a better standard of living as well.

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A Business Example: Shell Hydrogen Inc. Introduction Over the last decades the worlds ingenuity has sparked a slight reduction in the rate of increase in the production of carbon dioxide and other environmentally hazardous materials. However, simply limiting the production of these harmful substances is not sufficient. It is imperative that a renewable and environmentally safe alternative to petroleum-based fuels is found. With exponential population growth, comes increasing energy demand, it is evident that both renewable energy and a clean environment are essential. Spurred by strong environmental concerns, competitive force and environmental regulations corporations have developed creative new methods for the reduction of harmful greenhouse gases. Shell is one of several businesses working to lay the foundation for the hydrogen-based economy of tomorrow. Shell has implemented several practical projects world wide, all of which are utilizing some form of alternative energy. Shell has a research team currently developing PEM and SOFC fuel cells, gasoline reformers, and pondering storage options for large quantities of hydrogen gas. Shell has a new vision of the future as more efficient hydrogen vehicles are currently being researched. Electricity from the worlds abundant renewable resources such as wind or solar power can be used to transform ordinary water into large volumes of hydrogen. Hydrogen energy offers all of the traditional benefits of energy without the harmful consequences, and can be delivered wherever power is needed. The combination of this hydrogen with oxygen in the atmosphere via a PEM fuel cell converts this hydrogen potential energy back into electrical energy. Operating in your office or cell phone,

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residence or hospital, this groundbreaking technology will revolutionize the distribution of sustainable energy. The twenty first century promises substantial environmental, social, economic and commercial progress over the next few years. Yet in order to appreciate these benefits the world must invest in systems to deliver and use hydrogen that mirror the vast, well established international network of retail gasoline stations we rely on today. (a vision of the future. The official Shell Hydrogen home page. 11June 2002<http://www2.shell.com/home/framework?siteId=hydrogen-en>.) Shell hydrogen is a global business that is working toward a cleaner better tomorrow. Shell has realized and responded to the pressing demand for more efficient fossil fuels as well as alternative renewable energy resources. Shell asserts, We believe in hydrogen as one of the worlds principal energy resources far into the future. Our aims are two fold. In other words, this means that number one goal of Shells hydrogen division is to promote and assist in the creation of fuel refining devices that convert fossil fuels into hydrogen. Secondly, Shell is preparing to serve the demand for hydrogen in any form, ranging from refining fossil fuels, to converting natural gas and water by way of a fuel cell. Current Projects With the head quarters in Amsterdam, the Netherlands, and regional bases in Huston, Hamburg and Tokyo, Shell is nothing short of a global business. Putting thoughts into action Shell hydrogen has a number of practical projects worldwide that are pioneering the latest in super efficient and renewable energy resources. One of these is a new zero emissions Power plant in Norway. This plant is a 250-kilowatt, natural gas fueled electricity generating plant run and operated by Norske Shell. The plant uses a

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solid-Oxide fuel cell developed by the Siemens Westinghouse energy company to convert the Natural gas into Hydrogen. (Hydrogen-based sustainable power for the 21 st century. The official Shell Hydrogen home page. 11June 2002<http://www2.shell.com/home/framework?siteId=hydrogen-en>). Shell Hydrogen has implemented unique recovery technology that allows the carbon dioxide to be stowed away for safe, long-term storage, or even turn it into a commercial commodity. Shell hydrogen is also looking for alternative markets in which carbon dioxide emissions could be used constructively. These include carbon dioxide in the development of algae for fish farms or to incite growth in agricultural greenhouses. Another one of these projects is the Three-year Fuel- Reformer Project in Atsugi Japan. The Primary objective of this plan is to develop a convenient and efficient hydrocarbon fuel reformer proficient enough to produce and disperse hydrogen on the market. (Three-year, forecourt, fuel reformer project-Japan. The Official Shell Hydrogen home page. 11June 2002<http://www2.shell.com/home/framework?siteId=hydrogen-en>). The development team plans to utilize catalytic partial oxidation to split the gasoline and peel of hydrogen atoms. This idea is at the forefront of Shells hydrogen projects. Reforming gasoline is currently the most viable and widely embraced alternative to traditional fossil fuels. In California, Shell Hydrogen is a member of the California Fuel Cell Partnership. The partnership consists of vehicle companies, energy businesses fuel cell distributors and the government. This network of institutions is working to understand how to efficiently create vehicles and fuels that can deliver viable marketable solutions to meet the increase in energy demand. This is especially difficult to achieve in the midst of heightened environmental standards. In order to accomplish this exceptional task the

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people at Shell Hydrogen have opened a one-of-a-kind facility designed to gage the efficiency of hydrogen-fueled vehicles under real life circumstances. It is at this location that the largest group of hydrogen fuel cell cars is amassed. At this facility these prototype hydrogen powered vehicles are serviced by a compressed hydrogen filling station and set free on the highways for further testing. Despite this free testing, the public remains drastically unaware of fuel cells; therefore one other goal of this state of the art facility is to increase public awareness. Lastly, Iceland presents a prime opportunity to learn about the up and coming hydrogen based economy. Because Iceland has a plethora of geothermal and hydropower resources, along with a self contained road transport system it is a perfect candidate for hydrogen powered public transit systems. Shell Hydrogen has begun work on a project that wishes to see the total transition of the public transit system within a few short years. (Shell Hydrogens role. The Official Shell Hydrogen home page. 11, June 2002<http://www2.shell.com/home/framework?siteId=hydrogen-en>). This involves the production of custom-built hydrogen powered vehicles; and will allow the study of these new vehicles under real conditions. The first task to be set in motion is the creation of three fuel cell powered public buses. If these three buses function efficiently the plan is to eventually make the entire public transport system of Iceland hydrogen powered. The final step would ultimately be full assimilation of cars, trucks and shipping into the hydrogen-powered family. Although these projects are making great strides in moving away from the environmentally hazardous fossil fuels, there are still several obstacles that must be recognized and studied before these hydrogen vehicles can be set in motion. In order to

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do this Shell hydrogen has a team of researchers developing technology to overcome these barriers. There are current methods for storing large quantities of hydrogen, yet is hard to determine if the current methods can accommodate the upcoming demand for this resource. Fuel cells and hydrogen power provide an exciting driving experience with swift acceleration and first-rate performance. However coupling this first-class performance with a capable storage unit is another story. Swift acceleration results in equally swift hydrogen consumption and demand. Effectively storing these large quantities of hydrogen is problematic for a number of reasons. The PEM membranes work most efficiently at a temperature of about eighty degrees; on the other hand the metal alloy used to store hydrogen produces an exothermic reaction. This uncertainty concerning the temperature of the storage facilities is a challenging obstacle to overcome. Technological Innovations One of the main focuses of the Shell research team is to make a metal alloy that can deliver all of the necessary benefits in a unit that weights only one hund red kilograms or less. (Continuing progress. Official Shell Hydrogen home page. 11June 2002<http://www2.shell.com/home/framework?siteId=hydrogen-en>). Aside from hydrogen storage development Shell is also working on a joint project with a branch of the United Technologies Corporation. This venture is designed to institute the production, assembly and promotion of a new practical fuel processor intended for the rising fuel cell market. The processors being developed are designed to generate hydrogen from fossil fuels like natural gas and or gasoline. Nonetheless the by products are substantially more environmentally friendly that that of the traditional internal combustion engine. (National Energy Policy, Annual Report, 2001. Washington D.C.:

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Report of the National Energy Policy Development Group, 2001). The main aim of this undertaking is to expedite the availability of cleaner burning gas powered fuel cell automobiles, electricity generation and other energy consuming industries. The possibilities are really endless. Aside from demand for cleaner burning fuel, Shell could also reap immense economic benefits from this fuel cell production. With Shells educated research staff and astute marketing expertise this early adoption of fuel cell production could prove to make them an influential world competitor. In spite of this competitive edge, the main goal of this scheme is to provide a realistic processor for use in the very near future. The uses for this new technology are not relegated only to cars; fuel cells can also be used for buses and mass power generation. In addition to the development of fuel cells Shell is involved in the expansion of prototype gasoline reformers. The Shell project has generated a fifty-kilowatt structure, multi fuel system that can accommodate both mobile and stationary fuel cells. . (Continuing progress. Official Shell Hydrogen home page. 11June 2002<http://www2.shell.com/home/framework?siteId=hydrogen-en>). The real important implication of these reformers is that they provide the means for early introduction of this new hydrogen technology. Fuel Cell Innovations Another development in energy technology concerns (SOFC) Solid Oxide Fuel Cells. These fuel cells operate on a different premise than that of the PEM membranes typical of cars. In practice a solid oxide fuel cell plant would use hundreds of electrochemical hydrogen fuel cell packaged together into a bundle. Individually these electrochemical fuel cells can generate upwards of two hundred watts of power. This

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type of solid oxide fuel cell would be ideal for energy industries that arent mobile. This grade of stationary electrical energy is perfect for the light industry, hospitals or office buildings. Especially since the solid oxide fuel cells are proving capable of administering two hundred and fifty kilowatts of energy. It is estimated that some solid oxide fuel cells can cost-effectively produce up to 10 Megawatts of electricity, at a price and size that rivals conventional generating facilities. (Continuing progress. Official Shell Hydrogen home page. 11June 2002<http://www2.shell.com/home/framework?siteId=hydrogenen>). These large cluster cells can extrapolate hydrogen from natural gas, while releasing only pure carbon dioxide. In addition it may be possible to permanently and safely store these carbon dioxide by products utilizing modern recovery technology also pioneered at Shell hydrogen. Conclusion Shell hydrogen has set the standard for the direction of the rest of the oil industry. Shell hydrogen is pioneering projects and technology that will keep them in stride with the growing demand for non-petroleum energy resources. The progress that theyve made has provided them with a realistic and economically competitive solution to the movement away from oil energy sources. In order to maintain unity and concord between environmental organizations and the oil industry, oil companies must embrace the use of hydrogen as the fuel of the future. Shell hydrogen has shown that this is not only possible but also essential for the future of energy. Perfecting the renewable energy sources that the public will accept will take time, nonetheless shell has illustrated that we can reap the shot term benefits of fuel cells using gasoline reformers and fuel cells to produce hydroge n.

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Energy Security and the Hydrogen Economy Introduction Americans depend on energy such as coal and oil to satisfy their needs to live, just as most do in developed nations across the world. Electricity supplies the energy we need to light our streets, power our computers, and charge our cellular phones. Oil supplies the energy passenger vehicles need so that transportation is made faster and easier. Just as Americans depend on oil and coal as a source of readily available energy, we also depend on nuclear energy for electricity so that the demands of the consumer are met and the security of our nation remains intact. These three main sources of energy (oil, coal, and nuclear power) that secure the demands of the American people and secure our land are efficient in providing the energy we rely on, but they are not the safest and cleanest forms of energy available. The energy we consume has served its purpose and continues to do, but the danger oil and nuclear power poses to people, the environment, and the security of our nation requires us to actively seek out alternatives. Hydrogenbased energy offers a solution to the problem our nation faces. Our national security concerning energy consumption depends on a safe, reliable, efficient, and inexhaus tible form of energy, one that we can identify to be a reality. It is extremely exciting in our modern day and age to be able to identify such a source; Hydrogen. Petroleum Risks One hundred thousand dollars per minute is the figure spent by Americans on the purchase of foreign oil (Fuel Cell Packet p.28). Foreign oil investment plays a key role in Americas international relations abroad and the amount of money spent is measured through epic proportions. Our attachment to foreign oil weakens our national security

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and forces Americans to entrust the security interests of energy in different lands across the globe, spanning from South America to the Middle East. Almost all of the oil supplies we consume are directly used in the transportation sector. Passenger vehicles in the United States consume over 10% of the oil this world produces (Cruz, p.28). Transportation in the U.S. and all over the world depends solely on the production of oil. The facts presented here imply a state of concern in our national security. The billiondollar industry, one that is finite and entirely depended on foreign interests, does not prove to be as strong and sturdy as we would like to believe. The energy from crude oil and fossil fuels will soon be exhausted and our grasp on energy security and national security will be stricken down just as quickly. Fuel produced through hydrogen explores a new platform in fuel production acceptable for the transportation-oil conflict which is unfolding before us. This conflict requires the immediate attention of all nations and is definitely a global conflict. Americans will eventually secure a resolution, and hopefully it will be discovered through a clean, safe, efficient, reliable, and cheaper alternative we already know to exist in hydrogen fuel cells. The sooner America makes the transition from fuel produced through oil to fuel produced through hydrogen, the sooner Americans will live in an economy that is stronger and a world that is cleaner and safer. The introduction of fuel cells into the transportation sector will increase fuel efficiency, decrease foreign oil dependency, and become an important strategy/technology to mitigate climate change (Cruz, p. 28). This transition is predicted to create a stronger national/energy security by nationalizing energy sources in the transportation sector while simultaneously decreasing the amount of money spent on oil production and foreign oil investments.

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In attempts to secure interests in a source of nationally produced energy one may inquire how the deconstruction of foreign interests in oil will be prosperous to the U.S. In an open letter to congress, John D. Bell poses a correlation between energy crises and economic recessions in the United States. Bell addresses congress with his concerns on the price fluctuations of electrical and oil energy markets in the U.S., asking congress to look into fuel cell research in hopes of stabilizing an ever so fragile economy where energy crises can easily ignite the flame of recession. Be ll continues to report that business and consumers suffer the most when unpredicted cycles of energy prices interfere with the economic plans and goals of the businesses whose oil-producing operations depend on predictable values and prices of oil. Volatile energy prices place both US National Security and our economy at great risk (Bell p.1). If oil prices are to blame for the current economic recession (and recessions in the past) it is imperative that our exploration in hydrogen fuel cells be taken very seriously so that our national security remains strong and impenetrable. In recent news regarding the state of energy security in the United States, a single bullet fired from a high power rifle penetrated the Alaskan Pipeline (Carlton, p.1). This pipeline transports thousands of gallons of oil each day from the northern seaboard of Alaska. The leak caused by this single bullet penetrating the pipeline was responsible for $20 million worth of damage. The cost of lost oil, the repair of the pipeline, and cost of the pipeline being shut down proved to be a tremendous hazard to national security and to the security of our oil reserves. This example depicts how vulnerable the U.S. is as our economy suffers so drastically at the hands of an angry hunter in the Alaskan wilderness. Imagine how terrorist strikes against the U.S. may result in an economic and national

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security crisis far more serious than that of a single man with a rifle. The environmental strains experienced through such a mistake are just as serious as strains experienced within our economy. If there were to be an attack on American oil reserves, the threat an oil leak would pose to our land may be a crime against nature that may be irreparable. Nuclear Risks Just as oil poses threats to our economy and environment alike, so do the nuclear power plants across America. Nuclear power plants are responsible for generating 20% of Americas electrical energy each year (www.eia.doe.gov). There are currently 104 nuclear power plants in the United States and each one must be fully licensed to operate by meeting environmental and safety regulations (www.eia.doe.gov). Though these power generators are licensed to operate under safe conditions, they must be maintained and guarded so that terrible, unpredicted malfunctions as well as intentional attacks on these generators will not be a reality. If one of these 104 nuclear power plants were to suffer an attack or serious malfunction, entire cities would suffer the environmental stresses and our nation would suffer the economic upheavals due to price fluctuations and unpredictable market behavior in the energy industry. National security goes hand and hand with the interests of energy security. In order to keep American interests in energy secure, America must acknowledge that nuclear power is not as dependable as we would like to believe. Safe, reliable, and cheaper energy alternatives must be used to secure our future demands in energy and our nation as a whole. It would be a difficult strategic move for America to shut down nuclear power plants across the country due the fact that America is the worlds largest producer of commercial nuclear energy (www.eia.doe.gov). In terms of promoting energy security

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and national security, the transition from nuclear generated energy to hydrogen fuel cells would not be a transition with some difficulties. Such a transition appears to be a reality and with an alternative as safe and efficient as hydrogen based energy, it is an idea that defenders of national security must explore. Hydrogen: The Solution A move in energy production and consumption from oil and nuclear fuels to renewable energy and hydrogen fuel cells would be rewarding in these ways: (1) it would promote a self-sufficient production of national energy (retracting from foreign oil investments); (2) it would strengthen the economic security in the U.S; (3) hydrogen is environment- friendly, emitting only water; and (4) hydrogen is inexhaustible. In understanding how these positive and rewarding features of hydrogen will soon change everything we do from driving a car to switching on a light bulb, Americans will become excited to experience these rewards firsthand. Imagine owning a car that runs on hydrogen fuel produced by water. This car emits no harmful carbon gases into the atmosphere or any smog-producing proponents. The only emission that leaves the tail pipe is water. Fuel cell structures are easy to maintain and will not breakdown easily (Cruz, p. 27). A clean burning, safe, and cheaper alternative to modern transportation will create a new economy free of foreign oil consumption and free of countless harmful consequences oil creates when associated with modern passenger vehicles. The production of fuel cell generators for automobiles will create an industry in the United States that will undoubtedly promote self- reliance as well as a completely new and adequate industry in for American workers.

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The billions of dollars we send to oil producing nations for their crude oil exports will now be invested in the United States, creating a stronger national economy less vulnerable to economic recessions. Incidents such as the recent $20 million cost for the leak of the Alaskan pipeline will cease to exist. Oil will no longer control unpredictable fluctuations within our economy, causing hard working Americans to lose their jobs or even suffer the lack of national investment due to predicted energy crises. Oil production and consumption operates on a global network and the fear of disrupting this network is a concern among many economists. Oil is also a finite source of energy and one day the global economy must face the loss of such a network. The transition to hydrogenproduced fuel is inevitable, to stay internationally competitive we need to invest in early adoption of hydrogen technology. Homeowners can now furnish their homes with solar panels and prototype fuel cells that generate hydrogen energy; living completely off the power-grid while consuming the renewable energy they need to operate their household self-sufficiently. If most homes and businesses operated their electrical needs through fuel cell and solar panel use, the need for nuclear power plants will decrease, creating a safer environment and a stronger national security. People feel safer knowing that their source of energy is within the home and that the energy produced by hydrogen fuel is renewable and inexhaustible. Conclusion Introducing hydrogen fuel to the home and transportation sector of America is the first step in securing our interests as consumers and producers of energy. Hydrogenbased energy does offer a secure and safe energy alternative, one that will advance

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Americas economy and overall national security. It will not be long until countries in Europe and all over the globe will follow our example in producing, clean, renewable, and efficient energy. The threats that nuclear power and crude oil create against our national security demand lawmakers to reconsider our national interests in energy production. Our interests in energy security and national security will never be at rest until we meet a day and age where our dependency on crude oil and nuclear power is considerably less than it is now. Oil reserves will be exhausted sooner than we may realize and nuclear power is too dangerous to secure our economical future. Hydrogen must be recognized as our next source of fuel, and as our path into a safer, cleaner existence with the energy that fuels our daily operations.

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Hydrogen: Challenges to Implementation Introduction The United States energy development has been an evolutionary process beginning with the use of timber for fuel. After timber, people discovered coal and steam, which helped to power the Industrial Revolution. The discovery of petroleum made oil the dominant fuel source and established the oil economy that has paved the way for cheap energy and technological growth in the United States. Recently the more environmentally conscious people have become, the greater the demand for cleaner fuel, which has lead to the development of natural gas. The transition from one source to another has produced cleaner burning fue ls, but overtime these fuels have had a detrimental effect on our environment, and the continued use of these carbon intensive energy resources further threatens to destroy our environment. The development of hydrogen offers an intriguing prospect as an alternative to the oil economy. However, with the world, particularly the United States, so dependent on fossil fuels how would the transition to a hydrogen economy affect the United States? The current oil economy provides jobs and is heavily intertwined in the private market and the government. Yet, the inevitable transition to the hydrogen economy will happen impacting all facets of our society. The faster the United States commits wholly to implementing the hydrogen economy; the sooner the country will minimize the negative effects and realize the benefits. Technological Issues Many people have never heard of hydrogen fuel cells, however NASA has used the technology since the 1960s in space shuttles. Since 1984, the Office of

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Transportation Technologies has been researching the development of fuel cell technology (Fuel Cells 2), but it has not been until recently that fuel cells have become mainstream with many companies and non-profit organizations making prototypes and demonstration kits such as Eco Soul, Inc., Inc. However, fuel cells still are not yet costeffective, inhibiting the implementation of a hydrogen economy. Also, the country lacks the infrastructure to support a hydrogen-based economy (A National Vision of Americas Transition to an Hydrogen Economyto 2030 and Beyond 14). These two problems remain obstacles for the transition, but there are solutions. In order for energy storage mechanisms like the fuel cell to become cheaper, they need to become more massed produced. Current ly, many companies like HydrogenSource have teamed up with multinational companies like Shell Hydrogen to research hydrogen and the cheaper production of fuel cells and other related storage devices because they realize that the energy revolution will become a reality as the new hydrogen technology proves itself successful in the world's competitive marketplaces (Shell Hydrogen Online). The major problem is creating the infrastructure necessary to support a hydrogen economy. However, America has an extensive energy infrastructure that is aging and in need of significant upgrades, overhauls, and replacements over the next several decadesthe technology to convert this infrastructure exists but is not yet cost-effective (A National Vision of Americas Transition to an Hydrogen Economyto 2030 and Beyond 14). While it is not yet cost-effective, the fuel cells are becoming increasingly competitive in the market establishing a need to create a more extensive hydrogen infrastructure. Gradually upgrading and replacing our current energy infrastructure will eventually lower costs allowing hydrogen implementation to happen sooner.

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Economic Issues One facet that will feel the effects of the transition is our economy. The existing coal, oil and natural gas will suffer the most (Dunn, Flavin, 183). Oil companies are a large part of the U.S. economy employing many people, and this switch could cause some unemployment. The transition is necessary now because a gradual change will greatly reduce the economic effects compared to a rapid change in the future. One way to cushion the effects is to reduce or remove the billions of dollars in subsidies our government allocates for oil exploration and military defense for oil resources in the Middle East. Some of this money could be reallocated to the companies if they focused the majority of their production to hydrogen technology and to the training of the employees. Removing these subsidies would help reduce our trade deficit as oil imports drain $1 billion from the U.S. economy every week (Why Hydrogen, 1). In essence, the transition to a hydrogen-based economy might possibly have some negative effects on the oil economy, but it is possible to minimize them with gradual but efficient transitioning. Also, the switch would create thousands of permanent scientific and industrial jobs (Why Hydrogen, 1) while fueling investment into the hydrogen economy helping to stimulate economic growth. Political Issues Another inhibiting factor for the implementation into a hydrogen-based economy is political. One of the political problems is the inability to establish a national consensus on energy policies (A National Vision of Americas Transition to an Hydrogen Economyto 2030 and Beyond 16). The inability arises from the differing viewpoints and interests in Washington on how to go about obtaining energy. While

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almost all politicians agree we must become more energy independent, they disagree on the methods and sources of remaining independent especially since September 11. Since these attacks politicians have realized the need to become independent, but since more than one-half of our petroleum is imported (A National Vision of Americas Transition to an Hydrogen Economyto 2030 and Beyond 12), the U.S. is basically dependent on countries in OPEC, Venezuela and others (Lying, 2). Hydrogen offers on way to reduce our dependency on foreign countries for oil, which could reduce our military commitment to many countries and help improve our political relations with many countries especially in the Middle East. Also by still relying on oil and not funding hydrogen research fully, the United States is lagging behind many countries in the hydrogen production. For example, countries like Germany, Japan, Belgium and Saudi Arabia have taken U.S. invented technology and expanded upon it for years (Why Hydrogen 1). Essentially the longer we delay the farther we fall behind technologically. If America invests now it would be in the countrys best interest to create joint ventures with countries like Iceland who now plan to introduce fuel cells into their transportation systems beginning at the end of this year (A National Vision of Americas Transition to an Hydrogen Economyto 2030 and Beyond 18). If the United States partnered with these countries, it would not only foster economic growth but would also promote good foreign relations. The faster the U.S. establishes a hydrogen economy, the faster we become more energy independent meaning individual ho useholds and companies can operate independent of power grids. Also, we start to become more energy independent from oil producing countries helping to ease political tensions and reduce military presence.

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Lastly, the greater the investment into research and production, the more competitive the United States is in the global market. Environmental Issues Another problem that not only in the Unites States, but also that the world faces is the issue of the environment. The most notable is the issue of global warming, but another issue affecting the environment is population growth associated with energy consumption. The United States is at the forefront because recently because President Bush rejected the Kyoto Protocol citing that developing countries were exempt from emission standards even though we are the leading carbon emitter at 22%, contributing the most to global warming (Dunn, Flavin, 185, 195). The issue is really volatile because global warming has destructive effects and requires immediate attention. Hydrogen can play a major role in the reducing the amount of greenhouse gases emitted each year. The only byproduct of a fuel cell is water vapor (Fuel Cells 4), which cuts down on air pollution leading to cleaner, healthier air, and it helps to reduce the amount of carbon dioxide and other byproducts emitted by fossil fuels. The United States must take lead on this issue because we are the leading emitter and in order to reduce the effects of global warming, the U.S. must be much more active, and it is essential that the country assumes an aggressive leadership role. Another issue that needs immediate attention is the growing population with respect to energy consumption. One fact is that the population is growing potentially reaching 10.8 billion people in 2050 (Kennedy, 23), and between now and 2025, 95% of the growth will occur in developing countries (Kennedy, 24). The demand for energy will rise, and the developing countries will demand a lot, but presently the U.S. with 4%

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of the world population uses one-quarter of the world oil supply (Kennedy, 32). So this begs the question, in the next 25 years where is the energy going to come from? Again this is where hydrogen offers a solutionwith oil production peaking, alternatives to petroleum are necessary. If hydrogen is implemented in the U.S. and other industrialized nations, they can develop cheaper technology and sell it to developing countries as an alternative to oil and coal. The hope is developing countries will be able to leap- frog todays energy devices and infrastructure by adopting advanced technologiesa pattern similar to those taken by the telecommunications industry with wireless technology (A National Vision of Americas Transition to an Hydrogen Economyto 2030 and Beyond 13). This can only happen if industrialized countries are willing to develop and establish hydrogen economies. Also, this would provide new markets for multinational companies creating employment and fostering trade. Essentially to help counter the current environmental effects, it is up to the industrialized nations to take an active role. One way is to switch from oil to a hydrogenbased economy, and this requires the industrialized nations to pool their resources to develop cheaper techniques and to make the technology available to the developing countries. Social Issues Another facet that inhibits the implementation is the social area. Even though there are many advantages to the introduction of hydrogen, people are resistant to change especially if there is affordable coal, oil and natural gas are available around the world (A National Vision of Americas Transition to an Hydrogen Economyto 2030 and Beyond 15). Currently since there is no shortage or severe price hikes people are

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content with the current energy supply meaning hydrogen implementation will continue to lag. Even though there is increased awareness of environmental affairs and cleaner refining technology, world oil production cannot sustained at current levels indefinitely (A National Vision of Americas Transition to an Hydrogen Economyto 2030 and Beyond 15). It is imperative that people realize the big picture and see that fossil fuels are not inexhaustible. Another factor is the safety of hydrogen used as a fuel since it is explosive and dangerous, which could lead to potential problems. However, gasoline is a tremendously volatile fuel and the only reason people feel safe is that they learned to handle it (Richgels 3). Since people learned to handle gas safely, they can learn to handle hydrogen through public information campaigns and education. Also, it is imperative that the public becomes informed about hydrogen. Since fossil fuels are cheap and not exhausted, most people are content with the current situation. However, in order to change peoples minds and attitudes, they must learn about the potential advantages of hydrogen. If people begin to demand hydrogen technology, then it will become more popular pressuring the private market and government to respond to peoples demands. Education about hydrogen must be established in schools, and prototype fuel cells must be demonstrated to the public. It is also important for non-profit organizations to back the hydrogen campaign in order to inform people because then people might demand this technology from the private market and government.

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Conclusion The next step in the Energy Revolution is to a hydrogen-based economy. Although many people argue it is not feasible until later this century, the reality is the technology is available now. It may not yet be cost-effective, but the longer America waits to commit wholly to the introduction of hydrogen, the farther it falls behind in the competitive global market. Many problems prohibit the logical switch from fossil fuels to hydrogen, but these problems are not insurmountable. The hydrogen economy is inevitable and will affect everyone once the technology is implemented. The benefits far outweigh the disadvantages associated with the transition, and the faster we switch the more gradual the process making the transition to a hydrogen economy easier and cheaper. The technology is being researched and tested daily as it seems to be a viable alternative fuel source to oil. In order to facilitate the implementation, it is vital for the private and public sectors to operate together. Furthermore, to speed up the process the public must become informed and demand this technology right away, which will compel the public and private partnership to produce cheap clean technology that will fuel the 21st century.

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