Get it Right! / CLEAN THE PLANET

Clean hydrogen energy is just around the corner... if governments
have the guts to take on the oil barons. Seth Dunn reports.

The tiny South Pacific island of Vanuatu has big ideas about its energy destiny. The economically depressed and climatically vulnerable island, which spends nearly as much money on petroleum-based products as it receives from all of its exports, hopes to become 100-per-cent renewable energy-based by 2020.

'As part of the hydrogen power and renewable energy initiative we will strive to provide electricity to every village in Vanuatu,' said the Government's September 2000 announcement. And it also hopes to become an exporter, providing energy to its neighbours.

So does Hawaii. Like Vanuatu, this island has abundant geothermal and solar energy, which can be used to make hydrogen. This US State has long recognized the need to reduce its dependence on oil, which accounts for nearly 90 per cent of its energy and is mainly imported. In the mid-1980s, Hawaii's State legislature provided the University of Hawaii with $50,000 to explore the potential future of hydrogen. The Government's 'investment' was rewarded this year when the University and two private research partners opened a centre for hydrogen energy development that has attracted $5 million over the next 5 years from the US Naval Research budget. One aim is to split water and produce hydrogen for use in fuel cells which can power the island's buses and cars, homes and businesses, military and fishing fleets. Possibilities include the island becoming a mid-Pacific refuelling point that ships its own hydrogen to Oceania, the US and Japan.

Vanuatu and Hawaii are following the lead of yet another island: Iceland, which amazed the world in 1999 when it announced its intention to become the world's first hydrogen society. Iceland, which spent $185 million - a quarter of its trade deficit - on oil imports in 2000, has joined forces with Shell Hydrogen, DaimlerChrysler and Norsk Hydro in a multimillion dollar initiative to convert the island's buses, cars and boats to hydrogen and fuel cells over the next 30 years.

Brainchild of a chemist named Bragi Arnason (nicknamed 'Professor Hydrogen') the project will begin in the capital of Reykjavik. There, the city's bus fleet will draw on hydrogen from a nearby fertilizer plant and later refill from a new station that produces hydrogen on-site from abundant supplies of geothermal and hydroelectric energy - supplying 99 per cent of Iceland's power. If the project is successful the island hopes to become a 'Kuwait of the North,' exporting hydrogen to Europe and other countries.

Jules Verne would be pleased - though not surprised - to see his vision of a world powered by hydrogen unfolding in this way. After all, it was in his 1874 book entitled The Mysterious Island that Verne first sketched a world in which water, and the hydrogen that composed it, would be 'the coal of the future'. A century and a quarter later, the idea of using hydrogen - the simplest, lightest, and most abundant element in the universe - as a primary form of energy is beginning to move from the pages of science fiction and into the speeches of industry executives.

In part, the transition to hydrogen energy is fuelled by three of the world's most pressing energy-related problems: worsening urban air pollution, rising geopolitical instability due to oil import dependence, and accelerating climate change from fossil fuel combustion. Prolonging petroleum and coal reliance in transportation and electricity will increase global carbon emissions from 6.1 to 9.8 billion tons of carbon by 2020. In the absence of alternative energy sources in the market, the use of coal and oil are projected to increase by approximately 30 and 40 per cent, respectively. According to the World Energy Assessment, the accelerated replacement of oil and other fossil fuels with hydrogen could help achieve 'deep reductions' in carbon emissions and avoid the doubling of pre-industrial CO2 concentrations in the atmosphere: a level at which scientists expect major and potentially irreversible ecological and economic disruptions, such as sea level rising, coastal flooding, extreme weather events and loss of both biodiversity and agricultural productivity. It is no wonder that islands, stationed on the front lines of both the rising tides of climate change and a vulnerability to high oil prices, are in the vanguard of the hydrogen push.

But industry is also well and truly behind the transition, pushed on by technological advances and the advent of greater competition in the energy industry. 'Greenery, innovation and market forces are moving our industry inexorably toward hydrogen energy,' Texaco executive Frank Ingriselli explained to members of the Science Committee of the US House of Representatives in April 2001. 'Those who don't pursue it, will rue it.'

The commercial implications of a transition to hydrogen as the world's major energy currency will be staggering. The $2 trillion energy industry will be put through its greatest tumult since the early days of Edison, Ford and Rockefeller. Hydrogen-powered fuel cells will vie for the space now occupied by batteries and electricity. Over 100 companies are aiming to commercialize fuel cells for a broad range of applications, from cell phones, laptop computers and soda machines to homes, offices and factories, to vehicles of all kinds. Hydrogen is also being researched for direct use in cars and planes. Fuel and auto companies are spending between $500 million and $1 billion annually on hydrogen. Leading energy suppliers are creating hydrogen divisions, while major car makers are pouring billions of dollars into a race to put the first hydrogen-powered fuel cell vehicles on the market between 2003 and 2005. So it's not surprising that hydrogen and fuel cell companies are capturing the attention of venture capital firms and investment banks anxious to get into the hot new space known as 'ET' - or energy technology.

The geopolitical implications of hydrogen are enormous. Coal fuelled the 18th- and 19th-century rise of Britain and modern Germany. In the 20th century, oil laid the foundation for the United States' unprecedented economic and military power. Access to geographically concentrated petroleum has shaped major wars, including the 1991 Gulf War, and determined relations between and among Western economies, the Middle East and the South. Shifting to the plentiful, more dispersed hydrogen could alter the power balances among energy-producing and energy-consuming nations, possibly turning today's importers into tomorrow's exporters. As incredible as it sounds, the US's current superpower status may be eclipsed eventually by countries that harness hydrogen as aggressively as the US tapped oil a century ago. Countries that focus their efforts on producing oil until the resource is gone will be left behind in the rush for tomorrow's prize.

The most important consequence of a hydrogen economy may be the replacement of 20th-century 'hydrocarbon society' with something far better. Hydrogen fuel cells could help address global energy inequities - providing fuel and power to developing areas where nearly two billion people lack access to modern energy services. In a developed form, hydrogen energy production could persuade and assist developing economies in Asia, Latin America and Africa to bypass the hydrocarbon era that seemed to bring wealth, however short-lived and unsustainable, to the industrialized world. This would be a major development towards a more secure world. It would step boldly towards environmental security through greenhouse emission reduction. And it could create greater political security by wiping out world dependence on oil - and the need for countries to fight for it.

Seth Dunn is a Senior Fellow with the Worldwatch Institute, an environmental think-tank based in Washington DC. This article is adapted from Hydrogen Futures: Toward a Sustainable Energy System, Worldwatch Paper 157, August 2001.