Hydrogen is the Key to Our Energy Future

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What will our energy future look like? Of course, I have no special insights, but I see two interesting trends.

Here's the first. In large, complex economies, meaningful energy transitions occur gradually across many decades. Vaclav Smil, from the University of Manitoba, offers these compelling observations.

In most of the world's developed economies it took more than fifty years for internal combustion engines (both gasoline and diesel) to displace agricultural draft animals. In many low-income nations this process is still not complete.

James Watt's improved steam engine, which became commercially popular during the 1770s, remained an important technology into the mid 20th century.

The first diesel-powered car (the Mercedes-Benz 260D) was made in 1936. It wasn't until the 1990s that diesels claimed 15 percent of the new car market in the European Union. (In 2007, diesels share of the U.S. new car market was 3 percent.) This is despite the fact that diesel engines have always been inherently more efficient than gasoline engines (the difference is up to 35 percent), and that modern diesel-powered cars have very low particulate emissions.

Smil observes: "There is one thing all energy transitions have in common: they are prolonged affairs that take decades to accomplish, and the greater the scale of prevailing uses and conversions the longer the substitutions will take."

The second trend is the gradual decarbonization of the world's primary fuel sources. Jesse Ausubel and Cesare Marchetti noted that humanity first began using the energy sources rich in carbon. Over time, we have substituted fuels lower in carbon and richer in hydrogen. For example, the energy stored in wood (with water removed) has a carbon to hydrogen ratio of about 40 to 4. Coal is about 8 to 4. Oil, in the form of gasoline and jet fuel, is about 2 to 4, and finally methane, the main constituent of natural gas, is 1 to 4, or about 1/40th the ratio of wood. Ausubel writes, "Carbon is slowly losing market share to hydrogen as horses losing to cars or typewriters losing to word processors."

This trend points towards an energy future that will (eventually) be dominated by hydrogen. This has profoundly positive implications for our environment. Hydrogen is the universe's simplest and most abundant element. Burning it (with oxygen) produces heat and water.

What drives this trend? Marchetti explains that our energy system is evolving to meet the demands of consumers who increasingly live in dense populations. In cities such as Shanghai and New York fuels must conform to the supply and delivery constraints of high-density urban living. Such places accept only electricity and natural gas for these can reach consumers easily through existing infrastructure.

Furthermore, in the course of economic life, in which individuals and businesses are held accountable for the consequences of their actions, pollution and waste indicate inefficiency. And without government protection, inefficient processes are filtered out. The market process, like evolution, is a constant search for fitness. In the long run, companies face persistent economic and social pressures to become green.

However, misguided political directives can delay progress. For example, in 1978 Congress, concerned about impending shortages of natural gas, passed the Powerplant and Industrial Fuel Use Act. This prohibited the use of natural gas for power generation and industrial use.

As a result, capital investment shifted towards a new generation of coal-fired power plants. If all the coal-fired electric generating capacity added during the last thirty years had been fueled by natural gas, U.S. carbon dioxide emissions would have been about 20 percent lower. This act was repealed in 1987. Recent natural gas finds in "unconventional" geologic formations (e.g., the Barnett Shale in Texas) may double America's natural gas resources.

In a world where energy in more expensive, a supply portfolio with a low C/H ratio has a natural advantage. We should be alert to the dangers of political forces thwarting this evolution.