RAND Review
In Search of Energy Security
Will New Sources and Technologies Reduce Our Vulnerability to Major Disruptions?
Long-Term Option: Hydrogen
Hydrogen represents a new type of energy form that could take many decades to harness and to distribute in quantities large enough to improve our energy security on a national scale. One key obstacle is that the nation currently has an elaborate infrastructure in place to distribute fossil fuels, whereas nothing comparable exists for hydrogen.
Hydrogen has drawn attention because of its long-term potential to replace gasoline for use in automobiles. Currently, U.S. transportation is about 95 per- cent dependent on gasoline. As we have seen during the past year, this heavy dependence on the fuel can lead to soaring gas prices and general price volatility. The only way that consumers today can hedge against the fluctuating prices is to use less gas. For these reasons, hydrogen appeals to some energy experts as a potential alternative source of transportation fuel.
Hydrogen development and distribution would require the involvement of many government agencies. |
Yet many significant barriers remain. To begin with, hydrogen itself is not an energy source but rather an energy carrier. It must be derived from another energy source, such as electricity or natural gas, thus entailing processes that require significant energy input. There are major uncertainties regarding technology, the cost-effectiveness of hydrogen, its environmental impact, its commercial viability, and the need for a hydrogen distribution system.
An additional concern is that hydrogen development and distribution would require the involvement of many government agencies, from the Federal Energy Regulatory Commission to state public utility commissions to local agencies responsible for building and fire codes, zoning, air pollution control, and public transit. Rationalizing the roles and responsibilities of these various agencies and jurisdictions could be an important factor in determining the future success or failure of a transition from other energy sources to hydrogen.
San Francisco Mayor Gavin Newsom steps off of a hydrogen fuel – cell zero-emission bus at the San Francisco Recycling and Disposal Center as part of the United Nations World Environment Day in San Francisco on June 2, 2005. |
The lack of consistent, independent government estimates of the costs, benefits, and requirements of hydrogen development has also hindered research and development investment in this potentially critical technology. The Bush administration has made a substantial commitment to fund hydrogen research and development with the clear expectation that the bet will pay off in the form of hydrogen playing a leading role in the nation’s long-term energy portfolio.
A Balanced Set of Options
The examples cited above suggest that a balanced energy investment portfolio must contain a mixture of investment time horizons as well as a mixture of energy resources and strategies. No single time frame, no single resource, and no single development scheme will suffice in producing energy security for the United States. Each option offers advantages and disadvantages.
We at RAND have developed useful planning tools that could help decisionmakers strike the optimum balance among the available options. One such tool is called assumption-based planning; in essence, it is a sophisticated way of comparing multiple scenarios to understand what happens when assumptions prove false and, consequently, plans go awry. Such a tool could help the U.S. Department of Energy modify its research and development portfolio to help reduce the nation’s vulnerability to long-term threats to energy supplies.
In general, the greatest reductions in vulnerability come with greater diversity in investments across demand-side and supply-side strategies. Even with increased diversity, the examples described above illustrate just how challenging — and long — the path toward energy security will be. 
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