Remarks to the 4th International Hydrogen & Fuel Cell Expo

Chief Operating Officer Paul Dickerson's remarks to the 4th International Hydrogen & Fuel Cell Expo in Tokyo, Japan

February 27, 2008

Thank you. This is my first time in Tokyo—what a beautiful city.

Our countries have a long and productive history of energy cooperation—a history that goes back several decades. Nearly every laboratory in the United States is directly engaged in scientific collaboration with Japan on matters as diverse as climate, basic science, materials research, and nuclear energy. The United States has learned much from Japan—and there is much for us to learn.

Let me begin by commending Prime Minister Fukuda and Environment Minister Kamoshita for their leadership on the issue of climate change. Japan's recent commitment to provide $10 billion to help developing countries with their efforts to reduce emissions is a huge step in the right direction. The "Cool Earth Partnership" is a significant pledge, and shows how seriously this nation takes its responsibility to its neighbors.

Before I comment on the U.S. government's perspective on hydrogen and fuel cell technologies, I'm going to take a few minutes to focus on what we see driving the demand for cleantech solutions.

It is a surprise to no one: My nation, your nation, and the world are facing a new energy reality.

Surging demand for conventional sources of energy is taxing our oil supplies at an alarming rate.

The demand increase is challenging our economies, our climates, and our security.

The United States alone imports nearly 10 million barrels of oil per day at a daily cost of $1 billion. And, by 2030, that number is expected to rise to more than 17 million barrels per day.

So you can see how our energy appetite and the world's energy appetite are posing increased risks for our climate. Current global energy use accounts for more than 4/5 of the planet's greenhouse gas emissions. Without significant changes, by 2030, our emissions will rise by about 1/3 to nearly 8 billion metric tons of CO2 per year—with India and China accounting for almost half the gain.

So, if there is any question about whether the United States understands the scope of the challenges, I'm here to tell you—we get it.

In my country there is wide, bipartisan support for increasing our energy security and curbing carbon emissions. With that support, we have moved beyond the problem identification stage so that we can give all of our attention to creating solutions. The world can't drill its way out of the problem. The new energy reality requires we all work together to develop safe, reliable, clean, affordable, and diverse energy supplies.

And this, my friends, is where this conference can make a huge impact. We like hydrogen's potential because it can help us on two major fronts: transportation and power generation. When it comes to transportation, fuel cells can greatly reduce our oil use and carbon emissions. With power generation, hydrogen can help us solve storage problems for renewable energy sources like wind and solar. And the way we realize hydrogen's potential is the same way we look to develop all of our clean-energy alternatives—through a three-pronged approach involving policy, research and development, and deployment.

With policy, we are designing systems to better connect with the market, allowing our research advances to help expand America's energy choices. We seek to formulate federal policies that create markets for technologies like fuel cells in part by making them real choices. And we do that by lowering their cost.

President Bush's Hydrogen Fuel Initiative, announced in 2003, created my department's hydrogen program and committed $1.2 billion over five years to the effort with the goal of making fuel cell vehicles cost-effective by 2015. The President followed that up in 2006 with his Advanced Energy Initiative, both reinforcing the Hydrogen Fuel Initiative, and proposing a 22 percent increase in clean-energy research. Our policies are setting aggressive targets for the short- and long-term because we know our problems will require firm commitments that endure through many political cycles.

With research and development, we seek to catalyze the new wave of private sector cleantech financing by focusing our research on solving key problems—problems that are keeping these technologies from winning in the marketplace.

In the hydrogen and fuel cells program, our main problem is cost. You will hear from Bill Tumas tomorrow. Bill is one of our top hydrogen experts from Los Alamos National Laboratory.

I will let Bill tell you about the science—so, let me tell you how my office fits in and tell you about some of the successes we've had in reducing costs.

In transportation, we set a fuel cell cost goal of $30 per kilowatt. To meet it, we targeted platinum, working to reduce the amount used in fuel cells. Over a 5 year period, we have dropped the cost per kilowatt from $275 to $94—almost ¾ of the way towards our goal.

Because we want some filling stations to be able to produce hydrogen on-site, we set a target of 2 to 3 dollars per gallon of gasoline equivalent for distributed production. We hit that target for reforming of natural gas, and we've moved on to liquids derived from biomass, where we can finally start to make a dent in greenhouse gas emissions.

And finally, in power generation we're looking to drive down the estimated cost of stationary fuel cell systems to $30 per kilowatt by 2015. Our research projects are focusing on increasing system efficiency and lifetimes while making fuel cells that operate on a variety of fuels—including renewable ethanol. Five years ago, our estimated cost for fuel cells at high volumes was $274 per kilowatt. Today, our data shows that $94 per kilowatt is feasible.

So, my friends, as you can see, our targeted research is making real progress toward meeting our goals across a broad spectrum of applications.

Research is important, but without deployment, the technology has limited value. We need the right mechanisms to help get these valuable inventions to market—and to help you sell more. To accomplish this, we are pushing ahead on three fronts:

First, we are creating markets by demonstrating the value of technology. Second, we are building the infrastructure to support them. And, third, we are using our government's purchasing power to lead the way.

Taking a page from Toyota's experience, we're building demonstration fleets to test these technologies under real-world conditions. So, in 2004, we enlisted four auto industry teams in a 5 year Hydrogen and Fuel Cell Learning/Demonstration project to help us move from simulated tests to street trials. They are currently operating more than 75 vehicles and 14 refueling stations in various regions of the United States.

To develop the necessary fueling infrastructure, we're working with energy companies to design filling stations in California, Michigan, and New York where hydrogen can be produced and distributed.

We're partnering with U.S. federal agencies to help them become first adopters of hydrogen-based technologies for lift trucks or backup power for telecommunications networks. Our Department of Defense, as an example, is deploying fuel cells for forklifts in four of its distribution centers. And, in turn, they are providing our department with performance data to help direct our program's efforts.

By creating a testing ground to prove these technologies, we are building connections with the market, and we're encouraging the growth of new markets and building the infrastructure.

Through policy, R&D, and deployment, we're striving to bring down the cost of these technologies, prove their case outside the lab, and help these technologies proliferate in a global marketplace.

Now, when I say "global," I do mean global. The world cannot afford for these technologies to only do well in the countries that can afford them. Instead, for all our economies, our standards of living, and our environment, it's up to us, the developed nations, to help bring these clean technologies to the market. By pooling our efforts, we can help play an integral part in bringing clean technology to the world.

Both the United States and Japan have shown they take this responsibility seriously. In recent years, my country has worked with China on industrial energy efficiency, biofuels and vehicle efforts. In India, we are discussing work spanning from biofuels to green buildings. And in Brazil, we're assisting with energy-saving appliances and carbon sequestration.

Each of our nations understands—we need a post-2012 international framework which holds all nations accountable. We made great progress in Indonesia, where we cemented the "Bali Roadmap." A roadmap calling for quantified targets for greenhouse gas emissions, with actions tailored to fit each nation's stage of development. And we're looking forward to making yet more progress at the G8 meetings here in July.

There is time between now and 2012, but we can't afford to wait. We're counting on you and the hard work you have put in. Your technologies are opening up a world of possibilities. And if we work together, we can open the world to your products.

The United States and Japan represent an enormous capacity to solve our energy challenges. Together, we enjoy great prosperity, provide economic opportunity, promote education, and share ambition. We are leaders on so many issues, and now the world turns to us again.

We are being asked, not only by our own people, but by all the people of the world, to take a leadership role in confronting the challenge of global warming. Whether through diplomatic action, tech transfer, or the creation of new ways to manage our carbon footprint, we can meet our obligation.

And we will do so as friends.

Ten years from today, the world will look back on this as the time when our nations rose to the challenge and engaged in one of the greatest market transformations of all time. For our economies, for our climate, for our neighbors, and for our way of life—we must act, and we must act together.

Thank you.