March 1, 2005

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WASHINGTON, DC - Running counter to the belt-tightening trend in the administration’s total $2.57 trillion 2006 budget request released in early February, the Energy Department is asking for relatively large increases for hydrogen energy and fuel cell technology.

While DoE’s overall request is also down slightly - $475 million, or 2%, to $23.44 billion, according to a summary in the Feb. 8 “New York Times” - the combined funding sought for President Bush’s Hydrogen Fuel Initiative and FreedomCAR Program is $359.944 million, up almost $50 million compared to the $309.978 million appropriated for fiscal year 2005. In addition to the core funding for the Office of Energy Efficiency and Renewable Energy (EERE), it also includes hydrogen r&d funding requests from the department’s Fossil Energy, Nuclear Energy and Science Offices.

The Hydrogen Fuel Initiative is asking for $259.544 million, up almost $25 million from the fy ‘05 appropriation of $224.696 million. And the FreedomCAR program is requesting $100 million, almost $15 million above the fy ‘05 funding of $$85.282 million.

Big Jump in Nuclear Hydrogen Request

Most notable uptick: The Nuclear Energy Office request for $20 million compared to the fy ‘05 appropriation of $8.929 million. According to the “New York Times” account, “new types of hydrogen-producing nuclear plants would “get more money, including $511 million, up almost $25 million, for nurturing a new generation of power reactors with pilot plants by 2010, and money for entirely new designs” if Congress approves these requests.

Notable to a lesser degree is the increased request by the Transportation Department (DoT), which is also part of the program, for $2.350 million. Last year, DoT got only $549,000, according to budget tables made available to H&FCL by the Energy Department. Garman: More Money for Renewables, Safety

Leading his EERE ‘06 budget rollout presentation with a list of “What’s New?” items, Assistant Energy Secretary David Garman ticked off the following in this order, plus some others:

– Accelerating and expanding research on the production of hydrogen from renewables (+$18 million more than the fy ‘05 appropriation);

-- Expanding hydrogen safety research to provide the underpinnings for codes and standards (+7.2 million);

– Expanding capability for systems analysis of hydrogen pathways, assessing energy, environmental and economic impacts of hydrogen energy systems (+$3.7 million);

– Placing emphasis on accelerating offshore wind power technology research (+$5.1 million);

– Increasing emphasis on renewable and synthetic fuels utilization to better understand technical barriers to blending non-petroleum components into refinery-produced, petroleum-based fuels for use in advanced combustion regime engines (+$4.4 million).

The Energy Department’s main budget request chart for fiscal year 2006. “FE,” “NE,” and “SC” stand, respectively, for the Offices of Fossil Energy, Nuclear Energy and Science.

One item in Garman’s presentation that left some observers scratching their heads was the claim that the high-volume cost of automotive fuel cells has been reduced from $275/kW in 2002 to $200/kW in 2004, “using innovative processes developed by national labs and fuel cell developers for depositing platinum catalyst.” The presentation didn’t give any details about production volume assumptions, and as far as is publicly known, no fuel cell manufacturer has attempted mass production so far.

Another accomplishment listed in Garman’s presentation was reduction of the production cost of natural gas-based hydrogen from $5.00/gallon gasoline equivalent in 2003 to $3.60/gallon gasoline equivalent in 2004, “using innovative reforming and purification technologies.”

FC Council, Sustainable Energy Coalition Fears

Garman’s slides did not mention the Distributed Generation Fuel Cells program run by DoE’s Fossil Energy Office. The funding request for this effort, which includes the Solid State Energy Conversion Alliance (SECA), was cut back by $9.428 million to $65.0 million, much to the regret of the U.S. Fuel Cell Council (USFCC). The six-year old program focuses on solid oxide fuel cell technology and the efficient use of fossil fuels.

“While the overall commitment is most welcome, we will seek more funds for fuel cells for distributed generation,” commented USFCC executive director Robert Rose. “The program deserves an increase, not a cut.”

More criticism of DoE’s request for the total spectrum of energy efficiency and renewable energy programs came from the Washington, DC-based Sustainable Energy Coalition, an alliance of 85 national and state business, consumer, environmental and energy policy organizations.

The group said the new cuts totaled almost $50 million, an overall cut of about 4%, but that number "masks the far deeper cuts" in a number of sustainable energy budgets.

The steepest cut of 90% was in Hydro-Power, from $4.862 million to $500,000. The request for Industrial Energy Efficiency was reduced 24% (to $56.5 million); Biomass/Biofuels 18% (to 72 million); Energy-Efficient Buildings by 11% (to $57 million); Geothermal Energy by 8% (to $23.3 million); and Distributed Energy by 6% (to $56.6 million). The overall EERE reductions “appear less drastic only because of significant increases for the hydrogen program,” the Coalition’s statement said. While the organization “supports both fuel cell and renewable hydrogen development and has advocated funding increases for them as well as an overall doubling of the federal sustainable energy budget over the next five years,” the group “strongly opposes cutting key efficiency and renewable energy programs or skewing funding just toward a handful of technologies currently favored by the Administration.”

Complained the Coalition, “With this request, the Administration is continuing its policy of slowly bleeding the budgets for most of its core renewable energy and energy efficiency programs with cut after cut after cut - a policy that ignores the consumer, job creation, national security, and rural economic development benefits of sustainable energy technologies.”

Contacts: U.S. Fuel Cell Council, Bernie Geyer, phone 202/293-5500; e-mail bernie@usfccc.com; Sustainable Energy Coalition, Ken Bossong, 202/293-2898 ext. 201, e-mail kbossong@hotmail.com.