California Hydrogen Blueprint Plan Volume 1 May 2005

California Environmental Protection Agency

California Hydrogen Blueprint Plan Volume I May 2005

Acknowledgements

The California Environmental Protection Agency gratefully acknowledges thegenerous contribution of time and expertise made by members of the SeniorReview Committee, the Implementation Advisory Panel, and the Topic Teams(see Appendix B) without whose dedication this plan could not have beenproduced.

The California Hydrogen Blueprint Plan is submitted to Governor ArnoldSchwarzenegger in response to Executive Order S-7-04 by:

Alan C. Lloyd, Ph.D., Agency Secretary, Cal/EPA Shannon Baxter-Clemmons, Ph.D., Special Advisor on Hydrogen and

Renewable Energy Programs, Cal/EPA Daniel Emmett, Executive Director, Energy Independence Now

Coalition

The Plan is presented in two volumes. Volume I contains findings andrecommendations to the Governor and the Legislature to beginimplementation of the California Hydrogen Highway Network (CA H2 Net).It summarizes what needs to be done to accomplish the goals of ExecutiveOrder S-7-04, the estimated costs over the next five years, and recommendednext steps. Volume II is a technical report that contains the extensiveanalysis and findings of the Topic Teams and the Advisory Panel.

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Table of ContentsTable of Contents.............................................................................................................................. iList of Figures..................................................................................................................................iiList of Tables ...................................................................................................................................iiExecutive Summary ......................................................................................................................... 1

Background ............................................................................................................................ 1

What is the California Hydrogen Highway Network and Why Do We Need It? .................. 1

Recommendations .................................................................................................................. 2

1.0 Introduction and Background................................................................................................. 51.1 Executive Order S-7-04 ................................................................................................. 6

1.2 Development of the Blueprint Plan................................................................................ 6

1.3 Basic Description of Hydrogen and its Uses.................................................................. 7

2.0 Why Hydrogen? ..................................................................................................................... 92.1 Energy Diversity and Security Benefits......................................................................... 9

2.1.1 Hydrogen is an Integral Part of Californias Long-Term Energy Strategy ........ 92.1.2 Hydrogen Can Diversify and Stabilize Californias Energy Supply ................ 112.1.3 Hydrogen Can Be Produced From Renewable Resources................................ 11

2.2 Environmental Benefits................................................................................................ 12

2.2.1 Hydrogen Can Reduce Smog-forming and Toxic Emissions........................... 122.2.2 Hydrogen Can Reduce Greenhouse Gas Emissions ......................................... 13

2.3 Economic Development Benefits................................................................................. 14

2.4 Educational Benefits .................................................................................................... 14

3.0 Key Findings of the Blueprint Plan...................................................................................... 153.1 Points of Consensus from the Advisory Panel............................................................. 15

3.2 A Multi-Phase Approach: Short-Term Plan With a Focus on Long-Term Objectives 16

3.2.1 Description of Phase 1...................................................................................... 173.2.2 Description of Phases 2 and 3.......................................................................... 19

3.3 Early Risks Must Be Shared ........................................................................................ 20

3.4 Investment in Hydrogen............................................................................................... 21

3.4.1 Funding Required to Expand Fueling Stations and Vehicles ........................... 223.4.2 Estimated Costs for Phase 1 ............................................................................. 243.4.3 Estimated Costs for Phases 2 and 3 .................................................................. 263.4.4 The Competition ............................................................................................... 26

4.0 California Hydrogen Blueprint Action Plan......................................................................... 27Acronyms ....................................................................................................................................... 29

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Appendix AExecutive Order S-7-04..........................................................................................30Appendix BList of Contributors ................................................................................................34Endnotes ......................................................................................................................................... 37

List of FiguresFigure 1Basic Operation of a Proton Exchange Membrane (PEM) Fuel Cell .............................8Figure 2Basic Operation of a Hydrogen Fuel Cell for Automobiles ...........................................9Figure 3Growth in Demand for On-road Petroleum Fuels ........................................................11Figure 4Emissions Illustration (Source-to-Wheel) ....................................................................12Figure 5Source-to-Wheel Greenhouse Gas Emissions ..............................................................14Figure 6Example of Phase 1 stations in Northern California based on

population density and existing gasoline stations ........................................................18Figure 7Example of Phase 1 stations in Southern California based on

population density and existing gasoline stations ........................................................19Figure 8Map of hydrogen stations in California. .......................................................................21

List of TablesTable 1Estimated Numbers of Hydrogen Products and Stations by Phase................................17Table 2Estimated State Cost to Implement Phase 1 of CA H2 Net ...........................................25

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Executive SummaryBackground

In the January 6, 2004, State of the State address, Governor Schwarzenegger senta clear message that California would begin a course toward a sustainabletransportation energy future when he spoke the words:

I am going to encourage the building of a hydrogen highwayto take us to the environmental future...I intend to show theworld that economic growth and the environment can coexist.

And if you want to see it, then come to California.

On April 20, 2004, the Governor signed Executive Order S-7-04 calling for thedevelopment of the California Hydrogen Blueprint Plan. On the same day hedesignated the University of California-Davis hydrogen station as Station #1 ofthe California Hydrogen Highway Network (CA H2 Net).

Since that time, more than 200 volunteer experts have engaged in thedevelopment of the California Hydrogen Blueprint Plan (Blueprint Plan). Thevolunteers and the organizations they represent are motivated by a shared set ofcore values that define the vision of a sustainable hydrogen economy forCalifornia. These core values are:

Energy security and national security.

A healthy environment.

Economic growth and opportunity for California.

What is the California Hydrogen Highway Network and Why DoWe Need It?

The California Hydrogen Highway Network is a State initiative to promote theuse of hydrogen as a means of diversifying our sources of transportation energyused while ensuring environmental and economic benefits. To be implemented inphases, the Blueprint Plan outlines a path to 250 hydrogen fueling stations and20,000 hydrogen-fueled vehicles, which will help set the stage for full-scalecommercialization of these technologies.

Hydrogen has the potential to unlock a new energy future for Californiaa futurebased on secure, local, and renewable energy sources, accessible and affordable toall Californians, and pollution free. This transition will generate new jobs and newindustries and will restore Californias control over its energy supply.

Today, as it has been for more than a century, fossil fuels provide a relativelycheap and reliable means to power the vast majority of the worlds vehicles. Inthe last few decades, however, there has been a growing realization that, for atleast two reasons, we cannot continue to rely on fossil fuels. First, the supply of

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fossil fuels is in