demonstrate and deploy other types of fuel cells for stationary and  portable applications. DOE further focused its hydrogen R&D in response to the National Energy  Policy issued in 2001, which highlighted hydrogen as one of several R&D  priorities. The effort  is designed to construct a prototype integrated gasification combined- cycle coal power plant to be operational by 2015 that will demonstrate  production of hydrogen as well as reduced emissions. The Hydrogen Fuel Initiative Has Made Important Progress, but Some Target Dates Have Slipped, and Some Targets Require Significant Scientific Advances

According to DOE, key R&D targets to achieve technology readiness in  2015 focus primarily on (1) extracting hydrogen from diverse, domestic  resources at a cost equivalent to about $2 to $3 per gallon of gasoline, (2)  storing hydrogen on-board vehicles to enable a driving range of at least  300 miles for most light duty vehicles, (3) delivering hydrogen between  two points for less than $1 per kilogram, and (4) developing proton  exchange membrane fuel cells that cost about $30 per kilowatt and deliver  at least 5,000 hours of service for vehicles—which compares to about  150,000 miles in conventional gasoline-powered vehicles—and at least  40,000 hours for stationary applications. Because steam reformation of natural gas reflects the most mature  technology, natural gas is expected to be the primary source of hydrogen  through the next 20 years. DOE’s R&D focus is on developing new materials that can store hydrogen  without requiring high pressures or cryogenic temperatures. In particular, DOE has announced  its intention to fund R&D for commercial scale manufacture of fuel cells  for stationary applications. DOE Has Not Updated Its Plan to Assess the Impact of Delays in Meeting Some Key Target Dates on Technology Readiness or Projected the Initiative’s Costs through 2015

DOE has made important progress in many areas of R&D, but some target  dates have been pushed back, primarily as a result of technical challenges  and budget constraints, according to DOE officials. DOE Has Partnered Well with Industry on Vehicle Technologies, but Efforts to Develop Stationary and Portable Technologies Are Too New to Evaluate

DOE has effectively solicited industry input and has worked to align R&D  priorities, particularly for developing vehicle technologies. Nevertheless, industry  representatives stated that DOE generally has managed and coordinated  its hydrogen R&D resources well. Industry representatives stated that  workshops are an important collaboration channel. These  teams, co-chaired by industry and DOE, meet monthly and include  industry representatives with requisite expertise in hydrogen technologies. DOE Has Effectively Coordinated with Other Federal Agencies at the Working Level, but Efforts at the Policy Level Have Just Begun

DOE’s interagency coordination efforts among working level managers  and scientists have been productive and useful, but coordination with  senior officials at the policy level just began with the August 2007  establishment of the Interagency Task Force. In response, DOE created the Interagency Task Force—a new  entity composed of deputy assistant secretaries, program directors, and  other senior officials—which held its inaugural meeting August 2007. DOE and industry officials attribute this progress to  DOE’s (1) planning process that involved industry and university experts  from the earliest stages; (2) use of annual merit reviews, technical teams,  centers of excellence, and other coordination mechanisms to continually  involve industry and university experts to review the progress and  direction of the program; (3) emphasis on both fundamental and applied  science, as recommended by independent experts; and (4) continued focus  on such high priority areas as hydrogen storage and fuel cell cost and  durability. Furthermore, developing a nationwide commercial market for hydrogen  fuel cell vehicles is expected to cost tens of billions of dollars for  production facilities, fueling stations, pipelines, and other support  infrastructure and take decades to achieve, requiring a sustained  investment by government and industry in R&D and the infrastructure. Recommendation

To accurately reflect progress made by the Hydrogen Fuel Initiative and  the challenges it faces, we recommend that the Secretary of Energy update  the Hydrogen Posture Plan’s overall assessment of what DOE reasonably  expects to achieve by its technology readiness date in 2015, including how  this updated assessment may differ from prior posture plans and a  projection of anticipated R&D funding needs. More specifically, we  reviewed DOE’s 2004 and 2006 Hydrogen Posture Plans and R&D project  reports, attended DOE’s annual review of its projects in May 2007, and  interviewed DOE hydrogen program managers and scientists at DOE’s  National Renewable Energy Laboratory and Los Alamos National  Laboratory. To determine the extent to which DOE has worked with other federal  agencies to develop and demonstrate hydrogen technologies, we reviewed  pertinent documents and spoke with officials at DOE, the Department of  Transportation, the Department of Defense, the Department of Commerce,  the National Aeronautics and Space Administration, and the U.S.
Why GAO Did This Study

The United States consumes more than 20 million barrels of oil each day, two-thirds of which is imported, leaving the nation vulnerable to rising prices. Oil combustion produces emissions linked to health problems and global warming. In January 2003, the administration announced a 5-year, $1.2 billion Hydrogen Fuel Initiative to perform research, development, and demonstration (R&D) for developing hydrogen fuel cells for use as a substitute for gasoline engines. Led by the Department of Energy (DOE), the initiative's goal is to develop the technologies by 2015 that will enable U.S. industry to make hydrogen-powered cars available to consumers by 2020. GAO examined the extent to which DOE has (1) made progress in meeting the initiative's targets, (2) worked with industry to set and meet targets, and (3) worked with other federal agencies to develop and demonstrate hydrogen technologies. GAO reviewed DOE's hydrogen R&D plans, attended DOE's annual review of each R&D project, and interviewed DOE managers, industry executives, and independent experts.

What GAO Found

DOE's hydrogen program has made important progress in all R&D areas, including both fundamental and applied science. Specifically, DOE has reduced the cost of producing hydrogen from natural gas, an important source of hydrogen through the next 20 years; developed a sophisticated model to identify and optimize major elements of a projected hydrogen delivery infrastructure; increased by 50 percent the storage capacity of hydrogen, a key element for increasing the driving range of vehicles; and reduced the cost and improved the durability of fuel cells. However, some of the most difficult technical challenges lie ahead, including finding a technology that can store enough hydrogen on board a vehicle to achieve a 300-mile driving range, reducing the cost of delivering hydrogen to consumers, and further reducing the cost and improving the durability of fuel cells. The difficulty of overcoming these technical challenges, as well as hydrogen R&D budget constraints, has led DOE to push back some of its interim target dates. However, DOE has not updated its 2006 Hydrogen Posture Plan's overall assessment of what the department reasonably expects to achieve by its technology readiness date in 2015 and how this may differ from previous posture plans. In addition, deploying the support infrastructure needed to commercialize hydrogen fuel-cell vehicles across the nation will require an investment of tens of billions of dollars over several decades after 2015. DOE has effectively involved industry in designing and reviewing its hydrogen R&D program and has worked to align its priorities with those of industry. Industry continues to review R&D progress through DOE's annual peer review of each project, technical teams co-chaired by DOE and industry, and R&D workshops. Industry representatives are satisfied with DOE's efforts, stating that DOE generally has managed its hydrogen R&D resources well. However, the industry representatives noted that DOE's emphasis on vehicle fuel cell technologies has left little funding for stationary or portable technologies that potentially could be commercialized before vehicles. In response, DOE recently increased its funding for stationary and portable R&D. DOE has worked effectively with hydrogen R&D managers and scientists in other federal agencies, but it is too early to evaluate collaboration among senior officials at the policy level. Agency managers are generally satisfied with the efforts of several interagency working groups to coordinate activities and facilitate scientific exchanges. At the policy level, in August 2007, DOE convened the inaugural meeting of an interagency task force, composed primarily of deputy assistant secretaries and program directors. The task force is developing plans to demonstrate and promote hydrogen technologies.