Honorable John H. Gibbons, Director

Office of Science and Technology Policy

before the

Subcommittee on Toxic Substances, Research and Development

Committee on Environment and Public Works

United States Senate

March 22, 1993

Mr. Chairman, Members of the Committee, thank you for the opportunity tospeak with you today about the growing promise of renewable energy sources.Given adequate support, renewable energy could provide half of the energyneeded by the world economy by the middle of the next century. Large-scale useof renewable energy is essential if we are to maintain rapid worldwide economicgrowth without increasing global production of pollutants. Cost-effectiverenewable sources of electricity and fuels can provide much neede d diversity ofenergy supplies in all parts of the United States -- diversity that can meancontinued competition with conventional fuel sources that will help ensurestable prices.

My testimony will begin with a brief overview o f the status of renewableenergy. I will then discuss a plan announced by President Clinton on February22, 1993, to work closely with the automobile industry to encourage explorationof new propulsion systems and new domestic fuels, particularly domestic allyproduced renewable fuels.

Renewable Energy Sources

The term "renewables" includes a wide range of energy resources thatappear, for example, as sunlight, wind, falling water, biomass, and heat in theear th's crust. These energy forms have been used for centuries, but a varietyof technologies -- many demonstrated only in the past few years -- can now beused to convert these resources into economic sources of fuel and electricityfor a modern society. Many of the needed technical advances have come fromunexpected sources, such as aircraft engines, advances in semiconductorphysics, and advances in biochemistry.

Sunlight can be used to heat fluids to operate electric generatin gturbines; and it can also be converted directly to electricity usingphotovoltaic cells. We've always used sunlight to grow plants for food andfuel and advanced technology can convert biological materials -- includingwaste paper and other materials - - to sources of gaseous, liquid, and solidfuel for electric generating turbines. Advanced gasifiers and turbines now inadvanced design stages should be able to produce electricity from biologicalmaterials at prices comparable to that of electricity de rived from coal.Improvements in the cost and performance of photovoltaic cells means that thesedevices already provide attractive sources of electricity in specializedapplications. Applications can be expected to grow rapidly as costs arefurther redu ced. Advances in wind machines, made possible by a decade ofcontinuous technical development and field experience in California and otherlocations, has driven the cost of wind power down to a point where wind iscompetitive with conventional forms of e lectric generation today in selectlocations.

Renewable energy can also be used as a source of liquid and gaseous fuelfor operating vehicles. Waste materials and rapidly growing energy crops canbe converted into alcohol fuels and used as a direct substitute forgasoline.

In the longer term, hydrogen may provide an attractive way of transportingand storing renewable energy -- particularly if hydrogen is used in highlyefficient fuel cells. Hydrogen c an be made from natural gas, from biologicalmaterials (including waste materials), and it can be manufactured fromelectricity. Measured in terms of dollars per unit of energy content, alcoholand hydrogen fuels are likely to be more expensive than gaso line well into the21st century. But the true value of these fuels must be measured in terms offull cost per mile driven. Given time and adequate investment in research, thelife-cycle combined cost of owning and operating an automobile using anadvanc ed propulsion system with renewable energy sources can be comparable tothat of today's gasoline-powered vehicles using internal combustion engines.

None of the economic comparisons I've referred to here give renewableresources credit for other benefits not captured in standard economic accounts.For example, production of renewable resources can lead to economic developmentand employment opportunities, particularly in rural areas. It can lead to landrestoration when abandon ed or degraded farm lands are managed for sustainableproduction of biomass. Renewable energy sources generally produce fewer airpollutants and greenhouse gases than conventional, fossil fuels. Renewableresources are diverse, leaving us less dependent on a few energy suppliers.Global development of renewable energy would lessen the attractiveness ofnuclear power, thereby reducing the risk of nuclear weapons proliferation andthe vexing issue of high-level waste disposal.

Th e challenges we face in government are: 1) finding a way to providebalanced support for the rich set of technical alternatives in renewable energyby combining public and private research funding; and 2) ensuring that privateinvestors have the incentive to experiment with the alternatives so thatwinners and losers can be identified in competitive markets.

A Renewable Energy End Use: The Automobile

No industry is more important to national eco nomic recovery than thedomestic automobile industry and its suppliers. Motor vehicle productiongenerates nearly one-tenth of all compensation paid to American manufacturingworkers. Automotive production touches all parts of the economy -- accounting for one-sixth of the output of the iron and steel industry, and one-eighth ofthe output of industries ranging from textiles to service machineproduction.

As a result, we must pay careful attention to technology that can helpAm erican producers become the most agile and efficient in the world in the waythey design, test, and manufacture vehicles. And we must ensure that U.S.producers take the lead in developing vehicles that can enjoy large domesticand international markets because they are safe, fun to drive, produce littleor no pollution, and can operate on domestic fuels -- including renewablefuels. With such a product, automobile manufacturers would make a dramaticcontribution to the Nation's environmental, energy, a nd economic security andtheir own survival in highly competitive world markets.

Cars and trucks account for about half of the volatile organic compoundsand nitrogen oxides and 90 percent of the carbon monoxide dumped into the a irof the nation's most polluted cities. Reducing emissions further with tailpipeemission control devices is proving remarkable difficult, and reductions in theemissions of individual vehicles are being offset by the growth in the vehiclefleet. Highw ay vehicles also account for 25 percent of total carbon dioxideemissions from burning fossil fuels in the United States. TheIntergovernmental Panel on Climate Change estimates that to prevent climatechange (beyond that to which we are already committe d because of pastgreenhouse gas emissions) would require cutting emissions by 60 percent ormore. This cannot be accomplished without radical changes in our fossilfuel-intensive systems of energy production and use, includingautomobiles.

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Automobiles and light trucks now consume over 6.1 million barrels of oilper day -- equivalent to 85 percent of current oil imports -- and are expectedto consume 8.2 million barrels per day by 2010. The prospects for achievingenergy securi ty by diversifying oil imports is not bright, since the MiddleEast holds 65 percent of the world's oil reserves. The Middle East could againdominate world markets early in the next Century, and the energy securityproblem is compounded by the rapidly r ising demand for oil in the developingworld.

The President's technology initiative, Technology for America'sEconomic Growth: A New Direction to Build Economic Strength, focuses onsupporting applied research in areas wh ere public and private interestsintersect. His new program introduces several fundamental innovations in theway the nation will approach applied research and development.

-- For many years, American technology policy consisted largely ofmission-oriented research in DoD, NASA, and other organizations coupled with anabiding faith that much of the technology developed for these missions wouldeventually prove useful to the civilian economy. There have clearly beensuccessful t ransfers. Our new policy moves carefully, but directly, to supportcivilian technology using cost-shared research, dual-use defense programs, anda variety of other methods.

-- We established a goal of integrating environmental goals with goals ineconomic development rather than relegating environmental interests to anafterthought. This is good environmental policy since it reduces the cost ofmeeting any environmental goal. It is also good economic policy since itminimizes the cost and burden of environmental regulation, lowers productioncosts by encouraging efficient use of energy and materials, and encouragesdevelopment of a domestic industry capable of producing products acceptable tobroad world markets because of th eir low emissions.

This new philosophy finds a perfect fit with the needs of the automobileindustry. We have an opportunity to connect Federal R&D spending withmarketable products and good jobs. We have an opportunity to work withindustry to make environmental interests an integral part of technologicaldevelopment rather than a constraint. Both industry and government mustexamine the way they do business and develop the means to respond rapidly tochanging needs and o pportunities.

Radical Technological Change

Dramatic action is needed to resolve the energy security and environmentalchallenges posed by automobiles and to find ways to revitalize the auto mobileindustry. We will be working closely with the automobile industry to design aprogram of research that not only helps U.S. industry produce the best vehiclesin the world but helps them build these vehicles with the world's mostefficient manufact uring technologies. We hope to develop a balance programincluding both projects with a clear, near-term payoff and projects that canlead to fulfillment of ambitious long-term goals. The role of renewable fuelswill be considered carefully as we work t ogether to design an effectiveprogram.

A wide range of options exist, and we will take great care to design abalanced research portfolio. Many concepts we will be discussing involve majorresearch challenges and may not be rea dy for market for many years. Some willfall by the wayside as the market sorts the alternatives. It is essential thatwe create a market-based process that allows technical and economic merit, notthe enthusiasm of special interests or bureaucrats, to be the finalarbiter.

Replacing Gasoline

During the next few decades, several fuels will be competing for marketsnow dominated by gasoline. In the near term, the most important renewabletranspor tation fuels are likely to be ethanol and methanol used ininternal-combustion engine vehicles (ICEVs). Battery powered electric vehicles(BPEVs) may provide practical transportation in many markets. In the longerterm, however, methanol and hydrogen us ed in hybrid vehicles, including fuelcell electric vehicles (FCEV), may be preferred. Hybrid vehicles generateelectricity onboard the vehicle from a liquid or gaseous fuel.

Shifting to fuels other than gasoline is an enormous undertaking. Weshould take care that changes introduced in the next few years are consistentwith our long-term goals. For example, natural gas vehicles would give us anopportunity to explore strategies for delivering and storing compressed gasesfor use on a vehicle. In the longer term, it may be desirable to convertnatural gas to hydrogen for use in an FCEV. Somewhat later, hydrogen fromrenewable sources could be added to the market. With appropriate guidance fromindustry, we can design a wel l-balanced program of research, regulation, andfederal purchasing that can meet both near-term and long-termobjectives.

Ethanol and methanol are alcohol fuels that can be made from any plantmaterial -- including organic materi al in urban waste, the residues fromagriculture and forestry, and plants grown expressly for use as an energyfeedstock. While today's production of alcohols is limited to a relativelyexpensive process using corn as a feedstock, advances in biotechnolo gy now makeit possible to use paper, wood-chips, grasses, and other low cost sources ofcellulose to produce a competitively priced fuel. While waste materials arelikely to make the most attractive sources of biomass in early applications,U.S. farmers can find new uses for idle land by growing crops expressly as anenergy source. This additional source of farm income, together with localproduction of alcohol fuels, could be a major source of economic development inrural America. Farm incomes could increase while public expendituresdecline.

Biomass plantations also provide an opportunity for developing nations,particularly those in Africa and South America, to find new uses for degradedlands. While substantial and sust ained research will be needed to find ways torestore these lands, there is reason to be optimistic that methods can bedeveloped to produce cash crops in enormous regions in these countries wherethe lands have been abandoned because of poor agricultural or forestrypractices. Sales of biomass crops could help finance the restoration of theselands.

Methanol is produced from biomass via a thermochemical process that beginswith the gasification of biomass at high temperature. The products ofgasification, including carbon monoxide, hydrogen, and methane, are convertedto methanol via well-established industrial processes developed originally formaking methanol from natural gas and coal.

Both methanol and ethanol are excellent fuels for use in ICEVs. Asliquids, they are easy to store, and their wide use would require onlyrelatively modest changes in the fuel distribution infrastructure. Whenoptimized for operation on alcohol fuels, ICEVs are abou t 20 percent moreenergy efficient than when operated on gasoline.

Hydrogen will be an important fuel if the FCEV replaces the ICEV.Hydrogen can be manufactured from natural gas with commercially availabletechnology at a higher efficiency and a lower cost than for making methanolfrom natural gas. More importantly, hydrogen can be produced from biomass orvarious waste feedstocks with the same gasification technology that would beused to produce methanol from biomass. Hydrog en can also be produced bysplitting water electrolytically, using electricity from renewable sources suchas hydroelectric, wind and photovoltaic power. Hydrogen produced from thesesources and used in FCEVs could provide transportation with no pollutio n.Potential supplies of hydrogen from these sources are vast, and the productionof hydrogen would make it possible to exploit much more of intermittent sourcesthan would otherwise be possible.

New Propulsion Systems

Large improvements in fuel economy and large reductions in emissionsrequire improved fuels and improved vehicle propulsion systems. Emergingtechnologies and design tools are leading to attractive light-weight materialsand signifi cant reductions in the air resistance and rolling resistance oftires. Internal combustion engines are being continuously improved and theiruse in a variety of hybrid vehicle designs opens new opportunities.Improvements in standard engine designs can l ead to major improvements invehicle performance during the next decade.

Over the long term, however, the growing complexity of the technologiesneeded to further reduce air pollutant emissions from ICEVs, the fundamentaltechn ological challenges posed by greenhouse warming, and energy securityproblems will stimulate efforts to explore alternatives to the ICEV. To date,alternative vehicle development efforts have focused on the battery poweredelectric vehicle (BPEV). This technology can help improve energy security byshifting cars from oil to electricity produced mainly by domestic energyresources. Since they emit zero pollution in their operation, BPEVs can alsohelp improve urban air quality. But if the electricity f or these vehiclescomes from conventional fossil fuel-powered generators, air quality problemsare not eliminated but transformed and transferred from one site toanother.

FCEVs are at an earlier stage of development than BPEVs b ut are likely tobe attractive alternatives. They offer the advantages of BPEVs and can bequickly refueled and achieve greater range between refuelings.

Like a battery, a fuel cell converts chemical energy directly intoelectri city at high efficiency. For motor vehicle applications the electricityproduced by the fuel cell drives electric motors that provide power for thewheels. An FCEV would probably use a battery or an "ultra capacitor,"patterned after an electrical stora ge device being developed for the StrategicDefense Initiative, to provide extra power for starts and passing. Thiselectrical storage system can be charged both by the fuel cell operating underlow-load conditions or with the energy that would otherwise be lost in braking,via a "regenerative braking" system. The required electrical storage systemwould be somewhat larger than the battery used in conventional cars but muchsmaller than the batteries needed for BPEVs.

Fuel cell s for cars would likely use hydrogen as fuel, but the fueldelivered to and stored onboard the car could be either hydrogen or a "hydrogencarrier" that is converted into hydrogen onboard the car. If hydrogen is theform of the fuel delivered to the car, it could be stored in various ways -- ascompressed gas (the favored option at present), as a liquid, or as a metalhydride -- a compound with a metal that releases the contained hydrogen whenheated. Alternatively, methanol could be used as a hydrogen carrier. In thiscase, hydrogen would be produced onboard by reacting the methanol withsteam.

An FCEV fueled by hydrogen would produce only water in operation. An FCEVfueled by methanol would emit water, small amounts of carb on dioxide,evaporative emissions from the methanol storage tank, and pollutants from theoperation of the device that converts methanol into hydrogen. The airpollutants, however, would be a tiny fraction of the emissions from an ICEVfueled with gasoli ne or methanol. System-wide greenhouse gas emissions wouldalso be much less for FCEVs than for alternatives.

Next Steps

The Clinton Administration intends to encourage exploration of all thete chnological alternatives -- short- and long-term -- that will help ussimultaneously improve the environment and the economy. We will support abalanced, long-term research program in renewable energy. We will supportdevelopment and dissemination of ad vanced manufacturing technologies. We willwork with Congress to create tax, regulatory, procurement, and trade policiesthat encourage technological innovation and favor efforts that linkenvironmental and economic goals.

We ha ve initiated contacts with the automobile industry that we hope willlead to establishment of a task force -- guided by manufacturers, partssuppliers, and fuel suppliers -- that will coordinate the research efforts ofrelevant Federal agencies, the natio nal laboratories, and defense facilities inareas related to near-term needs and long-term opportunities for automobilesand fuels. The task force will oversee the establishment of cooperativeresearch ventures in: a) advanced propulsion systems; b) alte rnative fuels; andc) advanced materials and maufacturing technologies.

We will also coordinate our work with the States. We intend to bringtogether key State officials and representatives of the participating Federalagencies to: a) design a program to encourage introduction of prototypevehicles; and b) coordinate Federal and State regulatory programs.

The Clinton Administration wants to contribute to the goal of removing theautomobile from the lis t of national environmental problems while working torestore the technological preeminence of the nation's automobile producers. Wewill establish a partnership with industry and promote policies -- in trade,environmental regulation, federal procuremen t, etc. -- that, combined withresearch support, encourage change in the industry but allow industry toprosper as a result of that change.

The work on renewable energy sources and end uses done by many of thoseindividuals who w ill testify after me today has enabled this change. Iappreciate the chance to set the stage for their more detailed descriptions ofthese exciting technological opportunities and look forward to working with theCommittee to shape the government's role