Both of these issues derive from intrinsic chemical properties of hydrogen and are unavoidable. Understanding these issues highlights the significant uncertainty surrounding the future of a "hydrogen" economy – and in particular with the likelihood of hydrogen being distributed as a "fuel" as a replacement for gasoline.

Hydrogen is not a fundamental fuel

While hydrogen is abundant as an atom, it is highly reactive and for all practical purposes nonexistent as molecular hydrogen – the form needed for fuel cells. Producing hydrogen in a form usable as a fuel (i.e. hydrogen gas) requires the consumption of significantly more energy than is available from burning the hydrogen product. This is true whether hydrogen is produced by reforming natural gas, electrolysis of water, or any other method. The energy penalty for manufacturing hydrogen gas ranges from approximately 20% to 40% depending on the efficiency of the process, meaning that we must consume 1200 to 1400 Btu worth of natural gas or electricity to make 1000 Btu of hydrogen.

Electrolysis is the cleanest approach but requires more energy than reforming natural gas. No matter what process or form of hydrogen is ultimately used as fuel (pure, adsorbed, hydride, or unknown) the generation of hydrogen based fuels will always be a net negative energy process.

This energy penalty makes it misleading to call hydrogen a "source" of energy. A more fundamental source of energy is required to produce the hydrogen – such as wind, solar, biomass, geothermal, natural gas, crude oil, or coal. Energy from the fundamental source must be available and consumed in quantities significantly greater than that to be delivered to the end user. Hydrogen functions as a means of delivering energy rather than as a true "source" of energy. Hydrogen is at best a local energy source that requires consumption of energy elsewhere. As a result, hydrogen is not a fundamental energy source.

Due to the overhead energy consumption, inefficiencies, and losses, the fundamental fuel supply for a hydrogen economy must be oversized by at least 40 percent (and up to 100% or more depending on one’s assumptions). This will require that the cost for hydrogen (per Btu) will be at least 40 % more than cost of the fundamental energy used to make the hydrogen. The inclusion of capital costs for producing hydrogen will further increase the cost of hydrogen. The magnitude of infrastructure necessary to generate the fundamental energy for a hydrogen economy will be enormous. While this creates economic opportunities, it also creates barriers.

The energy penalty presents a fundamental problem for conversion to hydrogen in the near term. As production of hydrogen is almost totally based on fossil fuels, manufacture of hydrogen requires a proportionate production of carbon dioxide. If the incremental production of hydrogen from fossil fuel can come from natural gas the environmental impact is minimized. Should the ultimate source of energy (or the fuel that replaces the natural gas used for hydrogen) come from crude oil or coal the carbon dioxide production for an equivalent production of hydrogen is substantially increased, making hydrogen far less benign than having "only water" as its byproduct.

For hydrogen to be environmentally attractive, it must be produced from clean sources such as wind, solar, geothermal, biomass, or clean nuclear. Without one of these technologies being viable and available, a switch to hydrogen would seem to be premature and environmentally inappropriate. Conversion without new energy technologies would force increased reliance on fossil fuels or conventional nuclear. Neither of these alternatives have broad public or international appeal. Significant research is needed to develop a commercially viable fundamental energy production system to replace fossil fuels.

If we assume that the new fundamental energy technology lies in some combination of solar, wind, hydropower, and nuclear, the primary energy produced will be electricity. A question emerges, "Why would we convert electricity to hydrogen in order to use the hydrogen to make electricity?" The answer is straightforward: so we can store, transport, and use hydrogen to create electricity where electricity cannot otherwise be easily stored or delivered. However, it should be noted that one would prefer to use the electricity directly if at all possible, thereby avoiding the conversion losses.

For stationary situations such as home power units this implies that solar cells would be used to power the house during the day. The solar cells would need to be oversized to produce enough hydrogen to power the home overnight and to maintain a reserve for cloudy days and long winter nights. As a result the ability to store hydrogen becomes a significant factor in using hydrogen as form of energy. It is worth noting however that the challenges of stationary use are not as great as for vehicles where the size (volume) and weight of the storage system are critical factors. The challenges of storing hydrogen are addressed in more detail in the following section.

The properties of hydrogen complicate storage and distribution

Hydrogen is the simplest, and yet arguably most bizarre, element. Consisting of one proton and one electron – occasionally with one or two neutrons – hydrogen atoms and molecules are tiny, very lightweight, and incredibly reactive – with chemical characteristics of both halogen gases (such as chlorine and fluorine) and the alkali metals (such as sodium and potassium). The small size of hydrogen molecules demands high precision machined valves to minimize leakage. In addition, the small size allows hydrogen to seep into and through many materials. Over time, hydrogen makes iron and many other metals lose strength and become brittle through the formation of metal hydrides further complicating the storage issue.

Hydrogen has a reputation for being explosive though it is, in fact, not easily exploded for two key reasons:

However, it should be noted that hydrogen burns with a very hot, invisible flame. High-pressure leaks can cut like a laser. Acceptance of hydrogen by a risk-averse public appears less than certain. The safety requirements of handling hydrogen will mean that refueling in automotive applications will not be self-service and not nearly so straightforward and simple as gasoline. The safety issues surrounding hydrogen storage should not be underestimated. Safety issues will make the use of hydrogen more viable in fleet operations than for the general public.

One pound of hydrogen gas contains more chemical energy than an equivalent weight of any other substance – about three to five times the energy contained in a pound of methane or gasoline – so weight itself is not a problem. A problem lies in hydrogen’s density. Whether at very high pressures of 5000 psi (about twice the pressure in a Scuba tank) or in liquid form, hydrogen has only about one fourth the usable energy of a cubic foot of gasoline or one-third the usable energy of a cubic foot of natural gas at the same pressure.

Hydrogen storage must be at least three to four times the volume of a hydrocarbon tank to contain an equivalent amount of usable energy. A typical automobile fuel tank is about two cubic feet. An equivalent hydrogen fuel tank would need to be four times as large.

While fuel cells promise higher fuel efficiencies than gasoline engines, hydrogen fuel tanks will need to be larger than gasoline tanks. The added weight and volume may not be a big problem in a vehicle, but the sheer size of storage tanks at distribution centers and filling stations will pose challenges. Similarly, should local production of hydrogen at the filling stations not be practical the volume of tank trucks used to deliver hydrogen would be two to four times the volume of gasoline.

Hydrogen’s low volumetric energy density demands a balance between storage pressure and volume. The storage challenges are different for stationary storage and for mobile (automotive) applications. For stationary applications hydrogen may be stored at lower pressures reducing risk and energy lost compressing the hydrogen.

Low to moderate pressure storage systems for hydrogen are no doubt technologically feasible, but high facility costs due to the enormous volumes necessary and high leakage rates will complicate economic viability. For vehicular applications the challenge is much more complex.

Compression of hydrogen to 5000 psi, as is typical for vehicular applications, requires approximately 15 % of the energy contained in the hydrogen as a fuel. This is another energy penalty that is at best only marginally recoverable.

Liquefaction of hydrogen does not significantly increase its density but requires an additional 40% energy penalty, again reflecting a permanent loss of useful energy. A further challenge to liquid storage of hydrogen lies in the fact that high-tech vacuum containers of liquid hydrogen typically lose 2 to 5% of the hydrogen each day to evaporation – a substantial loss rate. Low-tech hydrogen containers would have even higher loss rates.

These difficulties have resulted in efforts to store hydrogen via adsorption on or in various substances and materials in the form of hydrides. While adsorbed hydrogen overcomes some of these problems, adsorption introduces new issues and none of the adsorptive methods are ready for commercialization. Further, no matter how the hydrogen is stored in a vehicle, high pressure or liquid hydrogen will exist somewhere in the system as adsorption is faster at higher pressure. Thus the penalties and problems of high-pressure hydrogen will almost certainly complicate vehicular use of hydrogen.

Substantial issues and uncertainties remain concerning hydrogen storage that force one to consider whether hydrogen can and will be used to distribute energy. To presume that "solutions" will be found could be naïve. Unavoidable safety issues inherent to the chemical and physical properties of hydrogen could easily result in accidents that could lead to public rejection of hydrogen as an automotive fuel.

It is worth noting that several automobile manufacturers are talking of incorporating small reformers into their fuel cell vehicles in order to allow them to store methanol or other hydrocarbons onboard to avoid the hydrogen storage issues. This returns us to the need to find a new source of clean fundamental energy to produce the methanol or other hydrocarbon.

The future of hydrogen as a means of energy storage and distribution remains uncertain. Significant issues exist – particularly in general transportation applications – that are likely to complicate early identification of the ultimately successful technologies. Public acceptance may to be difficult – particularly if accidents and events should highlight the inherent dangers of hydrogen. Investment in this sector will be risky for some time. Caution seems appropriate. For hydrogen to be successful requires that we find a clean source of energy such as solar, wind, or clean nuclear. From a chemical engineering perspective, energy is convertible. If we have cheap, abundant energy we can convert that energy into any number of viable forms storing or delivering energy. Hydrogen is but one of those alternatives. Batteries, capacitors, flywheels are also viable. Chemical synthesis of methanol, methane, diesel, or gasoline is also feasible in net-zero carbon dioxide, environmentally friendly processes.

Fortunately, demonstration fuel cell power plants incorporating natural gas reforming and fuel cell vehicles using compressed hydrogen have recently been placed in operation. The issues discussed in this paper are beginning to be experienced outside of the laboratory – in a "real world" environment, where the true issues of commercialization will emerge. With real world experience the true issues will be surfaced and addressed; the uncertainties will diminish; and greater clarity will come to the picture.

The one issue that is clearly highlighted is the need for a program to commercialize clean fundamental energy sources. It is arguably unfortunate that a program to generate clean energy is viewed as less urgent than commercializing fuel cells.