A lot of hay has been made of Bush's assertion that we should use technology to move away from an oil-based economy to using alternate fuels. For example, from Instapundit.com we have a link to The American Enterprise: An Energy Revolution
The energy panacea of the moment is a concept called the “hydrogen economy.” Theorists propose to transition U.S. energy usage to hydrogen—a common element which, when combined with oxygen, releases energy with only water as a waste product. With hydrogen, it is claimed, we can achieve not only energy independence but also an end to pollution and global warming at the same time. The concept is entirely fraudulent.
Hydrogen is not a source of energy. In order to be obtained, it must be made—either through the electrolysis of water, or through the breakdown of petroleum, natural gas, or coal. Either process necessarily consumes more energy than the hydrogen it produces.
What the article doesn't point out as it starts discussing Ethanol and Methanol is that both are also carriers of energy rather than energy sources.
Ultimately it's important to remember that there are two separate and distinct types of energy sources we're talking about here: energy sources, such as oil and uranium (nuclear power), and energy transport, such as hydrogen and ethanol. The equation for each source of energy is different.
For oil and uranium and other energy sources, the equation is simple: does it cost more energy to extract the energy from the ground and to refine into a useable form than the energy that is delivered? One of the reasons why we're seeing greater and greater amounts of useable oil-based fuels from the same oil fields, and we haven't run out of useable oil in the 1990's is that we have come up with much more efficient methods for extracting oil from oil fields.
So for an energy source:
Euseable = Esource - Eextraction - Erefine - Etransport
Because Eextraction, the energy required to extract the fuel and Erefine, the energy to refine the fuel has gotten more efficient, this has increased the amount of fuel Esource we can extract from the ground--since none of these values are constant, but are variable depending upon the location, depth, and quality of the fuel (oi, uranium, coal) we're extracting from the ground.
For energy transport, however, the equation is not just a matter of extracting the energy and refining it into a useable form, but also how efficient are we at converting the source of energy into a form that can be transported. That is, we also have the additional hit of producing the ethanol or hydrogen from whatever energy source that is being used to generate that energy. So:
Euseable = Esource * C - Eextraction - Erefine - Etransport
Where C is the conversion efficiency from 0 to < 100%. Now for hydrogen, as noted in the article, the conversion rate from oil to hydrogen is 85%: for every 100 watt-hours of energy of oil we use, we only get back 85 watt-hours of hydrogen.
The advantage of various so-called bio-fuels (ethanol, methanol) over other sources of energy is that they ultimately get their energy from the sun, which strikes the earth on average at a rate around 4.2 kilowatt-hours per square meter per day. The downside of solar energy is that the amount of energy varies greatly, from 6.0 kwh/square meter/day in the desert to 0.7kwh/square meter/day during the winter in Seattle. Now a gallon of gasoline contains around 36kwh of energy total--though most of that is lost in an internal combustion engine.
Now if we could ultimately figure out a way to cheaply and efficiently convert solar energy into a fuel transportation mechanism (hydrogen, ethanol, stored electrical energy, etc), then we could in theory extract fuel to power our cars and houses directly from the sun without too much worry about the fact that the amount of energy listed above is averaged over a day--and averaged over various weather conditions. For example, if there was some magic way to convert solar energy into hydrogen, we could simply use a large resevoir of processed hydrogen to offset the fact that on a sunny day we may produce twice as much as on a cloudy day.
Current research I've found on the Internet shows that we can currently convert solar energy to hydrogen energy with about 25% efficiency. This means that to replace a gallon of gasoline we would need to capture 35 square meters of solar energy per day.
It's worth figuring out what this sort of energy would cost. Since solar energy is free, whatever conversion process we use will drive the cost of the output of that fuel. For example, if we use a solar collection mechanism that directly converts water and solar energy into hydrogen with 25% efficiency, we will need to build a whole bunch of these devices (hell; I personally burn two gallons a day commuting to and from work), which means we will need 5,400 square miles of solar capturing devices to replace the 400 million gallons consumed in the United States per day. (The United States uses 20 million barrels of oil per day, and we extract 20 gallons of fuel per barrel of oil.)
This is an area roughly the size of Connecticut. And if each device captures (say) 1000 square feet of solar energy (about half the size of a modest-sized house), we're talking about 150 million machines to capture all of this energy.
Now the nice part about bio-fuels is that there is noting to construct. You sow, you reap. Bio-fuels may not be as efficient as converting hydrogen from water and solar energy--but it's far easier to plant 5000 square miles of grass than it is to maintain 150 million machines--which, even if we assume a mean-time to failure of 5 years and requires 10 people a day to fix, will require one million people to maintain (an average of 100,000 failures/day with an MTF of 5 years). (Which, by the way, is one of the reasons why solar to hydrogen won't work: employing 1 million technicians will cost approximately $1/gallon, not counting equipment costs. In the end such a major shift in manufacturing, installation and the like would probably drive costs of hydrogen to prohibitive levels.)
Bio-fuels pretty much use the same agricultural mechanisms we already have in place. Rather than having an average of one technician per 3.5 acres of machinery, we can have one farmer and farm equipment manage hundreds of acres. The conversion efficiency is not as great, granted, but in Brazil using sugar cane, they manage to produce ethanol at a rate of around 600 gallons of ethanol per acre. (Sugar cane is much more efficient than corn: for every one unit of energy spent in harvesting and growing and refinement you capture 8 units of energy from sugar cane, but only slightly more than one unit of energy from corn--which makes ethanol from corn a farm subsidy rather than an energy source in the United States.) Now a gallon of ethanol contains about half the energy as a gallon of gasoline--which means if we can use something half as efficient as sugar cane, we would need to use 1.2 million square miles of farm land to meet our current energy needs.
Up until now Oil has made a tremendous amount of sense, and so has nuclear and coal: they take less effort to use--and only because of artificial constraints on the price of oil combined with ecological concerns have driven up the cost of oil, nuclear and coal power to the point where alternative fuels--that is, fuels which are less efficient energy transport fuels rather than energy sources themselves--start making sense. Make no mistake: a wholesale conversion of our energy economy to use something other than oil is potentially extremely disruptive, so it's as much a matter of finding a less disruptive mechanism than switching to a technology such as the aformentioned 5,000 square mile hydrogen extraction fascility. Something like methanol or ethanol provides an easier path because they can be blended into gasoline--leading to a less disruptive transition for people: you just go to the pump as usual, and pick a different button on the same gas pump you are used to using.
But make no mistake: this will be disruptive as all hell in the back end. It's mostly a matter of understanding what we're doing, and not passing laws in the meantime which shoot ourselves in the foot.