In hydrogen production there are four considerations:
• The process used – electrolysis, reformation, partial oxidation or gasifi cation;
• The source of the hydrogen - water, fossil fuels, biomass or landfi ll gas;
• The source of power in the process – nuclear, renewable energy, grid electricity or fossil feedstock; and
• The byproducts of production – COx and SOx emissions or nuclear waste.

Each of these considerations brings with it a set of trade-offs and policy implications. While economic realities and market forces will guide what forms of hydrogen production will be used, existing policies and new initiatives will create the rules under which the market will operate and affect how hydrogen competes.The differing benefi ts of each source of hydrogen to policy goals such as energy independence or reduced emissions will drive policymaking. Lifecycle analysis such as described later in this report benchmarks the relative benefits of different hydrogen production methods compared to gasoline and other fuel options.

Electrolysis, at its simplest, breaks water molecules down into hydrogen and oxygen gas molecules by running an electric current through a cathode and anode present in water. Often a catalyst is used to speed the chemical reaction. The electricity can come from fossil power plants, renewable energy sources, or nuclear energy. In 2002, about 4 percent of the world’s hydrogen was produced using electrolysis. This form of production can be prohibitive in terms of capital and energy costs. Controlling these costs is essential for electrolysis to become a viable option for a hydrogen fuel infrastructure.

Two processes use fossil fuels to extract hydrogen: steam reformation and partial oxidation. Steam methane reforming uses high temperatures to extract hydrogen from natural gas, propane, biogas, landfi ll gas, or methane. In the process, carbon dioxideis a byproduct. Steam methane reforming can be done at a number of scales, from large centralized production to small, onsite DG units. In this process, the methane or CH4 in natural gas is heated in the presence of a catalyst to create a chemical reaction that removes an initial amount of hydrogen. The resulting components are then mixed with steam in order to generate greater concentrations of hydrogen while producing CO2 as the waste product. In the process of partial oxidation, the fuel source is combined with pure oxygen or air at high pressures and temperatures. The source may be oil, gasoline, methanol, or biomass. During the process, some of the fuel content is burned in order to create steam and high temperatures to produce hydrogen, carbon monoxide, carbon dioxide and smaller contaminants. The hydrogen is then separated out and used for desired applications. Heat from the processes during partial oxidation is controlled using steam, and any byproducts are used to run gas turbines in combined cycle systems to improve overall efficiency. The carbon dioxide produced is greater than natural gas steam reformation and can be captured.

Biomass and landfi ll gases are possible approaches for using existing domestic sources of fuel for hydrogen. A number of different research and development programs, some at the demonstration stage, have provided examples of hydrogen production using partial oxidation of biomass sources. These sources include agricultural products like corn, animal waste, and organic trash. While in most cases this hydrogen has a higher production cost than natural gas steam reformation, it can provide an additional revenue stream and reduce disposal costs and excess material. Altogether this makes the production of hydrogen a potentially positive venture in these circumstances. Since approximately half of most trash going into landfills is made up of organic material, trash may become a source of hydrogen for municipalities and counties looking to reduce transportation and landfill costs associated with solid waste disposal. Agricultural companies can use excess crops or crop byproducts to create hydrogen either directly or as a byproduct of fertilizer production. Biomass and landfill production of hydrogen creates CO2, and landfills also must remove sulfur and other impurities before production of hydrogen through the use of scrubbers or other separation technology.

The large quantities of coal available in the US have led many to look at generating hydrogen from that source. In a process called coal gasifi cation, coal is subjected to high temperatures and mixed with steam and oxygen. This creates a reaction that generates hydrogen, carbon monoxide and various impurities. The H2 and CO mixture is cleansed of impurities and mixed again with steam at lower temperatures to create pure H2 and CO2 gas. The hydrogen is separated for use and the CO2 is either vented or captured. No coal plants currently exist beyond the demonstration phase that are designed to optimally generate hydrogen and separate CO2. The U.S. Department of Energy (US DOE) has funded a project called FutureGen, an integrated gasification combined cycle (IGCC) coal plant that will be a test bed for coal gasifi cation technology and hydrogen production with carbon capture and minimal production of other harmful gases.

Steam reformation, coal gasifi cation, and partial oxidation all generate emissions of carbon dioxide, carbon monoxide, and other environmentally harmful substances, a major concern for environmentalists, since the overall advantages of hydrogen as a clean fuel would be signifi cantly reduced. Those proponents of using fossil fuels like coal for production of electricity or hydrogen believe that one solution is through carbon sequestration. In carbon sequestration, carbon dioxide created as a result of hydrogen production from fossil fuels is pumped into the ground to prevent its release into the atmosphere. This process captures CO2 emissions during production and stores them in various locations, such as depleted oil or gas fi elds, deep coal beds, deep saline aquifers, or deep ocean fields. If successfully developed, this technology would allow hydrogen production from current natural resource supplies while maintaining the environmental integrity of hydrogen as a clean end-use fuel.