Hydrogen Distribution Infrastructure

Marianne Mintz, Stephen Folga, John Molburg and Jerry Gillette

Jefferson Laboratory Fuel Cells WorkshopNovember 12, 2002

Topics

Infrastructure components and “well-to-pump”modeling approachAssumptions and component cost analyses in CHAIN model“Well-to-pump” costs of hydrogen vs. gasoline by pathway and “build out” Conclusions

Components of “Well-to-Pump” CostsFeedstock acquisition

Crude oilNatural gasUraniumCoal

Feedstock transport and storage Processing

Petroleum refiningHydrogen productionCoal, natural gas or uranium processing

Product distribution and storage PipelinesCompressor stations

Dispensing and retailing

Define Pathways

Resource Extraction

Transport and Distribution

Processing Storage

Fuel EfficiencyDispensing

Vehicle Fleet

Vehicle Miles Traveled

Stock Adjustment and Infrastructure Models Estimate Pathway Costs

IMPACTT,VISION or

Other

Estimate Size of Facilities

Capital and O&M Costs

Economies of Scale

Empirical Cost Equations

Add & Replace Facilities to Meet Demand

Work Backward from Fuel Demand

Assume Standard Sizes for Equipment

Modules

Learning Curves

Physical & Economic Life

Efficiencies of Pathway Stages

Estimate Fuel Demand

CHAIN

Infrastructure Costs Are Estimated for Four H2 “Well-To-Pump” Pathways

NA Natural

Gas Extraction

NG

Purification

NG Transmission

NG Storage NG

Distribution

DecentralizedH2 Production

Coal Extraction

Coal Preparation Coal

Transport

H2Transmission

Uranium Extraction

Fuel Preparation

ThermochemicalWater Splitting

CoalGasification

Steam MethaneReforming

H2 Transmission

H2Distribution Hydrogen

Fueling

Station

NG-Based Pathways Require Additional Natural Gas Transmission Lines

The US has an extensive in-place NG transmission infrastructure …..

And a Track Record of Continually And a Track Record of Continually Expanding Transmission CapacityExpanding Transmission Capacity

New pipelinesNew pipelines

Additional compressionAdditional compression

LoopingLooping

All of the aboveAll of the above

Since the MidSince the Mid--1990’s Transmission 1990’s Transmission Capacity Has Grown > 4 Capacity Has Grown > 4 BcfBcf/d Each Yr/d Each Yr

4,030

2,574

6,542

8,460

12,350

5,613

1,875

1,725

6,210

6,350

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1991 1993 1995 1997 1999

Mill

ion

cf/d

Source: EIA 2001

According to EIA, Nearly $5 According to EIA, Nearly $5 blnbln Was Was Spent on Pipeline Expansion in 2000 Spent on Pipeline Expansion in 2000

1996 1997 1998 1999 20000

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

552

1,397(Preliminary)

2,124

4,876

Mill

ion

Proposed

(Estimated)

Completed

2,380

Source: EIA 2001

Expansion Reflects Shifts in the Structure of the Industry and Its Resource Base

Increased production in deep-water Gulf of Mexico and in western and offshore eastern CanadaReduced production in mature provincesShippers seeking greater access to alternate sources of supplyProducers seeking greater access to non-traditional markets (market integration)Increased use for power generation with resulting shifts in seasonal demand patterns

Unit Cost of Natural Gas Transmission Pipelines Is a Function of Diameter

y = 52981xR2 = 0.9534

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

0 10 20 30 40

Inches

$/mile

NG-Based Pathways Require Underground Storage

At the end of 1998 there w ere 410 underground natural At the end of 1998 there w ere 410 underground natural gas storage sites in the U.S.gas storage sites in the U.S.

W ith 76W ith 76 BcfBcf per day of W ithdrawal per day of W ithdrawal Capability and 3,933Capability and 3,933 BcfBcf of W orking of W orking

Gas CapacityGas Capacity

The Cost of Underground Storage Varies by Type and Capacity

• Capital cost of underground storage is a function of working gas capacity (projects with 2001-04 completion, 1999$)

• Working gas capacity per field: 5 x 109 scf

• Unit O&M cost: $0.224 per 103 scf delivered (Young Storage Field, CO)

y = 2746.7xR2 = 0.6947

$0$20,000,000$40,000,000$60,000,000$80,000,000

$100,000,000$120,000,000$140,000,000$160,000,000$180,000,000

0 10,000 20,000 30,000 40,000 50,000

Working Gas Capacity (MMcf)

Steam Methane Reforming Has Large Economies of Scale

y = 5157200x0.58342

R2 = 0.905

$1,000,000

$10,000,000

$100,000,000

1,000,000,000

0 1 10 100 1,000

Ton/day

$

Conceptual Illustration of Pipeline Loop Supporting Local Hydrogen Delivery

Hydrogen Production

Transmission Pipeline

Distribution Main

Refueling Stations

Hydrogen Distribution Assumptionsfor Centralized H2 Production

Ca Assumes 180 refueling stations, a service pipeline unit length of 15 miles, and 3

stations per service pipeline.

900 a3$400,000H2 Service Pipeline Connecting H2Refueling Stations with Pipeline Ring

15712$1,000,000H2 Distribution Pipeline Ring

10012$1,000,000H2 Transmission Pipeline Connecting Pipeline Ring with H2Production Plant

Length (mi)

Diameter (in)

Unit Cost($/mi)Component

Annualized H2 Cost Declines with Scale and Investment Amortization

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

2015 2020 2025 2030 2035 2040 2045 2050

$/gge

Decentralized SMR

Centralized SMR

Nuclear

More Costly Production and Distribution Increase H2 “Well-To-Pump” Cost Relative to Gasoline

Crude oil represents 61%, distribution 10%, and refining 21% of gasoline cost (for $28/bbl crude)H2 production accounts for >60% of cost in nuclear path; ~25% in centralized NG path Distribution accounts for ~25% of H2 cost in nuclear and centralized NG paths Costs decline over time as infrastructure is “built out” and amortized

2030

2015 $/gge$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00

Gasoline

Centralized NG

Nuclear

DecentralizedNG

$0.00 $5.00 $10.00 $15.00

Gasoline

Centralized NG

Nuclear

Decentralized NGFeedstockFeedstock transpProcessingDistributionDispensing

Some Conclusions:With current technologies, on a well-to-pump basis, unit cost of hydrogen is likely to be 2-3 times gasoline. To offset this, mpge of H2-fueled LDVs must be at least an equal factor better than comparable vehicles.H2 transport and production are the largest components of all paths examined, hence appropriate focus for cost reduction.“Bi-” fuels, engines and distribution networks offer potential cost reductions, especially in the transition.