Oblivious to a frigid wind whipping across the plain, just west of Reykjavik, Arnason spells out the vision that earned him the moniker “Professor Hydrogen.” First, take all of Iceland’s cars and fishing trawlers and gradually replace their gas combustion engines with electric motors that run on hydrogen-fuel cells, just like American space shuttles. Meanwhile, harness the power of Iceland’s active volcanoes and raging rivers to begin producing pure hydrogen gas on a mass scale. Arnason even inspired countrymen to dream of Iceland as the “Kuwait of the North,” a major source of energy in a world where all nations have followed Iceland’s path. But that was the minority. “There were not many people who really listened to him” at first, says Valgerdur Sverrisdottir, Iceland’s minister of Industry and Commerce, throwing back her head and laughing. “It was so far away–to use water for cars?”
It’s not far out anymore. The roster of experts who see hydrogen as the most likely replacement for oil when the wells run dry now includes the oilmen of the Bush administration, and the futurists at General Motors and Ford. Iceland’s plan is now backed by DaimlerChrysler, Shell and the European Union, which plan to spend tens of millions of Euros to create the first societal lab test of a hydrogen economy. In the coming months, Iceland will roll out three hydrogen-powered buses and begin constructing a filling station where hydrogen gas will be produced on-site. If all goes according to plan, this demonstration will expand to cars and fishing vessels in 2005, and all vehicles within 30 to 40 years. Other nations are likely to follow. The only question is when, says Margaret Mann, an engineer at the U.S. National Renewable Energy Laboratory. “In the long term we have to move to hydrogen. It’s the only way to really divorce ourselves from fossil fuels.”
Even now, the vision of a hydrogen economy sounds too good to be true. Hydrogen occurs naturally in water, so the supply is as close to endless as the oceans. And pure hydrogen is a harmless gas, not a toxic liquid, so spills would dissipate in the air. Hydrogen-fuel cells emit only water vapor, and the electric motors make nary a sound. This all seems even more like a mirage in the case of Iceland, which will rely on steam and water to generate the power to make hydrogen fuel. The process involves bombarding H20 with electric ions to split off the hydrogen, which is recombined with oxygen in a fuel cell that makes charged ions to run a motor, and water molecules as a byproduct. In short, Arnason plans to use natural energy to make a powerful hydrogen fuel that emits only water mist as waste, promising a bottomless well of clean energy that produces no greenhouse gases and no threat of global warming.
Arnason thought it was an obvious idea. In the 1970s, he was living on top of a glacier and mapping Iceland’s reservoirs of hot groundwater as part of his doctoral thesis in chemistry. The reservoirs were no secret in a nation where cooks have been known to bake bread by burying boxes of dough in the ground, and farmers drilling in the backyard are likely to set off steaming geysers. But Arnason was the first to map those reservoirs, revealing huge reserves of natural geothermal energy.
It was a portentous discovery. Iceland grew up energy poor, a harsh reality that rankled an independent-minded nation founded in the 900s by Norwegian Vikings. With no fossil fuels of its own, and huge energy needs due to the cold weather and the economy’s reliance on gas-guzzling fishing vessels, Iceland was heavily dependent on foreign oil. It reeled from oil shocks, and its inflation rate averaged a staggering 17.6 percent between 1944 and 1995. Driving down the frigid North Atlantic coast, Arnason recently recalled that it was “quite natural” for a nation in this state of energy servitude to ask, “How can we change this?”
From the beginning, Arnason saw hydrogen as the answer, knowing full well it appeared a bit nuts. In the 1970s and 1980s, hydrogen-fuel cells were huge and expensive, and the fact that they were used by the U.S. space program only made Arnason’s vision seem farther out there. Arnason delivered his first paper on the subject in 1978 with trepidation. “I was not quite sure whether I should publish it. I thought that maybe people would think I was crazy,” Arnason recalls. “[My mentor] read it and said, ‘If you really believe this could be realized in 20 to 30 years, you should start talking about it now’.”
He did, mostly to Rotary clubs, his classes and other small groups in Iceland, where he soon gained a reputation. “He was always called a guru, not by the general public but by the energy people,” says Johann Mar Mariusson, vice president of Landsvirkjun, the National Power Company, and a longtime friend. “He didn’t like the name Professor Hydrogen. He thought people were mocking him.” Many of them were.
Then the world caught up. Arnason’s work began to pay off in the 1990s, when global oil and auto companies started to take seriously the idea of hydrogen as the “next oil.” The first breakthrough came in 1992, when Ballard Power Systems of Vancouver, British Columbia, demonstrated the first hydrogen-powered bus–the precursor to the models that will roll onto the streets of Reykjavik. The big surprise: Ballard’s bus produced 150 kilowatts, or 15 times more power than most engineers expected from a hydrogen motor. “People kept looking around and asking, ‘Where’s the rest of it hidden?’ " recalls Firoz Rasul, Ballard’s CEO. “They never thought it could be done.” Daimler-Benz stepped up and invested $250 million, and together they turned to Iceland.
Iceland just made sense. It has extreme weather conditions to test the durability of new automotive models, and a small population of 280,000 whose high energy costs were reason enough to experiment with alternative energies. Moreover, Iceland’s Professor Hydrogen was already well acquainted with the head of fuel-cell research at Daimler, Ferdinand Panik, who had been seeing Arnason at obscure conferences for years. The support of this big-shot scientist from a major multinational silenced the skeptics. In 1998, when officials from Daimler (now merged with Chrysler) arrived in Reykjavik to cut the deal, it was such a big local story that talks were moved to a secret site outside town. “We had to hide,” recalls parliamentarian Hjalmar Arnason (no relation to Professor Hydrogen), a leader of Iceland’s negotiating team. “Everything went crazy.”
The interest of an auto giant drew other global players. The result is Icelandic New Energy, owned 51 percent by Iceland and 49 percent by private interests including DaimlerChrysler, Shell Oil and Norway’s Norsk Hydro. The European business executives were stunned at how fast business got done in Reykjavik, a tiny capital where everyone knows everyone. It also didn’t take long to interest the European Union, which so far has allocated ¤2.85 million to the bus phase of the project. The EU plans to follow with similar bus projects in Britain, Germany, Spain and at least four other nations. “If it works in Iceland, it’ll work in other countries,” says Panik. “It’s the perfect place to start.”
Iceland is also unusually ambitious. Cities from Vancouver to Palm Springs have already deployed hydrogen buses, but Iceland represents the first attempt to phase out fossil fuels entirely, and thus become the first society to eliminate greenhouse emissions. Icelandic New Energy will be doing extensive market research to refine the design of hydrogen stations and cars, and to make the whole idea of the hydrogen economy “socially acceptable.” One key hurdle is cost: even under the most favorable estimates, Icelandic New Energy expects the hydrogen to eventually cost about twice as much as gas, though it would generate twice as many miles per gallon.
Iceland is a model in the making. The International Code Council in Virginia is holding a public hearing in April on draft fire, electrical and industrial-fuel codes to govern a hydrogen economy. This June the International Organization for Standardization will consider safety guidelines for tanks, containers and fueling stations that hold hydrogen, which is about as flammable as gasoline. “Iceland is small enough that you can actually test and validate codes and standards and so on,” says Rasul. “Iceland is going to be able to show where the rest of the world can go.”
The question is when, and at what cost. Shell Hydrogen figures it would cost at least $19 billion to build hydrogen fuel plants and stations in the United States, $1.5 billion in Britain and $6 billion in Japan. That’s compared with a “matter of millions of dollars in tiny Iceland,” says CEO Don Huberts. “Also, in Iceland people do not drive their cars off an island, so we won’t have to wait for the infrastructure to develop elsewhere.”
Iceland may prove unique in other ways, too. Its huge reserves of natural geothermal energy are unrivaled in Europe, and some dream of exporting the hydrogen to the mainland and creating a booming new industry (though first they’ll have to figure out a way to get it there). Whatever happens, when the new energy age dawns, Arnason will have the satisfaction of knowing that the first seeds of the hydrogen economy grew in his Viking land of snowy moonscapes and steaming water holes. And Professor Hydrogen will no longer have reason to hate his nickname.
