Hydrogen from nuclear reactors

I used to think this was part of the Hydrogen Economy scam. Now I think it might be a good idea, but it appears to be justified to the public as part of the Hydrogen Economy scam.

Here's the idea: electrolysis of water to make hydrogen is expensive (about $2.46/kg at $.05/kW-hr), because electricity is expensive. But electrolysis at very high temperatures takes much less electricity, since the heat supplies much of the energy. Nuclear reactors can supply that heat cheaply. New gas-cooled high-temperature reactors can supply heat at 850 C. General Atomics has published a report that claims hydrogen could be produced from high-temp reactor steam for $1.53/kg.

Yawn. In 2003, hydrogen from natural gas cost $1.40/kg. Sounds like a boondoggle for the nuclear industry, combined with some Hydrogen Economy crap that generally makes my skin crawl. Buuut...

At May 2005 natural gas prices, hydrogen costs $2.70/kg.

The domestic U.S. consumption of hydrogen is huge: about 11 million metric tons per year. Half gets used to make ammonia (fertilizer), the other half is used to hydrocrack heavy hydrocarbons into lighter, fuel-grade stuff. World production of hydrogen is growing at 10% per year. Growth is probably faster in the U.S.

Bottom line: The U.S. spends $30 billion per year to make hydrogen, most of that is the cost of imported natural gas. The dollar volume is going up very fast as consumption increases and gas prices rise. Billions of dollars a year can be saved by making the stuff at nuclear reactors, and that is billions of dollars directly diverted from importing natural gas.

Near term future: We're going to need a lot more hydrogen as the hydrocarbon stocks we process for fuel get heavier, for instance, if we start using oil from Canada's Athabasca tar sands. Note that hydrocracking is not a clever way to get ordinary cars to run on hydrogen: Refineries will use the minimum amount of $1.60/kg hydrogen necessary to convert and sell their $0.30/kg crude as gasoline for $1.50/kg.

I'd think these reactors would be more appealing for their operator than the current offerings. Instead of being stuck with base load electricity prices, they can make electricity during the day, when prices are higher, and make hydrogen at night, when prices fall. It's expensive to store hydrogen, but you can probably store a few day's worth before you pipe it to the refinery down the street. And as long as these reactors are just down the street from oil refineries, there's a good chance the refinery can use some process heat from the reactor, too.

Finally, there is an international market for any such nuclear reactors, as well as the ammonia that we can produce from them.

The market seems big enough: hydrogen consumption is growing fast enough that you could build 5 new one-gigawatt reactors each year just to keep up with the growth, assuming each makes hydrogen 24x7.

So why should the U.S. government subsidize these reactor designs?

Macroeconomy: Because a billion dollar subsidy can reduce our balance of trade by $30 billion.

National Security: Because it can reduce our dependence on oil (in two ways) by a useful amount, and this is a noticeable step towards energy independence.

P.S. But none of this means that running cars directly on hydrogen is anything but stupid. It's just too expensive for that. If Governor Schwartzenegger gets a clue maybe he can dump the hydrogen-fueled Hummer and help secure licenses for 6 more 1100 MW units at Diablo Canyon.