I just read "The Dodge Report' in Design News 8.11.08 and you miss the point. Hydrogen is an OK medium to transport energy, not as good as gasoline or alcohol but workable, but where does the energy come from. There is no free hydrogen on Earth, it is much too reactive and thus you have to make hydrogen. The various web sites in the article describe different ways to produce it but they all require and energy input. Coal? Oil? Nuclear? Back to the same problems. Wind and solar are great accept that solar is still about twice as expensive as gasoline and there isn't enough wind or solar to begin to power all the cars. As I stated initially hydrogen is a medium for transport and most advocate do spend little or no time determining where the energy is coming from.
I agree increases in efficiency will reduce the energy necessary to produce hydrogen, it can be as high as 80% now, but as noted it is always less then the amount necessary to produce it, thus no net gain.
Oil has a large amount of energy when it comes out of the ground, as you noted a good bit of it is used in it's refining but there is still a net gain. Now while I am all for renewables (if they are cheaper) there are a few places where physics gets in the way. For all solar power the approximate total energy available is about 1KW per square yard. If I buy a Harbor Freight 45 watt collector which is about a square yard I get an efficiency of 4.5% That will cost me $200. The very best available today at a price of over $1000 per yard will give you a 25% efficiency. There are some theoretical projections of 40% efficiency but the important point to remember that only 1 kw per sq yd is available.
So even though the solar cell are made of sand the processing does raise the price a bit.
As far as considering hydrogen as a means of transport again there is no free hydrogen available on Earth it has to be separated from something else with an input of energy. It can be used as a fuel but it will not replace any currently used energy resource, and since it is made using another energy source it is not pollution free it just produces the pollution somewhere else.
Hydrogen and oxygen can be generated at the same time at the point of power generation. Our power plants are sized for peak demand, but have few ways to store excess capacity. Running coal plants is very polluting. Running nuclear plants is a deferred radiation pollution/storage issue; howver, current plants could have the off-peak capacity used to generate H2 and O2. Additionally, off shore tide action, wave action, current, hydroelectric dams, wind energy, ocean thermal differential (indirect solar), and direct solar power can all be used with hydrogen and oxygen generation during any off-peak (e.g. - middle of sleeping hours, during off-peak fluctuation during the day, etc)) or high-generation time (e.g. - wind is blowing, sun is shining, current is flowing, heavy rain waters are being released, etc.).
I view this as more efficient than the electric cars all plugged into the grid. Transmission losses are staggering, the infrastructure would also need to be upgraded, and there is no way to "store-up" energy on the grid when cars are not plugged-in charging.)
This CAN be a regenerative type of energy. Coal is not, but hydroelectric, currents, wind, solar, methane from sewage, or even wood burning are. The coal and wood are also not as green, even with super scrubbing stacks. Oil will not be here forever. We are consuming it far faster than it could ever be made; unless, we start extracting it from peanuts or other plants (indirect solar). Besides, plastics are also valuable and require our precious oil as well.
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