Senator EGGLESTON (7:45 PM) —In this year's State of the Union address, the President of the United States, George W. Bush, committed the United States to a hydrogen-powered future. At the World Hydrogen Conference held in Broome in May this year the Senior Adviser for Climate Change in the Office of Energy Efficiency and Renewable Energy of the United States Department of Energy, Dr Dixon, referred to the United States having a long-term vision for `a transportation system powered by hydrogen derived from a variety of domestic resources'. Other nations also recognise the potential of hydrogen as a future energy source. Professor Thorsteinn I. Sigfusson, Chair of Icelandic New Energy Ltd, said to the conference:

As the Chair of the Senate Environment, Communications, Information Technology and the Arts Legislation Committee, I attended the World Hydrogen Conference in Broome which, as I have said, was held in May this year. The hydrogen conference had an international flavour and was invaluable in drawing together delegates from government, energy and transport industries, scientific bodies and research institutes from all over the world who had the opportunity to take the first step towards the future integration of hydrogen as a major source of energy by exploring the strategic, technical, economic, environmental and commercial issues surrounding the use of hydrogen.

The specific aims of the conference were to review existing Australian and international knowledge relating to the use, potential and safety of hydrogen as a significant new energy source; to identify and examine the key issues for Australia at national and international levels relating to the production and use of hydrogen energy; to share information on opportunities and impediments to the production and use of hydrogen energy; to develop actions that Australia might take in response to these opportunities and impediments; to discuss the potential for regional Australia to be involved in the production and use of hydrogen energy from renewable and other sources of hydrogen; and to showcase Australia's existing and potential capabilities for hydrogen production from both renewable and non-renewable sources, together with our capabilities in the related fields of science, technology, engineering, manufacturing and finance. I am sure that, in the future, hydrogen will be used in fuel cells and even as a direct fuel in combustion engines to power vehicles, electrical plants and buildings.

The Australian government recognises the significant potential of hydrogen as a future energy source and has commissioned a national hydrogen study. According to the Minister for the Environment and Heritage, the Hon. Dr David Kemp, who spoke at the conference in Broome, the aim of the study is:

The national hydrogen study team in their presentation referred to the Draft Australian Vision for Hydrogen. It says:

The Senate will be interested to know that there are two significant factors providing an impetus towards a hydrogen economy: energy security and environmental considerations. At the conference, Professor T. Nejat Veziroglu, who is President of the International Association of Hydrogen Energy and Director of the Clean Energy Research Institute at the University of Miami, referred to projections that by the year 2020 international demand for non-renewable fluid fossil fuels—petroleum and natural gas—will outstrip production. Australia is becoming increasingly dependent on imported oil. According to the Minister for Industry, Tourism and Resources, the Hon. Ian Macfarlane:

Not only does this pose an important economic consideration but also it poses the question of energy security for this country. Oil is, after all, the lifeblood of the world economy, including the Australian economy. In this respect it is important to note that most known reserves of oil are located in the politically volatile Middle East region. In fact, almost two-thirds of known oil reserves in the world are located in just five nations: Saudi Arabia, Iraq, Iran, Kuwait and the United Arab Emirates.

Conversely, hydrogen has the distinct advantage of being available everywhere and can be derived from a variety of domestic sources, which significantly include renewable energy sources such as water and biomass. There are a variety of environmental considerations driving interest in hydrogen. Unlike petrol or diesel, hydrogen is a non-toxic, clean source of energy that will deliver significant environmental benefits in terms of decreasing pollution and greenhouse gas emissions. According to the presentation of the Minister for the Environment and Heritage at the conference:

Emissions from hydrogen production will ultimately depend on the method of production and energy source used.

Hydrogen is the most abundant element in the universe but it does not occur by itself. In fact, it combines with other elements, meaning that it has to be separated. The most cost-effective method of hydrogen production is the steam reformation of methane from natural gas. However, this has the undesirable effect of producing carbon dioxide and the challenge will be to capture and sequester this greenhouse gas. Where hydrogen is produced from the electrolysis of water using renewable power, such as wind or tidal power, there is zero greenhouse gas emission and that, of course, gives it a significant advantage.

In relation to the hydrogen economy, Australia has a number of competitive advantages. In respect of research and development, the National Hydrogen Study team referred to Australia's internationally recognised research bodies, our good skills base and the fact that we are a credible and respected research and development partner, which will help us to participate in international research efforts. The second competitive advantage that the study team identified is the fact that Australia has an abundance of the inputs required to make hydrogen: coal, gas and renewable energy such as solar, tidal and wind power. Dr Michael Jones, General Manager of Hydrogen, BP International, told the conference that the lowest cost route to hydrogen is from natural gas. The North West Shelf off the Pilbara coast of Western Australia, of course, is blessed with abundant reserves of natural gas.

It is likely that in future, rather than powering our cars with fossil fuels—as we do today—we will probably power them with hydrogen, either by fuel cells or providing liquid hydrogen directly into internal combustion engines—which BMW plans to do and have a production car on the road by the end of next year. So the development of a hydrogen fuel is a very exciting possibility which will do much to reduce our dependency on Middle Eastern oil and certainly help to ensure that we reduce greenhouse gases.