Nearly 30 years ago, Iceland was looking for ways to reduce its reliance on imported fossil fuels and replace them with local, renewable sources -- geothermal and hydroelectric power. But a chemistry professor named Bragi Arnason outlined a more ambitious goal. From his study of Iceland's hot-water reserves, Arnason realized that the country was planning to tap only a small fraction of the energy resources that lay hidden beneath its volcanic surface. That convinced him that Iceland could become the first nation in the world to power its economy entirely with what is now widely seen as the energy of the future: hydrogen.
Arnason understood that Iceland offered a unique laboratory for exploring the potential of a hydrogen economy. The country's small size (40,000 square miles) and population (just 294,000) would simplify the challenge of transforming its energy infrastructure. Most important, he believed that the energy required to split water molecules and produce hydrogen could be provided by Iceland's cheap, abundant supplies of geothermal and hydroelectric power.
The response was polite. People told Arnason, "Of course it would be nice if you could do that, but it's a very long-term vision."
In the 1990s, however, as scientists around the world made breakthroughs in hydrogen fuel-cell technology, Bragi Arnason's dream began to seem less utopian. Several multinational corporations, familiar with his ideas and attracted by the notion of using Iceland's natural energy resources to produce hydrogen from water (rather than extracting it from a hydrogen-rich fuel such as liquefied natural gas or methanol), approached the Icelandic government to express their interest in implementing a national hydrogen plan.
In 1999, three of those corporations -- Shell, Daimler-Chrysler, and the energy and metals company Norsk Hydro -- joined forces with the Icelandic government, universities, research institutions, and business leaders under the banner of Icelandic New Energy (INE), a "cooperation platform" whose goal was to power the country's transportation system and fishing fleet entirely with hydrogen. The consortium is unique in the world.
Each company has made its own particular contribution to the project: Daimler-Chrysler has provided buses for the pilot phase, as it has for nine cities elsewhere in Europe; Norsk Hydro has the know-how for producing hydrogen; and Shell offers its long experience in delivering fuel to the public. The three corporations do not control the INE agenda, however; Icelandic stakeholders deliberately reserved for themselves a 51 percent majority of votes.
INE has embarked on a research phase that is expected to last 10 to 15 years -- recognizing, like hydrogen backers everywhere, that full conversion will take 40 years or more. "The Icelandic government sees this as a marathon, not a sprint," says Chris de Koning, a spokesman for Shell Hydrogen. The corporations take a similarly long-term approach: "We have been in the energy business for 100 years," says de Koning. "We want to be in the energy business for at least another 100."
Buses are the first step; after that come cars, and finally the country's fishing fleet. In 2003 the ribbon was cut for the world's first commercial hydrogen filling station, in Reykjavik. For now, its only customers are the three buses provided by Daimler-Chrysler, but when hydrogen-powered vehicles become more widely available, any driver will be able to simply pull in and use the pumps. INE is now in the midst of negotiations with vehicle manufacturers, with the goal of introducing the first hydrogen-powered cars by early 2006.
As they transport passengers around the city, white trails of pure steam floating behind them, the buses are constantly monitored to gather data on their efficiency, performance, and reliability; on the lifetime of their components; and on passenger satisfaction. "So far the project has been going extremely well," reports INE head Jon Bjorn Skulason. "The major components of the buses have not failed at all." The only significant challenge to date occurred when a pipe in the Reykjavik filling station ruptured, leading to a minor redesign.
The most revolutionary step will be to convert Iceland's fishing fleet to hydrogen. Seafood constitutes about 62 percent of the country's exports, and because of the heavy demand for oil by the fishing industry, Iceland's per capita carbon dioxide emissions are actually higher than those of a number of more industrialized European nations, including France, Italy, and Spain. Concern is growing worldwide about air pollution from ships, and Iceland's pioneering steps toward a hydrogen-powered fleet have propelled international interest and investment.
If the INE project is successful, Iceland stands to save nearly two-thirds of the $200 million a year it spends on imported fossil fuel, attract new foreign investment, and perhaps even develop the capacity to export hydrogen. It may never be the Kuwait or Saudi Arabia of the north, but Skulason believes that Iceland could someday supply the hydrogen needs of a country as large as Denmark, whose population is 20 times that of Iceland.
Most important, perhaps, hydrogen may allow Iceland to assert its own distinctive brand of global leadership in a world where finding alternatives to fossil fuels is becoming critical. "We see ourselves as pioneers in clean energy," says Olafur Ragnar Grimsson, Iceland's president. "This is an energy which is viable, which doesn't destroy life on earth. For a small nation, that is a very important vision and an important signal to the rest of the world."
-- Cynthia Grabber