Federal Push on Fuel Cells Faces Hurdles
The Energy Department’s alliance with the traditional Big Three auto makers to spend hundreds of millions of dollars to develop hydrogen as an energy source for cars and trucks faces daunting infrastructure hurdles, industry executives and experts say.
While the goal of the partnership announced Wednesday is to eliminate America’s reliance on the internal-combustion engine and its dependence on unstable countries for oil, it would require a vast overhaul of the nation’s fuel infrastructure so drivers can buy hydrogen as easily as they buy gasoline.
David Garman, assistant secretary for energy efficiency and renewable energy, acknowledged that 30% to 40% of gas stations, or up to 70,000 locations, would have to be retrofitted to offer hydrogen to make fuel cells viable.
Technology exists to extract pure hydrogen from water, but it takes energy to carry out that process, so unless the energy comes from a renewable source, such as hydropower or solar power, the process could consume more energy than it saves.
Some environmentalists say the plan, called “Freedom CAR” for cooperative automotive research, does not do enough soon enough and lacks tangible goals.
“The Freedom CAR is pointed in the right direction, but by itself it’s going nowhere,” said David Hawkins, director of the Washington-based Natural Resources Defense Council’s Climate Center.
“Americans will buy 150 million vehicles during the next decade, and Freedom CAR won’t do anything to reduce the amount of oil they will consume,” he said. “We can’t afford another research program that just gives billions of dollars in subsidies to the automobile industry with no commitment from them to actually produce advanced vehicles for consumers to buy.”
Freedom CAR will work to develop cars using hydrogen-powered fuel cells, as well as a nationwide system to distribute hydrogen in an efficient and inexpensive way, Energy Secretary Spencer Abraham said Wednesday.
“The long-term result of this cooperative effort will be cars and trucks that are more efficient, cheaper to operate, pollution-free and competitive in the showroom,” Abraham said at a news conference with senior Detroit auto executives at the North American International Auto Show here.
“For our security, it means we will no longer have to depend on unstable regions of the world for our energy supply,” amounting to importing 10 million barrels of oil a day, Abraham said. “And families will no longer have to factor in the cost of gasoline in their vacations.”
Freedom CAR replaces the Partnership for a New Generation of Vehicles, the push for an 80-mile-per-gallon car strongly supported by former President Clinton.
Meanwhile, Japanese manufacturers have taken leadership in so-called hybrid vehicles that pair an electric motor and gasoline engine to produce high-mileage cars.
Fuel cells use hydrogen to produce electricity to run electric motors, with the only byproduct heat and water. Many fuel cells developed so far run on hydrocarbons such as gasoline, methanol or natural gas, an imperfect solution because that process generates carbon dioxide, which contributes to global warming.
Pure hydrogen as a fuel source is the ideal because no greenhouse gases are produced, but the main difficulty is in delivering hydrogen to customers because fuel-cell vehicles will have little widespread use if drivers can’t easily replenish their supplies of hydrogen.
The Bush administration scrapped PNGV because it wasn’t moving a car to market. Fuel-economy technologies were developed but not at an acceptable cost.
“A car that gets 80 mpg means nothing in the real world if no one can afford it,” General Motors Corp. Chairman Jack Smith said at the news conference. With Freedom CAR, he said, “we’re intensifying our focus on fuel cells. We look forward to the day when vehicles like [GM’s fuel-cell concept car] replace gasoline-powered cars.”
DaimlerChrysler Vehicle Uses Different Fuel
Chief Executive Dieter Zetsche of DaimlerChrysler’s U.S.-based Chrysler Group noted that Chrysler last month showed a minivan that runs on a fuel cell powered by sodium boro-hydride, a compound related to borax, the natural substance used in laundry soap. “We are seeking what is the best fuel, and this is not a question that one auto maker can answer alone.”
William Boddie, Ford Motor Co.’s vice president for global core engineering, echoed the need to choose among hydrogen, hydrocarbons or borax compounds.
“Our future success lies in getting the right fuel with maximum benefits for the customer, the environment and society: affordable vehicles and an affordable source of fuel,” he said.
The 2002 budget for the project as it migrates from PNGV to Freedom CAR is $127 million. Abraham and the auto executives would not discuss its funding level for next year, saying it will be determined when President Bush submits his budget next month. And they did not offer any timetable for bringing fuel-cell cars to market.
Jason Mark, director of the clean vehicles program with the Union of Concerned Scientists in Berkeley, hailed the focus on fuel cells and on hydrogen, but said the level of government funding was only a tiny fraction of what would be needed.
“The reality is that government investment can make a difference because it’s good seed money,” Mark said, but building a nationwide hydrogen infrastructure would cost $50 million to $100 billion.
“It reminds us that we’re not going to transform our transportation with R&D; money.”
Recognizing the need for a hydrogen source and infrastructure is an important first move, proponents say.
‘Chicken-and-Egg’ Problem Exists
“But we have a real chicken-and-egg problem,” said Phil Gott, director of automotive consulting at DRI-WEFA in Lexington, Mass. “If there is no technology available to use as fuel, then why should anyone invest in infrastructure? And if there’s no infrastructure, why should anyone invest in fuel technology?”
An infrastructure need not cover 100% of gasoline stations to be effective, however. Diesel fuel, for instance, isn’t available at every location.
“You may have to go an extra two blocks. Is that a deal killer? Probably not,” said Thad Malesh, director of alternative power technologies at J.D. Power & Associates in Agoura Hills.
Winners in a hydrogen economy would include fuel-cell and hydrogen supplier companies in the long run. Shares of several fuel-cell developers skyrocketed Tuesday in advance of Freedom CAR’s announcement, but they shed most of their gains Wednesday after the plan failed to provide specifics and Abraham warned it would take decades for viable fuel-cell vehicles to come to market for consumers.
But transportation companies and government fleets would be early beneficiaries of fuel-cell vehicles. Buses and even locomotives are easier to equip with fuel cells, as they operate in “closed loop” conditions, in which a single fueling station would be sufficient.
Big Oil is certainly eyeing the directions auto manufacturers are going with fuel cells but claims to welcome the technology. ExxonMobil, for instance, is working with GM on developing gasoline-powered fuel cells.
“Oil companies are big investors these days. They could use their petroleum for things other than burning to run cars,” said David Eisenhaure, chief executive of SatCon in Cambridge, Mass., which makes electronic power systems for fuel cells. “They could make carbon fiber, plastics or clothing out of it, which are higher-profit products than gasoline.”
Whether the oil companies are on board or not, Detroit has seized upon fuel cells as having the potential to change the way U.S. consumers think of cars and driving.
“We used to say Chevrolet was the heartbeat of America,” said Byron McCormack, head of GM’s fuel-cell program. “Well, this is a heart transplant.”
