Industry, Hill reveal hydrogen-economy expectations
The transition
  to a hydrogen-based economy is an exciting prospect but won't come without a
  big investment and a lot of work, staffers and lobbyists at a Capitol Hill
  meeting organized by the American Chemical Society were told.
       Much of the "immense hype about the promise
  of hydrogen ... may be true," Sen Pete Domenici, R-NM, told the November
  conference.
       Congress is prepared to spend $2 billion on
  hydrogen R&D over the next five years, Domenici said, but the money must
  be used wisely.
       Some want demonstration projects now, Domenici
  noted, but serious research issues need to be addressed "before we even
  know what options are the most worthy among an array open for
  development."
       The appropriation for hydrogen development is
  "a big piece of money" but nothing compared to what it will take
  over the next several decades, Domenici added.
       "This is a major transition with a
  tremendous amount of uncertainty," said Shell Hydrogen.
       Shell thinks a quarter of all new vehicles sold
  in 2025 will be hydrogen fueled, Baxley reported, needing lots of spending on
  supporting infrastructure.
       Shell estimates it will cost $19 billion if 25%
  of US service stations offer hydrogen while only 2% of cars use it.
  Europe needs to spend a similar sum, Shell found, while the UK needs to spend
  $1.5 billion and Japan $6 billion.
       General Motors (GM) believes the hydrogen-car
  infrastructure will be ready by 2010 -- meaning capital risk for the 60% of
  service stations that are small businesses, GM warned.
       "We're building a new supply base," GM
  noted.
       Markets for hydrogen fuel cell technology exist
  today and help support R&D, said ChevronTexaco. Businesses need a
  "digital grade power supply now," ChevronTexaco explained, adding
  fuel cells make good economic sense.
       "This is not all smoke and mirrors,"
  ChevronTexaco maintained.
       The firm estimates investment needed to be
  between $10 billion and $15 billion to create a network of 11,700 hydrogen
  stations in 180 major cities for the first million hydrogen-powered vehicles.
       Transition to a hydrogen economy won't succeed
  unless customer expectations are met and a business case for hydrogen and fuel
  cells is made, said DOE's Office of Hydrogen, Fuel Cells & Infrastructure
  Technologies.
       "People are going to have to make money off
  of hydrogen fuel cells for this thing to take off," DOE said.
  Policymakers and local officials will have to be educated and costs have to
  come down, DOE added.
       A decision to go for commercialization will be
  made by 2015, DOE predicted, but market penetration will happen before that
  with back-up power and portable power supplies leading the way.
       The next phase needs big investment from the
  private sector, said DOE, but if hydrogen vehicles are on the road by 2020,
  the full benefits of a hydrogen economy will still be two to three decades
  away.
       Those at the meeting called for national
  standards, cheaper fuel cells, advancements in hydrogen storage capability and
  an early stimulation of customer demand.
       Government entities such as the Postal Service
  are thought to be "early customers," said GM.  (Story
  originally published in Restructuring Today 11/13/03)