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)