by Jeremy Cato
08-12-05
Yes, concedes Fuel Cells Canada president John Tak, the 1990s were a time
when fuel-cell advocates and certain shameless stock promoters horribly
over-promised and under-delivered -- if they'd been accurate and truthful, you
and I would be able to walk into a dealership and buy a fuel-cell car right this
minute -- but that doesn't mean fuel cells and the hydrogen economy won't
happen.
"I think you are going to find that the drivers for this new technology are
energy security and reliability, climate change, health issues and job creation
through innovation," says Tak, as the rain beats down on the roof of his
second-story office at the National Research Council's fuel-cell centre near the
oceanfront campus of the University of British Columbia.
Energy security is certainly front-of-mind in the United States. The world's
largest oil consumer, at some 85 mm bpd, finds itself bogged down in a war in
oil-producing Iraq. That war and the continuing broad threat of instability
ofMiddle East oil supplies have driven up oil prices to historic highs.
On top of that, increasingly volatile pump prices have been pushed skyward by
the effects of hurricane Katrina, which devastated US oil refining capacity in
the Gulf of Mexico and laid bare the utter fragility of America's energy supply.
Canada plays a big role in all this, as the No. 1 oil supplier to the United
States.
Then there is the China factor. If China's economic growth continues at its
present rate of 9 to 10 % a year, Tak notes that within 25 years that country
will be consuming 95 mm barrels of oil per day.
Can world oil production meet steadily rising demand in not just China but also
other fast-growing economies, such as India's? As one oil company notes: "The
world consumes two barrels of oil for every barrel discovered. So is this
something you should be worried about?"
True, some argue this is merely oil industry scaremongering, that only a
vocal minority of energy experts believe the world is at, or near, maximum oil
production. After all, China's economy may stumble and conservation efforts,
technological advances and consumer demand for more fuel-efficient vehicles may
actually slow oil consumption -- currently rising 2 % a year.
New exploration, spurred by rising prices, may also find new oil reserves. In
fact, in October, the International Energy Agency said oil reserves in the
Middle East are "relatively underexploited and are sufficient to meet rising
global demand for the next quarter-century and beyond." But that scenario keeps
in play the spectre of instability and war in the Middle East, both of which can
and will affect oil supplies and prices.
Tak's point about energy security and reliability is echoed in a February
study by Science Applications International for the US Energy Department. It
said that if energy supplies are declining or at risk, more than a decade of
"intense, expensive effort" will be required to build alternative fuel plants
and greatly increase vehicle fuel efficiency.
"If peaking is imminent, failure to initiate timely mitigation could be
extremely damaging," the report warned.
Tak argues that fuel cells fall under the heading of "timely mitigation" in
terms of energy security and reliability. Then there is the issue of global
warming. On this point, Tak suggests that it doesn't matter where one stands on
climate change -- whether it is man-made or not, whether human activities are
causing global warming or not.
So while many scientists say carbon dioxide, produced when fuel such as gasoline
is burned, is a leading cause of global warming, it really is of no consequence
that other scientists disagree on this point. Regardless of what scientists
think, what matters most is the number of governments around the world
(including Canada's) now mandating carbon-dioxide reduction.
Forget about the science; CO2 reduction is becoming the law in Canada and
around the world. Earlier this year, for instance, Canada and the major auto
makers signed a pact that calls for carbon dioxide and other gas emissions to be
cut by 5.3 megatons by 2010.
As a consequence of that, Canada's entire fleet of cars and trucks should
produce about 6 % fewer greenhouse gases in five years compared with what would
happen if no action were to be taken. The short-term offshoot of that agreement
should be a further increase in the number and variety of more fuel-efficient
cars and trucks.
Fuel efficiency is not the final solution, though. According to Larry Burns,
General Motors vice-president of research and development and strategic
planning, if half the cars sold in 2025 are 50-% more efficient than those sold
in 2002, there will still be a 35-% increase in fuel consumption from 2002
levels.
As global economies grow and more consumers purchase personal transportation,
the number of vehicles and the number of kilometres travelled will grow,
offsetting the benefits of even dramatic fuel economy gains. However, in the
long term, Canadian government officials say the CO2 reduction pact isnot solely
about fuel economy. Rather, it will help promote innovative technologies vital
to Canada's success in the coming century. At the forefront of those
technologies: Hydrogen fuel cells.
Canada is a world leader in this area, says Tak. Gasoline/electric hybrid
vehicles, clean diesels, natural gas, propane and other "green" technologies can
make a small dent in CO2 production, but only hydrogen and biofuels provide the
sustainable, long-term solution to reducing dramatically CO2 in the atmosphere.
"The fact is, Japan, the US and Europe are all going bonkers over this [fuel
cell] technology," says Tak. "I think that's a validation; it shows we're not
alone in believing in this technology. So absolutely, there is a total
consciousness in the [fuel cell] industry that this is no longer R&D -- that we
are now in the commercialization phase. And for that we have to ask: what are
the drivers for the commercial consumer, the industrial consumer and the public
consumer? That means, ask the consumer: Whatare your needs and what is your
price point?"
For the automotive consumer, the answer is simple. Tomorrow's driver wants a
vehicle that does exactly what today's vehicle does, only better, and at an even
more affordable price.
"Most of the public I don't think is driven by climate change," says Tak. "While
I think most people would like to be green, their drivers are better
performance, better fuel economy and something, some technology, that saves them
money and does so in a way better than the current technology. That's what
fuel-cell vehicles have to do."
In other words, the auto industry must design a fuel-cell propulsion system
that can compete with a conventional gasoline engine in terms of cost,
performance and durability. No fuel-cell company is there yet, nor is any auto
maker.
But even if one or more were ready to launch a production-ready fuel-cell
vehicle (GM, for instance, says it will have a commercially viable fuel cell by
2010), the bigger vision of a hydrogen economy in which fuel cells power our
everyday grocery getters is clouded by uncomfortable problems.
First among them is the fact that hydrogen isn't a free-standing element and
source of energy in nature. Hydrogen is an energy carrier and as such is must be
produced using other energy sources -- solar, nuclear, coal, hydro electric,
etc.
The point is, producing hydrogen to feed into fuel cells where a chemical
process turns it into useful electricity to run electric motors is a process
that requires energy and money. For now, reforming hydrogen into a useful energy
carrier isn't as economical as refining gasoline and diesel. But it should be
some day, says Tak.
Then there is the infrastructure problem. In a nutshell, this boils down to
one simple question: Where do you fill up on hydrogen? There are only a handful
of hydrogen filling stations in Canada and the United States and to use them
requires special training.
"Infrastructure is a big problem," concedes Tak, "and that's why early
applications will be industrial-oriented. Fleets and special applications like
forklifts."
Tak points out, however, that studies have pinned a $ 10-$ 12-bn price tag on
building a reasonably viable network of 12,000 hydrogen filling stations in
North America. That is, building enough stations so that the average driver in a
large metropolis is no more than two to three km away from a fill-up.
The question is, who will build those stations? It's not likely to be the oil
industry. ExxonMobil, for instance, turned a $ 10-bn profit in the third
quarter, but the oil giant also said it would not invest any funds toward
developing alternative or renewable energy sources.
That leaves the fuel-cell industry looking to exploit niches. Various
companies have had some success in selling forklifts powered by fuel cells. They
are useful and economically viable because they compete primarily with
battery-powered forklifts working inside giant warehouses.
The fuel cell-powered forklifts, for example, produce no emissions other
thanwater, have more range than battery forklifts and can be quickly refilled.
Various fleet applications, where a central filling station can service large
numbers of vehicles, will also emerge for the industry in the next few years,
says Tak. More details on this avenue for the fuel-cell industry, as well as
other possible areas of development, should be contained in a document to be
released early next year providing for a national strategy on hydrogen fuel
cells.
For now, at least as far as the average vehicle consumer is concerned,
hydrogen fuel-cell vehicles as everyday commuter cars are years away, perhaps
even decades -- despite arguments based on energy security and reliability,
climate change and the like.
That doesn't mean the auto industry is standing still on bringing
energy-efficient technologies to the market. Technologies such as six-speed and
continuously variable transmissions (CVTs), cylinder deactivation systems,
variable-valve timing, hybrid vehicles, advanced diesels and more are all making
their way into showrooms near you. But there are non-fuel-cell technologies that
deliver better fuel economy and lower emissions. None of them require a brand
new $ 12-bn infrastructure, either.
A recent study by J.D. Power and Associates and LMC Automotive Forecasting
Services predicts that gasoline/electric hybrids and clean diesel vehicles will
grab about 11 % of the North American market by 2012. That would represent a
doubling of current sales figures.
Higher fuel prices are acting as a catalyst for auto makers and consumers to
find alternatives to the traditional gasoline internal combustion engine. Sales
of diesels are expected to grow to 7.5 % of the market from 3.5 % by 2012.
Hybrids will account for 3.5 % of the market, up from 0.05 % currently. In
the same time span, the number of hybrid models should increase from 10 to 44,
and diesels models from 14 to 26.
"The bulk of the growth in hybrid models will be in SUVs and mid-size cars,"
said Anthony Pratt, senior manager of globalpower train forecasting at the
group. "The bloom of diesel vehicles will be in the pickup truck segment, as
well as the luxury car and SUV segments."
The study added, however, that continued strong growth is predicated on the
car business and its suppliers bringing down the higher costs of hybrid and
diesel engines, which now can cost $ 3,000 to $ 5,000 more than a gasoline
sibling. Diesel also has to meet stricter air standards starting in 2007.
"Outside of meeting future emission standards," Pratt said, "the biggest
challenge for auto makers concerning diesel technology will be convincing
consumers that today's diesel engines have increased performance and run cleaner
and quieter than previous-generation diesels."
Source: www.globeandmail.ca