Could the Hydrogen Economy Run on Ethanol?

• Plans for a fuel cell car running on ethanol look like a clever way to circumvent the obstacles faced by other fuel cell vehicles.
• However, it is not clear that ethanol's perceived logistical benefits or emissions profile would give Nissan an edge in the competitive market for green cars.

Japan's Nissan Motor Co., Ltd. made headlines this week when it announced plans to produce a fuel-cell car that would run on ethanol, instead of hard-to-find hydrogen. As reported by Scientific American, the company expects to commercialize this approach by 2020, even though competitors like Toyota already have fuel cell cars in their showrooms. It's an interesting choice. Ethanol seems to offer logistical advantages over hydrogen, but the technical challenges involved aren't trivial, nor is ethanol without drawbacks from an energy or environmental perspective.

Fuel cells have long promised a different and potentially superior path to electrifying automobiles, compared to battery-electric vehicles (EVs) with their limited range and relatively long recharging times. One of the biggest obstacles has always been the lack of infrastructure and supply--hydrogen must first be liberated from water, methane or other compounds--and the problems of storing sufficient quantities of it on board. I've driven prototype fuel-cell vehicles (FCVs) and found the experience pretty similar to driving a regular car, as long as you have a hydrogen filling station handy.

Nissan makes the case that ethanol (chemical formula C2H6O) is much easier to source and distribute than gaseous hydrogen, and the process for making it give up its hydrogen is routine, at least under laboratory conditions. However, as the alternative energy research subsidiary of my former employer, Texaco Inc., found in pursuing a similar concept with gasoline, it's one thing to do this in a bench-scale device and quite another to do it in a size and shape that will fit easily and safely in a car and run as reliably as an internal combustion engine. I suspect Nissan's engineers have their work cut out for them for the next four years.

The bigger questions about this approach are more basic: Does it make sense from an economic, energy and environmental perspective, and can it find a large enough market? Consumers already have a wide range of green alternatives from which to choose, ranging from Prius-type hybrids (gasoline only), plug-in hybrids (gasoline + electricity) and battery EVs, not to mention the continuous improvement of non-electric cars. 

Nissan didn't include many numbers in the documents accompanying its press release, but the chemistry and math involved are pretty simple. At 100% efficiency, a gallon of ethanol could produce just under 0.8 kilograms (Kg) of hydrogen (H2) using the standard steam-reforming process. The best efficiency I could find for this ethanol-to-hydrogen conversion  was around 90%, so in the real world that gallon of ethanol would yield around 0.7 Kg of H2--enough to take Toyota's Mirai FCV about 46 miles. That's pretty good, considering that same gallon in a Chrysler 200 equipped as a flexible fuel vehicle (FFV) would drive an average of just 21 miles. Fuel cells are much more efficient than internal combustion engines.

The economics of operation don't look bad, either. If we use today's average US price for E85 (85% ethanol + 15% gasoline) of $1.87/gal. as a proxy for an ethanol retail price, that equates to around 4 ¢/mile, using the Mirai's published fuel economy data. That's about 15% cheaper than a Prius on regular gasoline at this week's US average of $2.40/gal., but it's also around 10% more expensive than a Nissan Leaf using off-peak electricity in northern California.

Emissions are trickier to assess. There's a lively and growing controversy about whether biofuels produced from crops can truly be considered carbon-neutral, even in places like Brazil where the yields from sugar cane are so high. There's much less controversy that the production of most US ethanol from corn is anything but a net-zero-emission endeavor. Corn requires fertilizer sourced from natural gas, and ethanol refineries consume gas (or coal) and electricity in their production process. In any case, when Nissan characterizes their planned ethanol FCV as having "nearly no CO2 increase whatsoever", they are either oversimplifying a very complex discussion or taking a large leap of faith. 

We can count the CO2 coming out of the tailpipe of such a car, and it would need a tailpipe because the onboard ethanol converter would emit about 12.5 lb. of CO2 for every gallon of ethanol converted to pure H2, plus some CO2 from the ethanol burned to heat the unit. My back-of-the envelope calculation gives a figure of 135 grams of CO2 per mile, or 20% lower than a Toyota Prius on gasoline. It would not be a Zero Emission Vehicle (ZEV), though of course an EV running on average grid electricity isn't really a ZEV, either, except in isolated regions or at specific times of day.

Even if there aren't any deal-killers here, I'm skeptical about Nissan's fundamental assumption that the ethanol infrastructure for their FCV would be that much easier to develop than the H2 infrastructure other FCVs require. That's because of the cost and ownership structure of the retail fuels business, which as I've argued previously helps explain why your corner gas station is unlikely to sell E15 (85% gasoline, 15% ethanol) any time soon, despite the EPA having approved it for newer cars. 

At least in the US, most gas stations are owned by small businesses, not by the oil companies whose brands they display. Margins are slim, and these folks don't have deep pockets, so adding a new fuel like pure ethanol or the ethanol-water mix that Nissan suggests, poses a difficult business decision: Do you take over an existing tank and stop selling diesel fuel, or premium gasoline with its high margins? Or do you rip up the forecourt to add a new tank, which entails being out of business for months--or even longer if you discover that one of your existing tanks is leaking? Either way, the investment costs and disruption to current customers are significant, in exchange for selling what at first would certainly be a low-volume product. When I was in the fuels supply & distribution business, we would have called that kind of decision a "no-brainer."

If Nissan can't encourage enough service stations to add ethanol or an ethanol/water blend--E85 would not work--to their product mix, do they start their own service station network? That seems unlikely. And if you buy one of these cars in a few years, should you carry a case of vodka in the trunk as an emergency range-extender? That's only half-facetious.  

I give Nissan credit for pursuing a novel option for making fuel cell cars more viable, as an alternative to today's range-limited EVs. Ethanol looks like a cost-competitive source of hydrogen, and it is at least easier to store than H2 gas or liquid H2. However, they face practical and marketing challenges that might well offset most of the advantages the company claims to see. The ethanol FCV could encounter the same chicken-and-egg dynamic as FCVs running on hydrogen, or indeed any new model requiring a fuel that is not distributed at scale today. It will be interesting to watch their progress.

What Will Fuel Today's Advanced Vehicles?

Last month I attended the annual "policy day" at the Washington Auto Show, which typically emphasizes green cars and related technology. This year it included several high-profile awards and announcements, along with a keynote address by US Secretary of Energy Ernest Moniz.  Yet while the environmental benefits of EVs and other advanced vehicles are a major factor in their proliferation, I didn't hear much about how the energy for these new car types would be produced.

The green car definition used by the DC car show encompasses hybrids, plug-in electric vehicles (EVs), fuel cell cars, and advanced internal-combustion cars including clean diesels. One trend that struck me after missing last year's show was that most of the green cars on display have become harder to distinguish visually from conventional models. For Volkswagen's eGolf EV, which shared North American Car of the Year honors in Detroit with its gas and diesel siblings, and Ford's Fusion energi plug-in hybrid the differences are mainly under the hood, rather than in the sheet-metal.

Of course some new models looked every bit as exotic as you might expect. That included BMW's i8 plug-in hybrid, which beat Tesla's updated 2015 Model S as Green Car Journal's "Green Luxury Car of the Year", and Toyota's Mirai fuel-cell car. The Mirai is expected to go on sale this fall in California, still the nation's leading green car market due to its longstanding Zero-Emission Vehicle mandate focused on tailpipe emissions. 

BMW i8 plug-in hybrid

Toyota Mirai fuel-cell car

Many of these cars have electric drivetrains, increasingly seen as the long-term alternative to petroleum-fueled cars. Although Secretary Moniz pointed out that the US government isn't attempting to pick a vehicle technology winner, there seemed to be a definite emphasis on vehicle electrification and much less on biofuels than in past years.

Another announcement at last month's session addressed where such vehicles might connect to the grid. BMW and VW have partnered with Chargepoint, an EV infrastructure company, to install high-voltage fast-chargers in corridors along the US east and west coasts to facilitate longer-range travel by EV. In making the announcement BMW's representative indicated that EVs will need fast recharging in order to compete with low gasoline prices. With the relative cost advantage of electricity having become a lot less compelling than when gasoline was near $4 per gallon, EV manufacturers need to mitigate the convenience concerns raised by cars with typical ranges of 100 miles or less. 

Getting energy to these cars more conveniently still leaves open the basic question of the ultimate source of that energy.  Perhaps one reason this isn't discussed much is that unlike for gasoline or diesel-powered cars, there's no simple answer. The source of US grid electricity varies much more than for petroleum fuels: by location, by season, and by time of day. However, even in California, which on average now gets 30% of its electricity from renewable sources and has set its sights on 50% from renewables by 2030, the marginal kilowatt-hour (kWh) of demand is likely met by power plants burning natural gas, due to their flexibility. That's especially true if many of these cars will be recharged near peak-usage times, instead of overnight as the EV industry expects.

Based on data from the EPA's fuel economy website, most of the plug-in cars I saw at the Washington Auto Show use around 35 kWh per 100 miles of combined driving. That reflects notionally equivalent miles-per-gallon figures ranging from 76 for the BMW i8 to 116 mpg for the eGolf. On that basis an EV driven 12,000 miles a year would increase natural gas demand at nearby power plants by around 30 thousand cubic feet (MCF) per year. That equates to 40% of the annual natural gas consumption of a US household in 2009. 

To put that in perspective, if we attained the President's goal of one million EVs on the road this year--a figure that may not be achieved until the end of the decade--they would consume about 30 billion cubic feet (BCF) of gas annually, or a little over 0.1% of US natural gas production. With plug-in EVs making up just 0.7% of US new-car sales in 2014, they are unlikely to strain US energy supplies anytime soon. 

It's also worth assessing how much gasoline these EVs will displace. That requires careful consideration of the more conventional models with which each EV competes. While a Tesla Model S surely lures buyers away from luxury-sport models like the BMW 6-series, thus saving around 500 gallons per year, an e-Golf likely replaces either a diesel Golf or a Prius-type hybrid, saving 250-300 gallons per year.  A million EVs saving an average of 350 gallons each per year would reduce US gasoline demand by 22,000 barrels per day, or 0.25%.

At this point the glass for electric vehicles seems both half-full and half-empty. The number of attractive plug-in models expands every year, as does the public recharging infrastructure to serve them. However, they still depend on generous tax credits and must now compete with gasoline near $2 per gallon. More importantly, at current levels their US sales are too low to have much impact on emissions or oil use for many years.

 

A different version of this posting was previously published on the website of Pacific Energy Development Corporation.

Threats and Opportunities of Distributed Power Generation

• Rooftop solar panels aren't the only distributed generation technology that could challenge existing utility business models as it grows.
• Some power companies see DG as an opportunity and are entering this segment in ways that could prove challenging to their start-up competitors.

Two recent news stories highlighted different ways that utilities and large generating companies are beginning to respond to the emergence of distributed generation (DG) as more than back-up power. Arizona Public Service (APS) is launching its version of potentially the most challenging type of DG for utilities, rooftop solar. Meanwhile, Exelon Corp. announced an investment partnership with a provider of gas-powered fuel cells. The success of such ventures and the evolution of DG will have implications for electrical grid stability and our future energy mix, including the role of flexible, large-scale gas-fired generation.

APS is seeking regulatory approval for a program that might be characterized as free rooftop solar. In effect, they would lease approved homeowners' rooftops for $30 per month, in order to host a total of 20 MW of solar panels that would be owned and controlled by APS. The idea has generated some controversy, partly due to the utility's rocky relationship with the solar industry over issues like "net metering". 

The plan would enable homeowners who might not otherwise qualify for solar leasing from third parties to have solar installed on their homes, although they would apparently still receive their electricity through the meter from the grid, rather than mainly from the rooftop installation. That's a very different model from most DG approaches, though under current market conditions the net benefit to consumers reportedly would match or exceed that from solar leasing.

Exelon's announcement seems aimed at a different segment of the market, and based on a very different technology. The company would finance the installation of 21 MW of Bloom Energy's fuel cell generators at businesses in several states, including California. Bloom made quite a splash when it introduced its "energy servers", including a popular segment on "60 Minutes" in 2010.

Bloom's devices, which come in models producing either 100 kW or 200 kW, are built around solid oxide fuel cells.  At that scale they are too large for individual homes but suitable for many businesses. And because they are modular, they can be combined to meet the energy needs of larger offices or commercial facilities such as data centers. Unlike the fuel cells being deployed in limited numbers of automobiles, they do not require a source of hydrogen gas. Instead they run directly on natural gas from which hydrogen is extracted ("auto-reformed") inside the box.

In that respect, despite their novel technology, Bloom's servers are much closer than rooftop solar to traditional distributed energy, in which a customer owns or leases a small generator to which it supplies fuel. The advantages of Bloom's model are that its servers are designed for highly efficient 24x7 operation, without the expensive energy storage necessary to turn solar into 24x7 power, and with much lower greenhouse gas emissions and local pollution than a diesel generator.

In order to qualify as true zero-emission energy, these installations would need to be connected to a source of biogas, e.g., landfill gas, which effectively creates a closed emissions loop or recycles emissions that would have occurred elsewhere.  Even running on ordinary natural gas, the stated emissions of Bloom's energy servers are roughly a third less than the average emissions for US grid electricity, or 20% lower than the average for other natural gas generation. However, their emissions are over 10% higher than the 2012 average for California's grid.

I find it interesting that Exelon, the largest nuclear power operator in the US and owner of a full array of utility-scale gas, coal, hydro, wind and solar power, would make a high-profile investment in a technology that could ultimately slash the demand for its large central power plants. The company has invested in utility-scale solar and wind power, and as the press release indicated, is already involved in "onsite solar, emergency generation and cogeneration" via its Constellation subsidiary. In fact, it has apparently already achieved its goal of eliminating the equivalent of its 2001 carbon footprint.  However, the press release hints that something else might have attracted them to this deal.

Consider all the changes in store for the power grid. Baseload coal power is declining due to the combination of economic forces and strong emissions regulations such as the EPA's Clean Power Plan. Even some nuclear power plants, which have been the workhorses of the fleet for the last several decades, are facing premature retirement for non-operational reasons. At the same time, grid operators must integrate steadily growing proportions of intermittent renewable energy (wind and solar), along with increasingly sophisticated tools like demand response and energy storage. If any of this goes wrong, electric reliability will likely suffer.

From that perspective, Exelon's small--for them--step into DG also looks like a bet on the future value of reliability--"non-intermittent...reliable, resilient and distributed power." That's a bet even an old oil trader can understand: Uncertainty creates volatility, and volatility creates opportunities. I will be very interested to see how this turns out. 

A different version of this posting was previously published on the website of Pacific Energy Development Corporation.

Fuel Cell Cars and the Shale Revolution

• Although fuel cell cars have perpetually seemed to be the technology of tomorrow, carmakers’ persistence with them could still pay off, as a dividend from shale gas.

• Significant obstacles remain, including inadequate hydrogen infrastructure and competition from greatly improved vehicle batteries. However, the race is far from over.

As I was working off my reading backlog, I ran across an article in the Washington Post’s “Capitol Business” edition on “Are We Ready for Hydrogen Cars?” Published in conjunction with this year’s DC Auto Show, which I missed, it mentioned a new fuel cell model from Hyundai for the California market, while providing some background on a technology that looked much more like the next big thing a decade ago than it does to many, now.

Any evaluation of the prospects for fuel cell cars to become practical requires discussing the cost of fuel cell components, the infrastructure to deliver H2 to vehicles, and the suitability of various options for storing it safely onboard. However, I was surprised the article failed to mention a new factor that might do more than anything else to improve the odds for this technology: shale gas.

In the mid-1990s, when fuel cell vehicles (FCVs) first appeared on my radar, they seemed like an ideal alternative to the gasoline engines in most passenger cars, offering zero tailpipe emissions and very low lifecycle, or well-to-wheels emissions of all types. Onboard hydrogen (H2) storage, whether as a gas, liquid or chemically adsorbed in another material, enabled higher energy density than then-current batteries, giving an FCV significantly greater potential range than a comparable electric vehicle (EV). And like electric cars, they also provided a useful pathway for bringing energy from a wide variety of sources into the transportation market, which was and still is dominated by petroleum products. Cost and technology readiness were big barriers, along with non-existent retail H2 infrastructure.

Energy remains the key to FCVs, because H2 is an energy carrier, not an energy source. Standing up a competitive fleet of FCV models thus requires plentiful and preferably low-cost energy sources from which sufficient H2 can be produced and distributed. As recently as just a few years ago, this looked like a very tough challenge.

Most H2 used industrially is generated by chemically reforming natural gas. Until recently, US gas production was in decline, resulting in high and volatile gas prices. Generating H2 from electricity looked even worse, because power prices were climbing and seemed likely to increase steadily in the future, as natural gas prices rose and higher-cost renewables were phased in. And with US electricity generation dominated by coal, H2 from electrolysis–cracking water into its components using electricity–looked like a recipe for merely shifting, rather than reducing vehicle emissions.

Like many other aspects of the North American energy scene, this picture has changed radically in the last several years, mainly due to the shale gas revolution. We now have abundant gas at reasonable prices, and this is holding down electricity costs. (Renewables are also reducing wholesale electricity prices, though not necessarily the full cost of electricity, because they still depend on subsidies and mandates that don’t show up in wholesale prices.)

These developments create the potential for cheaper H2 sources than fuel cell developers expected. Moreover, US natural gas prices have diverged from oil prices and are now at a significant discount to oil. Wellhead gas today trades for the equivalent of $25 per barrel, compared to oil at over $100. Gas-derived H2 could end up with advantages in both cost and end-use efficiency over gasoline.

Of course the availability of natural gas isn’t the only thing that has changed for fuel cells in the last decade, from a competitive perspective. Automakers such as GM, Toyota and Honda have introduced various new fuel cell models. The most recent one I had an opportunity to drive was a fuel-cell version of the Chevrolet Equinox compact SUV in late 2007. In the meantime, though, EV models are proliferating.

Unfortunately for fuel cell developers, H2 distribution has had a somewhat checkered history, as the Washington Post article notes. Providing fuel for FCVs is a much more involved and expensive undertaking than setting up a network of recharging points for EVs. How many H2 stations will suppliers build before FCVs appear in large numbers, and how many FCVs can carmakers sell before sufficient infrastructure is available to serve them? California still has just a handful of public H2 stations, after years of development.

Energy trade-offs dominate the competition between FCVs and EVs. The former have longer ranges between refueling than moderately-priced EVs–the Tesla Model S has excellent range–and can be refueled in much less time than even high-voltage EV recharging can achieve. However, FCVs are much more dependent on refueling infrastructure than EVs, which can recharge at home. And thanks to robust federal support for battery R&D and production, including from the 2009 stimulus, along with extremely generous federal and state EV tax credits, EVs have gained significant awareness and initial market penetration since the current administration took office and scaled back federal support for fuel cells.

EVs may have an edge over fuel cell cars, for now, but EV sales remain disappointing and they must compete with more convenient, mainstream hybrid cars, with and without plug-in capability. They must also compete with conventional gasoline and diesel cars that are becoming more efficient every year, reducing EVs’ advantages in operating costs and lifecycle environmental impacts. Given all that, there’s still ample time for another technology like FCVs–or natural gas vehicles (NGVs)–to scale up, if they can reduce costs quickly enough and overcome infrastructure hurdles. Those are big ifs.

Nor is it the case that EVs and FCVs are mutually exclusive in the automotive market. Fuel cell cars are fundamentally electric vehicles, too, and most will likely be offered as hybrids, with regenerative braking and traction batteries. So advances in EV architecture, battery capacity and cost, and safety also benefit FCVs. That makes it seem even likelier that our future vehicle mix will be quite diverse, with EVs and FCVs coexisting with NGVs, various hybrids, and much more efficient gasoline and diesel models than today’s.

A different version of this posting was previously published on Energy Trends Insider.

Fuel Cell Déjà Vu

A small start-up company just launched an amazing new product to much fanfare: a novel fuel cell device capable of running on natural gas and potentially small enough to fit in your basement and power your entire home, replacing the electricity you buy from the grid. That proposition looks so compelling that builders will start incorporating them into new houses, so that the cost of the fuel cell would be absorbed into the mortgage a buyer takes out, making monthly power bills a thing of the past; you just pay your mortgage and your gas bill. Would it surprise you to learn that I'm not describing the "Bloom Box" fuel cell featured on last Sunday's "60 Minutes", but rather a home fuel cell designed by a small company in upstate New York called Plug Power Inc. in the late 1990s? Plug Power is still in business, and they still sell fuel cells of various sizes, including a home model, but the revolution in distributed power that their device was expected to launch hasn't occurred, at least not yet. The reasons why might shed some light on the hype surrounding Bloom Energy.

The late-90s' arrival of residential fuel cells that I mentioned above was a development that intrigued me in my professional capacity as a strategist and scenario planner for Texaco, Inc. Small fuel cells looked like a clever way to circumvent grid bottlenecks and reliability problems, using a platform that might eventually allow them to be built more cheaply and require less maintenance than either micro-turbines or the gasoline or diesel generators that dominated the small generator market. They also had the potential to increase the size of that market tremendously. (Rooftop solar was another attractive distributed power option, but without lots of expensive storage it wasn't and still isn't a recipe for 24x7 independence from the grid.)

I'm sure there are many explanations for the failure of home fuel cell sales to take off then or subsequently, including the high cost of the units, which was partly driven by the precious metals requirement of the Proton Exchange Membranes at the heart of these small fuel cells, which were similar to those being developed for cars. Bloom may have cracked this part of the puzzle by using lower-cost raw materials and choosing solid oxide fuel cell technology that can run directly on more complex fuels like methane, rather than requiring the fuel source first to be reformed into pure hydrogen--a step that adds to investment and operating costs and consumes some of the energy in the fuel, reducing overall efficiency.

Another key element of the economics of fuel cells relates to their operating costs, chiefly fuel. This was a problem for Plug and it remains a problem for Bloom, particularly at the residential level. While industrial users and commercial sites can negotiate gas supply contracts at competitive long-term rates that should allow cost-effective power production onsite, residential customers pay somewhat more and are exposed to significant seasonal and annual price volatility--much more than on electricity rates. Through November the average US residential natural gas price last year was $12.86 per thousand cubic feet (MCF). That's close to the weighted average I paid last year of $12.46, which was quite a bit lower than the $15.55 I paid in 2008, thanks to lower gas commodity prices. Based on that price and knowing the unit's "heat rate"--the amount of gas required for each kilowatt-hour (kWh) produced--I can calculate the fuel cost of power. At the stated 6,610 BTU/kWh, and using last year's US average residential gas price, that works out to $0.085/kWh. So even if the device were free, that's the least I'd have paid for electricity coming out of it last year. If you live in California or Long Island, that's pretty cheap power. However, if you live somewhere like Virginia, where my average electricity rate last year was just under $0.12/kWh, all-in, the savings would be much smaller. At just under 10,000 kWh per year of usage, that would have saved me about $340, setting a pretty low upper limit on what I'd be willing to pay for a Bloom Box, even after factoring in the various federal and state tax credits available.

Now, we can argue all of the benefits of producing your own power, particularly if you live in an area subject to power outages during storms or heavy snow. Self-sufficiency is an appealing idea for many. And there's clearly an emissions benefit here; just how large depends on your local generating mix. At 0.77 lb. of CO2 per kWh the Bloom Box beats the national average by about 40%, though it's hardly on par with rooftop solar or residential wind--a singularly expensive distributed energy technology--or indeed with what your regional grid emits if it includes a high proportion of hydro or nuclear power. Potential purchasers of Bloom Boxes will need to assess what such attributes are worth to them.

The enthusiasm that surrounds a new (or at least new-seeming) technology such as this is understandable, and I can't help being infected by it to some degree. At a minimum, it reminds me of how jazzed I was about these possibilities the first time I encountered them more than a decade ago. However, for Bloom and other small fuel cell suppliers to fulfill that potential, a lot of things will have to break their way, including moving rapidly down the cost curve to make these devices as cheap as possible, as well as some good luck concerning the overall economy, and particularly the housing market, especially its new-construction segment. Meanwhile, if the price of rooftop solar continues to fall, fuel cells could face stiff competition, while restrictions on the production of shale gas could boost natural gas prices and thus the net cost of electricity from a home fuel cell. I'll be watching Bloom Energy's progress with great interest as they attempt to develop this market.

Fuel Cell Trains

I often use my gym time to catch up on interesting podcasts, and NPR's excellent Science Friday series is one of my favorite sources. I just caught up with a recent segment on the development of hydrogen-powered trains, which seem like a particularly clever use of a promising technology that must still overcome serious obstacles in its automotive applications. But while I give the host, Ira Flatow, credit for pursuing the question of where the hydrogen for trains would come from, his guests' answers left something to be desired. That's not just because they tended to downplay the emissions associated with producing hydrogen, but because this omission might result in ignoring what could be an even better, more efficient fuel-cell configuration for trains and other large vehicles.

The basic idea of powering trains with fuel cells offers several important advantages--and one very serious disadvantage--for rail companies and their stakeholders. It also represents a less revolutionary change for rail than for automobiles, since trains are already partially or wholly-electrified, and a fuel cell is just another way to generate that electricity. Even the diesel locomotives that fuel-cell locos would be intended to replace are really diesel-electric hybrids. The key benefits of using fuel cells instead of big diesels for this application include substantial reductions in local pollutants, including soot, along with much quieter operation. Unfortunately, even if fuel cell trains could circumvent many of the infrastructure hurdles that have impeded automotive fuel cells, they still look prohibitively expensive. Diesels are pretty cheap on the basis of $ per kilowatt of generating capacity, while fuel cells are still much pricier, by at least a factor of 10.

Ignoring cost, fuel cell trains would face fewer obstacles to wide-scale deployment than fuel cell cars. As one of the program's guests pointed out, hydrogen storage, the Achilles heel of fuel cell cars, is not a problem in this situation. If necessary, a fuel cell train could carry an entire tank-car of compressed hydrogen behind the locomotive, and it wouldn't alter the train's performance or cost appreciably. That would also reduce the need for a widely-dispersed refueling infrastructure. For that matter, a train could carry along its own refueling set-up, in the form of an electrolyzer and compressor. It would require only fresh water--reminiscent of the coal-burning locos of yore--and a place to plug in. However, when you follow that plug back to its ultimate source, you find that the CO2 emissions of a hydrogen train could be quite a bit higher than zero, and possibly even higher than those of the diesel train it would replace, because our power generating mix is still dominated by fossil fuels.

So whether the H2 for a fuel cell train would be produced from natural gas, as most of the substantial quantity of industrial H2 in the US is, or from grid electricity, it results in CO2 emissions somewhere. In fact, because electrolysis of water into H2 is only about 80% efficient, the associated emissions of electrolytic H2 used to fuel a train would be 25% higher than the average of the grid power used to produce it. And although it's theoretically possible to generate H2 solely from off-peak renewable electricity when the latter is not being used to back out higher-emitting power sources, the capital cost of that route is much higher, because it would only operate a small fraction of the time. At least for the near-to-medium term, most H2 will likely be generated from natural gas, and that argues for a very different configuration for the fuel cell train than the one considered in this episode of Science Friday. Instead of using low-temperature automotive-design fuel cells, which require a source of pure H2, a high-temperature fuel cell of the type used for stationary power generation might make more sense. Not only do these operate more efficiently, resulting in lower overall emissions, but they can also run directly on natural gas and other light hydrocarbons, producing the H2 they require internally, rather than externally. In that case, the fuel tank for a fuel cell locomotive might just be an ordinary propane tank car, for which the entire supply chain is already well-developed.

If you've ever waited for a train in an underground or partially-enclosed station with several diesel locomotives idling away, you'll probably join me in wishing the hydrogen train test project team good luck with this initiative. The benefits of converting trains to fuel cells seem obvious, assuming this can ever be done at a competitive cost. At the same time, I hope the developers will take a broader view of hydrogen as not just another fuel, but as part of our overall energy ecology. That might lead them to an even more viable, beneficial result, with a better chance of showing up in real train yards, and eventually even passenger trains.

150 Years of Oil

As I noted in my first posting of the month, August 2009 marks the 150th anniversary of the first commercial oil well. Edwin Drake's well in Titusville, PA hit "paydirt" on August 27, 1859, and the world has never been the same since, though it took decades for oil production to grow beyond levels that would seem trivial today. In its early years the price of oil was even more volatile in real terms than it has been recently, as new sources of supply and new markets repeatedly swung the industry from boom to bust and back again. That led to numerous business failures, consolidations, and the eventual domination of a few large players. Although the world is quite different today, and history rarely repeats itself exactly, there might still be some lessons for alternative energy firms in the early history of the incumbent industry they are attempting to unseat.

Oil statistics back to 1859 are a little shaky, though this chart of oil's annual production history provides a useful overview of the early trends, if we ignore the portion devoted to projecting future output. From its current position of energy dominance, it's easy to forget that the initial success of oil was hardly a foregone conclusion, and its biggest early gains were matched by serious setbacks. While oil has never relinquished the lubricant markets it captured early on, kerosene met a very different fate. It was the most important oil product for several decades, rapidly penetrating illumination markets and displacing whale oil, which was facing its own imminent Peak Oil by then. However, it's no accident that one of the most important early markets for my former employer, Texaco Inc., which along with many other firms grew out of the great gusher at Spindletop, TX more than 40 years after Drake's well, was "oil for the lamps of China." By the early 20th century the US lighting market was already being swept by electrification. Oil was rescued from impending oblivion when a relatively unimportant byproduct called gasoline found its "killer ap" in the early automobile.

As impressive as the growth rates for wind and solar power have been over the last few years, they still fall short of the early growth of car ownership. Between 1901 and 1916, annual US car registrations grew from a few thousand units to over one million, a sustained compound average growth of around 40% per year. Over the same interval, oil production more than quadrupled, led by the combination of soaring demand for gasoline, which was produced by simple distillation of petroleum in "tea kettle" refineries, and the discovery of numerous large oil fields. This remarkable growth wasn't spurred by government incentives or economics that made oil and its products merely a little better than their closest competition. It was the result of a quantum leap in personal mobility facilitated by oil's extraordinary inherent advantages in convenience. Huge surpluses of energy could be extracted from the ground and delivered relatively easily and cheaply to cars in the most remote corners of the country.

The difference in oil's success in the transportation and illumination markets is clear. In modern terms we'd say that two transformational technologies competed head to head, with each ultimately dominating the market in which it had clear advantages of better/faster/cheaper. Kerosene, which lost to electric lighting, is only important today because it turned out to make a wonderful fuel for a device that didn't exist in Drake's time, the jet engine. And it has taken a further century for the technology of electricity to advance to the point at which it is again competitive in transportation, having once lost that battle definitively a century ago, with the mass production of the Model T.

The lessons for today's energy situation are worth contemplating. For example, ethanol has just experienced a boom and bust cycle that the early oil barons would readily understand. Over-investment in capacity still destroys margins, and distribution remains a serious constraint. More importantly, perhaps, ethanol lacks a better/faster/cheaper edge as it fights for market share with petroleum products. Must true success for biofuels await innovations that will turn cheap cellulose into molecules that carry energy at least as efficiently as those in oil, or for the mass production of new conversion devices (engines or fuel cells) that can overcome ethanol's shortcomings relative to gasoline? Oil's history poses similar questions for wind and solar power, which for all their environmental benefits remain costlier and less reliable than conventional sources of electricity. Subsidies and regulations seem anemic substitutes for the inherent advantages of cost and convenience that can sweep away incumbent technologies within a decade or two. I can't help wondering whether the story of today's alternative energy technologies will more resemble that of oil's experience in illumination or in transportation.

How Many Miracles?

Over the weekend I was catching up on articles, and one from Technology Review last week caught my attention. It was a brief interview with the new Secretary of Energy, Dr. Chu, covering nuclear power and fuel cells. In the back half, Secretary Chu explained why the DOE has cut funding for fuel cell R&D, suggesting that fuel cell cars were always a long shot, because they required "four miracles" to happen. Although I haven't mentioned fuel cells very frequently here in the last few years, I must say it's hard for me to consider the commercialization of something that I've already driven as requiring quite so many miracles as that. At the same time, I don't trivialize the obstacles that explain why fuel cell cars are still not available in large numbers, despite previous expectations--including my own--that they would be by now.

Dr. Chu helpfully breaks down the challenges facing fuel cells into four categories. Start with his concern about the principal source of hydrogen (H2) today, via extraction from natural gas. This route certainly undermines the "zero emissions" claim often attached to fuel cells. In practice, that means zero tailpipe emissions, but hardly zero emissions overall. Still, it's worth considering what else we could do with the natural gas in question. We could compress it and burn it in a modified internal combustion engine (ICE). T. Boone Pickens is quite fond of that idea, and it's not as foolish as some suggest, since it can displace a lot of petroleum and reduce emissions by 15-20% compared to a conventional car, on a well-to-wheels lifecycle basis. We could also use the Fischer-Tropsch process to convert natural gas to top-quality synthetic diesel at a somewhat smaller emissions savings, because the higher efficiency of a diesel engine is largely offset by the energy lost in fuel synthesis. Or we could produce H2, which as Dr. Chu notes involves throwing away about a third of the original energy in the gas by the time we've compressed the resulting H2. Yet the latter is the only one of these pathways that, despite the high energy price paid in producing H2, affords the opportunity to cut our overall lifecycle vehicle emissions in half, because producing electricity in a fuel cell is inherently so much more efficient than burning a fuel in an internal combustion engine. It's not perfect, but it's far from awful--unless you put the H2 into an ICE--and no miracles at all are required to make the H2.

Miracle number two involves H2 storage, and this looks a bit tougher. I am not keen on carrying around compressed gases at 5,000 or 10,000 psi in the same vehicle with my family, and that is no irrational fear. In my refinery days I saw examples of how much mechanical energy even 2,000 psi held, and I will never trust a Kevlar-wrapped tank enough to be fully comfortable with this option. Moreover, I don't think Dr. Chu is entirely correct that "compressed hydrogen is the best mechanism." ECD, a company that my former employer once invested in, has a technology for storing H2 via chemical absorption in metal hydrides, and you can buy canisters that use their technology today. The advantage of this system is that it doesn't involve high pressure. The disadvantage is that these hydrides are heavy, a drawback shared by the nickel-metal-hydride batteries (same basic technology) used in the Toyota Prius and other non-plug-in hybrids. None of these systems yet stores energy at the equivalent density (and thus driving range) of gasoline, but then neither do Lithium-ion batteries.

The third challenge concerns distribution, and this is a doozy. Transporting H2 in tube-trailers is fine for servicing demonstration refueling stations, but can't be scaled up to handle millions of cars. That may not be necessary, because the "reformers" that extract H2 from natural gas can be built on a scale that fits into a service station dispenser, drawing feedstock from local gas lines and delivering fuel without any need to transport it as H2, other than in the car. Installing such devices in thousands of locations would be a massive undertaking, but frankly the same can be said for the goal of installing E85 pumps at 10% of service stations, compared to about 2000 today. To me, cost-effective H2 distribution is a matter of engineering and economics, not scientific breakthroughs.

That leaves us with the one item on Dr. Chu's list that might qualify as requiring a genuine miracle: bringing the cost of a fuel cell stack down to a level comparable to an internal combustion engine, or at least to a point not so much more expensive as to render a fuel cell car inherently unaffordable. Fuel cells still cost over $1,000/kW--implying that just the fuel cell stack for a real car would cost more than an entire luxury car today. Forecasts that this would fall to anywhere near the roughly $35/kW of today's car engines remain theoretical, relying mostly on learning-curve effects analogized from other industries. Given the current state of the car industry, manufacturers will struggle enough just absorbing the initial high cost of low-volume plug-in hybrid car production, without taking on tens of thousands of dollars in losses per car for vehicles like the Honda FCX Clarity. Absent a breakthrough, an investment like that might truly require a miracle.

Whether making fuel cell cars a practical reality requires four miracles or only one, I have to agree with Dr. Chu's conclusion that their commercialization looks neither imminent nor assured. It's important to recall that hydrogen is merely another energy carrier, like electricity, rather than an energy source like petroleum or biofuels. The smart money today is on battery-electric cars, including plug-in hybrids. In order to beat them an automotive fuel cell stack must cost less than the battery pack required to give drivers the 250-300 mile range they seem to want, because in every other respect that matters a fuel cell vehicle is an electric car. However, we must keep in mind that the smart money is not always right. Cutting back federal R&D on fuel cells to a level that puts a higher priority on other options that can deliver meaningful results sooner seems prudent, as long as we don't abandon this option entirely, or cede our competitive position to others.

Perception vs. Reality

Last week I had a very interesting meeting with Mr. Norman Johnson, Director of External Affairs for the North American division of Robert Bosch GmbH, the massive German electronics and auto parts supplier. While receiving a helpful update on advanced automotive technology, I was struck by the contrast between the low-profile efforts of companies such as Bosch to increase the efficiency of internal combustion engines, which power 99.9% of all the cars now on the road, and the media hype that greeted the launch of Honda's new FCX Clarity fuel cell vehicle, of which apparently 200 will be leased within the next three years. Although I remain receptive to the possibility that fuel cell cars will ultimately deliver on their promise of clean, practical personal transportation, improvements in existing vehicle types offer a much larger opportunity for energy and emissions reduction in the near-to-medium term.

In the course of an hour-long conversation, Mr. Johnson filled in some of the gaps in my knowledge on the efforts to make internal combustion engines more energy efficient, while reducing their environmental impact, in terms of both local and global emissions. I've written periodically about the rapid penetration of the European car market by high-performance diesel engines, and I was interested in Bosch's perspective on their potential market here. The company sees its new technology enabling diesels to capture 15% of the US new-car market by 2015. That forecast, however, predates the recent dramatic shift in the price of diesel fuel relative to gasoline. Although even at these prices, diesel still delivers better miles per dollar, seeing ultra low sulfur diesel average more than 50 cents per gallon above unleaded regular, year-to-date, must reduce some of the attraction for consumers that were accustomed to diesel selling at a discount to gas.

In addition, it appears that the arrival of this wave of advanced diesels, including new models from VW and BMW later this year, won't necessarily create the vast market that US biodiesel producers have been waiting for. Mr. Johnson stressed that while these vehicles should run well on blends containing 5% biodiesel (B5), higher proportions of first-generation biodiesel (FAME) would interfere with the engine and exhaust technology that enables these cars to meet tailpipe standards in all 50 states. Biodiesel derived from biomass-to-liquids technology, on the other hand, ought to be fully compatible.

During the course of our chat, I got a sense of the seismic shift underway in the global car business. As auto companies see their customers demanding higher efficiency and lower emissions, the suppliers on which they rely for many of the systems that go into their cars are gearing up to facilitate this. Bosch is branching out into lithium-ion batteries and other aspects of vehicle electrification, while also working on further improvements to the efficiency of diesel engines, partly in response to aggressive European targets for greenhouse gas emissions from vehicles, which look especially challenging for the German car manufacturers. Diesel's efficiency advantage over conventional gasoline engines could increase from about 30% to roughly 40%. Nor are these the only fuel economy tricks in Bosch's kit-bag--hardly surprising for a company that spends 10% of revenue on R&D. I learned about a cheap software/hardware patch to modify the way conventional cars recharge their batteries, saving around 2% of fuel. There's also stop/start technology, sometimes referred to as a "mild hybrid", and gasoline direct injection, which offers diesel-like fuel economy gains.

As promising as all this technology is, I can't help wondering whether consumers will regard it as passé in a world increasingly focused on not just using less oil, but getting off oil entirely. Plug-in hybrids, electric vehicles and fuel cells all seem to offer zero-oil/zero-emission options, even if their ultimate energy sources render them a good deal less green than they appear, at least for now. When I put this to him, Mr. Johnson seemed confident that reality would beat perception, particularly when consumers compared the actual costs and benefits. Bosch is pushing for a level playing field--"technology neutrality" in their parlance. The arithmetic of fuel economy, in which the first big increment of savings is worth more than all the rest, generally favors the lower-cost improvements that companies such as Bosch offer, at least for car owners who drive less than the national average. Of course, cars in this country have never just been about economics. Putting high-performance diesels in packages as sleek as the Audi R8 could go a long way to erase their image deficit. And as a potential buyer--though not this year--I find the ultra-cool Mini Clubman D (55 miles per US gallon but not slated for the US market, alas) as appealing as any current hybrid.

Clean Green Wheels

Yesterday I attended the awards ceremony honoring the winners of the Challenge X competition sponsored by the Department of Energy and GM, in which teams from 17 US and Canadian universities vied to produce the highest energy and emissions savings from the same vehicle platform, a Chevrolet Equinox. The 17 cars that pulled up in front of L'Enfant Plaza in Washington, DC provided concrete evidence that we are on the threshold of a much more diverse transportation energy market, and a more efficient one. Equally encouraging was the new engineering talent on display. However, while these cars demonstrate the feasibility of achieving significant fuel economy improvements in vehicles that consumers will want to buy in large numbers, there were no 100 mile-per gallon miracles in evidence.

The winning team from Mississippi State University replaced the standard gasoline engine of its Equinox with a 1.9 liter direct injection turbo-diesel--a common engine type in Europe, but sadly missing from the Big Three's US lineups, thus far. The car was then hybridized with a 45 kW electric motor drawing on a metal hydride battery pack, and it ran on a 20% biodiesel blend. In fact, although the competitors included a wide variety of powertrains, and even one fuel cell-powered car, the top three configurations were all diesel-hybrids. According to the DOE, the winning team's vehicle achieved a 38% improvement in fuel economy and a 44% decrease in greenhouse gas emissions. With the stock Equinox rated at 20 mpg combined, that suggests a result for the Mississippi State car of 28 mpg. As impressive as that is for this "crossover" class, it certainly puts into perspective the suggestions by some politicians that the recently-mandated 35 mpg fuel economy standard can easily be exceeded by cars that match our current expectations. The winner of the ongoing Automotive X-Prize competition will probably not look much like a showroom-ready crossover SUV.

The biggest challenge of improving the fuel efficiency of real cars may not be the technological one so ably addressed by these university teams. Rather, it is making those improvements cost-effective. Combining an up-to-date diesel engine with the energy recovery of a hybrid is a sure bet, in terms of fuel savings. But there's a reason we haven't seen this setup in a production car, yet: it's expensive. Gasoline-powered hybrids already carry a premium of several thousand dollars over the comparable conventional vehicle, and switching one from gas to diesel entails an even higher up-front cost. At $4 per gallon and 12,000 miles per year, the undiscounted fuel savings associated with going from 20 mpg to 28 mpg add up to $4,800 over seven years. Could a manufacturer sell a diesel hybrid for $4,000 over a standard model and make a profit? Would customers line up to buy it? The answer to both questions is not clear, partly because of the extremely limited experience of American consumers with 21st century diesels.

In a brief conversation with a GM official attending yesterday's event, I got the strong sense that the company was as interested in the teams of creative, eager students as in their cars. Competition X thus serves as a pipeline to talent, not just technology. What better way to identify and nurture a new generation of automotive engineers who are motivated by the challenge of making cars more efficient and environmentally sustainable, rather than just more stylish or powerful? Considering that within a few decades China could add as many cars as the US now has, and with oil prices continuing to rocket upward, that is the only realistic way forward for the auto industry.

When Electrons Beat Molecules

Yesterday I nearly missed a very significant piece of news--a signpost of the future, if you will--because it was buried in the B section of the Wall Street Journal. In an article entitled, "GM, Toyota Doubtful on Fuel Cells' Mass Use" the reporters cited comments at the Geneva Auto Show by executives of these two companies, suggesting that battery technology was improving faster than fuel cell technology and that the mass-marketing of the latter might be delayed for years. In light of the substantial investments that both companies have made in both technologies, these remarks reflect an important shift in the battle for future transportation energy market share between electrons and molecules. Better batteries would not just delay fuel cell vehicles; they might trump them altogether.

For over a century, the competition for powering automobiles has pitted the onboard conversion of chemical energy into kinetic energy against externally-generated electricity from a variety of sources that could be stored onboard and used on demand. Although the latter pathway generally consumes less total energy and results in fewer emissions, the "molecules" side has consistently won this tug-of-war, for two reasons. First, it mirrors our sources of primary energy, for which fossil fuels still contribute 85% of the total. More importantly, even after throwing away most of that chemical energy in the form of waste heat from inefficient internal combustion engines, these fuels still delivered a multiple of the amount of energy that could be stored in a battery pack of comparable size and weight. However, both of these considerations are now changing.

For decades researchers have worked to develop batteries that could store as much useful energy as chemical fuels and be recharged as quickly as a gasoline tank can be filled, performing this charge/discharge cycle a few thousand times without degrading noticeably. Fuel cells were seen as a clever way to finesse the lack of such a battery, by combining the energy storage densities of chemical fuels with a very efficient way to make electricity onboard. Hybrids and plug-in hybrids (PHEVs) represent another attempt to gain electrical efficiencies in spite of the deficiencies of existing batteries. The suggestion by GM's Mr. Lutz that lithium-ion batteries might soon give battery cars a 300-mile all-electric range calls into question not only the necessity of fuel cells, but of hybrids of all types and even the conventionally-powered car. Could electrons finally be poised to win the war, after a century of losing all the battles?

At the same time, the advent of modest but rapidly-growing quantities of electricity from cyclical or intermittent renewable sources not only begins to shift the fuel vs. electricity balance of our primary energy sources, but it also provides incentives for creating the means of storing renewable electricity when it is excess to the needs of the normal grid load or fluctuating strongly, a situation that has already caused isolated problems of grid instability. As the advocates of vehicle-to-grid (V2G) technology point out, electric vehicles could provide the key to making wind and solar power practical on a large scale.

But while an entirely-electric vehicle with a truly high-performance battery would have clear engineering advantages over cars with internal combustion engines or fuel cells, we can't ignore the influence of infrastructure and consumer habits in determining the rate at which such a substitution might take place. Even if the US electrical grid has enough idle overnight capacity to recharge a couple of hundred million vehicles, as a 2006 study indicated, it's not clear that it has the fuel supply to spin all those gas and steam turbines (see yesterday's posting on natural gas.), unless we convert our oil refineries to make a lot more kerosene and a lot less gasoline. And while Mr. Agassi's Project Better Place might have an ideal solution for drivers who need to recharge in a few minutes, rather than overnight, his concept must still be proven, and I would love to see how his business model manages the large battery inventory it seems to require.

A few months ago I had the opportunity to drive one of GM's new limited-production fuel cell SUVs, which recently got a boost from Richard Branson's Virgin Group. I was impressed that they had managed to make a fuel cell vehicle seem so normal. But while conventional cars and hybrids have the inertia of infrastructure and consumer expectations behind them, the same can't be said for automotive fuel cells, which because of their cost, complexity and supply-chain hurdles might simply be shoved aside by greatly-improved batteries. Developments in the next year or two could determine the outcome of a very long competition.

The Future of Gas

Not many years ago, natural gas was widely regarded as the fuel of the future. Its use was growing at a much faster rate than for oil, and it offered important environmental benefits in terms of both greenhouse gas emissions and local pollution, relative to its main competitors, coal and oil. At least in the US, however, these perceptions were altered by a period of unexpectedly tight supplies and high prices, and the rapid growth of even greener energy sources, such as wind and solar power. A new campaign by gas producers aims to restore the fuel's luster, and at least from the standpoint of the facts they cite, this ought to be an easier sell than a similar campaign by the nation's coal industry. The larger question is whether gas supplies would be adequate to displace a meaningful proportion of other energy sources, as part of the solution to both energy insecurity and climate change.

The full-page ad that caught my attention appeared in this morning's Washington Post, with the headline, "We're Not Running Out of Natural Gas." It went on to cite recent large increases in North America's gas resource potential, based at least in part on the gas industry's success at exploiting gas from non-conventional formations such as shale and deep coal beds. In fact, unconventional gas now accounts for over a third of US gas production. As recently as 2000, estimates of proved and potential US gas resources equated to about 58 years of production at current rates, so the reported jump to 82 years is impressive. More significantly, US proved gas reserves have increased by 26% over the same period, while global reserves grew by 20%. So here's another resource for which the US consumes a fifth of the world's supply while holding only 3% of total reserves, yet it looks entirely sustainable for decades. It's less clear how much more it could increase, when the fastest-growing segment of US gas supply is LNG imports.

There are at least four pathways by which natural gas could displace petroleum products for transportation energy: as compressed or liquefied natural gas for modified internal combustion engines, via chemical conversion to liquid fuels such as methanol or diesel, via conversion to hydrogen for fuel cells or modified ICEs, or as electricity generated from gas for plug-in hybrids and electric vehicles. All offer consumers environmental, efficiency and operating cost improvements, though with up-front costs that may not be fully recovered by those benefits, as in the case of today's CNG car models. Producing enough vehicle fuel from gas to replace 10% of current gasoline consumption might require another 1.8 trillion cubic feet (TCF) per year, increasing US gas demand by 8%.

Gas could also be used to displace existing coal-fired power generation. Without fanfare, gas-fired electricity surpassed the contribution of nuclear power in 2006, despite the latter's steady and impressive improvements in on-line availability. Gas now accounts for 20% of US electricity supply, compared to 49% for coal. In the process, gas-fired power plants make up 30% of total US gas demand, up from just 22% in 2000. That expansion was achieved by squeezing out a large quantity of industrial demand. At that rate, replacing 10% of coal-fired power would require another 1.7 TCF/year of gas, adding 7% to total demand--or at the expense of other uses.

So in order for gas to make even modest inroads into oil's share of the transportation market and coal's share of electricity, without crowding out industrial and commercial users, US natural gas consumption would need to grow by about 15%, over and above the anticipated growth in traditional gas demand segments, while also providing most of the energy consumed by rapidly-expanding ethanol production. The reserves data and resource estimates confirm that there's enough gas. The real challenge, however, is whether it could be supplied without disrupting the price relationship between oil and gas--a 50% discount on equivalent energy, based on current futures contracts--that makes the prospect attractive in the first place, or without making gas less competitive with renewable energy sources, including wind turbines and solar thermal power. That would be a great question for the American Clean Skies Foundation to tackle.

Fuel Cell Test Drive - Part II

In a posting at the start of this year, I described the competition among various advanced technology vehicle options as a race that still had many laps to go. Moreover, it's a race in which the finish line keeps moving, as the technology of conventional cars improves--nudged along by a stricter CAFE standard, or by consumers placing a higher priority on fuel economy and emissions. Yesterday I described my experience test driving a hydrogen-powered Chevrolet. The Equinox Fuel Cell affirms that it's possible to build a fuel cell vehicle (FCV) that consumers might want to buy, although its future retail price remains highly speculative. Today I want to tackle the larger and more complex question of whether anyone should build such a car.

As I mentioned yesterday, the GM team that came to Washington to brief the media on the Chevrolet Equinox Fuel Cell didn't just bring a half-dozen or so of the cars; they also brought detailed presentations on their advanced vehicle strategy and the experts to answer our questions. They painted a picture of the progressive electrification of personal mobility, ranging from the kind of hybrid systems featured in some of their new SUVs to cars that are powered entirely by electricity, generated either onboard or externally: by a fuel cell, as on the Equinox FC, or by an internal combustion engine and the electric grid, as in the much-anticipated Chevrolet Volt plug-in hybrid (PHEV) car. That view of electric drive as the next big step in transportation is consistent with what I saw in Texaco's long-term scenarios, going back a decade.

Good strategy isn't just about having a sound and compelling vision; you must be able to implement it. As I discussed last month, the implementation of a successful fuel cell car must overcome a number of parallel obstacles dealing with hydrogen generation, storage and distribution, while also driving the cost of both the vehicle and its fuel down to a level at which the system becomes competitive with other options, or the status quo. GM's plans cover all of these bases, though I wonder whether they can achieve the simultaneous convergence of all of the factors necessary to go from a 100-car demo to full production. Let's look at the elements:

• Production - GM anticipates capitalizing on spare hydrogen production capacity from existing industrial operations--refineries, fertilizer plants, industrial gas facilities--to supply the H2 for the first large increment of fuel cell cars. That means relying on H2 made mostly from natural gas, at least initially, with its associated costs and emissions. In this regard, the "zero emissions/zero petroleum" label on the Equinox I drove only accounted for the vehicle's inputs and outputs, not a "well-to-wheels" lifecycle energy and emissions profile. While GM's figures on total US hydrogen production looked accurate, all of that output is currently spoken for, making cleaner gasoline, ultra-low-sulfur diesel, and other products. GM and its partners are apparently still working on an estimate of how much incremental H2 might be available from these sources. The energy and environmental benefits are likely to vary regionally and locally, depending on the source of H2, though all should be an improvement over the internal combustion engine (ICE).
  
• Storage - The Equinox Fuel Cell has three high-pressure H2 tanks. H2 at 10,000 psi is dense enough to give the car a 150-mile range, and it is manageable enough to allow the car to be refueled in 5-7 minutes, a bit longer than your typical gasoline fill-up, but far quicker than recharging any existing electric vehicle. Compressed H2 entails some trade-offs, however. While not subject to the venting concerns and boil-off losses that have plagued liquid H2--BMW's chosen mode--it is still not dense enough to provide as much range as gasoline, even after the 2X efficiency improvement from the fuel cell. And while the tanks are carbon-fiber-wrapped and the safety systems include sensors that close all the H2 valves in a collision, I will never be thrilled with a storage system that bottles up that much mechanical energy, even if it were compressed air, rather than H2. In the long run, metal hydrides or carbon nanotubes may provide a welcome upgrade, but I can appreciate that compressed H2 is what was doable now.
  
• Distribution - GM has mapped out how many refueling facilities would be necessary in each of their target markets. For example, in L.A. they foresee 30 local stations, supplemented by another 10 along the routes to Santa Barbara, Palm Springs, etc., handling up to 40,000 FCVs. The logistics of that seem a little snug to me, but that aspect has presumably been vetted by GM's fuel partners, including Shell. The economics of the required investment, cited at up to $3 million/station, look daunting, however. Absent government subsidies, the margin on retail H2 would have to be commensurately high, approaching $2/kg, to ensure positive returns on these facilities. Will GM's fuel partners have the stamina to put down in excess of $100 million against what could easily prove to be a negative NPV? But how many cars can GM sell, without pre-positioning enough stations to refuel them conveniently?

Many experts have written off hydrogen as a bad idea. As I mentioned in last Thursday's webinar (here, in case you missed it) I believe that view ignores the substantial well-to-wheels efficiency and emissions benefits that hydrogen fuel cells offer, and which the GM team highlighted in their presentation. It also presumes that we already know what will induce consumers to trade in their reliable-but-inefficient conventional cars. I give GM a lot of credit for getting the FCV to the point at which they can put it in the hands of real consumers, as Toyota is currently doing with a similar demonstration fleet of Priuses modified into plug-ins. Such market tests are essential to establish the viability of these concepts, though in neither case is consumer acceptance the only hurdle on the path to commercial viability. Manufacturers must still cut the cost of these cars to a level justified by their energy and emissions savings, and complex infrastructure issues--technical and economic--must be solved. For now, the race proceeds, but the finish line remains distant.

Fuel Cell Test Drive - Part I

Last Friday, along with several members of the press and a few other bloggers, I had an opportunity to drive GM's latest hydrogen vehicle, the Chevrolet Equinox Fuel Cell. This took place as part of GM's Project Driveway rollout, which will put 100 fuel cell cars in the hands of selected consumers (apply here.) The session in D.C. included an extensive briefing by GM's fuel cell team on the corporation's advanced technology vehicle strategy, the safety and design aspects of the Equinox FC, and its associated hydrogen refueling infrastructure. I couldn't possibly do justice to all this in a single posting, so today I'll focus on the fun part--driving a fuel cell car--and return to the larger strategic and policy implications tomorrow.

(Photos courtesy of GM.)

Even though I've been following the development of advanced technology vehicles pretty closely for ten years, as part of my broader focus on alternative energy and its environmental implications, I must admit that I was surprised at how normal the Equinox FC seemed. Nothing about it suggests a limited-production prototype. In appearance, trim and handling it looks and feels like a real car, rather than a test-bed for a highly efficient but very costly new propulsion system. Other than the animated fuel cell schematic on the dash and a power output gauge where you'd expect to find a tachometer--and the absence of a tailpipe--you'd be forgiven for not noticing that it isn't just another well-appointed example of the car-based SUVs that have become increasingly popular in the last few years.

How did it drive? Well, anyone who has never driven an electric car or a hybrid--which the Equinox FC is, too--might think that the equivalent 125 horsepower of the Equinox's 93 kW fuel cell stack wouldn't be adequate to deliver acceptable acceleration. After experiencing the EV-1 a decade ago, I knew to expect the electric motor's kick, with its instant torque. The car performed well on our loop around downtown Washington, DC, including a short hop onto I-395 towards Crystal City. It wasn't as eerily quiet as the EV-1; between the air compressor and H2 injectors, I might have guessed the car was powered by a big, refined V-6.

Naturally, there were a few other reminders that this wasn't a regular car. Because the Equinox FC employs regenerative braking, like other hybrids its brakes feel a bit stiff and unresponsive. Hybrid owners tell me they get used to this very quickly. Even when compressed at 10,000 psi, H2 takes up more room than its equivalent in gasoline or diesel. The hump in the cargo area behind the back seat--which would certainly complicate loading the car up for a family trip--isn't the only reminder of this fact. Even at an effective 43 miles per gallon, the maximum H2 capacity of 4.2 kg on board is only enough for about 150 miles, and H2 refueling stations are as rare as hen's teeth. (More on that subject tomorrow.)

I don't test drive cars very often, and the Equinox--fuel cell or otherwise--is quite different from my normal ride. I've never owned an SUV or mini-van, and the standard Equinox and its competitors weren't on my short list the last time I went car-shopping. So while my test drive didn't impart a desperate urge to own an Equinox FC, that's more of a knock on a car class that doesn't hold much appeal for me, than on this particular vehicle. At the same time, I think GM made a wise choice of the Equinox as a fuel cell platform, leveraging the standard model's 5-star crash rating to allay some of the safety concerns that hydrogen still raises, and put this technology in a package that most Americans would find similar enough to the cars they own to make them immediately comfortable.

So, on balance, count me as favorably impressed with the Equinox Fuel Cell. What's under the hood may be rocket science, but the car itself isn't. While that might disappoint some of us alternative energy "gear-heads", it's a useful reminder that no advanced technology vehicle will ever become a mass-market success, unless it incorporates the best marketing--as well as engineering--thinking. Tomorrow's posting will look at the energy and environmental implications of mass-producing a fuel cell vehicle such as this one.