Time
to jump start the hydrogen economy?
Thursday,
November 01, 2007
A
fuel cell vehicle being filled with hydrogen
$10 - $15 billion. Sounds like a huge sum of money,
doesn't it? Too much for the government to jump start the
hydrogen highway, right?
Well, let's add a little perspective.
In 2006, ethanol subsidies reached $8 billion dollars, and
within 10 years those subsidies could reach $25 billion
per year (more).
Even ethanol subsidies, however, are chump change.
The real cost of oil
The fascinating new book ZOOM
quotes a 2006 statement by GM czar Bob Lutz, "I think
there's a bone-deep awareness in the American public now
that $1.20 gasoline while the rest of the world is paying
five, six dollars is not some God-given right because the
maker decided to bestow cheap gasoline on the American
public."
So, how much should gasoline really cost?
Obviously, that's not an easy question to answer, but
there are other costs associated with gasoline that are
not added to the price at the pump. Yet, indirectly,
Americans are still responsible for the costs.
For example, ZOOM writes, "The Cato Institute, a
libertarian think tank, calculates that America spent $30
billion to $60 billion a year safeguarding Middle Eastern
oil supplies during the 1990s, even though its imports
from the region totaled only about $10 billion a year
during that period."
Others claim such an amount is only skimming the surface.
"A more comprehensive study of oil's security
subsidies added the costs of maintaining the
taxpayer-funded Strategic Petroleum Reserve (a stockpile
of crude oil kept as insurance against Middle East
turmoil) and other oil-protection services (such as the
Coast Guard clearing shipping lanes for, and providing
navigational support to, oil tankers), and reckoned that
the energy security subsidy for Big Oil is really $78
billion to $158 billion a year."
Add in $2 trillion for the Iraq and Afghan Wars, and
suddenly $10 billion to $15 billion to set in a motion a
plan with a real opportunity of ending foreign oil
dependency seems like the bargain of the century. Jump
starting the hydrogen highway is so cheap,
compared to its possible benefits - ending foreign oil
dependence - that even failure is worth the risk.
But fuel cell vehicles are a joke
I'm not sure that automakers can build cost-effective
hydrogen fuel cell vehicles in the next 5 years. Still, GM
claims that if $10 to $15 billion were subsidized to jump
start the hydrogen highway - enough to fuel at least a
1,000,000 fuel cell vehicles - then GM could build fuel
cell vehicles at a price cost competitive to conventional
vehicles.
Costs aside, I can state quite confidently that fuel cell
vehicles are no joke. In fact, on a recent test drive of
the Chevy
Equinox Fuel Cell Vehicle, I was absolutely stunned.
More interesting, the vehicle I drove was already based on
old fuel cell technology. The new generation of fuel cell
technology is already being developed and prototyped into
the next generation of fuel cell vehicles.
Ultimately, if there was one thing that most disappointed
me about the Equinox fuel cell vehicle, it was that its
NiHM battery pack - similar to that used in today's hybrid
cars - cannot propel the Equinox. The battery cannot
extend the range of the vehicle. New lithium-ion
batteries, however, the same kind of batteries that will
propel plug-in
hybrid vehicles and electric cars, could probably make
fuel cell vehicles much more hydrogen efficient.
Equally as important, as I claimed in an earlier
post, fuel cell vehicles and battery-powered vehicles
can be complimentary technologies.
In the future, it isn't unrealistic to think that pure
electric cars could work for some consumers, bio-fueled
plug-in hybrid vehicles for others (a proposed derivative
of the Chevy
Volt), and fuel cell vehicles for still others. One
type of vehicle probably won't work for everyone.
Still, in GM's world, all of these vehicles could be built
upon the same E-Flex Platform using many of the same
parts, components and production lines, which would
increase economies of scale and make fuel cell cars,
plug-in hybrids and electric cars cheaper - by sharing
costs. In Toyota's world, the Hybrid Synergy Drive holds
much of the same potential.
Just $10 to $15 billion to set in motion a potential
revolution in energy - THE most important factor facing
the world. Considering how much America spends simply
securing the oil-complex, isn't the risk of losing $15
billion worth the potential?
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