“I personally believe this is a wonderful opportunity to drive customer, public, and shareholder, benefits together. Hydrogen is going to be attractive to people. I think that combining something which is both attractive in itself, and brings public benefits at the same time, is very exciting. It’s the kind of world in which I want my son to grow up!”

·          Jeremy Bentham, CEO, Shell Hydrogen, Amsterdam   

Shell Hydrogen sees the way to 'the Hydrogen Economy.’   

There’s a lot of hype about “the hydrogen economy” these days. But PR alone doesn’t account for the immense interest in hydrogen to fuel our future. The fact is hydrogen has many benefits that western economies want and need: reduced greenhouse gas emissions; less dependence on foreign oil; and cleaner air in our cities.

The benefits are potentially huge, and that has governments, industry, and consumers all looking to help move the introduction of fuel cells and hydrogen power forward.

No matter which end of the process you approach the issue from – a fuel supplier like Shell, a vehicle manufacturers like Daimler-Chrysler, or a fuel cell developer like Astris Energi, the outlook is starting to appear similar: Fuel cells in general, and hydrogen in particular, are starting to have real appeal at both the consumer and producer ends of the supply chain.

The average fuel economy of new 2000 passenger vehicles in the U.S. languished at 24 mpg, the lowest level since 1980, while at the same time average vehicle weight was increasing. Combine these statistics with rising oil prices, and consumers are understandably demanding alternatives. So much so that GM and DaimlerChrysler have just teamed up as late entrants into the hybrid vehicle market. Hybrids can be seen as an intermediate step towards a full hydrogen fuel cell vehicle, and one that is becoming increasingly popular. Analysts expect hybrid sales to grow from 80 thousand this year to 470 thousand by 2007.

Shell Hydrogen CEO Jeremy Bentham looks further down the road. “If we look out to 2020, we imagine by that time a modest 5-10 million hydrogen vehicles on the road, but that could continue growing rapidly until it’s 50 percent of vehicles sold by the middle part of this century.”

Something people don’t necessary appreciate,” he says, “is that the only really NEW thing here is seeing hydrogen as a fuel for a cell. Hydrogen itself is a very familiar substance!” Shell produces tonnes of the stuff every year, and uses it to make cleaner gasoline, amongst other things. “The new step is taking it from the industrial setting and bringing into the consumer environment.”

"To expedite the transition of our transportation system away from petroleum fuels, and towards hydrogen fuel and vehicles, experts point to the crucial need for a hydrogen fueling infrastructure and the necessary leadership to make it a reality," said California’s EPA Secretary Terry Tamminen at the opening of California’s first hydrogen fueling station earlier this year.

California is moving ahead to create an early network of 150 to 200 hydrogen-fueling stations throughout the State, whose cost of approximately $90 million will be borne by a consortium of interested groups. By 2010, it is hoped the “ Hydrogen Highway ” will stretch all the way to the winter Olympics in Whistler, British Columbia .

Bentham sees such ‘lighthouse projects,’ along with Shell’s recent opening of a fueling station in Washington in partnership with GM, as essential to the future of the hydrogen economy. “It’s important for people to see hydrogen in action.”

Washington thinks so too, leading President Bush to create the Freedom Fuel initiative, which will include $720 million in new funding over the next five years to develop the technologies and infrastructure to produce, store, and distribute hydrogen for use in fuel cell vehicles and electricity generation. Combined with the FreedomCAR (Cooperative Automotive Research) initiative, the President is proposing a total of $1.7 billion over the next five years to develop hydrogen-powered fuel cells, hydrogen infrastructure and advanced automotive technologies.

Not everyone thinks hydrogen is the way to go on fuel cell development, however. “Even with aggressive research, the hydrogen fuel-cell vehicle will not be better than the diesel hybrid (a vehicle powered by a conventional engine supplemented by an electric motor) in terms of total energy use and greenhouse gas emissions by 2020,” says a study by MIT's Laboratory for Energy and the Environment (LFEE).

Asked what technology he sees being dominant, Shell’s Bentham replied: “Clearly, tech developments are going on in all fields. In terms of the transport and auto field, the PEM fuel cell is the dominant technology, with its characteristics of quick start up and acceleration. If we look towards the stationary-type applications, the most efficient are going to be the high-temperature cells with the potential for being high-durability. There is a lot of talk about Solid Oxide technologies, and obviously that is one tech that we watch carefully.”

Astris Energi Inc. (OTCBB: ASRNF), who are marketing a low-temperature AFC (Alkaline Fuel Cell) they developed with considerably lower material and operating costs than other fuel cells in its class, agrees that today hi-temp cells make the most sense for continuous heat/power applications. ‘’If we look at applications that require quick startup, however - such as backup power, UPS , or the eventual use in transportation applications, our AFC makes far more sense because of its instant start up time versus hours for the hi-temp cells, as well as the much more favorable economics.‘’ says Peter Nor, Astris’ VP of Corporate Development.

To have hydrogen where you need it, when you need, is one of the biggest challenges in the progression towards a hydrogen economy. Alternate Energy Corporation ('' AEC '') has a stand-alone unit whose chemical process creates hydrogen locally, and can deliver just the amount needed to run an Astris E8 generator. AEC is currently packaging the two units together to sell starting next year.

So the dominant fuel cell technologies are still to be determined. Like the battle between VHS and Beta videotapes, the most efficient technology does not always win out. Issues of distribution and public acceptance always play significant roles. So where hydrogen and fuel cells in general are going to fit in tomorrow’s society is still up in the air.

“It’s a marathon, not a sprint,” says Bentham. “But we are well past the starting line, and we see hydrogen as part of the Shell family of fuels alongside cleaner traditional fuels.”

Allen R. Gibson

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