Why Obama May Give Hydrogen Fuel-Cell Cars Another Chance

What's to come?
May 17 2012 12:28 PM

Giving Hydrogen Fuel-Cell Cars Another Chance

Obama slashed Bush-era funding for the clean-energy vehicle. Now he may reverse course.

A hydrogen fueling station and fuel cell vehicle.
Scott Tucker fills up a hydrogen fuel-cell vehicle at a Shell fueling station in Torrance, Calif.on July 8, 2011

Photograph by Tim Rue/Bloomberg via Getty Images.

This article arises from Future Tense, a collaboration of Slate, the New America Foundation, and Arizona State University. On May 21, Future Tense will host an event in Washington, D.C., called “How To Save America’s Knowledge Enterprise.” We’ll discuss how the United States approaches science and technology research, the role government should play in funding, and more. For more information and to RSVP, visit the New America Foundation’s website.

Three years ago, the Obama administration abandoned another of its predecessor's central tenets—that the future of vehicle propulsion was zero-emission hydrogen fuel cells. Energy Secretary Steven Chu, backed by Obama, instead launched an aggressive program to develop a new generation of high-performance batteries, the factories in which to manufacture them, and the vehicles they would power. Lithium-ion technology and electrified cars offered the best chance of achieving three key policy objectives, the administration asserted: get the country off of oil, reduce emissions of CO2, and invigorate a new age of American manufacturing.

But electric vehicles are off to a sluggish start in the United States and around the world. Battery costs seem likely to be high for the foreseeable future, and consumers are not buying electrified cars at the rates originally foreseen. Major oil companies are getting the impression that they can relax: The gasoline age will still be with us for at least another two decades, they believe, perhaps even longer.

No one can say whose bet will prove a winner—Obama's or the oil companies'. Yet it is fair to ask: Would the president have been wiser to hedge his gamble by sustaining the George W. Bush-era hydrogen fuel-cell program while also pursuing electrification? The answer is found in a habit of some of the biggest risk-takers of all—venture capitalists, who tend to spread their wagers around rather than hoping a single flash of intuition will pay off. Now it seems that the Obama administration may be reconsidering its distribution of chips—and that change can’t come soon enough. Just as Washington has incubated the battery and electric car industries, it ought to play a larger, proactive role in fuel cells, which solve some of the main problems hobbling batteries (though they have their own challenges).

Fuel cells are technically similar to batteries. Both contain three main parts—two electrodes separated by a liquid, called electrolyte. But while batteries store electricity made elsewhere, fuel cells create their own from a variety of substances, including hydrogen, which carmakers currently favor.

Industry and Department of Energy officials say that Chu seems to have softened his early rejection of hydrogen fuel cells. John Hofmeister, the former president of Shell USA and the incoming chairman of the Energy Department's technical advisory committee on fuel cell vehicles, said Chu made supportive remarks about the potential for hydrogen fuel-cell vehicles while speaking at a recent, closed event.

If Chu has changed his early hostility toward hydrogen fuel cells, he does so as a handful of major carmakers are readying models for as early as 2015. Toyota, Honda, Mercedes-Benz, and Daimler have announced plans for hydrogen fuel-cell propelled vehicles. General Motors says that as soon as 2016 it may release its own hydrogen fuel-cell vehicle, but it’s watching for the launch of supporting infrastructure—primarily new refueling stations.

The lack of fueling stations is a major obstacle to the rollout of hydrogen fuel-cell vehicles. A mature fleet will require 11,000 stations coast to coast at a cost of $20 billion to $25 billion, according to General Motors. Unless forced by Washington, oil companies, which generally do not produce hydrogen, have no motivation to add rival hydrogen fueling to their gasoline stations. So the industry’s calculus is that by and large hydrogen must be sold at new, dedicated fueling stations.

Another problem is cost. In order to spark the chemical reaction necessary to create electricity and propel a vehicle, fuel cells currently use platinum as a catalyst—and platinum, of course, is not cheap. John Voelcker, who runs the website Green Car Reports, told me that so much electricity is required to break down the chemical bonds in natural gas to create hydrogen that it is often more efficient simply to use the electricity directly in a vehicle—such as a battery-propelled electric car.

Yet there are also two big pluses: Hydrogen fuel-cell vehicles can be refueled in as few as three minutes, then travel for 250 or 300 miles straight. Electrified cars, on the other hand, require about eight hours for complete recharging. Depending on the vehicle, they can go only 40 to 100 miles on pure battery, creating the dreaded “range anxiety.”

When the first cars come out, they will cost more than electrics, whose price tag is currently substantially greater than gasoline-fueled engines. To help give consumers the confidence to take the hydrogen plunge, there will have to be a coordinated rollout of refueling stations, said Charles Freese, who runs the Detroit-based fuel-cell unit for General Motors. That is where public policy comes in: Government, fuel providers, infrastructure contractors, and the carmakers will have to work together to get the stations up and running. The cost of operating each station drops with every car it services. But there’s a “chicken or the egg dilemma," he says. "You need to have a number of stations in place so the customers have easy access to the fuel and have to have a minimum number of vehicles that start to deploy in [the] same time window so [you] can keep the throughput of fuel up at the station."

Fuel-cell vehicles will start out not with mass deployment, but in targeted regions—especially islands. The first places in the United States will be Los Angeles and Hawaii, Freese thinks—Los Angeles because there are high population concentrations that can be served by just 50 or 55 refueling stations; Hawaii because driving patterns are predictable: along set coastal routes and around self-contained islands, so drivers can’t go too far afield and find themselves stranded without fuel. GM and the U.S. Army launched a test fleet of 16 hydrogen fuel-cell cars in Hawaii earlier this year.

In California, the state government is already behind the allocation of funds for building hydrogen fueling stations. Twenty-six are either in place or funded. An industry-government collaboration called the California Fuel Cell Partnership has established equipment standards and permitting processes, and organized the training of emergency personnel in the case of an accident. In Hawaii, GM is teamed up with 13 companies, government agencies and university bodies in order to organize the rollout of infrastructure there.

Abroad, the initial rollouts will be in Germany, Japan, and South Korea (the last being essentially an island, since no one can drive through North Korea).

Private supporters of fuel cells appear to be hedging their own bets. After the Obama administration withdrew support, companies pulled back their initial efforts in some markets. Hofmeister noted that Shell has closed hydrogen refueling stations it established during the Bush era in New York, Washington, D.C., and elsewhere. But companies have also built up investment in what they regard as more promising areas—particularly those countries offering government funding. Shell, for instance, has added investment in Germany and Japan, which have poured hundreds of millions of dollars in public funds into the construction of hydrogen fuel cell infrastructure. "Government," said Hofmeister, "has to be in there in being the fixer, the solution, and not the obstacle, and maybe that will be happening."

Steve LeVine is a senior Schwartz fellow at the New America Foundation and a contributing editor at Foreign Policy magazine, where he writes the Oil and the Glory blog. He is working on a book on the geopolitics of batteries.