Texaco, Shell and Southern California Gas are moving fromopposite ends of the gas business to converge on the developingmarket for distributed generation powered by fuel cells.

Texaco announced Tuesday it is putting its expertise ingasification technology to work on the promising fuel cell businessas part of its drive to broaden its portfolio of energyopportunities. The new Texaco Energy Systems Inc. will participatein the “California Fuel Cell Partnership – Driving for the Future,”a unique collaboration of industry and the State of California thatwill test fuel cell vehicles on California highways.

Shell, which previously launched its entry in the field, ShellHydrogen, also is participating in the California partnership,focusing on its patented process for converting liquid fuels intohydrogen-rich gas.

And also making an announcement yesterday, SoCal Gas, thenation’s largest natural gas distribution utility, said it willinvest $7.5 million in residential fuel cell developer, Plug Power.

“Fuel cells represent a promising technology to bring thebenefits of distributed generation to the homeowner,” said LeeStewart, president of SoCalGas’ Energy Transportation Services.Plug Power, with headquarters in Latham, MI, is a privately heldcompany whose investors include: DTE Energy Co., the parent ofDetroit Edison, Mechanical Technology Inc., and General Electric.

Since June of 1998, Plug Power has operated the world’s firstfuel cell-powered home with a system designed to provide theaverage-sized house with its total electricity needs, independentof the electric utility grid. Initial market launch of this7-kilowatt system is planned for 2001, with distribution planned inthe United States and overseas with General Electric, through GEFuel Cell Systems.

The size of a dishwasher, residential fuel cells convert theenergy of a fuel, such as natural gas, into useable electricity.Unlike traditional combustion technology power plants that emitelements causing smog and acid rain, fuel cells generateelectricity through an electrochemical process which produces noharmful byproducts.

Furthermore, a significant percentage of heat produced by fuelcells can be captured and used to provide heating and hot water forthe home. This nearly doubles a fuel cell’s efficiency.

Texaco is coming at the business from another direction. “Weplan to apply our expertise in fuels and processing to develop fuelcell technology solutions that advance the commercial viability ofthis new source of energy and build Texaco’s technology-basedbusinesses,” said William M. Wicker, Texaco senior vicepresident. “The California Fuel Cell Partnership will affordpractical experience in understanding infrastructure needs andmotivate collaborative research on fuel conversion technology.”Converting a broad range of readily available hydrocarbon fuelsinto hydrogen is a necessary step in the commercial development ofan efficient and feasible fuel cell energy system.

The California Fuel Cell Partnership provides on-the-roadexperience in the transportation market segment. The partnershipplans to place about 40 fuel cell passenger cars and 25 fuel cellbuses on California roads between 2000 and 2003. Ford andDaimlerChrysler will initially provide five fuel cell passengercars each by 2001 and a total of 30 passenger cars throughout theproject. The Partnership will work with California transit agenciesfor testing the buses.

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