Natural gas-fueled vehicles (NGVs) have not gone the way of the dodo bird, but with only 130,000 NGVs on the road today and the government’s attention now solely focused on hydrogen fuel-celled vehicles (FCV), that outcome could be on the horizon.
The NGV industry will suffer through a complete cut in federal research and development (R&D) funding in 2005. Meanwhile, the Department of Energy (DOE) announced projects Tuesday that will soak up about $350 million out of a total of $1.2 billion in federal R&D funding for hydrogen FCVs.
The Bush administration has set aside $350 million for the Hydrogen Research Initiative. Numerous companies and universities are teaming up with DOE labs to do research on hydrogen production and storage, vehicle and infrastructure development and fuel cell development.
Ford and BP were selected to build 30 hydrogen-powered vehicles and a network of fueling stations to support them in metropolitan Sacramento, Orlando, and Detroit. Assembly of the vehicles will begin in the fourth quarter. In addition, ChevronTexaco, Hyundai Motor Co. and UTC Fuel Cells were selected to lead a five-year demonstration and validation project designed to showcase practical application of hydrogen energy technology in power generation and vehicles.
ChevronTexaco will provide the design and construction of up to six hydrogen fueling stations to be operated primarily in California. The stations will be test platforms for both “well-to-wheels” hydrogen systems and individual elements of the systems, including hydrogen generation, power stations, fueling procedures, fuel cells and design codes. Hyundai will provide a fleet of up to 32 hydrogen-fueled Tucson fuel cell vehicles, powered by UTC Fuel Cells power plants.
“President Bush’s administration recognizes that a hydrogen economy has the long-term potential to deliver greater energy independence by reducing America’s dependence on foreign sources of energy,” said Energy Secretary Spencer Abraham. “It offers immense environmental benefits that current energy technologies cannot meet. This multi-million dollar commitment to research is a down payment on a more energy and environmentally secure future.”
According to Rick Zalesky, president of ChevronTexaco Technology Ventures’ hydrogen business, NGVs have fallen by the wayside for a number of reasons. The infrastructure and the vehicle technology needed to evolve together, but that didn’t happen with NGVs, he said.
“The natural gas vehicle approach was a little bit out of sequence,” said Zalesky. “We built some vehicles, but we didn’t have infrastructure to support it and they just didn’t get anywhere. The other thing that happened was that the vehicles were not an improvement over what people already had.”
Zalesky said with this new hydrogen program DOE is asking the industry to avoid the pitfalls of the NGV experience and plan ahead to show all aspects of the hydrogen economy being developed simultaneously.
“How will NGVs themselves evolve in the future? I’m not exactly sure. Whether they just finish the course that they are on and they are done, or sort of come back and play a role, I just don’t know,” said Zalesky. “What happened was that the chicken and the egg were just too far separated.”
The other factor that brought the curtain down on NGVs was that DOE after 9/11 decided to find solutions that will decrease the nation’s increasing dependence on foreign oil.
“If you are simply substituting a gaseous source of petroleum (natural gas) for a liquid source of petroleum fuel (gasoline, diesel and jet fuel), that really doesn’t solve the problem,” Zalesky said. “Hydrogen solves that issue and it also deals with the tailpipe emissions.”
But in the early days of the “hydrogen economy,” most of the hydrogen is going to be made with petroleum and natural gas. “In the early days, it doesn’t solve the problem,” he noted.
In fact, it could be decades before FCVs are even commercially viable. The National Academy of Sciences recently concluded that FCVs could in fact replace combustion vehicles; it’s technically feasible. But it won’t be economically feasible until 2050. Furthermore, for that to occur there will have to be several major technological breakthroughs: in hydrogen storage technology; fuel cells have to be less expensive; and the cars will have to have a longer range — 300 miles rather than the current 100 miles.
Meanwhile, some wonder what the United States is going to do about this pre-existing problem of a dependence on foreign oil. “The DOE has said there won’t be a go-no-go decision on FCV commercialization until 2015,” said NGV Coalition President Rich Kolodziej. “That’s 11 years from now and by that time we will have replaced nearly all the current vehicles on the road with new ones. What should our policy be today? Should it be that we should continue to use gasoline and diesel in all those vehicles? That’s silly public policy, and it’s catastrophic for the United States. What if we get to 2015 and we find that FCVs still aren’t ready? Where’s Plan B today?
“We argue very strongly that it has to be NGVs. In other countries, it’s NGVs. In India, Bangledesh, Iran, Pakistan, it’s NGVs,” Kolodziej noted. Argentina alone has 1.1 million NGVs on the road on a base of six million vehicles.
Some observers may warn that putting more NGVs on the road would cause even more natural gas supply-demand tightness and higher gas prices. But Kolodziej said 10 million NGVs would increase gas demand by only 4% annually. Meanwhile, although natural gas prices are high, they currently are still much cheaper than gasoline. Natural gas is $1.80/gallon equivalent delivered to the vehicle in California compared to $2.30/gallon for gasoline.
“The federal government is investing billions of dollars now in fuel cell vehicles and the National Academy of Science, which just came out with a report, said they are not going to have an impact on oil use until 2050,” said Kolodziej. “If we had that kind of investment in natural gas vehicles back in the 1990s or the 1980s, we would have millions of vehicles on the road today.”
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