An excellent post.....courtesy of milnoid from the Yahoo FCEL thread:
"Your question lies at the heart of FCEL's long-term value as an investment.
Fuel cells are an amazing advance with outstanding business potential. And yes, all varieties of fuel cells ultimately derive power from hydrogen.
But where, then, does the hydrogen come from? Sure, it's the most common element in the universe, but the only significant local reserves are 93 million miles away, mixed with helium at a pressure of several million atmospheres (ie, the Sun).
Hydrogen can be produced on earth in three key ways:
* From water, using electrical hydrolysis. Very effective but, alas, energy inefficient. It takes more energy to split the hydrogen from the oxygen than you get from using the hydrogen you get. Get it? This might be a nice option if you are pro-nuclear.
* From organic matter. It is possible to derive plenty of hydrogen from plant alcohols, and sewage and coal gas, cheaply. Production, however, tends to be limited, mostly because it usually doesn't pay for farmers to grow organic matter for fuel. This could change.
* From fossil fuels, especially light hydrocarbons (like methane, methanol, ethane, etc.), also using catalytic reactions with steam. The economic costs are low because the reaction is energy efficient.
Unsurprisingly, most hydrogen is produced from fossil fuels---even coal. The cost is simply lower, though it may not be forever. At least overall carbon emissions will decrease because of the efficiency gains.
Low-temp fuel cells, like PEM and Alkaline, can only use pure hydrogen. This is good news, because they may pre-sage the development of a hydrogen gas infrastructure. In the meantime, however, PEM companies are trying to develop "fuel reformers" that generate hydrogen on site (or on board) from methanol, petrol (gasoline) and light hydrocarbon liquids and gases. They have met with, er, "undisclosed success".
A clear advantage for FCEL is the ability of its Direct Fuel Cell to utilise unreformed hydrocarbons with no reformation. This advantage will make it one of the first fully commercialized manufacturer of high-capacity fuel cell generators (along with Siemens and UTC). You'll do well with this stock, if you are long.
A political interpretation:
The existing guardians of global capital power have a tremendous amount invested in fossil fuels. So much so, in fact that they still prefer to lie about carbon-induced climate change, and even orchestrate right-wing political unrest to ensure their stranglehold on energy production. They even fund, indirectly but effectively, sophisticated media and community campaigns designed to turn popular opinion against environmental controls on emissions.
Eventually, however, even the oil giants will accommodate to the growing reality of fuel cells. They will learn to sell fuel by hydrogen content rather than volume. They'll be happy, because in the end they will still control energy production. They will still control politics, for that matter (unless Ralph Nader wins the presidential election...he he).
FCEL's technology will faclitate this process. It offers significant energy-cost savings over time, so large energy consumers, especially those facing emission restrictions, will pay a premium for it.
FCEL's management knows exactly what is going on. They have been extremely conservative with their stock, and generous and communicative with their shareholders. When you see a press release, it actually means something. They seem to take promises seriously.
If you want to make money on fuel cells, you are in the right place.
--Mil"
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