Michigan unveils drive to lure fuel cell industry
Michigan unveils drive to lure fuel cell industry
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DEARBORN, Mich, April 18 (Reuters) - Michigan Gov. John Engler unveiled a plan on Thursday to make the state the center of research and development for fuel cells -- power devices with the potential to replace internal combustion engines.
Engler's proposal, called NextEnergy, would create an industrial park for fuel cell companies near Ann Arbor, Michigan, and offer them a range of tax incentives for moving there. In addition, the state would lobby the federal government to build a fuel cell research center in the state, and offer residents incentives to buy alternative-fuel vehicles.
The fuel cell industry is still in its nascent stages, with several small producers scattered around the country. They split about $220 million in business in 2000, the latest year for which figures are available.
But Engler said the fuel cell industry could grow to $95 billion by 2010, and that Michigan -- hub of the U.S. auto industry -- stood to lose up to 200,000 jobs if fuel cells made in other states eventually replace the gasoline-fueled engines in cars and trucks.
``This is a huge industry, and Michigan must be home to this industry,'' Engler said.
Fuel cells use hydrogen to create electricity with no harmful emissions. Automakers around the world, including General Motors Corp. (GM.N), Ford Motor Co. (F.N) and DaimlerChrysler AG (DCX.N) (DCXGn.DE), have spent billions of dollars so far on adapting fuel cells for cars and trucks, but still see widespread use no sooner than the end of the decade.
While fuel cells promise a pollution-free source of energy using renewable fuels, several high hurdles have kept them from mass production so far. Currently, power from fuel cells costs about 10 times more than power from gasoline engines. There is no industry consensus about how to transport or store a hydrogen fuel. And prototype fuel cell vehicles can't match the driving range or performance of regular production cars.
Nevertheless, automakers have said those hurdles may be overcome by 2010.
``There's still a lot of cost challenges and a lot of developmental issues,'' said Bernard Robinson, Chrysler's senior vice president of engineering technologies. ``There's plenty of scope for this program to focus everybody's efforts.''
Auto executives said there was some opportunity for Michigan's plan to succeed because no center for fuel cells has been established so far. Detroit's Big Three do some fuel cell work near their headquarters, but also have major efforts under way at other locations, such as GM's lab in upstate New York, and with partners such as Canada's Ballard Power Systems
(BLDP.O) (BLD.TO).
Engler's proposal will require state legislation, something the Republican governor has little time to push before his third term expires in January 2003. The governor did not release estimates of how much the program would cost.
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