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Technology Stocks : Fuel Cell Investments

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To: Mr. Sunshine who wrote (188)2/16/2003 3:33:42 PM
From: Stephen O   of 280
 
Hydrogen power

These fuelish things
Feb 13th 2003 | NEW YORK
From The Economist print edition

The fuel cell is enchanting politicians on both sides of the Atlantic. It is too soon,
though, for them to dream of freedom from fossil fuels

Get article background

WHERE in the world can you find hydrogen? At first blush, that might seem a ridiculous
question: hydrogen, after all, is the commonest element in the universe. The problem is
that it is rarely found in its free state on earth. If you want to get your hands on some
hydrogen, you generally have to strip it away from carbon, as found in hydrocarbon
fuels, or from oxygen, as found in water. Either way, energy is required to produce it.
And that, in a nutshell, is the big drawback lurking behind all the recent hoopla
surrounding the charms of hydrogen energy.

The hoopla began at the end of last year, when the European Commission unveiled a
grand, euro2.1 billion ($2 billion) “hydrogen vision”. Romano Prodi, the commission's
president, even declared that he wanted to be remembered for only two things: the
European Union's eastward expansion, and hydrogen energy. Now, George Bush,
America's president, has produced his own $1.2 billion hydrogen plan (he even examined
a hydrogen-powered car, and made sure he was photographed doing so). In speeches
directed at the car industry in Detroit and, on February 10th, at the oil industry in
Houston, Mr Bush and his team have been making the claim that the rise of the fuel cell
will consign the internal-combustion engine to the dustbin of history. And if that were
not enough, Democratic rivals in Congress—trying to keep up—have just unveiled their
own hydrogen initiative.

Fuel cells are devices that work rather like
batteries, converting chemical energy into
electricity and heat. All fuel cells combine
hydrogen with oxygen to produce power. These
nifty power plants can be used to run anything
from a mobile phone to an office complex. Their
greatest attraction is that they can do all this
without generating emissions any more harmful
than water vapour.

The catch, of course, is that it is first
necessary to find a source of hydrogen. If
renewable energy is used to split water into
hydrogen and oxygen by electrolysis, then the
energy produced by a fuel cell is genuinely
emission-free. But if energy from a hydrocarbon
such as petrol or coal is used, there will still be
some unwanted emissions. That applies even if
the route taken is steam reformation, in which
the hydrocarbon is reacted with water vapour
to liberate the hydrogen in both, rather than
being used to make electricity for the
electrolysis of water.

The emissions from steam reformation, though,
are less than those created when the same
amount of hydrocarbon is burned in today's
combustion engines. This is because fuel cells
produce electricity efficiently, without
combustion. And, if techniques for capturing
and “sequestering” the carbon dioxide produced
by hydrocarbons are perfected, it would make
hydrogen from fossil fuels a great deal cleaner
still.

How the ghost of you clings

Europe and America do not see eye to eye on the question of how best to generate
hydrogen. Europe is putting more emphasis on renewables; America, by contrast, is keen
on the possibility of deriving hydrogen from fossil fuels.

At the moment, using renewables is an expensive
way of generating hydrogen (see table). So why
is Europe heading in this direction? Alessandro
Ovi, one of Mr Prodi's advisers, explains that
Europe's push for hydrogen is motivated largely
by a desire to meet its commitments to cut
greenhouse gases under the Kyoto treaty on
global warming. Accordingly, the EU has adopted
demanding targets for increasing the share of
renewable energy to 22% of the region's
electricity supply by 2010, up from about half
that today.

Such a target for renewable energy sounds pretty
green, but there is a snag: wind and solar energy
are intermittent, and unlike other
commodities—be they bananas or natural
gas—there is no good way to store electricity for
later use. No way, that is, unless you use
renewable energy to produce hydrogen, and store this instead. It can then be used
when the power grid is facing peak demand and the price of energy thus increases. Dr
Ovi thinks hydrogen could transform the economics of renewables and play an essential
role in the EU's clean-energy strategy.

Mr Bush's plan pushes instead for hydrogen via fossil fuels, because greenery is not the
only attraction of fuel cells. Mr Bush insists that hydrogen is a good way to bolster his
country's “energy independence” from Middle Eastern oil. Hydrogen can be made from
America's plentiful supplies of coal, as well as from locally produced biomass and
renewable energy, says John Marburger, Mr Bush's top science adviser. Thus, America's
reliance on oil from fickle foreign regimes will decline. That vision of energy independence
through fossil hydrogen is also gaining popularity among the leadership in coal-rich but
oil-starved China.

Does that mean the American approach is ungreen? Not necessarily. Even if fossil fuels
were used to produce hydrogen without sequestration, fuel-cell-powered cars would still
produce zero local emissions on roads. (Wags call this “drive here, pollute elsewhere”.)
Further, hydrogen is likely to be produced by some green sources anyway: in the Pacific
north-west, hydro-electric power is dirt cheap at night, and on the windswept Great
Plains renewables or biomass may prove more economic than fossil fuels.

If America pursues its hydrogen vision by using fossil fuels with techniques such as
sequestration, a technology Mr Bush has repeatedly applauded, its hydrogen embrace
will indeed be greener than green. What is more, if Big Oil also gets behind hydrogen—as
it is now starting to do thanks to the new push from the Texan oilman in the White
House—the thorny question of where you can find hydrogen could one day become very
simple to answer. Right at your corner petrol station.
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