A Yen for Power, 04/18/03: Japan Gets The Jump On Hydrogen
PAUL KANGAS: The days of the long-time automotive powerhouse, the internal combustion engine, may be numbered. Environment concerns and questions about the availability of gasoline make development of a new engine one of the auto industries top priorities. One promising technology involves tapping the power of hydrogen, the most abundant element in the universe through the use of fuel cells. President Bush cited the potential benefits of this technology when he asked Congress to approve $1.5 billion in funds for fuel cell research.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Simple chemical reaction between hydrogen and oxygen generates energy which can be used to power a car, producing only water, not exhausted fumes. With a new national commitment, our scientists and engineers will overcome obstacles to taking these cars from laboratory to showroom so that the first car driven by a child born today could be powered by hydrogen and pollution-free.
PAUL KANGAS: Although President Bush would like American automakers to be in the forefront of fuel cell development, Japanese automakers are already taking the initiative in this area. Tokyo correspondent Lucy Craft reports on efforts under way in Japan to make hydrogen-powered vehicles a reality.
LUCY CRAFT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Japan recently unveiled its latest hydrogen fuelling station, another step in the struggle to master technology, hailed as the silver for some of the most formidable global energy and environmental problems. Flowing from this dispenser isn`t gasoline by the gallon, but compressed hydrogen gas by the cubic meter. No more politically unstable oil supplies going in and no more noxious fumes spewing out, only a trickle of water and water vapor. A switch to clean fuel cell cars, scientists say, could slash carbon dioxide emissions by half. The fuel cell holy grail is being pursued worldwide, but nowhere perhaps as urgently as in Japan. Japan`s annual fuel cell spending, about $250 million this year, is roughly equal to the annual budget for the U.S.`s Freedom Car project. But as a percentage of GDP, Japan`s fuel cell wager is far higher. The Japanese economy is less than half as large as that of the U.S.
STEVE USHER, AUTO ANALYST, J.P. MORGAN SECURITIES, ASIA: The Japanese are much more willing to embrace alternative technologies than has Detroit. As we`ve already seen, with Toyota (TM) and Honda (HMC) with their hybrid vehicles, they can have an impact and they are likely to have an impact ahead of the rest of the market. CRAFT: The Japanese government`s target of 50,000 fuel cell cars on the road this decade, five million by the year 2020, is seen as more a call to arms than a realistic goal, however.
GEORGE HANSON, SR. MANAGEMENT, G.M. ASIA PACIFIC (JAPAN): We think it’s a very aggressive target. But we see it as a good sign by the government to set that kind of a clear target, because this shows the commitment of the government to that technology.
CRAFT: The dream of tapping a virtually infinite fuel is especially tantalizing for this resource poor island nation.
AKIHIKO MOROTA, DEPUTY DIRECTOR, ENERGY DIVISION, JAPAN GOVERNMENT (THROUGH TRANSLATOR): Almost 100 percent of our oil is imported. We want to have a domestic energy supply. And environmentally, fuel cells are a low impact technology. So on both counts, fuel cell technology is critical.
CRAFT: But exploiting this so-called miracle fuel will depend on achieving some miraculous breakthroughs. One of the biggest hurdles, experts say isn`t the fuel cell itself but the fuel. Building a national network of hydrogen fueling stations like this one will cost billions of dollars. And there`s no consensus yet on who will foot the bill or how to obtain the hydrogen.
TAIYOU KAWAI, GENERAL MANAGER, FUEL CELL RESEARCH AND DEVELOPMENT, TOYOTA (THROUGH TRANSLATOR): Creating a social infrastructure just doesn`t mean building filling stations. We`re talking about switching mankind to a society centered on hydrogen. Communities have to decide what they`ll make hydrogen fuel from -- fossil fuels, water or renewables. They must choose transport and storage methods. And we need to convince the public that it`s safe to put a hydrogen fueling station right in their own back yard.
CRAFT: No less daunting are the engineering challenges. The cars ace city road tests, but fade on the highway. Cold weather freezes the fuel cell. And then there`s the primo price tag, currently a cool million dollars per handmade car. Eco-friendly cars have long been a Japanese specialty since back in the 1970s, when Japan was the first to produce fuel efficient cars. Hydrogen fuel cell cars pose the toughest challenge yet. But if fuel cell cars ever make it off the drawing board and into the showroom, the Japanese are expected to take a leading role. Lucy Craft, NIGHTLY BUSINESS REPORT, Yokohama, Japan.
GHARIB: Joining us now from Detroit to talk more about the future of fuel cell powered cars, David Cole, president of the Center for Automotive Research. Dr. Cole, nice to see you. Let me begin by talking to you about money. Right now the price of a fuel cell powered car is something like a million dollars, but you say that price could come down rapidly. Why is that?
DAVID COLE, PRESIDENT, THE CENTER FOR AUTOMOTIVE RESEARCH: Well, the rate of increase in knowledge right now with respect to commercialization of the fuel cell is very high. There still is a question of whether we’re going to be able to make it cost competitive with current technology. But we’re making great progress. And it’s being done on a number of fronts all over the world.
GHARIB: You have been quoted as saying that there’s a problem with every type of auto engine. What would say are the main drawbacks of a fuel cell engine?
COLE: Well, right now the main drawback is one of cost and the tremendous investment required in the infrastructure. Somehow we’re going to have to generate hydrogen stored on board the vehicle to be able to use it in the fuel cell. Most of the other power plants have a somewhat simpler challenge than the fuel cell. The fuel cell has got a big economic challenge, an infrastructure challenge. And we just don’t know enough right now to be able to predict accurately when or if the fuel cell is going to make it into future cars. But there is a great chance. I think it’s on a very good track.
GHARIB: As you know, there’s been some criticism of President Bush’s favoring of fuel cell technology over alternative technologies like electric cars or hybrid gas and electric cars. Do you think that the electric car idea is effectively dead?
COLE: Well, the pure electric with the battery power I think is – it just doesn’t work because we don’t have sufficient battery technology. In many ways what the fuel cell is, is like a battery that we put fuel so it doesn’t have the range limitations potentially that a battery has. When you look at all of the other technologies, I’m talking now about advanced gasoline engines or clean diesels or the different types of hybrids, those have really reached more of a competitive stage. We can focus more on the problems which are in many cases economic or emission control. The fuel cell is still at a pre-competitive stage where we just have enough potential, it’s huge potential, but with so many uncertainties, so many areas, that it makes sense in my judgment for the government to really participate here because it’s still in many ways pre-competitive. That is, everybody can work together, solve some of these problems, and then like the other plants, power plants that we have, it can go to a competitive state where everybody is going to compete ferociously for being the big winner.
GHARIB: You have said that rapid advances in fuel cell technology could actually hold up production of hydrogen-powered cars because automakers just wouldn’t be interested in making that big capital investment. But shouldn’t technological advances actually speed up the process?
COLE: Well, in a sense they would. But if you’re making tremendous progress – and to give you some scale on this, five years ago we looked at a fuel cell that would be a thousand times the cost of a current gasoline engine. Now it’s down about 10 times the cost. So that indicates rapid progress. Ultimately it has to be about one times the cost or maybe just a little bit more. So when you’re making great progress, if you commit to early to the kind of investment required in this business, what you end up doing potentially is investing in technology that’s obsolete by the time you put it into the marketplace.
GHARIB: Let’s talk a little bit about timetable. About a year ago, you said that you expected limited production of fuel cell vehicles for the public within five years and widespread production in about 10 years. Do you still stick to that timetable?
COLE: Well, I think that it’s really hard to say because there is so much invention that is yet required. I think we’re going to see some token fuel cells. We have them right now in demonstration situations. But we’re talking less than 50 on a worldwide basis. From what we learn in that process I think it’s going to help define where we’re going to be in 10 years. Probably the most optimistic company in the world right now is General Motors. And what they’re looking at is something in the area of five to 10 years. But it’s a bit of a gamble because there is still so much invention, so much that we need to learn before we can make those final decisions.
GHARIB: Well, we’ll have to leave it there. Thank you very much Dr. Cole.
COLE: Great to be with you, nice to chat.
GHARIB: We’ve been speaking with David Cole, president of the Center for Automotive Research.
Source: Nightly Business Report program transcripts
