Does capitalism hinder conservation or ensure best technologies win?
Tuesday, April 1st, 2008I read a Contra Costa Times article today, “Hydrogen Highway stuck in first gear.” To start, hydrogen-fueled engines are propelled by fuel cells that produce electricity from oxygen and hydrogen. Somehow the electrons are separated from the protons, croutons and futons…let’s just say it gets you to the grocer and furniture stores! But unless you live a few minutes from the whopping 24 hydrogen fuel stations in California, it’s likely you don’t own a hydrocar. Why so few stations? Well, there’s always the chicken-egg scenario…the automakers won’t build hydrocars en masse until there is a network of refueling stations. The state has offered matching funds to build the $3M stations but requires the stations to jump through some environmental hoops that reverses the economic benefit. A $3m investment requires a return of at least $300,000/year in net profits (10% interest) before hydrogen stations will be embraced, which would require at least 176 cars($300k/$1700 per yr gas bill) dedicated to using each particular station and right now there are a total of 175 hydrocars in California. I didn’t factor in the yearly operating costs of a hydrogen fuel station, which would mean more cars are needed. Anyone know the op costs? It doesn’t make economic sense for the oil companies that own the distribution system. Their money gets better returns with less doubts by focusing on oil production and better-recognized alternative fuels like ethanol. I’m not saying hydrocars won’t be a significant part of the energy mix, but it is foolish to push environmental technology at taxpayer expense unless the buyers see the economic benefit, along with the environmental one. In this case, the buyers are the automakers, gas companies and drivers and only when all of their economic concerns are met will this technology flourish. If California politicians want to use our money to advance this technology, fine. But focus it on businesses with local car and truck fleets who are most likely to reap the economic benefit of building and operating a hydrogen-fuel station, without requiring them to jump through so many hoops. This will slowly build a market for hydrocars and keep businesses from leaving California. In fact, if you focus on businesses you think are getting ready to leave, maybe you can achieve a double win! Fast Facts: $3M per hydrogen-fuel station to build, 24 stations in California, 3 in Bay Area, and 175 hydrogen vehicles in California including the Chevrolet Equinox (180-mile range) and the Honda FCX Clarity (270-mile range). In 2005, the Legislature provided $19M to the Air Resources Board to boost the hydrocar market.










