Infrastructure & Environment

Fleet Dreams

If tomorrow's cars won't be fueled by gas, what will run them and who'll pick the winner?
by | May 2007

Marc Geller pulls no punches when talking about the hydrogen car: "Hydrogen is always 15 years out, and it always will be." He doesn't hide his opinion on ethanol, either. "Corn is a disaster in every regard," Geller says. "Rich people who want liquid fuel are competing for the same piece of land with poor people who want food."

Geller might sound like an oil company executive trying to discourage competition, but he's actually in the alternative-vehicle business himself. He serves on the board of directors of the Electric Auto Association, a group that advocates for electric cars. Geller's skeptical take on hydrogen and ethanol speaks to the fragmentation of the alternative-vehicle movement. While there's a growing consensus that tomorrow's cars won't be fueled primarily by petroleum, there's no consensus on what will power them. "Who knows?" says Daniel Sperling, of the University of California, Davis, one the world's leading experts on automotive technology. The question comes down to this: Will tomorrow's vehicles run on hydrogen, biofuels such as ethanol or batteries that plug into the electricity grid?

The automobile industry will weigh in, but it won't just be Toyota, GM or Ford that decides. In the heart of this debate are state and local governments and their fleets, which serve as testing grounds for hydrogen and electric vehicles. Governments also are funding research and development and, in the case of hydrogen and ethanol, starting to create the network of fueling stations necessary if vehicles powered by these alternatives are ever to be successful commercially. These decisions will influence the types of vehicles Americans drive in the future. That reality has some people enthused and others worried that governments might make the wrong choices.

THE HYDROGEN HOPE

Concerns about greenhouse-gas emissions and American dependence on foreign oil have led even automakers to concede that the petroleum era is ending. "The auto industry would love to gets this emissions monkey off its back," says John McElroy, host of "Autoline Detroit," a weekly television program. "Almost every major automaker around the world will tell you that hydrogen is the answer." Hydrogen is a far more efficient fuel than petroleum, and it produces no harmful emissions.

Enthusiasm for hydrogen extends to state governments, too. Not surprisingly, California and New York are leaders in hydrogen experimentation, with government fleets serving as testing venues for prototype vehicles. Smaller states, such as South Carolina and Connecticut, are also pumping millions of dollars into hydrogen research and development. State officials see that as a small price to pay to make their home-state businesses and universities the focal point for tomorrow's economy.

Beyond working out the technological kinks, though, hydrogen faces a major challenge: Little infrastructure currently exists to mass produce it--a process that wouldn't necessarily be emissions free--or to fuel hydrogen-powered vehicles. Creating that infrastructure is likely to be hugely expensive for government and industry alike. In 2004, California pledged $90 million in public and private funds to set up hydrogen fueling stations every 20 miles on major highways. Such price tags are why, for the public and private sectors to truly commit to hydrogen, they have to be sure it's far and away the best option. And that's not at all clear yet.

LOVE THE PLUG

One of the competing ideas is a plug-in hybrid electric vehicle (PHEV). It is unlike the popular hybrid gas-electric cars such as Toyota's Prius in a key way. The Prius uses gas to recharge its electric batteries and gets only moderately better gas mileage than conventional vehicles. The PHEV recharges its batteries the same way a cellphone recharges: The owner hooks it up to a standard electrical socket.

Although PHEVs are currently in their infancy--there are only a few dozen prototypes around the Unites States--the concept makes a lot of sense. The battery power is good to go 40 miles, which means that the car travels without using any gas at all. But the cars have traditional engines, too, so there's no risk of a driver getting stranded if the electric battery runs down.

These vehicles have found a special home in Austin, Texas. In 2005, officials at the city's utility, Austin Energy, had an epiphany. The wind blows in Austin, but usually at night, precisely when power is least needed. Plug-in hybrids could provide an intake for the energy. An added twist: If a PHEV owner doesn't use his or her car on a particular day, Austin hopes to buy back the power, using automobiles as storage devices to make wind power more useful. Daryl Slusher, a former member of the Austin City Council and deputy coordinator of the city's PHEV efforts, sees this as the technology "that we think can make a significant dent in greenhouse gases most quickly."

There was a blip in Austin's vision, however. Automakers weren't producing PHEVs. So Austin Energy and the city's mayor, Will Wynn, launched a national campaign to educate others about the PHEV potential, including leaders in other cities and at utilities, nonprofits and private companies. As a result of Austin's efforts, hundreds of organizations--from Cambridgeport Plumbing in Massachusetts to the city of Crested Butte, Colorado, and from the Oklahoma Department of Commerce to Oconomowoc Utilities in Wisconsin-- have placed "soft orders" of PHEVs with auto manufacturers, promising to consider the vehicles for their fleets once they become available. Chicago, Los Angeles, Philadelphia, Phoenix, San Francisco and Seattle are all members of the pact to buy the cars.

Most major carmakers are now looking at or actually developing plug- in hybrids. In particular, GM's PHEV, the Chevy Volt, drew excitement when it was unveiled early this year. How much Austin's proselytizing campaign influenced automakers is a matter of some debate.

Improvements in lithium ion battery technology were likely the biggest reason for car manufacturers to give plug-in vehicles a serious look.

What's clear is that fleet managers and policy makers now know a lot more about PHEVs than they did just a year or two ago and that this knowledge is boosting the future of plug-in hybrids. Many places, including Austin, aren't waiting for the major automakers. They're retrofitting existing vehicles to be plug-ins. One of the boldest efforts is in New York, where the state plans to turn its entire fleet of conventional hybrids--some 500 vehicles--into plug-ins.

To be sure, there are plug-in naysayers. Robert Rose, executive director of the U.S. Fuel Cell Council, a group that favors cars with hydrogen fuel cells, argues that lithium ion batteries still aren't advanced enough to be commercially viable and might never be. "The engineering performance really doesn't match the hopes of the people who pursue these technologies," he says. "The only strategy that gets to an end point is the hydrogen strategy."

PICKING WINNERS

Technological capabilities aside, the larger question--and one that applies to state and local efforts to promote hydrogen just as much as it does to Austin's campaign--is whether governments are going too far in stating what technologies they prefer. Is there danger in South Carolina and Connecticut betting on hydrogen and Austin putting its weight behind PHEVs? "The market should decide which technologies work best," says Charles Territo, a spokesman for the Alliance of Automobile Manufacturers. "It's most useful for governments to encourage all different types of technologies."

To understand the automakers' concern, you have to understand the previous generation of electric cars. While Austin's impact on automakers is ambiguous, California's in 1990 was not. That's when the state announced that, by 1998, 2 percent of cars sold in the state would have to have no tailpipe emissions. This was effectively an electric-car mandate--hydrogen wasn't yet an option. California later delayed, then cancelled this zero-emissions vehicle (ZEV) rule but not before automakers hustled to comply. The most famous result was GM's EV1, which the automaker began leasing to the general public in the late 1990s.

It didn't take long for the flaws of the EV1 to become apparent. With its weak battery power, the cars couldn't manage 100-mile trips without extended recharging. The EV1 also had only two seats and cost more than many luxury cars to produce. Millions of dollars in investments by GM appeared to have been wasted to satisfy state policy makers who thought they should decide what cars reach consumers.

Today, California has a different approach. "We've seen enough mistakes and failures in the past," says Daniel Sperling, who was recently appointed to California's Air Resources Board, "to know that picking technological winners is fraught with danger." The state is dipping its toes into hydrogen but also PHEVs and ethanol. California's newer regulations (which automakers are challenging in court) require sizable reductions in vehicle greenhouse-gas emissions, but they don't mandate a specific percentage of zero-emission vehicles. That means that automakers will be able to use hydrogen and PHEVs to meet the California standards as well as biofuel vehicles, traditional hybrids or simply more efficient petroleum-powered cars.

What's unclear, however, is whether actions in Austin or Connecticut or some other state or city will lead the auto industry down a bumpy road, the way the ZEV mandate did. Of course, telling automakers you'll buy plug-ins or focusing research dollars on hydrogen is far less confrontational than legislating a specific number of clean vehicles.

Beyond that, it's not clear that the ZEV rule was such a bad thing in the long run. Brett Smith, a senior industry analyst with the Center for Automotive Research, notes that the mandate forced automakers to research electric cars, without which PHEVs would be much further away today.

More fundamentally, hydrogen cars and PHEVs are not necessarily adversaries. Even the most partisan hydrogenista can accept hybrids and biofuels as ways to cut petroleum use in the short term as the country transitions to hydrogen.

In the long-term, PHEVs and hydrogen cars may be symbiotic. There's a version of the Volt that has the same chassis, motor and electric battery as a standard one but complements the plug-in electric power with a hydrogen fuel cell instead of an internal combustion engine, resulting in a plug-in hydrogen car. Even if that fusion doesn't catch on, there are enough similarities between PHEVs and hydrogen vehicles to make research into one useful for development of the other.

The real danger might be if governments across the country were all pushing automakers in the same direction. But with hydrogen, electric and biofuels all winning support from government, state and local policy makers are actually helping automakers maintain optimal flexibility, which is what experts say the industry needs right now. "There are so many options," Smith says. "If you talk to someone from a car company that says they have the answer, walk away from them." Or drive off in your hydrogen-enhanced Chevy Volt.

Josh Goodman
Josh Goodman  |  Former Staff Writer
mailbox@governing.com  | 

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