From: Kurt Blumenau, The Morning Call, Allentown, Pa.
Published October 2, 2004 12:00 AM

Analyst Lowers Outlook for Hydrogen Cars

Oct. 2—Hydrogen-powered fuel cell cars may face a longer, rockier road to acceptance than originally thought, a research firm studying the vehicles said this week.


ABI Research revised its prior market predictions "sharply downward" on Thursday, said Atakan Ozbek, director of energy research at the Oyster Bay, N.Y., firm.


Ozbek declined to comment specifically on his new estimates, except to say that expectations for growth have been pushed out by at least five years. Last April, he predicted 100,000 fuel cell cars would be on the road worldwide in 2010, jumping to 800,000 cars in 2012.


He said a lack of fueling stations in the United States is delaying hydrogen's development. He also said national and local governments need to make stronger commitments to the technology.


Some in the hydrogen community support the new report, saying earlier predictions were too optimistic. Others disagree with Ozbek, saying problems with fuel-cell cars, not fueling stations, are the real stumbling block.


"We have the infrastructure ready to go," said David McCarthy, commercial manager for future energy opportunities at Air Products and Chemicals of Trexlertown.


Air Products ranks as the world's biggest producer of hydrogen. It has also built more than 30 hydrogen-fueling stations worldwide, more than any other company.


Hydrogen, when run through devices called fuel cells, provides enough power to run a car without the pollution of gasoline engines. Researchers are still figuring out how to make enough hydrogen to meet demand, and how to get it to fuel stations.


President Bush made hydrogen the focus of America's future energy policy last year, pledging more than $1 billion for research over the next five years. Democratic rival John Kerry has said he will spend $5 billion if elected.


But Ozbek said governments worldwide need to do more than pay for research. They need to commit to buy fuel-cell fleet cars, for instance. He applauded China's pledge to have a large fleet of hydrogen cars ready for the 2008 Olympic Games.


Ozbek also believes governments play the most vital role in building a network of stations.


The debate over which needs to come first — cars or fuel stations — is a common chicken-and-egg debate among hydrogen backers. Some national and local governments side with stations, and are beginning to invest in that infrastructure. Most notably, California unveiled a "Hydrogen Highway" program this year, to build a network of stations along the state's major highways by 2010.


Ozbek praised Air Products's work, but said it's not up to the Trexlertown company to lead the charge for new stations.


"Air Products is one of the great companies in the hydrogen sector. They've been very proactive," he said. "I don't think it's 1/8in3/8 their hands."


Air Products' McCarthy said the company is ready to meet demand for hydrogen stations. That's a contrast to the auto industry, which has not yet built fuel-cell cars with the range and reliability needed for mass-market sale.


Michael Davis, chairman of the National Hydrogen Association trade group, took a middle ground. Davis said hydrogen production and storage will have to be a major focus over the next few years. But fuel cell research will have to continue as well, he said.


"I don't consider fuel cells out of the woods at all," he said.


Pat Serfass, a spokesman for the Washington, D.C., association, said the group sees early fuel-cell fleets arriving in around 2010. The group expects fuel-cell cars in showrooms in or around 2020, he added. That timeline is slightly less optimistic than Ozbek's revised prediction.


Most of hydrogen's development milestones are still far in the future, Serfass and others said. That means predictions of market growth will inevitably change, depending on technology breakthroughs and other factors.


"If they're adjusting their estimate a little bit, times change," Serfass said.


To see more of The Morning Call, or to subscribe to the newspaper, go to http://www.mcall.com.© 2004, The Morning Call, Allentown, Pa. Distributed by Knight Ridder/Tribune Business News.


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