Energy Department Slashes Hydrogen Transportation Funding in Proposed Budget

(Note: Updated 5 p.m. 5/7/09 to include link to Hydrogen and Fuel Cell groups' joint statement.)

By John O'Dell, Senior Editor

In a huge blow to backers of fuel-cell electric vehicles, the nation's top energy official said today he sees little promise of the technology becoming a significant player in the nation's transportation system within the next two decades.

As a result, Energy Secretary Stephen Chu is proposing that more than $100 million be cut from the Energy Department hydrogen program in the 2010 budget the administration is submitting to Congress.

The proposed budget slashes hydrogen fuel cell spending by 59 percent to just $68 million and focuses on programs for stationary power generation rather than for transportation.

"We asked ourselves, 'Is it likely in the next 10 or 15, 20 years that we will covert to a hydrogen car economy?' The answer, we felt, was 'no,'" Chu said in a briefing today.

The National Hydrogen Association and the U.S. Fuel Cell Coalition quickly issued a joint statement criticizing the program cuts.

Chu said in his briefing that there are too many significant stumbling blocks to widespread adoption of fuel cells, which convert hydrogen and oxygen to electricity on board a vehicle that is propelled by an electric motor. A major impediment to quick commercialization, he said, is lack of a nationwide fueling infrastructure.

But Chu's belief that it is best to cut hydrogen spending and divert the funding elsewhere isn't necessarily shared by Congress, which must approve the budget, said Patrick Serfass, the National Hydrogen Association's vice president for technology.

In the past few years, he said, Congress has actually added money to the DOE's hydrogen funding requests and there has been strong bipartisan support for fuel-cell technology development.

"While Chu's comments are not a good indication [for hydrogen] from the DOE, we think it is too early to be picking winning and losing technologies," Serfass told Green Car Advisor.

"We think this is a wrong idea, and that there will be vigorous discussions in Congress when the budget comes up for review."

Chu's message, though, was clear. The Obama administration is "shifting resources" toward other advanced transportation technologies including battery-electric vehicles, biofuels and development of lightweight alloys and composites to reduce the fuel-draining heft of new vehicles.

Funding for all of those programs would be increased under the budget proposal, which hydrogen funding for fuel-cell research and development would drop and what remains would be focused on stationary power generations and other programs that have nothing to do with transportation.

While Chu questioned the viability of fuel cells for transportation, Sefrass and other backers of the technology point to the small test fleets of fuel-cell electric vehicles being tested in California and several other areas of the country by General Motors Corp. and Honda Motor Co.

Both the GM Equinox FCEV (right) , a crossover SUV, and the Honda FCX Clarity (top) , a futuristic sedan, have won praise from auto critics -- including those at Edmunds.com - for their performance and drivability.  

Honda has said publicly that it believes the fuel-cell car is ready for prime time, and that only by encouraging development and use of the vehicles will the now astronomical costs of building them come down to the point they can be competitively marketed.

But without a healthy national network of hydrogen fuel stations, the fuel-cell electric car will remain little more than a daydream.

Serfass suggests an even worse scenario.  

The U.S. has so far been the world leader in fuel-cell vehicle research and development even though much of the work is being done by foreign automakers including Toyota, Honda, Nissan, Mercedes-Benz, Hyundai, Kia and Volkswagen.

All are members, along with GM and Chrysler -- the sickest of the three U.S. automakers -- in the California Fuel Cell Partnership, which promotes cooperative development and is pushing hard for construction of hydrogen fuel stations. (Ford Motor Co. also works on fuel-cell vehicles, but not as part of the partnership.)

Toyota and Honda, no slouches when it comes to guessing which way the winds will blow, both say they believe the fuel-cell electric car is an important part of the future of personal transportation.

Serfass worries that if the Obama administration turns its back on hydrogen fuel-cell vehicles, the automakers will take their research and development programs to Europe or Asia and the U.S. will lose the lead in technology that will be a critical part of an oil-independent future.

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John O'Dell May 7, 2009, 3:49 PM

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Alternative Fuels, Chevrolet, Chrysler, Ford, Fuel Cell, General Motors, Honda, Hydrogen, Hyundai, Kia, Mercedes-Benz, Nissan, Plug-ins and Electric, Toyota, Volkswagen

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2010 Energy Department Budget, Energy Department Budget, Fuel Cells, Hydrogen Program Spending

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