Budget Slash Leaves Hydrogen Crippled, But Not Dead

(MoneyWatch)  Yesterday marked the end of the United States government's drive toward the vehicles, at least if a cut proposed by President Obama removing 60 percent of hydrogen program funds is approved. Details on that are next door at BNET Auto.

Enthusiasm for the fuel peaked earlier in the decade, as President Bush picked up up on the idea of clean-running hydrogen vehicles and used the imagery of tailpipes dripping purified water to appease environmentalists worried about global warming. As a piece of political theater, it worked. Whether his public support of hydrogen helped its cause, on the other hand, is debatable.

Bush's attempt at misdirection also helped illuminate what looked like similar efforts on the part of automakers. Hydrogen for years helped these companies prevent coherent action toward improving fuel standards -- held out as a promise, hydrogen remained ever-unattainable.

Yet most of the companies that were working on the vehicles have continued to do so, even as most of the public gave up hope. BMW, Honda, Toyota and yes, even beleagured General Motors are all still working to improve designs for hydrogen fuel cell vehicles. GM, despite its financial difficulties, is leasing 100 fuel cell Equinox SUVs, and is quietly pushing a program for hydrogen filling stations in New York state.

And outside of the powerful fuel cells required to move a heavy vehicle at highway speed, hydrogen fuel cells are picking up speed in some other markets. Nestle, for one, plans to use hydrogen-powered equipment in warehouses. Other small applications for hydrogen could proliferate, depending on their cost.

Aside from the difficulty of building high-powered, compact fuel cells, there's the problem of producing hydrogen itself. Most hydrogen has to be created using other resources like natural gas, consuming energy in the process (one of the major arguments of critics). If gas prices went up, hydrogen would as well, making it a risky fuel to bet on. One alternate possibility would using solar energy to crack carbon dioxide, running it through a process to create hydrogen. Sundrop Fuels, a secretive Colorado startup, may be showing that process off later this year.

And there's one more reason for hydrogen enthusiasts to smile past Obama's decision to cut $100 million in funding from the program: The stimulus bill passed earlier this year provides $42.9 million to the technology. So for the moment, things are only half as bad as they thought.