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Bay Area Hydrogen Car Market May Get Boost From State Grant

SAN FRANCISCO (CBS SF) -- Car show season is just around the corner and one of the new models is all the buzz: It's the first mass-market hydrogen fuel cell car.

Toyota's betting big on it, but there's one hitch.

Bill Holloway's daily commute is a science experiment. He's driving one of only three hydrogen powered cars in the Bay Area, a Mercedes B-Class Hydrogen Fuel cell car.

It's quiet, fast and just as clean as an electric plug-in car. "You can drink it. It is pure H2-O," said Bill. And there are some extra advantages. Instead of waiting hours to charge it, he can refuel at a pump in minutes. "I fill up in the same amount of time it takes to fill up a gasoline car," Bill said.

One tankful of hydrogen costs him $40 to go 200 miles, roughly the equivalent of 60-miles per gallon in a gasoline car.

There's just one hitch, he says: "I just wish there were fueling stations around!" said Bill. The station where he fills up in Emeryville is the only one in the Bay Area.

There are 8 more down in Southern California, but that's it. A so-called "hydrogen highway" has yet to materialize.

This year it's finally getting a kick start: The state awarded almost $50-million in grants to build 28 new hydrogen refueling stations.

The industry predicts once they are all up and running next year consumers will start buying the cars. But not everyone is convinced. "We need more stations obviously, perhaps in the order of 1000," said Roland Hwang with the natural resource defense Council.

"It's the chicken or the egg," he said. "No one is going to buy the vehicles unless there is infrastructure and no one is going to fund hydrogen charging stations until there are vehicles," he said.

Roland says it's time for private industry to step up, but that's not happening. "The oil companies have fought us tooth and nail when we had a requirement in California to force them to put alternative fueling at their gas stations. That is the last thing they wanted to see, competition in their own back yard," he said.

Yet refineries are the top producers of hydrogen, most of which is made from natural gas, and which they use to refine crude oil into gasoline. "They know that technology and if they wanted to they could put hydrogen stations on every corner," said Hwang.

Chevron, Exxon, Shell and BP have all backed out of the Fuel Cell Partnership, a joint government-industry group that promotes hydrogen cars. They turned down our request for interviews.

For now Bill's playing it safe: He's leasing his fuel cell Mercedes for two years, but fully enjoying the attention. "I get thumbs up from Tesla drivers. What  more could you want!" he said.

Shell operates three demonstration hydrogen stations in the L.A. area but has no plans for more in the U.S. for now. In a statement sent to KPIX5 here's what they say:

"Shell made a decision not to renew its membership of the California Fuel Cell Partnership for 2011/2012. Since Shell became a member of the Partnership we changed our retail station business model in California and no longer own Shell branded retail sites in the State. In combination with a number of other factors, this will make the development of a commercial hydrogen retail network in the State challenging for Shell. We have therefore decided to focus the limited resources that we have available for the development of early-stage commercial hydrogen infrastructure in markets where we have a large network of Shell owned retail stations.  In the near term, this is likely to mean a focus on Germany, where the Government sponsored H2 Mobility program represents a promising public-private coalition set up to progress the commercialization of Hydrogen. Additionally, while we support the objectives of the Partnership to 'prove that we are undeniable and necessary' as an extension of the original objectives of the Partnership, it has become clear in recent meetings and from the latest planning committee notes that advocacy and communications have become priorities for the partnership. This development reflects a view of progress towards a commercial Hydrogen market in California that does not correspond with Shell's own views.

By the way the Emeryville pump, owned by AC Transit, produces hydrogen onsite with solar power. It's one of several ways to produce hydrogen with renewable energy.

However most hydrogen today is made from natural gas. The process requires a lot of energy in itself, and is in fact a major producer of greenhouse gases.


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