President Obama's proposed fiscal 2012 budget cuts hydrogen technology spending by about 40 percent. How would these cuts affect the industry and the United States' competitiveness? During today's OnPoint, Ruth Cox, executive director of the Fuel Cell and Hydrogen Energy Association, gives her take on the Obama administration's decreased emphasis on fuel cell technology and hydrogen energy. She also discusses how lawmakers are responding to the proposed Department of Energy budget.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Ruth Cox, Executive Director of the Fuel Cell and Hydrogen Energy Association. Ruth, thanks for coming on the show.
Ruth Cox: Thanks for having me.
Monica Trauzzi: Ruth, last week the president's budget proposal cut spending on hydrogen technology by $70 million about and that would amount to a 40 percent drop from the current budget. Other technologies like wind and geothermal actually got a boost in funding. So why do you think fuel cells and hydrogen energy aren't as much of a priority for this administration?
Ruth Cox: Well, honestly, we're a little bit mystified at the position that the administration has taken. We have a program in the fuel cell technologies group that has exceeded every goal and benchmark that's been set for it. They have doubled the durability, doubled the efficiency of fuel cells. They have reduced the price by a factor of 10. And we have a fundamental role to play in complementing the renewable energies that they are investing a great deal in. We provide a conversion and storage mechanism for them and we also enable the fossil fuels to be used more efficiently and with a lower impact and negative impact to the environment. So we're a little surprised by the disproportionate cuts that we received here and it seems like a lack of understanding of the fundamental role that we play. Equally, on the fossil energy side, we have the solid state energy convergence alliance or SECA program that was zeroed out completely. And this is an extremely important program because it provides for the scaling of fuel cells, solid oxide fuel cells in this case, to central power station level performance. And we think it's a critical component going forward in dealing with coal and trying to separate CO2 from coal gas and actually processing coal gas in an efficient and environmentally sound manner.
Monica Trauzzi: Are there just too many economic challenges and risk posed by this technology and is that why the administration doesn't feel comfortable moving forward right now, especially considering the economic climate that we have in the U.S.?
Ruth Cox: I would say not because, I mean, these technologies are being commercially deployed today. There are hundreds of megawatts of power for stationary fuel cells, backup power, and for materials handling, like equipment, that's being used by major corporations today to gain a competitive advantage. Whether it's Google or eBay, Wal-Mart, Coca-Cola, FedEx, all of these companies are gaining a competitive advantage today. And we've invested billions of dollars, probably 2 billion by the government and 8 billion by private industry to get to the point where we are. And now, to basically pull the rug out from under us, it's not so much the funding as the rhetoric coming from the administration. It's really harmful. It sends a message to the market that they don't believe in this technology. They're not going to support this technology. It's not a priority for them. Yet you see corporations and universities and other organization's using it very effectively for distributed power, distributed, clean, reliable, and efficient power.
Monica Trauzzi: Could the industry survive solely on the private funding that you get?
Ruth Cox: Well, I think that it's really, again, the rhetoric is issue. It shows a fundamental lack of understanding for the important role that fuel cells and hydrogen technologies play in this energy network that is emerging. And we see ourselves as the microprocessor of the energy age. And it seems really strange that the government would be turning its back on the microprocessor of the energy age.
Monica Trauzzi: How close is the industry to achieving a market for fuel cell vehicles?
Ruth Cox: Fuel cell vehicles will rollout commercially in the 2014/2015 timeframe and all of the major what they call OEMs or car manufacturers that are delivering fuel cell electric vehicles to market also have battery electric vehicles and hybrids and they're still focused on their goal of commercial rollout in the 2014/2015 timeframe. And pretty much everyone who's done studies in this area, whether it's the National Science Foundation or the McKinsey study that came out of Europe, indicates that fuel cells and hydrogen, and in particular, in the transport sector are essential to us meeting our economic, our environmental, and our energy and national security goals. We need a portfolio approach and they've been very clear that fuel cells and hydrogen need to be part of that portfolio.
Monica Trauzzi: I know last week after the budget was released you spoke to many folks on the Hill.
Ruth Cox: Yup.
Monica Trauzzi: What kinds of discussions have you been having? Is there support for this technology? Does it sound like you may continue to get funding?
Ruth Cox: Yeah, there's quite a bit of support. I mean, there are tens of thousands of jobs at stake right now in this industry and so that's one issue. The second issue is that, you know, they know that we've invested about $10 billion. They don't want to see us turn over the fruits of this investment, both financial as well as manpower investment in these technologies, to our foreign competition. And you see Japan, Korea, China, Germany all gearing up to do exactly that. And they don't like the idea of the Department of Energy picking winners and losers in this. So I think we have a great deal of support. We had more than 50 meetings last week and it's just the beginning and we're confident that we're going to be able to get some equity here for fuel cells and hydrogen.
Monica Trauzzi: So, does this technology fall under the clean energy umbrella? There's all this talk about a clean energy standard this year. Does this qualify?
Ruth Cox: Absolutely, fuel cell power is always clean power. So, whether it's operating with biogas, you know, there's been quite a bit of effort to couple fuel cells with biogas, which is renewable. It is a storage, a conversion and storage mechanism for excess wind or solar power or geothermal power that can then be used as hydrogen to fuel vehicles or other applications or even, in some cases, put electricity back onto the grid. You know, when you operate with fossil fuels you're always lowering, by 30 to 50 percent, the amount of pollution that you're putting in the air, zeroing out all what they call NOX and SOX, so particulate matter, which is important to human health, right? And it also makes those fuels much more efficient. So we're actually preserving our vast stores of fossil energy by using them with fuel cells.
Monica Trauzzi: If this funding cut were to go through, what are the immediate impacts on the industry?
Ruth Cox: Well, I think the immediate impact is it's going to galvanize us to find another way. I don't think we're going to give up just because the government has decided to pull our funding. And almost every member that I speak with about this will make that statement. But it does make it harder for us and, again, we are really mystified as to why the administration would want to turn its back on the microprocessor of the energy age. I mean we are entering the energy age. Economies will be developed based on access to affordable and reliable and sustainable energy and we have this tremendous lead today. Why would we turn our lead over to foreign competition? We already did that with batteries and with solar and with wind. Here we have a lead. It's a modest investment to sustain it. We think that cooler heads are going to prevail in this in the end.
Monica Trauzzi: OK, we'll end it there. Thank you for coming on the show.
Ruth Cox: Thank you very much.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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