For ten years I have been told that a hydrogen infrastructure is the main thing keeping us from hydrogen fuel-cell vehicles. The problem is framed as a Chicken and Egg type dilemma. Should the cars come before the infrastructure, or vice versa? After studying how other infrastructures were developed, I am convinced that a hydrogen infrastructure will only be developed if it is preceded by the release of hydrogen fuel-cell cars.
History Supports This Theory
When America transitioned from using coal to natural gas for heating homes, a new infrastructure was needed. Everything from storage, pipelines, delivery trucks, and dispenser systems were needed to get natural gas to its users (who would want to mass produce natural gas furnaces without an infrastructure?). The transition didn’t happen over night. Natural gas furnaces started out as a luxury item that only the rich could afford—they were clean, convenient, and environmentally friendly. The demand for natural gas from the rich drove the development of better infrastructure. The new infrastructure, in turn, made natural gas more available and more affordable. Gradually more and more people could afford the switch. In fact, natural gas eventually became less expensive than coal. The transition from coal to natural gas happened simultaneous to the development of the infrastructure, but it was led by people’s demand for natural gas furnaces (the end product).
Many other industries underwent similar transitions:
- Wood to Coal
- Telegraph to Telephone
- Candles to Kerosene Lamps
- Horse and Buggy to Automobile
- Kerosene Lamps to Electricity
- Dial-Up to Broadband Internet
Other industries were started from scratch rather than transitioning from a previous industry. They still required a new infrastructure:
- Radio
- Television
- Cell Phones
It’s obvious the need for new infrastructure is nothing new. All of these products started out as expensive luxury items with little or no infrastructure. Their infrastructures developed gradually (not to be confused with slowly). This development happened simultaneous to the products being adopted. And because all of these products were better/more affordable than their predecessors, they all developed into the industry standard. Hydrogen could do the same.
A Lesson From the Automotive Industry
Hydrogen fuel-cell cars are not the first innovation to come out of the automotive industry. New innovations are a regular occurrence (IE: air conditioning, power windows & locks, power steering, and countless others). The manufacturers almost always begin by releasing these new features ONLY on their high-end models. The features that are really worthwhile quickly trickle down the model lines until they are available even on economy cars. The features that are less worthwhile either fade out or stay limited to the high end models. Why should fuel-cells be any different?
My Suggestion
Honda, Toyota, GM, Hyundai, and any other manufacturer who has the technology and ability should release a high-end, luxurious, expensive fuel-cell car on a limited basis. In fact, these cars should be released under the companies’ premium badges (IE: Acura, Lexus, Cadillac, etc.) The release should be limited to densely populated areas where a hydrogen fueling station already exists (IE: Los Angeles, San Fransisco, DC, etc.) These cars should be loaded with expensive, organic/recycled materials. They should be designed to appeal to movie stars, politicians, and athletes—anyone who wants to make a flashy statement about their status and the environment.
Kudos to Honda
Honda is already doing a form of what I’m suggesting. They are leasing their FCX Clarity for $600/mo. to a limited number of people in the Los Angeles area. I’m certain that a few new hydrogen dispensing stations will pop up as a result. What a great way to get the ball rolling!
What NOT To Do
I hear environmentalists, auto manufacturers, and hydrogen advocates all calling for the government to take the initiative and build a hydrogen infrastructure. The idea is that if an infrastructure were to be built in advance, the auto manufacturers could finally release their fuel-cell vehicles and go straight into mass production.
I’ve made it pretty clear that I hate the idea of asking the government take care of it. Not only would it undermine freedom, but it would be a huge project wrought with waste and inefficiency. It is simply impossible for Washington DC bureaucrats to predict where and how many fueling stations should be built. Some areas would suffer shortages while others would have a surplus that could only be supported by forcing the tax payers to subsidize it.
It is essential that we trust in the free market and the law of supply and demand. It’s the only way for the infrastructure to grow in the right places, at the right time, at the right speed.
Conclusion
If auto manufacturers release their fuel-cell vehicles as high-end, luxury cars; then environmental advocates with plenty of money will be able to purchase the cars. This will send a signal to service station owners and hydrogen distributors who will in turn build up their hydrogen distribution infrastructure.
As hydrogen becomes more available, it will get less expensive. As the price goes down, demand for it will go up. With the increased demand, the auto manufacturers will be able to increase their quantity and lower their prices. The transition to hydrogen will be gradual but not necessarily slow.
Your Thoughts?
Tags: hydrogen, infrastructure
What kind of car are you purchasing next then? Something to push the move away from regular cars or something more financially viable?
@Amy,
If I were wealthy I would certainly be an “early adopter” of some futuristic car. Here are a few that catch my eye:
Honda FCX Clarity http://automobiles.honda.com/fcx-clarity/
Tesla Roadster http://www.teslamotors.com/
Fisker Karma http://www.fiskerautomotive.com/
But I’m not wealthy. I will drive my 96′ Camry until the wheels fall off then buy something else affordable.
Investing in hydrogen infrastructure would be a tough bullet to swallow. As you mention Ben, without the need for the hydrogen stations, there will be fewer people willing to jump into the pool.
It’s like those parties in high school. Everyone wants to be invited, but everyone is also afraid that if they show up and no on else does, they will be emberassed. So, the prospective party goer, asks questions of everyone to see who is going, after they are assured they won’t be going alone, they are more secure in going to the party.. Also, if those party goers found out the popular crowd would be there, it would be even more reassuring and interesting.
With that said, perhaps some of the “green” people should recruit some “popular” people, moviestars, athletes etc, to front the movement. I don’t mean put the financial onnus on the althlete, moviestar, but rather put the “cool” factor on them as the “green” group gets the grants and money to back the infrastructure..
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More support of my theory:
http://www.autobloggreen.com/2008/12/06/celebrities-starting-to-show-up-mercedes-bluetec-diesels/
Hey Benton
I liked your article. Supporters of the emerging hydrogen economy need to talk about all kinds of ways of speeding up this transition. I’d like to ask you to please check out my thoughts on how to speed up this transition. I’ve come up with a very creative and unique plan that can be adopted in every state. I believe that how we go about making this transition is even more important than the transition itself. I believe we need to marry aggressive social action with sound principles of market forces. My plan is how the state of Minnesota can create a state wide buying group that I call the North Star Group to buy 10,000 Ford Focus FCVs and 2,000 refueling stations with no new funding, no tax credits, and no subsidizes. I look forward to hearing your feedback. Please check out my website http://www.bigbuystrategy.org
[...] Another argument that is far less stupid, but equally insignificant is that of infrastructure. Infrastructure ALWAYS follows successful products (notice how 3G technology is only available in select cities right now—if the technology proves [...]