May 11, 2009

Corn by an ear uh...nose

I guess water does not have much of a lobby in Washington.
Picking Winners: Team Obama, Hydrogen Cars, and the Future of Transport

The Obama administration’s about-face on hydrogen cars appears to amount to picking a winner.

The big cuts in the budget for hydrogen cars mark a sharp reversal with the Bush administration. Not that it has stopped auto makers: General Motors, Honda, and Toyota all said they’d press ahead with cars powered by hydrogen fuel cells, Bloomberg reports today.

There is the bigger question: Why is hydrogen a non-starter even as biofuels are getting more love from Team Obama? Energy Secretary Steven Chu’s rationale for killing the hydrogen program fits squarely with the administration’s embrace of pragmatism:

“We’re going to be moving away from hydrogen-fuel cells for vehicles,” Chu said. “We asked ourselves, is it likely in the next 10 or 15, or even 20 years that we will convert to a hydrogen car economy? The answer, we felt, was no.”

But doesn’t that apply equally to electric cars, or the hope that massively increasing the use of biofuels will lead to energy independence? And both of those transportation alternative are getting more, not less, funding in the federal budget.

If hydrogen’s murky future is just a question of cost, as Dan Sperling of the University of California’s Institute of Transportation Studies pointed out, the government has an easy remedy to hand: Just channel the billions of dollars a year in biofuel subsidies toward a hydrogen-car infrastructure.

The Obama administration seems to be signaling that in this era of trillion-dollar budget deficits and urgency to change the energy mix, not all new technologies are equal. Some deserve funding and some don’t. In short, the federal government seems to be getting into the business of picking winners.

If past is prologue, that’s not a task the government is well-suited to. And it probably won’t sit well with the oil industry, which doesn’t want the federal government to begin throwing its weight around and backing particular energy sources. Consider the message in the Exxon Mobil ad that ran today on the front page of the Wall Street Journal this morning: “Oil, gas, biofuels, nuclear, wind, solar… to fuel the future we need them all.”


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