Dana Flavelle
Toronto Star
June 4, 2001

“Around here, we call it Saudi Arabia in a box,” says Andrew Stuart, patting the washing machine-sized metal box that can turn ordinary tap water and household electricity into fuel for cars.

Its technical name is the “personal fuel appliance.” It’s like having your own personal gas station in your garage, except this one pumps hydrogen for cars that run on fuel cells.

Sounds too futuristic to be real? Well, yes and no, says Stuart, president and chief executive officer of Stuart Energy Systems Inc., the Toronto-based company that’s developing them.

“It may seem slow to the casual observer, but to those of us involved it seems like it’s happening at lightning speed,” Stuart says.

Fuel cells have long been touted as the cleaner, more efficient fuel of the future, able to power everything from light bulbs to cars, not to mention their potential to reduce North America’s growing dependency on Middle East oil supplies, while producing virtually zero emissions.

Lately, the energy crisis in California, along with U.S. President George Bush’s controversial energy program, has thrown the spotlight on the emerging fuel-cell industry, in which Canada is a significant player.

The White House task force on energy emphasized increased output of conventional sources of fuel, but also recommended a tax break for buyers of vehicles that rely partly on fuel cells.

While fuel-cell cars have captured the public’s imagination, the more likely short-term applications of this technology lie elsewhere.

In fact, some fuel-cell products are already on the market, though not in the places most consumers would expect to find them.

They’re hanging on the racks in Wal-Mart and other leading consumer electronic retailers, where they’re being sold as backup power packs for cellphones.

Sold under the brand name Instant Power, they’re made by Electric Fuel Corp. Ltd., a New York-based company with operations in Israel, using a fuel-cell technology based on zinc, rather than hydrogen.

It’s all part of the vast and complex world of the fuel-cell industry, where the number of players is expanding rapidly, each armed with slightly different technologies with different applications, and different game plans.

Fuel cell is a generic term for a non-mechanical device that operates like a fuelled battery, as opposed to conventional batteries that operate on stored energy.

Most Canadians, when they hear the term fuel cell, think of Ballard Power Systems Inc. The Burnaby, B.C.-based outfit is a world leader in this emerging technology.

The company has deals to supply fuel cells to major auto makers, including DaimlerChrysler AG, Honda Motor Co. and Nissan Motor Co.

But at least half a dozen other Canadian companies are exploring the market. They include:

Fuel Cell Technologies Corp., of Kingston, which is developing a fuel cell that would power the home. The company expects to have a device on the market by 2003. Its Solid Oxide Fuel Cell is powered by natural gas or propane, but gives off lower emissions than conventional power sources.

Its initial target market is remote locations, sites that require uninterrupted power, or have severe weather.

Global Thermoelectric Inc. of Calgary, is also developing fuel cells for the home. The company expects to deliver the first unit for testing later this year.

It has a strategic alliance with Enbridge Inc., the natural gas distributor to 1. 5 million homes in Canada. Enbridge invested $25 million in the company last year.

Hydrogenics Corp., of Mississauga, makes fuel cells for all applications. It also makes fuel cell test beds and components for auto makers, fuel-cell developers and government agencies.

The company was co-founded by University of Toronto research engineer Pierre Rivard in 1995.

Methanex Corp., of Vancouver, produces methanol, one of the potential sources of hydrogen for fuel cells.

Several of these companies have raised millions in the past year by going public.

However, big questions remain about how long it will take to achieve the economies of scale that make fuel cells financially competitive with conventional sources of power and whether this new industry will realize its environmental potential.

“There’s a lot of hype around fuel cells,” says Tom Adams, spokesperson for Energy Probe. “Like all good hype, there are some threads of truth mixed in there.

“There are workable technologies and, in the long term, the prospect for non-mechanical, purely chemical engines for converting gaseous fuels to electricity has potentially great benefits.

“I’m a fan in principle.”

Like other environmental activists, Adams has reservations about how the technology will be applied.

 

Another critical issue is where the hydrogen comes from in the first place, says Peter Tabuns, executive director of Greenpeace Canada.

Hydrogen can be extracted from a variety of sources. Most people think of water, where hydrogen is the H2 in H20, as the cleanest, most ubiquitous source.

But you can also get hydrogen from gasoline and natural gas.

Also, one of the ways to separate hydrogen from oxygen is by electrolysis. In effect, using electricity that may have been produced by coal-fired plants.

“You’d actually have more pollution than you have today,” said Tabuns.

So, how will this new fuel lessen our dependence on the old ones?

One of the applications both Tabuns and Adams say makes the most sense is in the home.

A fuel-cell device hooked up to the existing natural gas supply in the basement could deliver enough electricity to light your home. The by-product, waste heat, would replace the need for a furnace.

In the auto industry, on the other hand, environmentalists fear manufacturers will fall back on gasoline as the main source of hydrogen.

“We see that as really bad news,” Tabuns said. Hydrogen from gasoline won’t produce the desired environmental or energy benefits, he said.

“The issue is not as straightforward as it looks.”

Over at Stuart Energy, the enthusiasm remains high despite the challenges ahead.

Andrew Stuart, who presides over the company his father and grandfather co-founded 50 years earlier, agrees there are still issues to be resolved.

And he’s the first to agree that mass commercialization of the fuel-cell car is still a long way off. However, he’s quite sure it’s coming.

“We’re very optimistic we’re going to see a period starting in the next few years, when we see a transition away from gasoline toward a hydrogen-based economy,” Stuart said.

“The potential of this is enormous,” he added.

“Even if hydrogen covered only 1 per cent of the market it would be a very large business opportunity.”