The Oxen Report: A Special Investigation into the World of Alternative Fuels and Investing Opportunities, Part 1 – Fuel Cells

Martin Tangney and his staff at Edinburgh Napier University are raising their glasses tonight. In this Scotland university, scientists have now developed the ability to turn scotch whiskey into a biofeul that can power cars. While many cheers are indeed aplenty, the discovery definitely grants the question of what are the limits to what can power one of human’s most inefficient inventions – the automobile. We all have heard the arguments for the electric car or perhaps the hybrid, but what if cars could run on grass, water, the sun, a fuel cell, or corn. These various fuels will be uncovered, discussed, and examined for pros and cons as well as their investment potential. 

We start our investigation in William Wallace’s home country of the kilts and Scotch. Tangney and his staff underwent a two-year research project using two of the main by-products that are made from the production of Scotland’s finest spirit – scotch whiskey. The researchers combined "pot ale" and "draff," which are the byproduct from copper stills and spent grains, respectively, to make butanol. Butanol is able to be used as a fuel, and Tangney comments that it would be most effective if combined with ninety to 95% petrol.

"Five or 10 percent means less oil which would make a big, big difference," Tangney comments.

One of the best parts of the biofuel is that it can be a great source of revenue for Scotland, and it made from something that is already being produced. Typically, these by-products are disposed of into fills, but now, by-products can be used efficiently to help power cars. It requires very little in any new products. The biofuel is actually something that can be used without having to mine, cut down, or take away any new "bio" products.

While perhaps whiskey, at this moment, is a bit far fetched, it is the generation of this capability that one day will most likely help humans continue to enjoy our lifestyles of ease while also being able to live more efficiently. In the meantime, one of the most highly researched and investable alternative fuels is the fuel cell.

The Fuel Cell – The Future of … Nothing

The fuel cell could be the wave of the future with cars. The way that a fuel cell works is that generates electricity inside of a cell via reactions between a source fuel and an oxidant. The reactants flow into the cell and out of the cell a reaction product with the electricity inside the cell. The hydrogen fuel cell is the most researched for the automobil which uses hydrogen as a fuel and oxygen as its oxidant. 

The fuel cell does not use any gasoline or oil, whatsoever and therefore, it is viewed as an extremely clean alternative fuel. It requires your car to be fueled with hydrogen rather than any gasoline. One of the biggest positives of a fuel cell is that it can much more efficiently convert energy into electricity than gasoline engines. Only about 15% of the fuel put into the car is actually used to move the car, the rest is burned off by heat. Fuel cells have an estimated efficiency at 80%. Here are results from fuelcells.org:

EMISSIONS FROM VEHICLES 

One of the negatives on fuel cells is that they create CO2 just like gasoline, and they in fact require fossil fuels at some point in the process.

ZPower, creator of rechargable batteries, CEO Ross Dueber comments on the fuel cell’s problem, "All fuel cells require their incoming fuel to be converted into hydrogen first. Most hydrogen today is created from natural gas, a fossil fuel. It can also be created from water by electrolysis, but this process requires electricity, which most likely comes from a fossil fuel. Bottom line is that fuel cells seem clean, but they rely on fossil fuels just like everything else which makes them a part of the problem rather than the solution. Hydrogen is very energy intensive to make and store. In fact in takes more energy to make and store hydrogen, than the hydrogen yields as output in a fuel cell. Hydrogen has to be stored at very high pressures or as a very cold liquid. In both cases it takes a lot of energy and space to create and store."

This knock on fuel cell is with its current and capable technology. Car companies are jumping on the opportunity, however. Honda, in 2008, released a fuel cell that got 60% tank-to-wheel efficiency with their Honda FCX Clarity. Surprising to many green activists, it was President George Bush who, in 2005, implemented legislation through the Energy Policy Act to develop hydrogen fuel cells with the goal of producing commercial fuel cell vehicles by 2020. Yet, Obama, in 2009 cut off the funding for research, as much like ethanol, he saw the fuel cell as unpractical for a vehicle and that it won’t cut emissions like other sources. 

Another huge danger is automobile crashes. Highly pressurized hydrogen needed for fuel cells is extremely dangerous. If ruptured via a car accident, a canister would explode. A normal car crash would no longer be so normal. So, this danger is one that is something fuel cell creators will have to try to work on before it has any chance of being an everyday fuel source.

Yet, fuel cells continue to be researched and looked as a possibility to one day outgrow oil. Daimler AG is working with Ballard Power Systems (BLDP) to create experimental units that were used in 2007 through the beginning of 2010. These experimental units were buses, and it appears that buses are currently the most likely user of a fuel cell. United Tech (UTC) powers a fleet of buses in California. Even Boeing (BA) has attempted to use the fuel cell for plane testing. 

Other companies in the industry are Fuel Cell Technologies (FCEL), who uses fuel cells in industrial applications. Plug Power Inc. (PLUG) is another automotive fuel cell develop that is publicly traded. The company focuses primarly on warehouse vehicles, such as forklifts, and it is still operating at a loss. Yet, the company has seen growth in revenue in its latest quarter and has 85% of the market share of fuel cell powered vehicles. All of WalMart Canada use Plug Power’s motive fuel cell vehicles.

While the fuel cell is perhaps still not completely useful as automotive on a wide scale, it seems to be growing as stationary power and some niche automotive markets. Without the backing of the government, though, fuel cells may be at a stand still while the electric car appears to be on the forefront.

Tomorrow, our second part will feature the future of powering cars with water and solar power. The third part will look at the actual efficiency of the electric car and some other fairly outlandish ideas for fueling automobiles.