Air Products could gain from fuel cell research

Air Products and Chemicals could get a major long-term boost from the US government“s recent announcement that it will help develop hydrogen-based fuel cells to power cars. Air Products is the world`…

Air Products and Chemicals could get a major long-term boost from the US government“s recent announcement that it will help develop hydrogen-based fuel cells to power cars. Air Products is the world“s No. 1 seller of tonnage hydrogen that could be used to refuel such cars. So fuel cells could open a huge new market for the company if hydrogen becomes an eventual replacement for gasoline. However, the Trexlertown company won“t see an immediate impact. If the technology takes off at all, it will take at least 10 years for hydrogen to be an economical power source for cars and for gas stations to be ready to deliver it to drivers. Analysts said the new emphasis on hydrogen-based fuel cells could mean more business down the line for Air Products, which is the area“s third-largest employer with 4,300 workers in the Lehigh Valley. It employs about 18,000 worldwide. This technology also could help the company“s stock in the long run. In a major policy shift, the US Department of Energy announced mid-January it will devote research and development money and future policy toward hydrogen-based fuel cells. The new project, called Freedom CAR, replaces a Clinton administration programme to develop high-mileage vehicles. The US government will now work with General Motors Corp., Ford Motor Co. and DaimlerChrysler AG to develop fuel cells that will make cars more efficient and reduce reliance on foreign oil. Hydrogen suppliers such as Air Products and competitor Praxair in Conneticut, US, also might be included in the project, energy department officials said. Automakers are under pressure from governments to develop cars and trucks that use less fuel and create less pollution. Fuel cells generate power through a chemical process that emits mainly water vapor, making them less polluting than most current vehicle engines. But the technology faces major hurdles. To make fuel cells viable, tens of thousands of US gas stations would have to be retrofitted to offer hydrogen. Also, technology exists to extract pure hydrogen from water, but it takes energy to carry out that process. So unless the energy comes from a renewable source, such as solar power, the process could consume more energy than it saves. Air Products has more than a 50% share in the tonnage hydrogen market in the US. It“s the world“s top seller of so-called third-party hydrogen, which is supplied to a customer by either an on-site facility or through a pipeline. The firm supplies hydrogen for uses such as refining petroleum, making semiconductors and even fueling the NASA space shuttles. Over the years, Air Products has been funneling more and more money into the research and development of hydrogen-based fuel cells. Officials declined to say how much has been spent. The company first invested money in this area around 1992. It“s an area that John Jones, chief executive officer of Air Products, hopes will drive future growth in the hydrogen segment, according to the company“s annual 2001 report. The United States has only two hydrogen-fueling stations for cars in operation – one in California and one in Michigan. Air Products was involved in developing both. Also two years ago, the Lehigh Valley firm entered into a five-year partnership with the Department of Energy to build a one-of-a-kind refueling station in Las Vegas. The project is worth about $12 million. Hydrogen will be extracted from natural gas at the fueling station as opposed to being made elsewhere and then shipped to the location. Even before hydrogen becomes a viable source for cars, Air Products envisions the gas being used to power portable devices such as laptops and calculators. The major benefit for this use is that fuel cells have much longer lifespans than traditional batteries. Before Air Products will see a boost in profits, its stock price will rise to reflect its potential of being a hydrogen supplier for fuel cells, said Dan Quinn, chemicals analyst for Morningstar in Chicago. But this also will take some time, analysts say.