US Government & Auto Industry Announce "Freedom Car" Program

US Government to fund research into fuel cells and creating infrastructure for hydrogen.

Published: 07-Jan-2002

DETROIT (Reuters) - The U.S. government has agreed to a program with major automakers to promote the development of hydrogen as an alternate fuel for cars and trucks, as part of efforts to reduce American dependence on foreign oil.

U.S. Energy Secretary Spencer Abraham said on Monday he would announce the program on Wednesday with the heads of General Motors Corp., Ford Motor Co. and the Chrysler arm of DaimlerChrysler AG, who have gathered in Detroit this week for the industry's annual auto show.

Under the program, expected to be called "Freedom Car", the government will fund research into fuel cells, which use hydrogen to produce electricity without creating pollution as gasoline engines do.

"That would be a major achievement," said Thad Malesh, director of alternative power technologies practice with J.D. Power and Associates, an automotive industry consultancy. "Without their (government) involvement, it means the industry is out there blowing in the breeze."

The deal will also advance different ways of handling hydrogen and creating an infrastructure to make the fuel widely available.

Automakers have been spending billions of dollars on research to develop fuel cells as an eventual replacement for gasoline-powered combustion engines, which have powered cars for 100 years. But a big hurdle for the widespread adoption of fuel cell vehicles is the need for an infrastructure to make hydrogen more available -- a replacement for the gasoline station found along most roads.

"The more certain we are about the infrastructure, the more aggressive we can be about the cars. Bottom line -- (the government is a) huge force in what we're talking about," said Byron McCormick, GM's executive director for fuel-cell activities.

American drivers now burn about 370 million gallons of gasoline a day in passenger vehicles, which is projected to grow to 433 million gallons over the next decade if fuel economy does not improve, according to the U.S. government. Last year, passenger vehicle engines created 284 million metric tons of carbon dioxide gas, a major contributor to global warming.

Having more cars on the road that run on fuel cells would reduce gasoline consumption, which accounts for 44 percent of total U.S. demand for petroleum products. The cars should help reduce U.S. dependence on foreign oil, which accounts for 60 percent of America's daily petroleum supply.

The "Freedom Car" program, focusing on fuel cells, will replace the Partnership for a New Generation of Vehicles (PNGV) program, a multibillion-dollar research effort between automakers and the U.S. government that sought to develop an affordable gasoline-burning family sedan capable of getting 80 miles per gallon by 2004.

Automakers have succeeded in building a few highly fuel-efficient cars, but they would cost several thousand dollars more than comparably-priced vehicles if they went on sale, according to a government report.

The Bush administration proposed last year to slash the program's $141 million research budget within the Energy Department by $40 million, but Congress restored most of the funding.

The "Freedom Car" program comes as automakers fight tougher federal fuel economy requirements under consideration in Congress. Meanwhile, Japanese automakers have already begun selling high-mileage "hybrid" vehicles, which are powered by a small gasoline engine and an electric motor.

Environmentalists have pushed for higher mileage standards and wider uses of hybrid power, but many automakers contend the mileage standards do little to curb fuel consumption, and that hybrids are too expensive currently for mass production.

Studying future uses of hydrogen is "legitimate research, but it's a smokescreen," John DeCicco, a senior fellow with Environmental Defense. "It's using legitimate future research needs to hide the fact the Japanese have beaten the pants off them for delivering the goods to the marketplace."

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