CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, MAY 29, 2012, OR THEREAFTER
FOR RELEASE: TUESDAY, MAY 29, 2012, OR THEREAFTER
BY
THOMAS D. ELIAS
“HYDROGEN HIGHWAY GRANTS FAIL THE SMELL TEST”
Millions of dollars in “hydrogen
highway” grants by a state commission are drawing cries of favoritism and
collusion as they seem to guarantee that most refueling stations for the
hydrogen fuel cell vehicles due to hit the road by 2017 will be owned by two
large companies closely aligned with auto manufacturers.
Very quietly, the California Energy
Commission is letting carmakers – seven of the eight companies involved are
foreign-owned – decide which proposals for building hydrogen stations get the grants,
authorized by a law passed in 2007.
So far, virtually all grants have gone
to two corporations that deal in industrial chemicals including liquefied and
compressed natural gas, among other products – the German-based Linde Group and
Pennsylvania-based Air Products and Chemicals Inc. Recent grants to build the
stations range from $1.4 million to $2 million each.
“It’s unprecedented for these
companies to decide how state money is spent,” says Jamie Court, president of
the Consumer Watchdog public advocacy group. “It amounts to turning the keys of
the state treasury over to large corporations.”
Meanwhile, at almost the same moment
the Energy Commission gave preliminary approval to its most recent $23 million in
grants to Linde and Air Products, the state Public Utilities Commission agreed
to a lawsuit settlement with NRG Energy Inc. Since 2010, NRG has owned most
assets of Dynegy Inc., one of the major electric generators that bilked
California consumers out of about $10 billion during the energy crunch of 2000
and 2001.
The settlement has NRG building $100
million worth of electric car recharging stations it will own, thus assuring it
will be the biggest owner of such stations for years to come. Given that leg up
for NRG, it will be difficult for smaller companies to compete, a problem also set
up by the Energy Commission policy.
Both Linde and Air Products are
members of the California Fuel Cell Partnership, which promotes development of
hydrogen cars. Others among the 32 partners include the Energy Commission and
the eight carmakers – Toyota, Daimler Benz, GM, Nissan, Hyundai, Chrysler,
Honda and Volkswagen. That means the commission and the automakers have steered
virtually all grants to their own partners. The partnership says all members
pay the same dues, but won’t give an amount. The Energy Commission reports it
paid $87,000 to belong for 2012..
“The grant process appears totally
rigged,” says Court, noting there is at least the appearance of collusion
between the partner companies.
Another who believes there is illegal
collusion is Paul Staples, president of Eureka-based HyGen Industries, which convinced
15 service station owners in prime locations across California to permit HyGen
hydrogen pumps at their sites. These would look somewhat like today’s diesel fuel
pumps.
But HyGen has had only one site approved
by a carmaker, a station in West Hollywood. So Staples didn’t apply for one of
the recent grants, explaining that one station would not allow sufficient
economies of scale in making hydrogen fuel from water. Linde and Air Products
locations, meanwhile, won approval from their partner carmakers for the gas-tax-funded
grants.
“The collusion is as obvious as the
nose on your face,” said Staples. “It would be funny if it weren’t so serious.
Even the yearly dues are so high small companies need not apply.”
The Energy Commission says it lets
carmakers okay or veto refueling grant sites because they “possess confidential
market data on potential early adopter fuel cell vehicle purchasers (like most
hybrids, the first fuel cell cars will cost more than ordinary ones). On the
basis of this confidential business information, (automakers) can
identify…stations with the highest potential for high volume use.”
It’s hard to see how any carmaker
would rationally believe one approved site at the same address as an Air
Products plant in industrial Wilmington, near the Los Angeles-Long Beach Harbor,
would draw many car owners or why it’s worthy of $2 million in tax money. But
that’s one grant approved by a car manufacturer and tentatively rubber-stamped in
April by the Energy Commission.
Both carmakers and the commission
ignored proposed HyGen sites in places like San Francisco, Pacific Palisades,
Sacramento and Newport Beach, locales where swarms of hybrids were bought soon
after they first became available. Asked why the Wilmington site is better
suited for state money, the commission said only that it never got applications
for any of the others. But applications for them were not feasible since no
carmaker would approve them. Catch 22.
And yet, the commission insists “There
is no evidence to support the allegation of (collusion)” between carmakers and
their chosen grant recipients.
The bottom line: Nothing will now undo
the decision on electric car refueling stations. But there’s still time for the
Energy Commission to wake up and stop letting carmakers decide who gets its
taxpayer-funded grants.
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Email
Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough:
The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It,"
is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net
