Hydrogen Forecast: The hydrogen economy's leading news source

Rick Zalesky has a unique job at one of the world's largest gasoline producers, one he describes as "turning an elephant into an ant." In less allegorical terms, he leads a team that is helping to prepare Chevron for what's coming next in transportation fuels. The company has recently featured CEO, David O'Reilly, in ads that ask questions about the sustainability of our current appetite for oil -- those ads explain that for every two barrels of oil we use, we only replace one. Another ad explains that by 2030 the number of cars will increase by 50 percent.

Zalesky is in charge of hydrogen business for Chevron Technology Ventures, the company’s advanced technology subsidiary. As part of the $300 million a year Chevron is spending on "clean and renewable energy" projects, Zalesky’s major focus for 2006 is gathering the kind of experience that he hopes will make Chevron a leader in not just hydrogen production (which it has done for some time), but the new world of hydrogen retailing.

While Chevron produces more than one million kilograms of hydrogen a day, that production stream has been distant from its bread-and-butter oil and natural gas business. Zalesky is exploring ways to both integrate and differentiate the two businesses. The path Chevron has chosen is to learn by doing, which means Zalesky will be on the road this year opening three more hydrogen stations across the country (giving the company a total of five). Each will offer Chevron a different perspective on how to economically and technically meet the challenges of hydrogen production and delivery for expanding fleets of hydrogen-powered fuel cell and internal combustion engine (ICE) vehicles.

Zalesky is a fuel guy, so when he looks at hydrogen, the basics of energy physics is the first thing he sees. Compared to the gasoline and diesel transportation fuels with which Chevron is intimately familiar, hydrogen is less dense. "We have to take that into account," Zalesky notes. Which leads him to a fundamental conclusion -- the "old" ways don't work. To centrally produce hydrogen fuel and transport it (as is the standard with oil and natural gas) will not work, according to Zalesky. Both he and Chevron conclude that it will make more sense to create hydrogen where it’s consumed. A corollary of that conclusion is that the method of producing hydrogen and its feedstock will vary depending on the location.

Chevron’s advanced technology subsidiary, Chevron Technology Ventures, has already constructed two stations, with another three immediately planned. Each will be an active demonstration that will address a slightly different version of the future of hydrogen refueling.

Hydrogen on a small scale: Chveron's first fueling station at Hyundai-Kia America's Techincal Center in Chino produces 15kg of hydrogen per day.

Chevron Station No. 1 -- Chino, California -- On February 18, 2005, a Chevron Hydrogen energy station, developed as part of the DOE program, began operation at the Hyundai-Kia America Technical Center in Chino. The private station produces hydrogen on site from natural gas using a proprietary Chevron autothermal reforming process. The small-scale station produces about 15kg of hydrogen a day and can store up to 100kg on site. The station has two pumps that can simultaneously fuel two vehicles at 5000psi. The station is also capable of producing hydrogen from ethanol.

Chevron Station No. 2 -- Oakland, California -- On March 13, 2006, Chevron upped the ante with a station that is part of city bus operator, AC Transit's primary maintenance yard. That station can produce 150kg a day (10 times that of the Chino station) using steam methane reforming technology to pull the hydrogen from natural gas. It will also store 366kg of hydrogen at 6250psi, slightly higher than the 5000 psi at which it dispenses the fuel. Future plans call for on-site integration of a stationary fuel cell to supply power to the whole facility.

Chevron Station No. 3 -- Orlando, Florida -- Later in 2006, Chevron will open a station that will service fuel cell and hydrogen-powered ICE Ford vehicles operating in Florida. It will be a small station and will use steam methane reforming.

Chevron Station No. 4 -- Selfridge Air National Guard Base, Michigan -- Chevron's next station will site its advanced steam methane reforming in a cold weather setting, where it will fuel Hyundai's Michigan-based fuel cell vehicles. The station is a collaborative venture with the U.S. Departments of Defense and Energy.

Chevron Station No. 5 -- Rosemead, California -- Chevron is working with Southern California Edison and the Department of Energy to open a hydrogen station in Southern California in the fourth quarter of 2006. The station will use an electrolyzer process to produce its hydrogen, providing fuel for Edison's expanding fleet of fuel cell vehicles.

Chevron is already learning the hydrogen production and fueling business. "The early prototype stations have taught us about the challenges of different feedstocks and the density issue," Zalesky says. As an example of the fundamentals learned, he adds, "You can't just make a large reformer smaller. It needs to be simpler."

On the other hand, Chevron has learned what can be carried from one project to the next to avoid having to start from scratch each time. In Oakland, for instance, the company used the same basic station design as it had in Chino, even though the hydrogen production process was different and the scale bumped up ten-fold.

"It made sense because it allowed us to use all of the safety systems we had worked out down there," Zalesky explains, "and we could do the whole project faster in Oakland. It took only three days from feed-in to on-test (that is, from initially bringing the natural gas into the unit until it was making hydrogen)."

The Oakland station with its scale and diverse vehicles (buses and light-duty vehicles) excites Chevron Vice President and Chief Technology Officer, Don Paul, who acknowledged that the station was a "demonstration, but with real buses on real routes carrying paying customers and with real production of hydrogen on site."

Thinking Big: Chevron’s latest hydrogen fueling station in Oakland, California, is built to handle large AC Transit fuel cell buses, but will also be host to a handful of smaller fuel cell vehicles.

Advanced manufacturing is the focus of the next generation of hydrogen production, according to Zalesky, and is what the company will be focusing on with its new stations. With current technology, a small plant means a small throughput. "You can't make a small elephant," is how Zalesky puts it in his elephant/ant analogy. What is implied, he adds, is that "we need an elephant if we're going to use this for transportation fuel." The Oakland station is an incubator for Chevron, a start-up to facilitate the transfer of technology from Chevron Technology Ventures to the main company.

But Zalesky warns, "We can't get ahead of ourselves. There can be fundamental infrastructure changes only when you know the technology works." To that end Chevron is learning, Zalesky says, and building capacity while it learns. As an example of the learning curve, he notes that "the cost performance here (in Oakland) with 10 times the production (compared to Chino) is better, but we're still not there yet." He notes that besides demonstrating the technical feasibility of the different hydrogen production methods, the economics will have to be addressed. Right now, Zalesky explains, the most efficient method still costs 10 times what it needs to.

In his view, the current state of the art technology for hydrogen production results in a product on the order of 3-to-5 times that of gasoline. It needs to be at parity, but Zalesky doesn't know when his company (or any of the competition) will get there.

Part of the problem may be distractions, like exploring different feedstocks for different locations. Zalesky says Chevron was "checking out reforming ethanol, looking at liquid transport and biomass-to-liquid" areas all the while evaluating energy balance/emissions for whole process.

"It's another order of magnitude more complicated," Zalesky says of ethanol reforming. What he doesn't say is whether this is a new elephant that may have arrived at his door; even while he focuses on shrinking the old one.