This is the second article in our new Strategic Alliance with the Northwest Venture Group.

Two forces are converging that point to a significant arena for technology investment and growth in the next decade. First, high oil prices once again signal that there will come a day when oil grows scarce. That day is at least a half-century away, but once again high prices encourage a search for alternate energy sources to power the 21st Century. The second force is momentum to develop a real alternative to the internal combustion engine for autos and other vehicles. This second force is small, but developing, leading initially to hybrid cars on the market this year, and then to fuel cell vehicles in the next five years.

“The Pacific Northwest is home to several leading companies doing research and development in fuel cells, both for energy generation and for transportation.”

The Pacific Northwest is home to several leading companies doing research and development in fuel cells, both for energy generation and for transportation. Combined, these technologies represent true breakthroughs, and market potential in the next decade. A recent three-day conference in Portland, Oregon highlighted this exciting research area (www.gofuelcell.com).

Consider this question. How many hours per day do you drive your car?one or two hours perhaps? What does your car do the rest of the time? Collect dust and evaporate a little gas. What could a fuel cell car do while it is not being driven? Generate electricity! Imagine a world in which you drive to the office, and plug your electric car in, not to charge it up but to add to the power grid for the building. Drive home, and plug in to help power the home. Parking lots might charge a fee for conventional internal combustion cars, but pay the fuel cell cars to park there, selling the electricity to the deregulated power grid.

My only question is how fast we can get to this future.

A fuel cell is a membrane which is exposed to hydrogen on one side. The membrane and associated catalysts have the effect of separating positively charged protons, which pass through the membrane, and negatively charged electrons, which do not pass through. The electrons are directed into an electric current, which can then power electric devices of any kind.

Fuel cells require hydrogen to operate, and if the hydrogen source is pure, the cell emits no pollution. Thus, in an ideal world solar power farms would extract hydrogen from water, which would then be distributed to be used in fuel cells. If such an infrastructure could be built, a virtually pollution free energy system can be envisioned. However, since such an infrastructure is unlikely in the near term, other hydrogen-rich fuels will be used first, including natural gas, coal-derived gas, and even conventional gasoline.

The use of fuel cells in transportation is promising, both economically and environmentally. There is little doubt that automobile use will grow around the world. There is also no doubt that this increase will contribute greatly to greenhouse gases as well speeding the eventual depletion of oil supplies, unless the technology of autos is changed. It is time to change this technology, and soon.

Ballard Power Systems, traded on the NASDAQ and based in Vancouver BC, is considered the world leader in vehicle applications of fuel cells. Their research and development partners include Ford and Daimler Chrysler. Prototype autos are being shown now, and commercial models are planned for as early as 2003.

A fuel cell auto will use the electricity from the cell to drive an electric motor. It is in effect an electric car without batteries. At best when using pure hydrogen, the car is non-polluting. At worst, with gasoline as the hydrogen source, the car uses far less gas and produces only 10% of the pollution. If the technological hurdles of reliability and the conversion and distribution of fuel can be overcome, this is a product that would seem a perfect match with what the world needs.

Avista Labs, a Spokane based subsidiary of publicly traded Avista, has targeted residential and commercial building power systems, and hopes to sell residential units by 2005. Their key technology is a cartridge system that allows individual fuel cells to be replaced within a fuel cell stack, just as one might remove and plug in a new board in a computer. The entire unit stays online while the individual module is exchanged.

Whether fuel cells provide all the power for a building space, some of the power, and simply offer a reliable and pollution-free back-up generator, expect to see rapid adoption of this technology over the next ten years.

Other Northwest enterprises recognized in the fuel-cell industry include Idatech, headquartered in Bend, Oregon, and Pacific Northwest National Laboratory, a government research center in Richland, Washington.