FREEPORT, Texas -- General Motors and Dow Chemical Co. launched the world's largest commercial hydrogen fuel cell project on Tuesday in a bid to jump start development of the green power source.
Fuel cells have been touted as environmentally sound electricity producers that could replace fossil fuels such as coal, oil and natural gas as the world's primary energy source.
Fuel cells operate by generating electricity through a chemical reaction between hydrogen and oxygen that leaves water and heat as byproducts.
Secretary of Energy Spencer Abraham said the new project would help propel advances in technology and drive down costs so that mass production of fuel cell-powered automobiles would eventually be possible.
"It really helps us to demonstrate this isn't some esoteric, pie-in-the sky idea," Abraham said.
"Today we're one step closer to the hydrogen economy," said Larry Burns, GM's vice president of r&d and planning.
Burning fossil fuels produces smog and heat-trapping greenhouse gases such as carbon dioxide that are blamed for boosting the planet's temperature.
GM, like many car makers, has sought to harness fuel cells to power automobiles, and hopes to launch the cars on the market by 2010.
But fuel cell costs are about 10 times too high to use in commercial cars and must be reduced to about $3,000-$4,000 per 75 kilowatts, Dow and GM said in a release.
The companies declined to comment on the cost of the project at the Dow plant.
Spencer activated the project's first 75-kilowatt capacity cell, which is fueled by excess hydrogen produced at the 30-square-mile manufacturing facility about 50 miles south of Houston. Another 12 are expected to go on line later this year.
Eventually, 400 fuel cells are expected to operate at the peak of the seven-year project at the facility, Dow's largest manufacturing site. That would provide 35 megawatts of electricity, enough to power to supply about 25,000 households for a year, GM said.
At the peak, output would supply about 2 percent of the Dow's electricity needs at the plant, the company said.
Spencer said development of fuel cell technology for automobiles was critical to help reduce the country's dependence on oil imports, which are expected to rise to 70 percent of the total U.S. consumption in 20 years from 54 percent currently .
That issue was highlighted by the surge in oil prices on Tuesday after OPEC countries moved to trim output, he said.
"It further underscores the importance of reducing America's ... dependence on foreign energy sources," he said.