Source:R.King

Ballard's Mark 902 fuel cell power module 
 
 

A fuel cell engine consists of a fuel processor, where a fuel other than hydrogen is used, an air supply subsystem, a cooling subsystem and controls. For the transportation market, combining these subsystems with the fuel cell creates a fuel cell engine, which can power a car, truck, bus or other vehicle.
 
 
 

The Nexa™ power module – Ballard's first commercial fuel cell product for portable applications. The Nexa™ power module generates up to 1200 watts of unregulated DC power
 
 

In the race to build the car of the future, Firoz Rasul had backed himself into a corner. His company was making hydrogen-powered fuel cells for a propulsion system whose other key components, the engine and electric drivetrain, were the responsibility of DaimlerChrysler (DCX) and Ford (F). But the partners had taken to blaming each other for various technical hitches, and Rasul could easily imagine their complex joint venture collapsing. Scrambling to save it -- and his Ballard Power Systems (BLDP), based in Vancouver, British Columbia -- he made an audacious proposal. His idea was to put one company in charge of the whole thing. The company he had in mind, Rasul told the two auto giants, was his own.

At first, they laughed off the idea. Ballard had never made an engine -- or turned a profit, for that matter. And Ford and DaimlerChrysler were already uneasy players in the fuel-cell game. Under pressure from several states (notably California, where the nation's first greenhouse-gas limits may soon become law) to develop a nonpolluting car in a hurry, both companies were afraid that such vehicles would be clunky, expensive, and a consumer turnoff.

Greater than their fear of the new, however, was their fear of being outdone by a rival carmaker. During one lapse in the two-year negotiations, Rasul obtained closely guarded details ofToyota's (TM) rapid progress from sources in Japan. In a panic, his partners rushed back to the table. And late last year they essentially gave Rasul what he had asked for, designating Ballard their exclusive supplier of fuel-cell engines until 2021.

It was a remarkable coup for Ballard, for CEO Rasul, and for a strategy he laid out when he took the job in 1988. He wasn't interested in Nobel Prizes, he said. He just wanted to get fuel cells into everyday use -- and that meant forging partnerships with the carmakers. From then to now, the Ballard saga has been about networking and diplomacy as much as raw research and development. Thanks in no small part to these labors, fuel cells -- which turn clean-burning hydrogen into electricity -- have emerged in recent months as the consensus alternative to the internal combustion engine. Automakers, environmentalists, and elected officials alike cite them as the answer not only to smog and global warming but also to the nation's dependence on foreign oil -- a problem that has itself taken on new urgency since Sept. 11.

Key issues remain, one being the great chicken-and-egg question of where the first drivers will go for their hydrogen. From a purely technological perspective, however, the idea is road-readier than most people think. DaimlerChrysler plans to put 30 Ballard-outfitted buses into service in Europe early next year. There may be an element of ambivalence, if not hypocrisy, in the recent stream of fuel-cell testimonials from government and auto-industry figures. But environmentalists see real momentum as well. One large reason is the work of Ballard engineers, whose fuel cells are generally acknowledged to deliver more punch than anyone else's. Another is the belief that in Rasul, a deeply religious Muslim raised in Kenya, the long-suffering cause of a cleaner and more efficient automobile has found a formidable champion.

"We passionately, almost viscerally, believe that if we're successful, we'll change the world," Rasul says, standing in the front of an eerily quiet 40-foot fuel-cell bus that's tooling around Vancouver. With his booming voice and lofty rhetoric, Rasul sounds a bit like Apple Computer's Steve Jobs. Like Jobs, too, he trained as an engineer but found his true calling as a salesman. Working for a small Canadian wireless company in the early '80s, Rasul traveled with a jury-rigged "brick" that simulated long-distance communications and clinched many a deal.

But unlike Jobs, who grew up on technology and had scarcely reached drinking age when he founded Apple, Rasul has had a long journey, as the 50-year-old's pure white hair suggests. The Kenya of his childhood was deeply impoverished; his working-class parents, in keeping with the tenets of their little-known Islamic sect, gave 20 percent of their income to charity. After studying in the United Kingdom, Rasul bounced around for five years, working at General Foods and then Black & Decker, feeling vaguely dissatisfied.

His own social ethic wasn't ignited until he signed on at Ballard, at that time little more than a research project of 13 engineers. "Have you lost your mind?" a friend asked. "How can you take on the auto companies, the oil companies, utilities, and governments?" Rasul replied that the time seemed right. "It was a new look at technology in the face of environmental pressure and energy constraints," he says.

The technology itself was not new. Invented by a Welsh physics professor in 1839, the fuel cell generates electricity by combining hydrogen and oxygen; it's the opposite of electrolysis, in which electricity extracts those two elements from water. Ballard, founded in 1979 by an American geophysicist named Geoffrey Ballard, had parlayed a series of Canadian military contracts into a leading position in the field. Still, when Rasul arrived, its mightiest fuel-cell stack produced barely enough juice to spin a kitchen blender.

Rasul knew that a feel-good story alone wouldn't attract customers or investors, so he prodded his engineers into a Moore's Law-type quest for higher "power density." Soon there was a prototype the size of a coffee cup that could turn a nail molten orange. Another, the refrigerator-like "blue box," could set six airport runway lights ablaze. But all of this was mere preamble to the ultimate seeing-is-believing prototype: the fuel-cell bus. Its first public demonstration, in 1993, set off a worldwide media stir, and carmakers began lining up at Ballard's door. That same year, the company went public.

Rasul was quick to sense the need for political as well as corporate allies. In the late 1980s, smog-choked California led the nation in imposing tough deadlines on the auto industry. By the early 1990s, some of the state's demands had begun to seem unrealistic because of slow progress in the development of electric vehicles. Until Rasul came on the scene, few experts saw fuel cells as an option. But Rasul had shrewdly named Larry Berg, a former state air-quality regulator, to Ballard's board. When California's rules were redrafted in 1995, Berg saw to it that fuel cells figured prominently. "I inserted the language," Berg says. "But I couldn't have done it without Firoz." Rasul went on to co-found the California Fuel Cell Partnership, which today includes eight automakers, four oil giants, and six government agencies.

Rarely has a development effort united so many adversaries: At its facility in Sacramento, Ford, General Motors (GM), Toyota, and others work in side-by-side bays on 19 test vehicles, 13 of them equipped with Ballard fuel cells. "No one has done more than Firoz to take the fuel cell from the bench onto the roads," says Alan Lloyd, chairman of the California Air Resources Board.
 

Meanwhile, Rasul had been slowly reeling in a big partner for Ballard itself. For four years Daimler had dabbled with the company's fuel cells. In 1994 it came up with a "laboratory on wheels," followed two years later by a van that carried six passengers and went 155 miles between refueling stops. In late 1996, Rasul organized a retreat with a Daimler delegation. They met at Resort Semiahmoo in Washington and settled into a conference room with sweeping views of Puget Sound.

Rasul had already earned Daimler's confidence by laying out specific targets and hitting them year after year, while Daimler, running a parallel effort, had repeatedly fallen short. One key was Ballard's proton exchange membrane, a filter that divides hydrogen into protons and electrons and converts the freed electrons into an electrical current. Ballard found ingenious ways to sharply reduce the cost of the membrane's key ingredient, platinum. In 1992 a fuel-cell stack the size of a bread box would have generated 5 kilowatts. Today it produces 85 kilowatts -- enough to power a car.

At Semiahmoo, Rasul gave Daimler an ultimatum: Invest $320 million in Ballard's development effort or lose the deal to General Motors. "They did their own background check," he says, his eyes twinkling and his white mustache bristling. "They found out we were not bluffing." Daimler responded by insisting on the right (later relinquished) to license Ballard's fuel-cell technology, something Rasul had in the past steadfastly refused to give. Ballard, for its part, wanted a stake in a new Daimler unit to develop the engine that would wrap around Ballard's fuel-cell stack. "Both of us called a lot of time-outs to caucus," Rasul recalls.

After four days, they conceded to each other's demands, and Daimler became Ballard's biggest shareholder, with a 25 percent stake. Within months, Ford had committed another $420 million, taking responsibility for the drivetrain. "Having those two big guys onboard sent shock waves through the industry," Berg says. The two automakers now hold 41 percent of Ballard and the power to block key executive appointments -- but, tellingly, they still lack board-level control.

Gaining the allegiance of the carmakers was one thing, but keeping the allegiance of Ballard's rank and file has been another. Over the years, Rasul has spent generously on research while handing out bonuses for every significant advance. His trademark salesmanship has played a part too. When the engineers have hit roadblocks -- and there have been plenty -- Rasul has been there with soothing words, "calming them down and putting them back on track," says Michael Brown, a former board member. In March, after laying off more than 300 employees in a consolidation of related DaimlerChrysler and Ford operations, Rasul convened one of his regular "balcony broadcasts" in the lobby of the company's headquarters. "I talked about the adversities we had already overcome and about how close we are to the finish line," he says. "It comes down to focus, and making sure it doesn't overwhelm us or become a psychologically insurmountable challenge."

Insurmountable or not, a host of political, economic, and social challenges still loom. The oil industry recoils at the thought of building giant new refineries and retrofitting countless corner gas stations; some say the cost could come to $5 billion in California alone. The carmakers, too, are hardly eager to rebuild their operations around a radically new form of vehicle. And in their battle against laws and regulations that would compel such a transition, both industries are getting a sympathetic ear in Washington.

At first glance, President Bush's recently announced "freedom car" initiative was a momentous victory for the fuel-cell cause. With tax credits and other incentives for fuel-cell development, the plan amounted to a presidential seal of approval. Yet, as skepticsm were quick to note, Bush simultaneously renounced the near-term fuel-economy rules put in place by his predecessor. In Washington as well as Detroit, some skeptical environmentalists say, the fuel-cell initiative's greatest appeal may lie in its hazy time frame. "It's a Big Three/White House deal to create political cover and reduce pressure from Congress," says Roland Hwang, senior policy analyst for the Natural Resources Defense Council.

Behind the obvious practical and political hurdles lies one of the conundrums of a market economy. This is a technology whose major benefits -- cleaner air and energy independence -- are ethereal. The costs, by contrast, are all too clear, and will fall squarely on the shoulders of the companies that produce the cars and the fuel-supply infrastructure, and on the companies' first brave customers.

Still, Ballard's partners and other automakers say they will begin introducing commercial versions of fuel-cell cars by 2005. They will start small, on the order of hundreds of vehicles. If all goes well, that figure is expected to rise to tens if not hundreds of thousands by 2010, making the cars as available to eager consumers as hybrid vehicles are today. "It's only a question of time. We're in a marathon," says Rasul, adding that he's not yet losing sleep over the issue of consumer acceptance.

Indeed, on a warm April morning, several hundred middle-school students are gathered around an outdoor stage in Stockton, Calif., to see two DaimlerChrysler and Toyota fuel-cell cars go through their paces. Fourteen-year-old Saul Reyes is one of the lucky ones invited to hop in and experience the smooth, gear-free acceleration for himself. "It was hecka tight," he says, meaning very cool. "I'm gonna put 20-inch rims on mine." A decade from now, he may just get his chance.*