Gas Crunch Special report:
Gas Crunch +Full coverage

BP, GM see hydrogen in their future

Companies agree that renewable energy is the future fuel of choice, but pursue a variety of options in the meantime.

Subscribe to Companies
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Steve Hargreaves, CNNMoney.com staff writer

The future of green energy
Chevron CEO David O'Reilly talks with Fortune's Geoff Colvin about the investment Chevron has made in green energy.

WASHINGTON, D.C. (CNNMoney.com) -- Top executives of BP and General Motors Corp., two of the world's largest corporations, outlined on Tuesday their visions for the future of renewable energy.

They came to the same bottom line: Hydrogen will likely fuel the cars of the future, although it could take 50 years to get there. Until then, each company will pursue different strategies for developing new energy sources.

Their comments kicked off the Washington International Renewable Energy Conference, a global meeting of energy officials organized by the U.S. State Department, and an adjoining trade show with over 300 vendors and energy industry luminaries.

Speakers ranged from BP head Tony Hayward to U.S. Energy Secretary Samuel Bodman to venture capitalist Vinod Khosla.

The meeting, scheduled to last several days, frames one of the greatest challenges facing the world economy today: The need to cut greenhouse gas emissions in half by 2050 to avoid the worst effects of global warming, while fueling a worldwide economic boom expected to use 50 percent more power by 2030.

"Relying on the internal combustion alone is probably not going to get us there," said Robert Babik, director of emissions, environment, energy and safety policy at General Motors (GM, Fortune 500). "The key is to let electrification of the vehicle play a critical role."

To that end, Babik said GM is rolling out its all-electric Chevy Volt hopefully by late 2009 and is pushing its "E-Flex" design concept.

The E-Flex is a vehicle with an electric motor that also has an on-board electricity generator to charge the batteries on long trips or other times when the vehicle can't be plugged into an electric outlet. The generator could either be a conventional gasoline engine, an engine that runs on biofuel or, eventually, a bank of hydrogen fuel cells that Babik said could be the fuel of choice 50 years from now.

"We're trying to make this a very consumer friendly vehicle," Babik said of the Volt. The all-electric vehicle will be able to travel 40 miles on electricity before the motor kicks in and is expected to cost about the same as a typical Chevy compact sedan.

The long view: Expensive alternative

One analyst said GM is right to be developing a variety of cars - from hybrids and diesels to electric and hydrogen.

"The game has barely started, and GM is in the forefront," said Jim Hossack, a consultant at the auto research firm AutoPacific.

But, citing hydrogen's costs and lack of infrastructure, he said it will be a long time before it's commercially viable. "You won't see it in mine or your lifetime," he said.

Oil giant BP is also eying hydrogen for its long-term potential, although in the short run the company plans on sticking with its investments in wind and solar technology.

To spur those investments, which total about $1 billion a year, BP's Hayward called on governments around the world to enact regulations limiting the amount of carbon dioxide that can be emitted each year, and called for subsidies to help fledging technologies get off the ground.

He said developed nations should go ahead and enact carbon controls regardless of what China or India does.

"A global trading system should be our ultimate goal, but we shouldn't be deterred from starting on a regional basis now," he said.

The United States has resisted signing international treaties like the Kyoto partly because India, China and other developing countries refuse to join.

Hayward said BP is looking to develop advanced biofuels that don't require food crops to make. Corn-based ethanol, a gasoline substitute, has recently attracted lots of negative attention in the United States and elsewhere because it's being blamed for driving up the price of food.

He recently said he might spin off the firm's renewable energy division because he thinks its value is not being fairly reflected in the company's share price. Still, BP is one of the larger investors in renewable energy.

"They will continue to invest more, it's one of the fastest growing parts of the division," said Fadel Gheit, an energy analyst at Oppenheimer.

Cleaning up: $2 billion investment

In other events at the conference, Energy Secretary Bodman applauded the private sector's investment in clean technology, which he said has gone from $500 million in 2005 to over $2 billion in 2007.

And Vinod Khosla, a well known venture capitalist and ethanol advocate, cautioned the audience against placing too much faith in statistics - like the ones showing the world will use 50% more power in 2030 or that renewables will still only make up a small percentage of the world's energy usage by then.

"Forecasts are important, but most of these forecasts are wrong," he said.

Khosla cited a host of historical forecasts that proved incorrect, from oil prices trading at $20 a barrel to a study he said AT&T commissioned in 1980 showing 1 million cell phone users by 2000. Of course, the actual number of cell phones in 2000 had exceeded 100 million.

"It's the power of ideas and entrepreneurship that will determine our future - not these forecasts," he said. To top of page

Photo Galleries
Best-loved cars in America These cars and trucks topped J.D. Power's APEAL survey, which measures how much owners like their new vehicles. More
America's most powerful cars A new 'horsepower war' has erupted among U.S. automakers and these are the most potent weapons in their arsenals. More
A sampling of beers being made with traditional Latin flavors A small but growing number of craft breweries are including passion fruit, Mexican cinnamon and other traditional Latin flavors. More
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.