Good news for Greens. The rise in the oil, and hence petrol, price over the last year has achieved something years of lobbying could not do. It has made President Bush worry about America's high levels of energy consumption. Americans, he has declared, should "do less driving". And he, according to The Guardian last week, is going to lead by example: the president isn't actually going to drive less himself, but he is going to consider shortening his motorcade. How much this will affect the global energy crisis we're not sure but, along with the suggestion from the White House that federal agencies should operate more car shares and consider using public transport, it does suggest something of a shift of emphasis.
That said, it isn't easy for Americans to drive less. Not only are the distances between communities huge, but visitors will have noticed that even the most urban of areas are designed not for pedestrians, but for cars. What Americans can do, however, is drive more efficient cars. Indeed, says the FT, if there is a silver lining to the hurricanes in the Gulf of Mexico, it is that prospects for hybrid cars in the US are improving (hybrid cars use a battery and an electric motor as well as a standard engine in order to use less petrol and emit less pollution). Sales of SUVs are already falling slightly, and Ford this week announced that it intends to create similar products in a major "catch up" programme, following the lead of Toyota and Honda, whose sales of hybrid cars in the US are trebling every year. Still, hybrid cars, while a good start, are far from a final solution to the energy issue - they still contain conventional engines and their batteries need charging from conventional electricity sources. The hope is that in the not-too-distant future they will be abandoned in favour of cars driven by hydrogen fuel cells, which use no oil and emit only water vapour. Most still consider this a bit of a pipe dream, given that each fuel cell still costs as much to make as a Formula One engine, but the technology is progressing nicely, says The Sunday Times. It is possible, for example, with surprisingly "few modifications", to convert a petrol engine to run on hydrogen. There are unresolved complications to do with handling the fuel, but hydrogen engines are barely different in the essentials from petrol engines.
GM is keen to get in on the game, too, says Andrew English in The Daily Telegraph. According to the giant car company's research department, the market's love affair with hybrids makes investing in fuel cell development increasingly popular. Hybrids are complex, expensive and heavy. Fuel cell engines are not: they have a tenth fewer moving parts, fewer wearing surfaces and fewer parts. The only problem is the price. But GM thinks it might have cracked that too: the firm claims to be confident that its Sequel fuel cell project will be able to produce a fuel cell vehicle that matches one with an internal combustion engine on cost, durability and performance by 2010. Using hydrogen to create cells to drive smaller devices is harder, says Helen Knight in New Scientist, but progress is being made here too. UK firm QinetiQ is working on a prototype with Japanese electronics firm Olympus, which it hopes will be ready by 2008 and which will not only fuel consumer devices, but will do so for three to five times as long as conventional batteries. It seems a fuel cell future isn't that far away after all.
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Three promising plays on fuel cell technology
The pure plays in the fuel cell market tend to be small and relatively speculative. One is Ceres Power Holdings, which develops fuel cells that produce electricity from hydrogen and natural gas. The firm saw "a number of achievements"in the year to 30 June, including the generation of its first commercial revenues and a strengthening of its intellectual property portfolio, says the FT. Ceres is yet to make money, but its "robust" financial position (£17m in cash and short-term investments) provides some support to the share price, which has all but doubled since the summer. An alternative is ITM Power, says The Times, a fuel cell specialist that floated on Aim last year. It has recently revealed test results that Panmure Gordon described as an "exceptional achievement", and which means ITM can now search for commercial opportunities for its technology. As is the case with Ceres, ITM has yet to make a profit and is at an early stage in the development of its commercial future. However, Panmure still rates ita buy.
Finally, look at Voller Energy Group, says the Investors Chronicle. The company makes portable fuel cell systems that extract the hydrogen found in fuels such as propane, LPG and diesel, and is still considered a buy by Arden Partners, which brought the firm to market earlier this year.
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