Duncan Macleod Speaks Out

GREEN CAR JOURNAL: While Shell is an energy company, most know it as an oil company because of its history. How does hydrogen fit in?

MACLEOD: “The fact that we have an outfit like Shell Hydrogen inside the Shell Group, leveraging the capabilities of the rest of Shell, and that we get support from our leadership and things keep going...it just shows that a lot of other people believe the hydrogen journey is worth taking.”

GCJ: Your company has been quite active in building high-profile hydrogen fueling infrastructure in key areas. Where did you start?

MACLEOD: “As far as Shell Hydrogen goes, we’ve been a separate business for about eight years. We’ve been building demonstration projects, the most visible ones in Washington, Iceland, Tokyo, and Amsterdam, and we’ve got some new ones coming up. The first one in Shanghai will be open by this summer. One in White Plains in New York will be coming up also in the summer. We’ve got further projects down the line. Within the next year I would guess in California as well. So, the activity and building selected sites continues. These of course are built very much in alignment with the auto companies’ plans for rolling out their fuel cell vehicles.”

GCJ: What’s next?

MACLEOD: “From these demonstration sites, and some that are actually a bit more than just demonstration sites, we’re moving in these concepts of mini networks in areas where the auto companies are concentrating their vehicles. Its not people like us in the energy business that decide the geography of these sites, it’s the auto companies. There’s no doubt that in the States, California and to a somewhat lesser extent the New York/Washington corridor – and over in Europe, particularly Germany, and in Asia, Japan, China, then Tokyo and Shanghai specifically – that’s where the auto companies seem to see the greatest interest.”

GCJ: Are you talking just the major automakers?

MACLEOD: “Of course, you’ve got some wild card plays by not just the global auto companies, but the Chinese auto companies that are all based down in Shanghai. They may not be as sophisticated as General Motors or DaimlerChrysler, but they’re looking at this stuff as well and they could actually put quite a few vehicles out on the road. India may be coming in later. There’s lots of stuff going on, and we try to concentrate these activities in parts of the world where the auto companies are also planning to do the same.”

GCJ: Is all this hydrogen activity centered around cars?

MACLEOD: “Buses are important in Europe, probably not so much in the States. The Rotterdam project we have is potentially the biggest single bus project in the world and it fits nicely with Shell’s manufacturing position over in The Netherlands, where we have a big manufacturing complex.”

GCJ: How do you see hydrogen demonstrations rolling out in the years ahead?

MACLEOD: “We’ve been looking a little bit more closely at the timelines in order to avoid building infrastructure in the wrong places, or building it too early. Broadly, we see that the next generation (fuel cell vehicles) DaimlerChrysler and General Motors are about to launch will test for three or four years, with GM building a hundred vehicles going to California and New York. Somewhere around 2012 or 2013 we think they will make final decisions whether they’re going to be able to get into a truly commercial, competitive, and attractive vehicle.”

GCJ: And then?

MACLEOD: “There are a few more technology questions they need to answer. Five years from now, they’ll probably be close enough to say this is going to fly. And then they’ll need another one or two generations to really bring the costs down. This suggests mass production is out toward the end of the decade. So, for commercialization we’re talking around 2015. I wouldn’t necessarily challenge that. And, of course, the auto companies will probably say they’re “small mass production.” Clearly, we have to make sure that the infrastructure we put in and the fueling facilities match those timelines.”

GCJ: How do you view the automakers efforts as a whole?

MACLEOD: “Every time I sit with the auto companies and I listen to what they are planning to do, and not just their optimism but the detail at which they are working through, how they are going to get to an attractive customer product... It just makes me believe that they are going to get there, and that it’s our job on the energy side to help support them and deliver the hydrogen.”

GCJ: Refocusing a bit, how does Shell Hydrogen view C02 emissions and society’s need to deal with climate change?

MACLEOD: “Clearly, things that have come out within the past few months – the Intergovernmental Panel on Climate Change Report and the one from the U.K, the Stern Report last autumn – they have given a bit more scientific foundation to the need to really pull back from CO2 emissions. We can’t go on growing energy and transport fuel demand at the current rates without dealing with the CO2 that’s coming with it, and the development of intelligent energies and the development of energy efficiency on their own are not enough to completely fix that. We’ve really got no choice but to work on the carbon emissions associated with conventional energy.”

GCJ: And this is in sync with Shell Hydrogen’s mission?

MACLEOD: “I think that if you come from there, then the fuel cell vehicle or the hydrogen story is a very good one. It’s a very important part of the solution...one starting point. There’s nothing inconsistent between what we’re trying to do with hydrogen for transport and fuel cells and the bigger global concerns about climate change and CO2.

“The bigger picture issue here around the whole climate change issue is that energy companies like Shell Hydrogen see that hydrocarbons will continue to be the majority fuel probably until the end of the century...and among hydrocarbons I’m including coal. Whatever you do in terms of developing a meaningful business alongside that, you’ve got to recognize that hydrocarbons are still the dominant energy source. Once you come to that conclusion, you realize how critical the CO2 issue is. That’s why we’ve been working on this for quite some time around our own emissions, around energy efficiency, and our own manufacturing.”

GCJ: There are always questions about where hydrogen comes from and how clean it really is. Your response?

MACLEOD: “It’s important that in this journey towards the hydrogen economy, the manufacture of hydrogen becomes cleaner. If we can’t make those steps then we shouldn’t really start the journey. I know that the auto companies will say the fuel cell technology, the potential of the vehicle, the attractiveness to the customer, all these things have made the fuel cell vehicle even more attractive than current hydrocarbon vehicles. From an energy point of view, we say okay, let’s make sure we can deliver the hydrogen from renewable, cleaner sources and that makes the whole thing beautiful. If we don’t do that, then I don’t think we achieve enough.”

GCJ: Are there any examples now of more sustainably produced hydrogen?

MACLEOD: “There are some markets where renewable hydrogen is already in play. For example, Iceland, where we have one of our first demonstration sites. It’s already fully green. They have surface hydroelectric-generated electricity that goes through the electrolyzer, and that’s what the hydrogen comes from. There are probably a few other island economies where you’ve got wind. In Hawaii, you could use wind-generated electricity. In fact, our site in Amsterdam uses electricity that comes from wind farms in the north of The Netherlands. That’s another story of green electricity now, and green hydrogen now. Other countries have got different choices based on what energy they already have.”

GCJ: But do all countries really have sustainable choices available to them?

MACLEOD: “Countries will make choices based on what they have. The scientists will argue there’s all these different pathways to produce hydrogen and they’re all correct theoretically. But if all you have is coal, like China, then you will do something else. I feel that China, which doesn’t have enough oil, doesn’t have enough gas, is going to base a lot of its energy on coal...power and transport. So stuff like gasification of coal, carbon capture...these things will play big in China, as I think also in the States. I think coal gasification as a route to clean power, potentially cleaner hydrogen transport fuel, will work. France will probably use nuclear. You get into this debate about all these individual choices. but I think that hydrocarbons will still be the prime source of hydrogen out for another few decades.”

GCJ: How important is hydrogen to our future, from your perspective?

MACLEOD: “Very. I don’t think hydrogen will necessarily be the only transport fuel. We have to be aware that the world keeps turning and obviously my colleagues inside Shell and in the fuel business are also putting a lot of time and energy in looking at cleaner fuels, more efficient fuels, effective fuels, gas to liquids, etc. To think they will stand still while we are going on this hydrogen journey is a bit naive.”

GCJ: So where does hydrogen fit in?

MACLEOD: “The diverse energy environment that sits around this, and the different choices that are going to be made – different concerns around energy security, around environment, around air quality, around efficiency – keep coming back to the conclusion that things will finish up with a portfolio of fuels, and hydrogen is going to be part of it. I’d like most of it to be renewable hydrogen, although I recognize that in some countries they may choose something else.

“Hybrids and all these other intermediate biofuels are part of the big story. But I think that hydrogen is very important for the world to deal with this developing energy challenge and to deal with the CO2 problems that come with these existing energies. They all link together.”