Hydrogen Leader Stumbles with Domestic Operations: Oil Giant’s Struggle with Global Reputation
Shell Hydrogen announced this week that it will be shutting down all seven of its pumping stations in California with immediate effect. The company has decided to completely cease its operation of light-duty hydrogen stations in the United States, which is another setback for the struggling hydrogen car market. This decision particularly impacts the state of California, as it is the only place where hydrogen fuel is extensively accessible.
Thursday’s announcement was first made by Hydrogen Insight. According to the Hydrogen Fuel Cell Partnership (H2FCP), Shell used to oversee seven out of the 55 retail hydrogen stations in California. This news may come as a setback, but it is not catastrophic for the relatively small hydrogen industry.
Regrettably, the motive behind Shell’s decision to shut down operations should be a major cause for alarm among Toyota Mirai, Hyundai Nexo, and Honda Clarity Fuel Cell owners, may God bless them. In their announcement of the closure, Shell Hydrogen Vice President Andrew Beard stated that it was due to “hydrogen supply complications and other external market factors.” It is evident that Beard is alluding to the following.
Upon conducting a quick analysis of the impressive station map provided by H2FCP, it is evident that a large percentage of Hydrogen stations located in Southern California are not functioning or have limited operating hours. According to a report from Hydrogen Insight, this shortage has been causing disruptions at stations since August 13. I personally experienced this issue while riding in a Mirai, as the Uber driver driving the car mentioned the struggle of locating fuel and the situation has only deteriorated since then. Every station on H2FCP’s map has a unique notice displayed, but the one posted by an Iwatani hydrogen filling station accurately portrays the current state of affairs.
“Our main hydrogen provider has faced a disruption that will affect our ability to access hydrogen for the Hawaiian Gardens station. At the moment, we do not have an estimated time of arrival for a return to regular service levels. We will keep you updated as soon as we receive more details. We sincerely appreciate your understanding and patience as this may result in extended downtime.”
Numerous hydrogen stations are currently undergoing maintenance due to significant reliability problems. Iwatani, a major Japanese gas company operating in the American hydrogen filling station market, is taking legal action against its supplier of core technology. According to official court documents obtained by Hydrogen Insight, Iwatani claims that their supplier failed to conduct proper testing in an actual commercial setting, concealed flaws, and misled them. This situation has resulted in a chaotic and problematic state for the company.
The outlook for hydrogen fuel-cell vehicles in the United States is becoming increasingly unsure. Despite efforts to promote this technology, it has faced challenges in gaining widespread popularity due to the high costs of fuel stations and the fuel itself. While manufacturers of hydrogen cars typically offer a significant amount of complimentary fuel with the purchase of a vehicle, once depleted, consumers are faced with exorbitant prices at stations that are frequently out of service or experiencing long wait times. This explains why pre-owned hydrogen cars can be found at significantly discounted prices and still may not be a sound investment.
It’s hard to argue against the benefits of using natural gas to produce hydrogen, and Shell is a prime example of its effectiveness. The company’s close ties to the fossil fuel industry led to expectations that it would be a cost-efficient option, while also encouraging the development of reliable fueling infrastructure. However, this has not been the case, and even one of the biggest players in the oil industry is now giving up on the idea. If a dominant fossil fuel company like Shell can’t find reason to support the growth of hydrogen infrastructure for light-duty vehicles, it leaves us questioning who else can.