July – August 2022 Commentary

Illustration of robots as gas pumps
Illustration by James Yang

“Governments need to take rapid actions to lower barriers that are holding low-carbon hydrogen back from faster growth.”
– Faith Birol, executive director, International Energy Agency

Energy – Hydrogen Economy

As the auto industry strives to build more electric vehicles to meet government mandates for fuel economy, it’s clear the market isn’t ready for prime time.

Major challenges remain to be addressed, if not solved, before EVs become more than a blip of annual sales — namely range anxiety, too few charging stations, shortcomings with the electric grid, child labor sourcing of raw materials, recycling concerns, costs, and more. Compounding the situation is a recent spate of supply chain delays for key battery materials, along with inflation.

Inside the Numbers, prices for investing in hydrogen technologiesBut there’s another alternative that’s cleaner than electric propulsion. Hydrogen is making inroads into the commercial marketplace as major companies center their research efforts on bringing the clean energy alternative forward. Most recently, German auto supplier Bosch, which has its North American headquarters in Farmington Hills, said it will invest up to $591 million on hydrogen technology by 2030.

In turn, Cummins, a large manufacturer of diesel-powered engines, introduced a 15-liter, hydrogen-powered motor earlier this year that can run on different fuel types. The company, which operates several sales and research facilities in Michigan, produces a range of diesel engines for trucks, motorhomes, agricultural equipment, and school buses.

The new powerplant, Cummins states, can be fueled “at a lower initial price of a fuel cell or battery electric vehicle,” and converting vehicles to hydrogen fuel requires minimal modification. To bring the concept forward, Cummins and Daimler Truck in North America are modifying Freightliner Cascadia trucks with a hydrogen fuel cell engine, with sales to begin in 2024.

In other developments, North Carolina State University reports its researchers have found a way to extract hydrogen gas from liquid carriers that’s less expensive and more energy-efficient than traditional systems. On a related front, Washington State University scientists can now produce pure compressed hydrogen using ethanol, water, and electricity, which eliminates the need to transport the high-pressure gas.

Closer to home, in May, Noble Gas Systems Inc., a developer and manufacturer of conformable high-pressure hydrogen gas storage tanks in Novi, raised $3.5 million in Series A funding to build out its high-pressure, lightweight storage and delivery system that can accommodate compressed gases including hydrogen, natural gas, air, oxygen, and nitrogen. It features a tank comprised of a polymer liner, woven reinforcement, and a protective outer shell.

Automakers aren’t the only ones exploring hydrogen. Airbus, the European multinational aerospace corporation, announced in May it’s ZeroE program will develop a hydrogen-powered, narrow-body-class aircraft that it plans to introduce in 2035. Other aircraft manufacturers are exploring hydrogen propulsion, as well.

Going forward, it’s difficult to imagine Americans will all be driving EVs in the next few years, given the limitations; sales have been incentivized for more than a decade and still haven’t taken off. If politicians were truly eager to prevent pollution, they would promote different clean alternatives like hydrogen or nuclear energy rather than pursuing a one-size-fits-all course of action.

Education – Shortage Fiction

Gov. Gretchen Whitmer has proposed $2.3 billion in retention bonuses for every schoolteacher, custodian, bus driver, administrator, aide, and paraprofessional as part of her 2023 fiscal year budget. Whitmer claims the $2,000 bonus for every school worker, a key campaign promise, along with another $2,000 for each employee who comes back to work at a school, is needed to offset staffing shortages.

But her budget assertions don’t hold water. The overall birth rate has been declining for years and took a nosedive during the 2008 global financial crisis. Although there are fewer children in school — many colleges are already reporting declining enrollment — Whitmer states teachers are working harder than ever, and more instructors are needed.

According to the Mackinac Center for Public Policy, a nonpolitical think tank in Midland, “there are 8.4 percent more public-school employees in 2021-22 than in 2016-17, when claims of a statewide teacher shortage surfaced. There were 192,881 full-time equivalent positions in 2016-17. That increased to 209,003 in 2021-22. Student enrollment, by contrast, dropped 5.8 percent over that span.”

At the same time, even with added personnel, public schools in Michigan continue to fail students. The state ranks 32nd in the nation for fourth-grade reading outcomes. Among Black students in the fourth grade, Michigan is among the 10 worst states for reading performance. Rather than reward select allies over other workers in the state, the governor should follow up on her campaign pledge to improve student outcomes.

Economy – Survival of the Smartest

As businesses and consumers adapt to high inflation caused by too much government spending and regulations, other warning lights are going off. Slower economic growth, if not the likelihood of an outright recession by 2024, has companies scrambling to drive profits during a time of lower labor participation, supply chain delays, and cybersecurity fears.

According to data from Gartner Inc., around 37 million people will leave their jobs this year, part of the Great Reshuffling that began in 2021. To attract and retain workers, businesses have been boosting their workspace culture and offering higher pay. Apart from those headwinds, supply chain delays have been exasperated by Russia’s invasion of Ukraine and China’s lockdown of key cities like Shanghai due to a zero COVID-19 policy.

To offset such challenges, businesses have embraced digital tools like never before. Consider smart manufacturing adoption rates jumped 50 percent over the last year, and more than two-thirds of equipment makers have integrated some aspects of the digital transformation known as Industry 4.0.

Expect the digital revolution to continue, as data from Statista shows the market for industrial robots is estimated to reach $100 billion this year, while the global smart manufacturing market will jump to $500 million in 2022, more than triple the results from 2017. Given all the challenges today, the takeaways for businesses are to focus more than ever on the bottom line, reward talent, and continue to boost productivity.