Of Fuel Cell and Selling Nigeria's Fuel

Of all the clichés I heard as a little boy, one that readily comes to mind when I think about Nigeria is “Do not put all your eggs in one basket”. I am not sure if I remember this cliché because I didn’t get enough eggs as a child or because of the wisdom in it. Be that as it may, it is sad to say that Nigeria has consistently placed all her eggs in one basket (of oil export) and I fear that the bottom might drop off sooner than I want to believe.

One imminent challenge that is lurking in our shadow is the rapid advancements in fuel cell technology, and the emphasis that governments and corporations around the world are placing on this technology. In his recent “State of the Union” address, President George W. Bush proposed a $1.5 billion bill to fund research in Fuel Cells. In that same vein, he challenged Detroit car manufacturers to get Fuel Cell powered cars into the showrooms in less than 15 years. This is definitely a clear and present threat to Nigeria.

Fuel Cells or fuel sells?

Fuel cells are electrochemical devices that combine hydrogen fuel and oxygen from the air to produce electricity, heat and water. These fuel cells generate electricity without combustion – thus they are almost pollution free, making this technology a darling of environmentalists. Compared to traditional combustion power plants, fuel cells eliminate 40,000 pounds of acid rain and smog-causing pollutants from the environment per year. They also reduce carbon dioxide emissions by more than 3.5 million pounds per year.

Cynics may ask why this technology has not been adopted earlier than now if it were that efficient. The simple answer is that the executive branch of the US government has never before had the guts to face up to the lobbyists from Detroit. However, in the face of the deadlock in the Middle East, it has become clear to everyone in Washington that unless the US found an alternative to Oil, it would be stuck in the Middle East for a long time. Depending on who you listen to, Gulf War II is estimated to cost between $50-$200 billion. The US government has already spent over $10 billion maintaining peace in the Middle East, or as political pundits would say, guarding their access to the oil. The present US administration may have been jolted into rethinking it stance in the Middle East by the chain of events since September 11th.

Beyond the need to break the dependency on the Middle East for energy is the pressure on the government to clean up the environment. The Kyoto accord (and other declarations by environmentalists) is putting a lot of pressure on the Detroit-based industries to clean up the environment. These pressures have also driven even countries like Iceland to come up with a plan to transition the entire economy to a fuel cell based economy by the year 2030.

Which way, Nigeria?

Take a minute and internalize the consequences of this new US direction on Nigeria that the Nigerian economy depends (90%) on oil, and 30% of the sales are to the United States. Even scarier is the fact that if the US transitions to this cheaper alternative, it would confer a lot of competitive advantage to US manufacturing industries. In this race for the world (called globalization), it is only a question of time before other nations would adopt the fuel cell technology. What would be the place of oil in the world market? What would Nigeria children?

This essay has not attempted to advise the Nigerian government on how to diversify the economic base because lots of experts have already done that. Rather, the aim of this piece is to sensitize the government and our administrators on this developments and its potential threat to our economy.

I hope that Aso Rock is listening because I am really scared for our basket of eggs.

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