GM: Oil Volatility, H2 Opportunity
20 May 2004
Larry Burns, GM’s VP of research and development and planning, and one of the outspoken proponents of GM’s hydrogen investment, to the FT:
General Motors, the world’s biggest carmaker, expects a long-term oil price of $30-$35 a barrel, well above the target set by the largest oil exporters but lower than last week's US peak of more than $41.
Burns... said yesterday that prices were also likely to become more volatile over the next few years.
“The auto industry’s 98 per cent reliance on petroleum puts us in a very exposed position.”
The high oil price will help GM executives justify heavy spending on alternative fuel technology, particularly hydrogen, on which $1bn has been spent so far.
Burns said hydrogen-powered fuel cells were the biggest single item of spending in the advanced technology budget.
However, the oil price is not likely to accelerate the adoption of hydrogen, he said, as the technology would not be competitive with petrol cars before 2010 at the earliest.
But Mr Burns said hydrogen cars could become popular faster than predicted if catastrophic events required a move away from petrol.
“We believe that world events could put us in a position where this has to happen a lot faster than forecasters expect,” he said. “Look at 9/11, blackouts in the north east [of the US], the Iraq war.”
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