State positioning itself to win in the hydrogen world

jhammond@thestate.comMarch 26, 2007 

In trying to build the best hydrogen fuel cell research team in America, South Carolina has taken a page from George Steinbrenner's playbook for building a great baseball team: Hire your competitors' best players.

And, like the flamboyant New York Yankees owner, South Carolina has gotten good at it. -- * The S.C. Hydrogen Coalition, which promotes the hydrogen economy in the state, hired as its new director Shannon Baxter- Clemmons, hydrogen fuel cell adviser to California Gov. Arnold Schwarzenegger. -- * To manage its new technology campus, which will be home to the hydrogen fuel cell team, USC lured John Parks away from a successful run as manager of the University of Kentucky's technology park.

-- * USC this spring hired Kenneth Reifsnider, director of the Connecticut Global Fuel Cell Center. Reifsnider has strong ties to United Technologies Corp., a fuel cell innovator with a huge interest in how hydrogen might hit the marketplace: Its subsidiaries make Carrier heating and air conditioning systems, Otis elevators and Pratt & Whitney aircraft engines.

Reifsnider's departure created a bit of a buzz for South Carolina -- and some panic in Connecticut.

When the news slipped out, Joel M. Rinebold of the Connecticut Hydrogen-Fuel Cell Coalition told The New York Times that South Carolina fuel cell education and training are tops in the nation.

But can South Carolina attract the right brainpower to become a leader in the "hydrogen economy"? To be to hydrogen what the Silicon Valley is to computers?

It doesn't hurt that South Carolina has a growing economy -- and yes, the weather is nice.

But there are other reasons South Carolina's high-stakes gambit might succeed:

-- * South Carolina's approach is a statewide one, with public and private cooperation.

-- * USC researchers have been breaking ground in hydrogen fuel cell research for several years.

-- * USC for four years has been home to the country's only National Science Foundation Industry/ University Cooperative Research Center for Fuel Cells.

USC's School of Engineering has as many as 20 researchers at the center conducting cutting-edge research. And big-name industries are signing on as corporate partners.

The center's mission is to hit the industry's multibillion-dollar home run: Develop the technology to make fuel cells commercial -- useful in everyday life -- possibly even replacing electricity, batteries and gasoline as energy sources.

-- * The state has something few others have -- a former nuclear weapons plant with 50 years of experience in producing and storing hydrogen. USC and the Savannah River National Laboratory near Aiken are sharing technology and expertise. And Aiken County has built a center just outside the plant to help transfer technology developed in the public sector to the private sector.

-- * Clemson University's automotive research campus in Greenville, CU-ICAR, is getting ready to provide real-world testing for fuel cells developed for automobiles, thanks in large part to industry giant BMW, whose only North American plant is a dozen or so miles away.

-- * Clemson scientists have contributed major breakthroughs in improving membranes necessary for fuel cells.

-- * The state's fledgling endowed chairs program is providing the real money it takes to attract more top researchers.

"If we are going to win, if we are going to move the university forward, we don't just need a few stars, we need a constellation," said John Van Zee, a core driver of USC's fuel cell efforts and director of the National Science Foundation center. "That's part of what we are trying to create here with these endowed chairs."

MORE THAN ONE WAY TO WIN

Getting the science right will not be enough to make the state a world leader in an emerging industry.

Granted, whichever state makes the big breakthrough in the commercialization of hydrogen will attract researchers, federal dollars, private industry and jobs like a flame draws moths, like California attracted gold diggers in 1849.

But converting the science into products and services is another way to become a major player in a hydrogen-driven world.

To boost the state's chances in finding applications for hydrogen, Clemson has brought in David Bodde, a former executive with the National Academy of Sciences and an expert on entrepreneurship. Bodde in February participated in a National Academy conference on the future of the hydrogen economy.

"I think we can win in this independent of where the breakthrough comes from in the science," Bodde said. "We'd like it happen here, of course. But the entrepreneurship will be key to economic success.

"(Clemson is) a player. We don't have a huge lead. We are kind of small in the game, but we have some advantages," Bodde said.

Bodde cites a $2 million grant Clemson received from the Department of Energy to study the effects of impurities in hydrogen fuels. "If we weren't getting these types of awards, we'd have to question our ability to play. But we are getting them."

USC has received similar grants, including $2 million from the Department of Energy to collaborate with industry on high-temperature membranes, new catalysts and gaskets and seals, and $1.7 million from DOE for research on nonplatinum catalysts.

Tom Vogt, director of the USC NanoCenter, also expects his department to be a player in the commercialization of fuel cells.

"As an incubator (for new businesses), the question is always: What is the big picture? What is the end game?" Vogt said.

"The end game is that you become a sustainable entity, I mean scientifically, with world renown, and financially self-supporting," Vogt said.

USC's challenge, Van Zee said, has been to single out one or two fields of study with major commercial potential, and to excel in those areas.

"We can't be excellent in everything," Van Zee said.

The National Science Foundation endorsement has given the state great momentum. And it, in particular, has helped create a national buzz about fuel cell research in South Carolina.

But South Carolina has serious competition.

Ohio has invested more than $40 million in 30 fuel cell-related projects throughout the state. Last December, Rolls-Royce PLC, a British maker of power systems worldwide, announced it would build the U.S. headquarters of its fuel cell subsidiary in Ohio.

And California has been very successful in attracting private investment when the state has primed the pump. In just four southern California counties, $11 million in state incentives has generated $100 million in private investments.

But Bodde says those investments in current technology don't necessarily rule out South Carolina as a player in future breakthroughs. One major scientific milestone could make all that investment in transitional technology obsolete, he said. A LONG-TERM VISION

Most marketplace applications are years away. In South Carolina, the gains being made now are small but significant.

The state has not yet produced its own Bill Gates, the chairman of Microsoft, or Steve Jobs, who runs Apple Computer. But Van Zee believes the culture being created in Columbia could lead to an emerging company with a scientific breakthrough that will lead the transition to a hydrogen-fueled economy.

"We hope, with these endowed chairs and with the education our students are getting, to create some of those types of companies," Van Zee said. "We are beginning to see some of our young Ph.D. graduates file for corporate charters with the state."

"I think this is a real change for Columbia, for such companies to grow out of this university," Van Zee said.

Vogt, the USC NanoCenter director, cautioned that the goal of economically sustainable industries built on academic research will be a multigenerational effort.

"Rarely do you have the people who have the vision and can then implement it," Vogt said. "It is a different set of skills, a different culture even."

"So I look at this as a very long ball game, and the guys who are on the mound pitching now will have made their contribution to the ballgame. And when you walk off in the ninth inning, even the guy who pitched in the first inning did his part," Vogt said.

Reach Hammond at (803) 771-8474.

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NEW ECONOMY LEADERS

The top five states in transforming themselves from "smokestack" economies to knowledge- and technology-based economies.

1. Massachusetts

2. New Jersey

3. Maryland

4. Washington

5. California

How South Carolina and its neighbors ranked:

18. Georgia

26. North Carolina

39. South Carolina

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PLAYERS -- Some of the people helping USC and the state build a hydrogen economy.

* Shannon Baxter- Clemmons, S.C. native and director, S.C. Hydrogen and Fuel Cell Alliance. Wants South Carolina to craft more detailed blueprint for hydrogen economy. Formerly assistant secretary for hydrogen and alternative fuel policy at California Environmental Protection Agency; led development of California Hydrogen Blueprint Plan for Gov. Arnold Schwarzenegger.

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* Lee Bussell, CEO of Chernoff Newman marketing firm and chief consultant on marketing for USC's Innovista campus. Firm shapes communication plans for high-tech businesses and hones the Innovista brand.

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* Bill Boyd, head of Waterfront District Steering Committee. Leads committee working to secure public funding for a $77 million riverfront park that will extend USC's Innovista to the Congaree River.

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* Reinhardt Brown, interim director, James C. Clyburn Transportation Center at S.C. State University in Orangeburg. Leads institution's research on mechanics of fuel cells and making better containers for liquid hydrogen fuel.

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* James Clyburn, Democratic majority whip, U.S. House. Holds key congressional power to back federal funds for South Carolina's hydrogen fuel cell initiatives. Legislative patron of Clyburn Transportation Center, a partner in state's fuel cell development.

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* Bob Coble, Columbia mayor. Shaping Columbia's vision of itself as a world center in the emerging hydrogen economy.

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* Craig Davis, developer of N.C. State's Centennial Campus and USC's lead private development partner. Contracting to build two private-sector research buildings as match for two statefunded USC research structures.

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* Lindsay Graham, U.S. senator. Exhorting state leaders to present a common front in campaign to make South Carolina a world center of hydrogen fuel cell development.

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* Guignard family, longtime owners of largest undeveloped property in Columbia's Vista. Partnering with USC to plan development of 500 acres from USC's Horseshoe to the Congaree River, complete with a riverfront park with condos at its edge.

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* Bobby Harrell, S.C. House speaker. Carries banner of hydrogen fuel cell advocates in General Assembly, saying it is one of his most important priorities. Sponsor of state incentives for hydrogen fuel cell companies that locate in state.

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* Fred Humes, director, Center for Hydrogen Research, in Aiken County, adjacent to the Savannah River National Laboratory. Spearheads county-owned center that works to transfer government-funded research to the private sector. Early advocate of collaboration between USC, Clemson and the Savannah national laboratory

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* Bob Inglis, U.S. House member from Greenville. Conceived national "H" Prize, an award for breakthroughs in hydrogen fuel cell research. Leads efforts to make hydrogen fuel development a priority in the U.S. House.

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* Rick Kelly, USC vice president of business affairs. Juggles USC's research campus construction within a hefty list of 21 USC projects worth $315 million. Builds on experience managing renovation of the State House while with the State Budget and Control Board.

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* John Lumpkin Jr., senior consultant for Consera Healthcare Real Estate Services. Continues to advise hydrogen advocates after serving as Innovista interim director. USC vice presidents Harris Pastides and Rick Kelly asked him to step in as a bridge to the private sector until an Innovista director was hired.

* Neil McLean, executive director of EngenuitySC, a strategic leadership group dedicated to building Columbia's high-tech economy. Secured $1 million federal grant to create the National Institute of Hydrogen Fuel Commercialization, an Innovista incubator for startup research companies.

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* John Parks, executive director of Innovista. Newest member of the USC team, he brings a track record of luring private industry to the University of Kentucky.

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* Harris Pastides, USC vice president for research and health sciences. Knocks on doors in Washington offices of National Science Foundation and National Institutes of Health. Recruits star researchers from competing institutions.

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* Andrew Sorensen, USC president. Takes office declaring he'll make USC a premier research institution. Forges working partnerships with Clemson University president Jim Barker and Medical University of South Carolina president Ray Greenberg.

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*Samuel Tenenbaum, retired Lexington businessman. Early and ardent advocate of a lottery-funded endowed chairs program to attract academic stars to South Carolina. Inaugural member and chairman of state board that awards endowed chair grants.

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* Board members of the USC Research Campus Foundation, which helps oversee campus growth. Chosen for their ability to open doors nationally and internationally. Serving with Larry Wilson are: Ray Greenberg of Charleston, president of MUSC; Don Herriott of Florence, head of Roche Global Chemical Manufacturing; Pike Powers, of Austin, Texas, an attorney considered a driving force behind Austin's shift to a knowledge-based economy in the 1980s; and Mack Whittle of Greenville, chief executive of The South Financial Group and former chairman of USC's trustees.

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* Sonny White, president of Midlands Technical College. Pledges his twoyear college will supply lab technicians to staff Innovista. The school also plans to build an incubator for startup companies producing fuel cell components.

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* Larry Wilson, Columbia venture capitalist, board member of the USC Research Campus Foundation and early vocal advocate of a research campus. Chairman of Duck Creek Technologies insurance software company, Innovista's first tenant.

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* Todd Wright, director, Savannah River National Laboratory near Aiken. Guides nation's newest national laboratory in partnership with USC to exploit and commercialize 50 years of federal scientific research with hydrogen.

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HOW SOUTH CAROLINA RANKS

The Kaufman Foundation ranked South Carolina's "new economy" against other states on a variety of factors as to how well it is able to attract high-wage, knowledge-based economy jobs.

Overall: 39

Foreign investment: 1

Exporting a focus of manufacturers: 15

Technology in schools: 24

E-government: 28

Broadband telecommunications: 30

Fastest-growing firms: 33

Entrepreneurial activity: 39

Work force education: 40

High-tech jobs: 40

Scientists and engineers: 42

Venture capital: 44

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