Mister Natural aims to change the world


  • Business
  • Saturday, 04 Jan 2003

SKIPPING stones across an inlet, the 64-year-old cement executive hardly seems like someone out to change the world. But Masatsugu Taniguchi aims to do exactly that. He is leaving Taiheiyo Cement Co to start a new career on Yakushima Island, south of Kyushu, Japan, a place designated by the UN as a world heritage nature preserve. His mission: to create the world’s first zero-emission, hydrogen-based economy – and to pull it off through no-nonsense business principles, not tree-hugging wishful thinking. 

“I heard that Iceland was planning to switch its economy over to hydrogen, and I realised we could do it way faster on Yakushima,” says Taniguchi. The 338-square-mile Yakushima makes a perfect test case. It is a steep granite island drowning in 320 inches of rainfall a year. That means it can, says the Agency for Natural Resources and Energy, potentially generate 233 megawatts of hydropower without having to build any dams bigger than 100 feet. Strong ocean winds are another potential source of energy. In addition to harnessing hydroelectric power from an existing 60-megawatt plant to make silicon carbide, used in various industries, Taniguchi realised he could make plenty of cheap hydrogen fuel with current technology.  

 

Huge surplus  

 

Hydrolysis – running an electric current through water to produce hydrogen – yields fuel that is usually not economically competitive with other forms of energy. In Yakushima’s case, though, there is a huge surplus of electric power that can’t be stored or exported to the mainland; creating hydrogen and forcing it into tanks at 350 times atmospheric pressure makes economic sense. Such hydrogen can be exported in tankers, similar to those that carry liquefied natural gas. To set up the infrastructure, Taniguchi created a consortium called the Yakushima Clean Energy Partners (YCEP) and would like to gather US$24 million from private investors, including automakers, other major companies and various municipalities.  

That initial investment should provide the island’s 14,000 residents with enough clean electricity to shut down its heavy-oil-powered generator in 2004. In the longer run, by 2020 or so, Taniguchi envisions that there will be sufficient hydro and wind power to supply 500,000 mainland cars with hydrogen. This will be a huge boon to the island’s tourism industry, which employs 24 per cent of the work force (fishing and forestry are also big here). Already 200,000 eco-tourists a year flock to see the island’s towering 1,000-to-7,200-year-old cedars, phantasmagoria plant life and hordes of monkeys.  

“It is a wonderful idea,” says Yuji Kawaguchi, Honda’s top researcher for future auto technologies. He says it’s the best private-sector plan he has seen for a hydrogen economy. By contrast, he criticises several US and Japanese government hydrogen plans as being too geographically scattered. He has shown a strong interest in turning the island into a giant laboratory when the switch to fuel cell vehicles begins in earnest 10 to 15 years from now, as well as in testing the safety of hydrogen gas stations, the long-term reliability of cars and the economic viability of fuel cells.  

 

Loosen restrictions  

 

YCEP aims to be profitable from the start, initially by selling electricity to the residents and later by peddling hydrogen to automakers. Tourists who visit Yakushima will be required to ride hydrogen-powered buses. First, however, Taniguchi must get bureaucrats to loosen overall restrictions that prevent, for example, the importation of fuel cell buses that already meet European and American safety standards. The island is likely to be designated a special economic zone with relaxed hydrogen regulations within 2003, so that in 2004 the first hydrogen buses and cars will be running.  

Toyota announced in July that within a year it would introduce 20 fuel cell cars. It is due to give four of them to the Japanese government as well as two to the University of California’s Irvine and Davis campuses in December. The lease is US$10,000 a month for 30 months. By 2008 the price should be somewhat lower – and many Yakushima residents, subsidised by the government, are likely to be driving them. By 2020 or so, depending on the progress of fuel cell technology, the last of the island’s 9,500 gasoline cars will be gone and only water-vapour-emitting fuel cell autos will remain, according to Taniguchi’s plan.  

Can the Yakushima model be exported? It might make sense for vacation spots, like Kami Kochi National Park in the Japanese Alps, which have an abundance of potential hydroelectric power. Imagining hydrogen-powered cars and buses in Yosemite and Yellowstone is a little more difficult, given the unpredictable snowfall and the fact that visitors to US parks drive in from cities where gasoline remains the norm. Still, the city of Tokyo has already banned diesel cars (effective October 2003), and there is talk of eventually banning all hydrocarbon-based cars from the city centre.  

It will take visionaries like Taniguchi to bring the hydrogen economy closer, say realists like Masasuke Takata, a professor at Nagoaka University of Technology in Niigata, and to keep the public’s expectations a few notches below the utterly impossible. Says he: “Ten years ago people were predicting hydrogen would be economical within a decade, but gasoline kept getting cheaper.” He nonetheless believes that fuel cells are already making inroads, as combined heating and electric systems for large buildings. Within a decade, he says, if gasoline prices rise and fuel cell cars get cheaper, the switchover could begin.  

 

Enviro-capitalist reputation  

 

Taniguchi has a reputation as an enviro-capitalist stretching back decades. Graduating from the Kyushu Institute of Technology in 1960 with a degree in mining engineering, he discovered there was no work underground, so he joined what is now known as Taiheiyo Cement. But he put his training to work, filling empty iron and copper-ore ships with lime and selling it to mines that exported the ore (lime is used to neutralise acid used in mining). “As I visited mine sites around the world I began to feel with my own skin how seriously they damaged the environment and wondered if there was not a business opportunity here,” he says. Taniguchi travelled the world in search of ideas that would both make money and reduce the damage caused by industry.  

Realising a lot of industrial waste contained ingredients that could be profitably recovered; he became an enthusiastic recycler of gypsum in Japan. Scrubbers used in thermal power plants, for instance, require limestone to capture sulphur from their exhaust. The reaction creates gypsum that can be sold to companies like wallboard makers. That particular variety of waste recycling is now common around the world, and Taiheiyo makes a big business of it.  

Taniguchi was also inspired to use cement furnaces to aid in the disposal of household garbage. In Sweden he visited a plant where refuse is rotated in an unused rotary kiln for three days, allowing bacteria that thrive in that temperature to quickly degrade it into fertiliser and bits of plastic. “It smelled so bad that when I left even my underwear stank,” he recalls. He realised that if the building were sealed and the foul exhaust pumped into a 3,600-degree cement furnace, the odour disappeared.  

Taiheiyo was able to create a US$375-million-a-year sideline in waste treatment with, Taniguchi says, a 20 per cent operating margin. “If businesses start taking an offensive instead of a defensive attitude to environmental issues, then many opportunities appear,” he says.  

The practical side of this dreamer was forged early. Taniguchi was just 8 years old and just a mile and a quarter from ground zero when the atom bomb hit Hiroshima. Aside from losing his hair for a while, he was unharmed. The grisly experience, he insists, did not affect his views on the environment or atomic energy: “I just think that people are so scared of nuclear energy that power plants end up so over-designed for safety they are not profitable.”  

Just the kind of attitude to face his greatest challenge yet. 

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