Asemblon, Forging Ahead With Hydrogen Fuel Dream, Leans on Partners to Make it Happen

4/18/11Follow @xconomy

Hydrogen is the most abundant element in the universe, and scientists have dreamed for years about turning it into a source of clean alternative fuel. The vision hasn’t materialized, but one Seattle-area entrepreneur, Michael Ramage of Asemblon, says he is more confident than ever that this idea can reach the marketplace in about two years.

“I’m optimistic,” he says.

Asemblon, advised by University of Washington bioengineering professor Buddy Ratner, has long seen itself as a key technology provider to the hydrogen fuel business. The company, founded in 2005, has raised about $12 million since inception to develop organic carrier molecules that are supposed to make hydrogen practical as a liquid fuel. The big knock on hydrogen has always been that it requires a whole new infrastructure for distribution and storage, making it too expensive and impractical to replace fossil fuels.

Asemblon’s way around this problem is through its science, and an incremental business strategy. Scientifically, it is seeking to enable hydrogen to be stored at a wide range of extreme hot and cold temperatures, and without high pressure tanks, so people can carry it around in containers or ship it on pipelines or on trucks like gasoline. That’s much different from the hydrogen fuel of today, which must be kept under high pressure and in cold temperatures. That isn’t cost efficient, and raises safety concerns in the event of a crash.

The business plan is to license the hydrogen storage technology to partners, who will put it to work in the commercial trucking business. Commercial trucking makes sense as a place to start, Ramage says, because it’s a large market that accounts for about one-fifth of all the U.S. transportation fuel. And yet it doesn’t represent such a huge distribution challenge, because most of the fuel goes through about 500 commercial fueling stations dotted along Interstate highways from coast to coast, says Ramage, who will be a speaker at Xconomy Seattle’s next event, titled “Separating Hype From Reality in Alternative Fuels” on May 19th.

One of Asemblon’s partners, Los Angeles-based Vision Industries, has said it believes hydrogen fuel stations could be equipped to serve cross country truckers for less than $100 million. And Ramage says one of Asemblon’s other prospective partners—whom he wouldn’t identify—has told him its fleet of 17,000 commercial trucks could save $120 million to $130 million a year by switching to hydrogen fuel, assuming diesel stays where it is, at more than $4 a gallon on average nationally.

“The economics are what will really drive this,” Ramage says.

While Ramage isn’t in position to announce any new partners yet, because he says talks are ongoing, they have heated up lately because of some key scientific progress in the past year. Asemblon’s family of organic carriers now make it possible to store up to 12.5 gallons of liquid hydrogen fuel, enough to power a car engine for a range of about 300 miles. That’s comparable to the amount of gas volume and range in a typical gas-powered passenger car.

Important as the efficiency gain may be, there is still a lot of technical work to do at Asemblon. The carrier molecules still need to be combined with industrial catalysts inside a custom-designed reactor before people will be able to fill up tanks with liquid hydrogen on demand. The latest estimate is that it will take another 12 months to integrate the organic carriers with the catalyst and reactor system, and then another 12 months to build a prototype to demonstrate it can work, before the system is really ready for the marketplace.

“It’s not trivial, but it’s doable,” Ramage says about the next steps.

There have been plenty of setbacks. Asemblon is “on a never-ending search for cash,” and frankly, hasn’t found as much lately as it would like. The company, which had 30 employees when I wrote about it two years ago, has cut down to just five employees today to conserve its remaining cash, Ramage says. If Asemblon can get the cash it needs from partners or angel investors, Ramage says he anticipates growing back up to about 15 employees.

Much of Asemblon’s future depends on how well its partners do. One of them is Vision Industries, which is seeking to commercialize a zero-emission big rig it calls the Tyrano truck. This truck relies on a combination of power from a plug-in electric motor and hydrogen fuel. Vision Industries earlier this month won a $1.4 million contract from the Port of Los Angeles to retrofit 15 electric trucks with the hydrogen power system to extend their range. The current range of the trucks is limited because the hydrogen system requires high-pressure cold storage, which is only available at 41 stations in California.

Cryo-compressed hydrogen stations cost about $2.1 million apiece today, while Asemblon figures that stations using its form of hydrogen fuel would cost about one-tenth as much.

It’s hard to say how big Asemblon’s business could be, if it ever gets off the ground. But the model hinges on being a technology provider to big partners, who would then make the investment in hydrogen fueling infrastructure—which they will really only do it if saves them money over the long term in operating costs. If the partners do that, then Asemblon could be in position to collect a healthy amount of royalties on hydrogen fuel going into trucks.

“We have no illusion that a handful of scientists can try to commercialize something like this at scale,” Ramage says.

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  • Jose Jimanez

    Hasn’t this Buddy Ratner scam died yet? How come nothing got done the last time money was raised for more Ratner musings? Buddy’s rep at WRF is that he should only publish in the Journal of Irreproducible Results. Sounds like more wishful thinking and kool aide drinking BS. Doesn’t Luke do journalism or just write puff pieces with no investigationg at all.