Five years ago AC Transit embarked on a bold experiment when a prototype Canadian bus circled Oakland's Lake Merritt, powered by hydrogen and spewing nothing more than water vapor from its tailpipe. 

On Tuesday, the far-sighted but far from certain hydrogen bus program took a major step forward when energy giant ChevronTexaco Corp. announced it will build a state-of-the-art hydrogen refueling station at AC Transit's bus yard near the Coliseum. 

The fuel farm of the future will be ready to pump hydrogen in August 2005, San Ramon-based ChevronTexaco announced at a National Hydrogen Association conference in Los Angeles. The fuel station will strip hydrogen from natural gas coming through existing PG&E pipelines, and, project managers say, become the biggest hydrogen fuel stop in California. 
 

A new step 

That makes it a showcase in Gov. Arnold Shwarzenegger's self-proclaimed hydrogen highways initiative and a key test of what true believers call the conversion to a hydrogen economy. 

"Producing the fuel where it's consumed is what's new," said Donald Paul, chief technology officer for the company. "This reflects a new phase, from research to a demonstration project. We're at the point where projects will have a substantial component of reality." 

Until now, critics have labeled hydrogen vehicles as distant, with perhaps a quarter of U.S. cars expected to be fueled by Earth's most common ele-

ment no sooner than a quarter-century away. 
 

Safe alternative "The consuming public will actually experience this hydrogen economy," said Rick Zalesky, president of the hydrogen business team. 

"Most people think of the Hindenberg. When you say, 'Hey, would you like a ride in my hydrogen car?' most people would think that's unsafe, but AC Transit would never expose lots of people to something if it wasn't safe." 

For months, the public has ridden hydrogen buses running in the Oakland and Berkeley hills. 

A month after the fueling station is to open, AC Transit, the nation's third-biggest bus operator, expects to receive the first of three new prototype hydrogen fuel cell hybrid buses from Belgium. The 40-foot buses cost between $3 million and $3.5 million apiece, and will go into full service in Oakland. 
 
 

The zero-emission buses work by forcing compressed hydrogen through a membrane, which strips electron particles that are used to power the electrical engine. The proton particles pass through the fuel cell, combine with oxygen and come out the exhaust as a clean byproduct -- water. Because they are hybrids, the buses can also run on battery power. 
 

Trial and error 

But, as with most experiments, the program has gone through fits and starts. AC Transit had originally expected to test eight to 12 buses by mid-2003. Early technologies didn't evolve as quickly as expected and costs stayed high, so now only three buses will be tested. 

"It's slipped. It's really only now where I thought it would be in 2000," said AC Transit Director Greg Harper, who ran for office promoting zero-emission buses. "There's been a lot of progress, but instead of taking 10 years, it will take 15." 

"It's going to truly be a model in making this happen, and happen sooner rather than later," said Jamie Levin, AC Transit's point man on hydrogen. 
 
 

Also announced Tuesday, AC Transit, ChevronTexaco and Hyundai will team up to test a fleet of hydrogen hybrid SUVs, which the bus district's road supervisors will drive. It's part of an Energy Department program. 

Meanwhile, questions remain about funding the bus experiment. 

AC Transit's $16 million hydrogen experiment gets half its funding from a state transportation program that has been stripped of money and could be terminated in the upcoming budget. Of the $8 million pledged, AC Transit has received $150,000, regional transit planners said. The bus agency continues to draw down funds to pay contracts, expecting, but not knowing for sure, that Sacramento will reimburse it. 

If the state reneges on its commitment, it's unclear how AC Transit will continue to pay for hydrogen buses in an era when regular service is being cut. 

"The last thing we can afford to do is put operating funds into this," said Harper. "It's hard to tell somebody we cut their bus so we can get them a clean bus in 10 years."