House Speaker Bobby Harrell plans to introduce legislation in 2007 to provide incentives and seed money for South Carolina’s strategy to become a major center for hydrogen fuel development.

Harrell, R-Charleston, said the bill, which his staff is drafting, should include:

• Tax cuts to encourage hydrogen fuel businesses to locate research and manufacturing here

• A state development fund, perhaps $15 million, to support commercialization of hydrogen fuel technology

• Changes in the state procurement code to ensure that, when possible, state purchases support alternative fuels

• Financial incentives to lower the cost of hydrogen fuel development and fuel cell technology

• Continued incentives for collaborative research among South Carolina institutions

Leaders in the effort to make South Carolina a center of fuel cell research have said the state lacked a comprehensive policy putting substantial resources behind developing a hydrogen fuel economy.

Harrell’s legislation could fill that gap.

“Frankly, when we started this, we did not know where we wanted the research to go, only that we wanted it to lead to jobs,” Harrell said. “It is our job to ensure that South Carolina is positioned to benefit from the next big changes in technology.”

The General Assembly has channeled hundreds of millions of dollars into basic research at the University of South Carolina, Clemson University and the Medical University of South Carolina through the endowed chairs and Life Sciences laws. A substantial portion of that money will be dedicated to fuel cell and hydrogen fuel research.

While hydrogen fuel research is a high-risk economic development strategy, it also has the greatest potential for reward.

South Carolina has substantial research and development resources to help build a hydrogen fuel economy:

• The Savannah River National Laboratory, with a half-century of experience in basic research about hydrogen generation and storage

• USC’s Industry/University Cooperative Research Center for Fuel Cells, the only such center designated by the National Science Foundation. Private partners in the center include Millennium Cell; Air Liquide; BASF AG; Boeing; DANA Corp.; ePower Technologies; General Motors Corp.; John Deere; LG Electronics; and Westinghouse Savannah River Co.

• Clemson’s International Center for Automotive Research in Greenville, which plans to work with S.C. institutions in adapting hydrogen fuel technology to power vehicles

But South Carolina also has many competitors, some of which have substantially larger financial resources. In a report compiled for the state of California, Breakthrough Technologies Institute Inc. found that 47 states and the District of Columbia have some sort of fuel cell or hydrogen legislation, demonstration or activity.

U.S. Rep. Joe Wilson, R-S.C., told fuel cell advocates at last week’s EngenuitySC ’06 conference in Columbia that Fort Jackson, the largest U.S. Army basic training base, might provide an important testbed for fuel cell power plants.

He said the U.S. Defense Department aims to reduce its reliance on fossil fuels, and hydrogen fuel cells will be an important piece of that strategy.

U.S. Rep. James Clyburn, D-S.C., said the state’s strategy must find a way to “break the cycle of South Carolina developing the technology and other states reaping the benefits” of new manufacturing jobs.