Speaker: Theo Walthie, Business Group President, Hydrocarbons and Energy, and Ethylene, Oxide/Ethylene Glycol
Event: Dow and GM Hydrogen Fuel Cell Collaboration
Location: Oyster Creek, TX
Date: 02/10/2004

Good morning ladies and gentlemen.  I want to thank our host Tommy Block of Dow Texas Operations for having us here today.  I also want to thank Larry Burns of General Motors for being here, and congratulate you and your team for their excellent work on this exciting collaboration.  Governor Perry, and Secretary Abraham, thank you, for your leadership in laying the cornerstones of a new hydrogen economy.  We applaud the important commitment of the U.S. government to apply, in an increasing way, science and technology to address the global issue of Climate Change and a reduction in U.S. dependence on finite fossil fuel reserves

I am so pleased to represent The Dow Chemical Company at this exciting and, I believe, history-making event. It is great to be back in this area.  Together, General Motors, Dow, and the people of this community and state have taken a significant step in the journey of human progress. 

Today, with the pull of a lever, we have catalyzed efforts to reduce our dependence on fossil fuels, to mainstream the use of alternative energy, and develop tangible solutions to the Climate Change challenge. We have all (hand gesture spanning the audience) taken a significant step toward making the hydrogen economy a realistic option - a milestone on our journey toward a sustainable future. 

This project represents two significant firsts:

1. The first opportunity for evaluating the broad industrial use of fuel cell technology, and
2. The first time a carmaker has used its fuel cell technology in "distributed generation" to provide electricity and heat for buildings and manufacturing.

Why should we care about these firsts? Because they have the potential for a hugely positive impact on what we at Dow call the Triple Bottom Line. What we are about today will have far-reaching business, environmental and social effects.
Here's how...

Hydrogen is generated in many ways now and will continue to be in the future. As for Dow, hydrogen is a normal by-product of several of our chemical manufacturing processes.  Typically, we use excess hydrogen as fuel for boilers or sell it to industrial gas companies for re-sale to their customers.  Flowing hydrogen through fuel cells to generate electricity, however, is much more efficient and economically desirable than either of those options. 

By efficiently consuming by-product hydrogen in fuel cells, Dow will reduce emissions of greenhouse gases. That's good for the environment. We will also create competitively priced electricity.  That's good for the economy. Also of major importance are the key learnings to be gained from this project, GM seeks to reduce the cost and improve the durability of fuel cells, so it can put them in cars by the end of the decade.

That will be good for society, but this will also be an excellent opening of new pathways for the transportation industry.

With this project, Dow could eventually use up to 35 megawatts of electricity from 400 fuel cells-that's enough electricity for 25,000 homes!  This innovation, once proven, may enable the use of hydrogen fuel cells for large industrial power systems. That, in turn, will benefit industry as a whole and improve the global environment through reduced fossil fuel usage and decreased emissions of nitrogen oxide.  The application options then, to develop distributed power generation with fuel cell technology are immense.

From a Dow perspective, this fuel cell project is just one example of our broad commitment to be part of the Climate Change solution and/or reduce our dependence on finite fossil fuel reserves-I'd like to share some others with you as well.

 As a major consumer of natural gas, Dow is actively investigating renewable sources of energy. For instance:

• In 2002, Dow accelerated R&D efforts to identify product and process improvements that reduce carbon emissions - including advanced catalysis to convert alternative raw materials into chemical feedstocks while reducing energy input and greenhouse gas emissions.

Dow teams are continuously exploring business opportunities that contribute to climate change solutions and/or reduce our dependence on finite fossil fuel reserves. For example:

• DERAKANE* epoxy vinyl ester resins have helped windmills endure challenging weather conditions for more than 35 years. And now, this same resin family is being used to make buses that consume 10 percent less fuel and produce less exhaust than traditional steel buses - because they are 7,000 pounds lighter!
• Other commercialized sustainable products include WOODSTALK™ biocomposites, based on waste wheat straw... and BIOBALANCE* polymers, a soybean-based technology used in carpet backings.
• Nature Works** PLA polymers by Cargill Dow LLC are made from corn, for such applications as clothing, cups, candy wrappers and home furnishings.

We are also focused on understanding and interacting with the external landscape. That means:

• Working to better align our internal Research and Development efforts with government and academic projects, and to leverage external research funding.
• Participating in trade associations to utilize industry capabilities
• Exploring non-traditional partnerships, like working together with NGO's and others on the issues of today.
• And participating in cross-industry ventures, such as the work with GM that brings us here today.

Why are we making these types of investments? Why does Dow want to be part of the answer to the climate change challenge? It comes back to our commitment to the three pillars of sustainable development and Dow's triple bottom line:  economic prosperity, environmental stewardship and corporate social responsibility.

We strive, always, to be a company that our employees are proud to work for... a neighbor that our communities want in their backyards... and an innovator that plays an important role in the journey of human progress. I think that today was a great step in that direction and I hope you will agree.

With that, I once again want to say what a privilege it has been to be here today, to work with GM on this exciting opportunity, and to launch this important fuel cell project. Together, we will continue to journey toward an exciting, sustainable future.

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Now, I am honored to welcome a man who among many accomplishments, has championed tort reforms and business incentives for state economic growth and job creation--the 47th governor of the State of Texas-the Honorable Governor Rick Perry.

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