by Joe Shea
American Reporter Correspondent
March 6, 2009
THE F.T.C. CHALLENGES HYDROGEN KIT CLAIMS, AND LOSES
BRADENTON, Fla., March 6, 2009 -- A New Jersey man whose company guarantees that its hydrogen-injection kits for cars and trucks will produce mileage gains of 50% or more has won a key stage of his battle with the Federal Trade Commission after a Federal Judge ruled the agency had not been able to disprove his claims.
Federal judge and magistrate Michael Shipp ruled last month that Federal prosecutors and their expert witness failed to prove that inventor Dennis Lee's extraordinary claims for his Hydrogen-Assist Fuel Cell were untrue or that the public would be harmed by them. And, the judge noted, large companies and a major university are trying to build hydrogen kits like his in their own laboratories.
Lee, 62, of Newfoundland, N.J.,-based Dutchman Enterprises, has been battling the government over his claims for hydrogen for almost 20 years.
Ever since Alessandro Volta discovered electrolysis in the year 1800 and chemist William Nicholson discovered four months later that hydrogen and oxygen could be separated in water by Volta's process, hydrogen as a fuel has struggled to gain a footing. Free, easy to make and hugely abundant everywhere, it is a 132-octane fuel for cars that has also found favor with diesel truckers and by researchers working for the U.S. Dept. of Transportation's Federal Motor Carrier Safety Administration.
But skeptics have always claimed that the process of creating the gas in the car in a kit powered by a battery, and then running the car on hydrogen alone, is a violation of the Second Law of Thermodynamics. That law says you can't get more energy out of a process than you initially put into it. Most such skeptics, and apparently the FTC, fail to grasp that the kits are used to produce hydrogen as an additive to gasoline, not to run cars on hydrogen alone (a feat that is also possible, but not with small kits like Lee's). The kits create anywhere from a quarter-liter to 21 liters per minute of hydrogen gas, usually mixed with oxygen, that is then added to conventional gasoline or diesel fuel burned in internal combustion engines. The U.S. Dept. of Transportation funded a limited Booz-Hamilton study by the Federal Motor Carrier Safety Administration that says hydrogen-injection systems (i.e., HHO kits) improved mileage and reduced emissions in diesel trucks.
Prominent scientists like Dr. Yiping Zhao of the University of Ga. physics department say that since the hydrogen gas produced by so-called HHO kits - named for the two atoms of hydrogen and one atom of oxygen that bubbles out of them - is used to make gasoline burn more quickly and efficiently, they don't violate the laws of physics. But trying to run the car on HHO alone would do so, since the battery would have to provide more energy than the HHO produced. Zhao is an expert in hydrogen storage who has published more than 97 peer-reviewed articles in physics journals.
"That doesn't violate the law of thermodynamics," Dr. Zhao said in an interview at his campus office. "It could be that it makes the gasoline burn more efficiently, and it could be that it reduces emissions."
The "could be" in the cautious Dr. Zhao's assessment is the limbo hydrogen-injections systems have found themselves in since the early part of the 20th Century. Competing with well-known gasoline and diesel fuels, and now with electric, solar, biodiesel and propane gas systems, cheap and ready hydrogen has fallen far behind. Yet as claims of success in everything from tiny toys to World War II bombers, from giant tandem semis to foreign subcompacts, and even as home heating and welding fuel, continue to get validated, interest has grown.
Someone's been listening, and not just the FTC, which is charged with minimizing harm to the public arising from false claims for everything from snake oil to suntan lotion.
A legion of devoted followers have so far mounted nearly 35,000 videos about HHO on YouTube, and swear to its value in extending the number of miles they get when hydrogen is added to gasoline, environmental benefits of burning about 98% of all the gasoline which strictly gasoline engines fail miserably to do, and the improved engine performance gained by cleaning out "gunk" that results from carbon buildup due to incomplete burning.
Generally, experts say most cars burn just 20 percent or so of the gasoline they use as useful energy that drives the car forward; the rest, they say, is lost heat that is expelled from the tailpipe. Hydrogen, its supporters and some scientists say, causes all of it to be burned.
Now comes the Dennis Lee case. Before the February 5 trial on the FTC's request for an temporary restraining order against Lee and Dutchman Enterprises, on Jan. 14, 2009, Federal prosecutors Joshua Millard of the FTC and U.S. Attorney Susan Steele won a freeze on all of Lee's assets, crippling his Newfoundland, N.J., business.
"If this decision goes the wrong way ... we are a dead company," Lee had told Judge Faith S. Hochberg. "Our primary asset was not money in the bank. It was our inventory, much of which is not paid for, and will have to be returned to those we trained as independent manufacturers to make it." Judge Hochberg granted the FTC's request.
At the February hearings on turning the temporary restraining order into a preliminary injunction, however, Lee's lawyers introduced documents from the New Jersey Service Center. There, Lee's patented device was tested last October on 34 cars and trucks ranging from luxury SUVs to Ford F-150s and little Honda subcompacts, in some cases in freezing weather - when hydrogen kits may perform poorly. The defense pleadings provided the service center's documentation as scientific evidence for some astonishing results. Mileage on those 34 cars improved an average of 98 percent, and in some, fuel savings were more than doubled.
The center, run by a high-performance race-car mechanic, showed that a 4-cylinder 2005 Honda Accord with pre-testing mileage of 33MPG got 104MPG with the HAFC kit. A Lincoln MXK V6 went from 20 to 42.5MPG. A Ford F-150 V8 went from 15MPG to 35MPG. A 2006 Mazda 3 4-cylinder car went from 28.4 to 60MPG. A 1997 Lincoln Town Car went from 20 to 35MPG, a 75 percent improvement. All of the results were positive (see sidebar).
Perhaps most compelling of all was one testimonial from Rick Brancadora, an Atlantic City, N.J., Christian radio station owner. After a broadcast radio interview with Lee, he had Lee's HAFC installed on his 2005 Honda Accord LX, a 4-cylinder coupe with 87,345 miles on it.
"We ran exhaustive tests on the vehicle," Brancadora told the court in a Jan. 19, 2009, letter, "and found that in city driving, Trenton and Atlantic City, the vehicles performance held steady at just over 77 miles per gallon. On open road travel, Route 195, Route 133 and the New Jersey Turnpike, the car immediately returned to high mileage 100 miles per gallon and slightly above."
Brancadora told the court that he'd also noted "improved passing performance," the absence of service codes or problems with an important sensor, less soot at the tailpipe and a modest amperage draw of just 11 to 13 amps of DC current from the car's battery. "During extremely cold weather," he noted, "fuel mileage dropped to 65 miles per gallon in single figure degree days, however, the mileage returned to much higher levels as the temperature improved to the upper teens. Overall, the fuel savings are measurably and dramatically improved, and the vehicle's performance has likewise improved."
Lee, who has been prosecuted in eight states for his claims, multilevel marketing schemes and other charges and was once convicted of a felony, had been advertising the HAFC kit in Newsweek, Popular Science and Smithsonian Magazine when the FTC finally noticed him.
He wholesales the kits through his Website to those who pay to be distributors, such as auto shops and mechanics. Foes frequently call Lee a "scammer," and a Google search for his name brings up numerous Websites that criticize him; Judge Shipp took note of his "checkered past." Those issues were not at the center of the FTC case, though. The issues that were, however, sound like a million other claims floating around the Internet these days.
The FTC says "the advertising campaign has claimed that the HAFC kit offers 'Incredible Savings,' fostering 'Less Dependence on Foreign Oil.' One magazine advertisement claimed that the HAFC kit increased a 2007 Honda Civic's gas mileage from 35 miles per gallon to 85 miles per gallon, and had increased mileage from 33 mpg to 121 mpg on a 2006 Mazda. Another ad claimed that the device would "double mileage, even with SUVs."
Also, the FTC said, the company's Website "claimed to have 'scientific data on over two hundred vehicles right now that have gotten over 50% increase in fuel economy - and there are a dozen of the smaller four-cylinder cars that have gotten over 100 miles per gallon,'" the federal consumer-watchdog agency said.
Like others who have fought against the hydrogen-injection movement, the FTC also cited the laws of physics the Lee firm was supposedly violating. In a Feb. 2. press release, the agency said "... [T]hese and other claims defy well-established physical principles and contain 'gross errors and misrepresentations of fact.' According to an expert hired by the FTC, the device does not even meet the scientific definition of a 'fuel cell,' and several of the processes touted by the companies either are impossible or would lead to a net loss of energy. The promoters 'are marketing a product that cannot exist and function as claimed.'"
But it now appears that the Commission made a serious error in their selection of an "expert witness." Lee says the man never bought or tested his kit, and was an expert on cryogenics, not automobile engines and equipment. Judge Shipp agreed when he lifted Hochberg's temporary restraining order the day after a Feb. 5 hearing and denied it formally in a decision on Feb. 9. That decision never got posted on the FTC's Website, although its preliminary victories against Lee were. The FTC instead relies on studies done by the Environmental Protection Agency cited in an FTC brochure titled "'Gas-Saving' Products: Fact or Fuelishness?" The EPA's own site, however, shows that it hasn't studied any hydrogen-generating HHO kits since 1999, when the technology was still primitive at best. Even so, the FTC says only testing data by the EPA can be claimed as evidence. "The most that can be claimed in advertising is that the EPA has reached certain conclusions about possible gas savings by testing the product or by evaluating the manufacturer's own test data," the agency says. It's a Catch-22 for HHO kit manufacturers: they can't claim gains until the EPA tests their kits or their data, and the EPA isn't testing any kits or data. Instead, the FTC files civil or criminal actions against defendants who often have no financial resources to defend themselves, even when they may have kits that are quite defensible. The Lee case is most unusual because Lee had a lawyer and both evidence and an expert witness to defend his kit.
Shipp wrote that "William P. Halperin, PhD., an expert in the field of physics, testified on behalf of the FTC and opined that Defendants' product violates the laws of thermodynamics, principles of physics, and has no foundation in science. According to Plaintiff's expert, the HAFC cannot possibly do what Defendants state that it can do." But Shipp was unsparingly critical of Halperin and the FTC's sloppy work in the case. Before the hearing was over, Halperin had to admit that a major engineering firm and MIT were both working on a similar product.
The FTC, Shipp's 13-page decision said, "did not carry its burden of proving that the Defendants' representations are false" as it presented a six-month investigation of the HAFC by Halperin. The ruling is unpublished, meaning it cannot be used as a citation in other cases, but is available to the public.
First, Shipp said, the FTC did not substantially challenge the so-called "orange test" documentation presented by the New Jersey Service Center's representative. The defendants told the judge that their tests compared "an orange to an orange," not a physics theory to a practical application.
Second, Shipp ruled, Halperin "is not an expert on automotive internal combustion engines" and never worked in the automotive industry. "The Court finds it significant that the FTC failed to rebut the Defendants' proffered scientific evidence with any specificity," Shipp wrote.
Case documents also indicate that Halperin never realized that the hydrogen produced by Lee's kit is an additive to gasoline, not a vehicle's lone source of fuel.
Third, Judge Shipp said, "in the six months that Dr. Halperin worked with the FTC on this investigation, he never once physically touched an actual HAFC unit, he never tested it in a lab, and he never examined its component parts. This is a fatal defect in the FTC's proofs. Instead, the FTC and Dr. Halperin deemed it sufficient to abstractly conclude the HAFC simply cannot work. The FTC's lack of thoroughness calls into question the basis of its arguments," wrote Shipp, a former N.J. assistant attorney general for consumer protection appointed by President Bush in 2007.
And that was not all. "Fourth, Dr. Halperin actually agrees that adding hydrogen to fuel which is what the HAFC purportedly does, could increase fuel efficiency. Furthermore, Dr. Halperin acknowledged the potential of a similar device being developed by ArvinMeritor and the Massachusetts Institute of Technology. The fact that the FTC's expert concedes that the technology employed by the Defendants has potential to meet Defendants' challenged representations further handicaps the FTC's claim."
"Over the long term," ArvinMeritor's Website says about its "plasma reformer" kit, "the hydrogen-rich gas may also be used to greatly enhance the combustion efficiency of gasoline engines." That claim comes from a major player in the auto industry that is traded on the NYSE. And it also sounds an awful lot like what's been going on throughout the much-maligned HHO industry for years - without the associated million-dollar grants and other government help. Listen:
"The [ArvinMeritor kit] produces hydrogen onboard and on demand from the vehicle's fuel," Pedro Ferro, the firm's vice president and general manager, said in a press release in 2007. "It's also compact, has a rapid start-up, a low electrical power drain and an excellent transient response. It can efficiently convert diesel and gasoline fuel. Most of all - because the hydrogen is created efficiently on the vehicle and used as needed - there is no need for any kind of hydrogen storage on the vehicle. There is also no need for an all-new roadside hydrogen distribution infrastructure - two unsolved issues of other hydrogen systems."
Shipp didn't note it, but a 1973 study by scientists at the Jet Propulsion Laboratory, using a nearly identical design on a 1974 Chevrolet, made similar claims. A similar kit was tested by the Society of Automotive Engineers years later with similar results.
And now oil major ExxonMobil has gotten into the act. The company says it is working on a kit to convert not water, which is free, but hydrocarbons, which it owns an abundance of, into hydrogen. Their kit would replace compressed hydrogen tanks with much smaller electrolyzers that, like Lee's HAFC, creates hydrogen on demand.
Ironically, perhaps, their announcement came just a day after the end of the Nov. 11-14 Florida mega-conference called the HHO Games & Exposition, which brought scores of developers, inventors, and vendors together to "cross-pollinate" their ideas about onboard hydrogen-injection systems, better known as HHO kits. More than 2,500 people from all over the country and abroad attended the four-day event, which culminated Nov. 14 in a six-hour developer seminar at Manatee Technical Institute in nearby Bradenton, Fla.
On Saturday, Nov. 15, 2008, Exxon announced via the PR Newswirethat its own onboard hydrogen kit "uses conventional fuels and produces hydrogen on demand. ... We found a way to scale down [the] process so that it will fit on a vehicle. ... Unlike [hydrogen tanks] this overcomes one of the key challenges manufacturers face... ," the company said. But how about competing claims markedly different from Lee's and those of many others who manufacture HHO kits - i.e., onboard hydrogen generators - that are already available on eBay and at smaller auto shops? The judge answered that. Dr. Halperin's abstract observations on the laws of physics, he said, are "inapplicable."
Finding that the FTC had failed both to prove the falsity of Lee's claims or that they were unreasonable - and that the FTC did not challenge Lee's mileage evidence - fairness required that the TRO be lifted. There was "minimal" indication the public could be harmed, Shipp said, yet Lee would suffer an "oppressive hardship" if the TRO was allowed to become a preliminary injunction.
What will happen now? The FTC can drop the case - and if they do, Lee says he will forego the $750,000 loss he's suffered - or appeal the injunction defeat to a higher court. It could also proceed to a trial on the merits of Lee's claims. The agency did not return a reporter's call for comment. Lee could not be reached.
American Reporter Editor-in-Chief Joe Shea founded the HHO Games & Exposition, which brings together hydrogen-injection kit inventors, developers, vendors and users - and the curious public - to advance green technology. Follow Joe on Twitter as joesheaUSA.