Local firms see opportunity in emissions restrictions: embrace of auto rules could help economy.

Seven years ago, the carbon fiber flywheels that Pentadyne Power Corp. now sells to produce electricity for backup generators had a different application.

They propelled the world's first turbine-flywheel powered car around a race track. But sluggish demand for alternative-fuel vehicles, and safety challenges caused the Chatsworth firm to use the acquired technology for other purposes.

Now, Pentadyne is taking a second look at the advanced transportation industry following the landmark Sept. 24 decision by the California Air Resources Board to require vehicle manufacturers to cut greenhouse gas emissions.

"We are able to provide power very rapidly to get a car accelerated or to boost power for hill climbing," said Flint Craig, Pentadyne's chief financial officer. "We are well positioned to tap into that market when it's mature."

Other local companies also see opportunities in developing technology for hybrid, fuel cell, electric and other clean-energy vehicles that will be needed to meet the new regulations--should they survive a likely legal challenge from the auto industry.

"We know the advanced transportation technology industry will not cost jobs but create jobs," said Bill Van Amburg, senior vice president of Pasadena-based Westart-Calstart, which just issued a report identifying more than 100 high-tech companies and institutions in the state that are poised to benefit. "California has an awful strong skill set in these technology areas."

The report by Calstart, a non-profit organization that promotes advanced transportation technologies, suggests the new rules could pump hundreds of millions of dollars into the economy, rather than being a drag as the automakers have argued.

California's greenhouse gas emission rules require automakers to reduce carbon dioxide, nitrous oxide and other tailpipe emissions by an average of 22 percent in 2012 and 30 percent in 2016 in new cars and light trucks. They will go into effect in January 2006, unless the state Legislature and governor overturn them during a mandatory one-year review period.

The air board estimates that the rules will cost up to $1,050 per vehicle, but will be more than offset by savings from lower gas consumption. But the auto industry contends the regulations would add at least $3,000 to the price of new cars without any measurable economic or health benefits.

Manufacturers also contend that the industry is moving ahead on its own to develop hydrogen-powered automobiles, though critics complain they have lagged in producing hybrid-electric cars that would help Detroit meet the California near-term regulations.

The Calstart report, which was partially funded by the Natural Resources Defense Council, has identified companies and supporting institutions that could benefit from an aggressive regulatory push, positioning the state as a leading provider of clean, energy-efficient technology worldwide.

The companies have largely grown out of the Bay Area's high-tech electronics industry and Southern California's defense and aerospace roots. They are in seven broad categories: electronics, fuels, advanced propulsion, conventional propulsion, energy storage, lightweight materials and vehicular design.

Some, such as American Honda Motor Co. in Torrance or El Segundo's International Rectifier, are already entrenched in the auto industry.

Others that could find new opportunities. They include A. E. Schmidt Environmental, a Van Nuys firm that builds alternative fueling stations; AC Propulsion, a San Dimas developer of advanced electrical components; and XCORP, a Malibu company specializing in lightweight advanced composite materials.

Of the companies surveyed, 60 percent said the regulations would result in a "'large to very large" increase in employment. The report pointed out that past air board requirements have already growth for some of these companies.

Pentadyne is positioned to reap big benefits from an accelerated move into cleaner automobile technology.

The company has so far focused on the backup power market, said Craig. Pentadyne has a $35 million contract with Emerson Electric Co., a supplier of power backup systems.

Pentadyne's flywheel technology is particularly suited for alternative powered vehicles, whether they are hybrid gasoline-electric vehicles or fuel cell powered vehicles.

All of these vehicles need a place to store and discharge energy. Pentadyne's flywheels can capture the heat energy produced from braking, for example, so the energy can be reused when accelerating up a hill.

The company is launching discussions over systems for trucks, trains and buses with Mack Trucks Inc., the Los Angeles County Metropolitan Transportation Authority and the New York City Transit Authority for truces, Craig said. But a big move by domestic automakers into alternative systems would dwarf those opportunities.