But even if all the technical hurdles are overcome, one big challenge remains: Where will that hydrogen fuel come from?

It's one of the great conundrums of the hoped-for hydrogen economy. Most of the fuel today is extracted from natural gas, which would still leave America dependent on overseas energy. Domestic coal could be turned into hydrogen, but not without losing the environmental benefits of the technology.

So what's a nation to do?

Enter Francis Lau and his plan to turn agricultural waste like cornstalks, wood chips, or switch grass into hydrogen. Right now, that's expensive. But if he succeeds, it could mean a giant leap toward replacing oil with cheap, clean hydrogen.

All Mr. Lau needs is a breakthrough.

He and a team of scientists from the Gas Technology Institute in Des Plaines, Ill., are trying to invent a very tough, yet permeable, membrane with which to extract hydrogen from gasified wood chips and cornstalks. The system would do this midway through the gasification process, instead of at the end of the pipe, saving considerable time and energy. The expected result: hydrogen that costs 20 to 40 percent less to produce than today's product and roughly in line with Department of Energy goals for 2010.

Best of all, the fuel would come from biomass, making it clean, renewable, and 100 percent American.

"There are challenges, but we do see a path forward," Lau says. The project is funded by the Department of Energy and a private company.

The effects could be huge. In Minnesota alone, where Lau's team is at work outside Duluth, hydrogen made from forest and mill residue, agricultural waste, and energy crops like switch grass could replace 89 percent of the state's gasoline needs, according to a February study by the National Renewable Energy Laboratory in Golden, Colo.

Hydrogen might be created in other ways: through electrolysis, for example, with electricity harnessed from nuclear plants, solar panels, or wind generators.

Not everyone's a believer in hydrogen cars. A raft of technical barriers make the likelihood of a fuel-cell vehicle coming to market "speculative" at best, says John DeCicco, senior fellow at Environmental Defense, a Washington-based environmental group.

But fans of the technology are not losing heart.

"We need to diversify our energy portfolio," Lau says. "Wind, nuclear, biomass all have hurdles. We think we can get there, too."