Energy Secretary Samuel Bodman, touring the Washington Auto Show, said the money would fund projects to help overcome some of the barriers "in getting technology out of the laboratory and out onto the test track."

"We are well past the point where we see that it can be done, and now we're at the point of figuring out how it can be done - affordably and safely," Bodman said.

The funding is part of President Bush's $1.7 billion hydrogen research program, first detailed in 2003. The government and automakers have been working to develop vehicles powered by pollution-free hydrogen fuel cells, which could reduce demand for imported oil while cutting greenhouse gas emissions.

Many obstacles remain - fuel cell vehicles are extremely expensive to produce and lack an infrastructure of fueling stations to make them viable. The government has said it hopes hydrogen fuel cell vehicles will be available in car showrooms by 2020.

The Energy Department would provide up to $100 million during the next four years for research projects to improve various components of fuel cell systems, with the goal of improving performance and lowering cost by 2010.

Another $19 million will be devoted toward a dozen research projects looking at the components involved in using hydrogen to create electricity. The projects will be conducted in Arizona, Colorado, Connecticut, Florida, Massachusetts, New York, Ohio, Pennsylvania, South Carolina, Tennessee and Virginia.

Bodman also released guidelines for identifying and overcoming some of the technical challenges facing the industry. Some of the challenges include the reducing the cost of hydrogen production and fuel cell systems, improving the durability of the systems and increasing the capacity of onboard hydrogen storage.