It's clean. Renewable. Efficient.

It's also impractical for cars and trucks right now.

But that hasn't kept a growing number of people from investing time, energy and money in hopes of hitting a home run with this alternative energy.

"We're in the midst of a spurt of specialty 'green investing' that is looking for pure plays in areas of wind, solar, biomass and fuel cells," said Jonathan Naimon, chief executive of Light Green Advisors, a Seattle-based environmental investment firm. "In the fourth quarter of last year, about $500 million in venture capital went into green energy. It represents about 10% of the North American venture capital."

Fuel cells, similar to batteries, use stored fuels and an oxidant to produce power. Most are powered by hydrogen, which can be generated within the fuel cell system by reforming hydrogen-rich fuels such as methanol, ethanol and hydrocarbon fuels.

Auto companies like General Motors Corp., Ford Motor Co. and the Chrysler Group of DaimlerChrysler AG are spending hundreds of millions of dollars to make hydrogen fuel cells commercially viable and cost competitive with the internal combustion engine.

GM, the world's largest automaker, said it plans to have a hydrogen-powered fuel cell propulsion system ready to compete with conventional engines by the year 2010.

"The world doesn't need another niche powertrain," said Larry Burns, GM's vice president for research, development and planning. "We need a solution that will solve energy issues and allow us to grow. The key is durability, cost and performance, and we've made dramatic progress."

On the design side, there is a growing interest in portable electronics -- computer notebooks, PDAs and stereo equipment -- where fuel cell technology could be available to the consuming public soon.

Fuel cells are also being used to heat office towers and provide backup power to the electric grid. These are the places where a number of smaller Michigan-based tech firms are hoping to expand their alternative-energy footprints.

"Stationary power might be nearer term in portable power for a number of handheld devices," said Jim Saber, director of business development at NextEnergy Inc. "Though they are not commercially available yet, there is a lot of activity in Asia surrounding fuel cell portability. The possibility of developing notebook computers with 8 to 10 hours of run time will probably be available within three years."

Michigan's impact

Cutting-edge research into more compact fuel cells is being pioneered by companies like Adaptive Materials Inc. in Ann Arbor, REB Research & Consulting in Ferndale and Energy Conversion Devices Ovonics in Rochester Hills.

Their impact has been substantial.

During Gov. Jennifer Granholm's State of the State address in January, for example, Adaptive Materials' e20 portable fuel cell prototype was recognized as an example of Michigan ingenuity that will push fuel cell development.

What began as a one-man operation in 2001, has grown into a manufacturing and design firm with 36 employees and several contracts with the U.S. military to produce non-hydrogen-reliant portable fuel cells to replace batteries soldiers use in combat.

Portable fuel cell design "is the fastest-growing area in the field and will become the next generation of the technology," said Aaron Crumm, president and chief executive of Adaptive Materials.

State and federal programs designed to support the advancement of fuel cell research are helping Michigan companies develop products that will buttress local economies.

Since October 2004, for instance, Michigan companies have created or retained nearly 600 jobs that have generated $157 million worth of investment in the state.

Fuel cell research is an increasing portion of that pie, reports the Michigan Economic Development Corp. That is separate from and above Granholm's $2-billion 21st Century Jobs Fund initiative that will encourage job creation in the area of alternative energy research over the next decade.

"We decided to stay in Michigan to leverage some of the automotive resources and know-how in the area," said Crumm, a graduate of the University of Michigan.

Nationally, the U.S. Department of Energy will ask for $289 million for the fiscal 2007 budget to work on putting hydrogen power vehicles on the road by 2020. The funds would come from the coffers that make up President George W. Bush's Advanced Energy Initiative.

"We certainly see that alternative energy today, more so than in the past, is an essential component of our economic growth strategy in Michigan and reducing the dependence on foreign oil," said Jeff Mason, senior vice president for technical development at MEDC.

Yet there is skepticism from Wall Street analysts who question whether investing in an alternative energy resource will reap any real economic benefits.

Some analysts point out that a multitude of factors -- economic, environmental and political -- could conspire to impede some of the momentum many in the auto industry believe exists in the area of fuel cells. "All these alternative energy sources are unlikely to make a dent in the big picture," said Fadel Gheit, a senior oil analyst with Oppenheimer & Co. in New York. "It's going to be many, many years into the future before we see any meaningful results. I don't think any real analysts or investors are betting the ranch on hydrogen."

Nevertheless, many researchers, scientists and engineers view hydrogen technology as a critical piece to weaning American consumers from fossil fuels and creating greater diversity within the nation's energy portfolio.

U.S. Energy Secretary Samuel Bodman, speaking at the 2006 SAE World Congress in Detroit last week, predicted that if hydrogen-powered vehicles gain mass-market acceptance by the year 2040, it could save 11 million barrels of oil a day. He added that hydrogen offered the greatest promise for Americans to break their addiction to oil.

"Fuel cells and the hydrogen economy are absolutely the next great race for industry," GM's Burns said.