In his State of the Union speech in January 2003, President Bush laid out his hopes for the future of hydrogen fuel cell cars.

"With a new national commitment, our scientists and engineers will overcome obstacles to taking these cars from laboratory to showroom, so that the first car driven by a child born today could be powered by hydrogen, and pollution-free."

The administration pledged $1.7 billion for hydrogen research and development (R&D) over the next five years to make fuel cell cars a reality. With government funding secured, the race is on to overcome the obstacles involved in making hydrogen a viable energy source.

Hydrogen fuel supporters cite its significant environmental benefits: unlike fossil fuels, hydrogen can be pollution-free and infinitely renewable through wind, solar and hydropower sources.

Skeptics argue that the fuel source does have its environmental drawbacks, and are concerned about the Bush administration's plan to extract hydrogen. Instead of generating hydrogen from water and sunlight, the 2002 National Hydrogen Energy Roadmap requires that up to 90 percent of all hydrogen be refined from non-renewable resources, oil, natural gas and other fossil fuels.

Once the hydrogen is in a fuel cell car, only water vapor and heat will be expelled from the tailpipe, but the process of burning fossil fuels to obtain the hydrogen will release carbon dioxide, the primary cause of global warming.

Some scientists say that if hydrogen is only extracted from fossil fuels, the environmental impact of the carbon dioxide released from the burning of fossil fuels will outweigh the environmental benefits of a clean-burning energy provider.

According to John Heywood, director of MIT's Sloan Automotive Lab, "If the hydrogen does not come from renewable sources, then it is simply not worth doing, environmentally or economically."

President Bush's 2004 budget asks for more than $22 million for hydrogen research and development to be devoted to coal, nuclear power and natural gas, and $17 million for renewable sources.

"Cutting R&D for renewable sources and replacing them with fossil and nuclear doesn't make for a sustainable approach," said Jason Mark, director of the clean vehicles program for the Union of Concerned Scientists.

A recent study warns of the danger of releasing hydrogen itself into the atmosphere. Los Alamos researcher Thom Rahn led a team of scientists from California universities and the National Center for Atmospheric Research in Boulder, Colo. Their study of the natural cycle of atmospheric hydrogen was recently published in the British science journal Nature, and finds that substantially increased hydrogen production has the potential to damage the upper atmosphere.

Escaped hydrogen could build up, depleting the ozone layer near the North and South poles and triggering an increase in global warming. The study also warns that hydrogen may further contribute to global warming by aiding other chemicals in producing increased amounts of water vapor in the upper atmosphere.

"It is impossible to manufacture, store and transport hydrogen without at least some fractional loss (to the atmosphere)," Rahn said.

Researchers from the California Institute of Technology estimate that leaked hydrogen in a hydrogen economy could cause as much as a 10 percent decrease in the stratospheric zone. If hydrogen replaces fossil fuels as the world's main energy source, the researchers believe that each year 60 trillion to 120 trillion grams of hydrogen could be released into the atmosphere. This is four to eight times the amount that is currently released.

The impact of increased hydrogen production depends on how well the earth adapts to the change. John Eiler, assistant professor of geochemistry at CalTech, said, "This man-made hydrogen will either be absorbed in the soil -- a process that is still poorly understood but likely free of environmental consequences -- or will react with other compounds in the atmosphere. Determining which of these two processes dominates should be a solvable problem."

Tracey Tromp, another CalTech researcher, contends that early recognition of problems will mitigate hydrogen fuel's environmental flaws.

"If hydrogen emissions present an environmental hazard, then recognizing that hazard now can help guide investments in technologies to favor designs that minimize leakage," Tromp said.

The CalTech researchers, like other scientists looking at the environmental impact of increased hydrogen production, believe that the sooner such problems are identified, the easier it will be to find solutions to make a hydrogen economy truly feasible.

-- By Katie Mulik, The NewsHour with Jim Lehrer