Hydrogen is a dream fuel that's a nightmare to make.

Most companies currently produce it by cracking methane molecules, a process that requires large amounts of energy and generates 9.3 kilograms of carbon dioxide for every kilogram of hydrogen. Cracking water molecules with electricity also consumes a lot of power. Transporting hydrogen, the smallest molecule out there, is also difficult.

Some researchers, though, believe that hydrogen could be economically generated through chemical catalysis and the latest one is AlumiFuel Power. AlumiFuel says it can generate 1,000 liters of hydrogen in 20 minutes by mixing water with two 32-ounce cans of aluminum powder and other additives. The reaction between the water and the aluminum and chemical powders creates the hydrogen. (Aluminum has a strong urge to react with oxygen, which is why aluminum powder gets used as an accelerant in rocket fuel.) Carbon dioxide does not get produced in the reaction.

AlumiFuel will begin delivering its PBIS-1000 generator to customers in early 2010.

The PBIS generator was originally created to inflate weather balloons, but the hydrogen can also be used in fuel cells, according to the company. As an added bonus, the cans of catalysts don't need to be pressurized and external power sources are not required to generate the reaction. That cuts down distribution headaches: cans of aluminum powders can be delivered to filling stations instead of raw hydrogen gas. 

The catalyst crowd is small but determined. Purdue University professor Jerry Woodall has discovered a way to make hydrogen out of a reaction of water and an alloy of aluminum and gallium. Mixing water and pellets made up of the alloy in a tank can produce fuel for a small engine or a car. Woodall discovered the process in 1967 and started to move toward commercialization two years ago. Signa Chemistry has a hydrogen catalyst based around sodium. Other researchers have identified microbes that can produce hydrogen with sunlight and water. The downside: some species of bugs die in the presence of the oxygen. Oxygen, of course, gets released when water breaks down into hydrogen and oxygen.

Is it an uphill battle? Yes. Critics of government-funded initiatives often hold up he hydrogen car program sponsored by the Department of Energy as an example of why the government shouldn't get involved in sponsoring technologies.

"The present hydrogen fuel cells are losers," Nobel prize winner Burton Richter told us earlier this year and he provided a list of cogent, sound reasons.

The cost of generating hydrogen in mass production through catalysis also must be established. Woodall has said it could be competitive with $3 a gallon gas, but cheap hydrogen is a big part of his life's work.

Still, many car companies, particularly Toyota, still hold out the idea that hydrogen could play an essential role in transportation in the 2020s. That's further out that earlier estimates, but the technology is not simple and the potential benefits remain large. Fuel cell cars can be recharged in minutes (compared to hours for a battery-powered car) and the fuel cell stack weighs far less than a lithium ion battery pack, increasing range and performance.