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Like electricity, hydrogen is not an energy resource but an energy carrier, meaning that it stores energy that has been generated by some other means. It can be used as a fuel by means that release the energy it stores, such as through an electrochemical fuel cell or by burning the hydrogen in a combustion engine. When used for combustion, nitrogen oxides form, contributing to smog and acid rain, but this is characteristic of all combustion (in atmospheres with sufficient nitrogen and oxygen) regardless of fuel type. In other respects, hydrogen is a zero-emission fuel. Unlike fossil fuels, it does not rely on a depletable resource.

Pure hydrogen is rarely found, because as the lightest element on Earth, it rises into the atmosphere, but it can be manufactured. There is considerable interest in developing hydrogen as an alternative transportation fuel. However, the manufacture of hydrogen requires more energy than it can later provide as a fuel (a natural limitation of the conservation of energy), and involves environmental impacts the severity of which in the event of large-scale hydrogen production sufficient to significantly reduce the use of fossil fuels is unknown.

Hydrogen's energy density is low by volume but high by weight, given its lightness. It is usually compressed or liquefied for transport, delivery, and fuel use. In the current state of automotive technology, a hydrogen-burning internal combustion engine has a maximum energy efficiency of 38 percent, compared to the 30 percent of a gasoline-burning engine. This efficiency can be further increased with a hybrid hydrogen-electric design using hydrogen fuel cells, but until there is a technological breakthrough or an increase in demand sufficient to reap the benefits of economies of scale, hydrogen fuel cells will be prohibitively expensive for use in most consumer vehicles, with a wholesale cost higher than the retail cost of many cars. Further, the purity requirements of hydrogen fuel cells are far more stringent than that of hydrogen-burning engines, which makes their operating costs more expensive.

However, a Japanese start-up company, Aquafairy, announced in 2013 plans to introduce affordable hydrogen fuel cells in 2014, based on a solid form of hydrogen. At the time of the announcement, its working prototypes were insufficient for powering a vehicle, better-suited to powering appliances during power outages or while camping, but vehicle-sized fuel cells were in the planning stages.

Hydrogen Production

Hydrogen production is a $100 billion industry, but most of the hydrogen produced is not for fuel but rather to be consumed by other industrial-scale chemical processes, such as the production of ammonia or methanol. About half of U.S. hydrogen production is consumed by oil refining (which is one reason natural gas producers have had such an interest in large-scale hydrogen production). Most of the rest is used in the production of ammonia for fertilizer.

In the 2010s, hydrogen production capacity in the United States is about 3000 million cubic feet per day. Multiple technologies make hydrogen production possible, but about 95 percent of American hydrogen production comes from natural gas reforming. Natural gas reforming takes advantage of existing natural gas delivery infrastructure and uses some of the methane (CH4) found in natural gas to produce hydrogen.

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