Based on an electrochemical process that was discovered over 150 years ago, fuel cells use an electrically conductive material to convert chemical energy from hydrogen and oxygen into electrical energy. They pollute less than traditional power sources, producing little more than water as a by-product. Fuel cells are not dependent on dwindling oil supplies, running instead on hydrogen, the most abundant element in the universe. And, unlike traditional batteries, fuel cells can be refueled.

Much of the buzz surrounding fuel cells is in the automotive industry. Researchers expect that Proton Exchange Membrane (PEM) fuel cells will be twice as efficient as internal combustion engines and will cut carbon dioxide emissions in half. The current goal is to get fuel cell vehicles to the 300-mile mark before needing to refuel. Fuel cell vehicles can be refueled as quickly as today’s vehicles, and the absence of a motor would allow engineers to develop vehicles that would last 20 years and would provide the ability to easily fit a different type of body on the chassis, a much cheaper solution to buying a whole new vehicle.

A number of automakers are now testing fuel cell vehicles. DaimlerChrysler is building 30 buses with fuel cell engines from Ballard Power Systems that will be deployed in European cities, such as Amsterdam, Barcelona, and London, where they will be driven for two years in normal traffic to see how they perform. General Motors, Ford, and Honda are testing fuel cell prototypes, and all are aiming for mass production by 2010. At that point, the cost of purchasing a fuel cell vehicle should be comparable with that of a traditional car (the current test models can cost $1 million or more).

Another area where fuel cells are expected to play a prominent role is in mobile devices like laptops and cell phones. Direct methanol fuel cells would draw their power from methanol without the need for a reformer. Methanol has ten times the power of lithium batteries, and one cell could power a laptop computer all day. The fuel cell would draw in methanol and oxygen, and emit water (probably collected in a bladder) and a small amount of carbon dioxide. To refuel the laptop, you would simply pop out the fuel cartridge and slip in a new one. It’s unclear at the moment how much such cartridges would cost.

There are many companies making significant strides in this area. MTI MicroFuel Cells has developed a prototype methanol mobile phone that will provide power for much longer periods than traditional cell phones when it is launched in 2004. Motorola, Toshiba, Casio, and Sanyo are developing miniature fuel cells for a variety of devices, including PDAs, laptops, and cell phones. Some very innovative work is being done by Neah Power Systems, which has developed a "porous silicon" design that would make fuel cells not only cheaper, but also much more powerful than current cells.

The Department of Transportation gave the industry a big boost last October when it announced that a fuel cell design by PolyFuel would be allowed on airplanes, a change from the airline industry’s rigid "no fuels" policy. Methanol powered devices, such as cell phones and laptops, should appear within the next two years.

While the automotive and mobile device markets are expected to be most affected by fuel cells over the next few years, they are hardly alone. Fuel cells can be used anywhere that energy is required. Things such as highway road signs, often used where power is hard to come by, are currently being powered by prototype cells in New Jersey. There are a number of commercial fuel cell generators now working around the world, and companies such as Plug Power are testing residential generators that not only produce electricity, but can also be used for water and space heating.