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The hydrogen economy is a theoretical future societal model where the power for vehicles and other portable machinery is provided by the combustion of hydrogen rather than fossil fuels. The idea is that burning hydrogen produces only pure water as a waste product, at least on paper, making this a better bet than burning fossil fuels as a power source. The Bush government was a big supporter of the hydrogen economy to distract people from doing anything about global warming.
The main problem is that hydrogen does not occur in its free form in large amounts on Earth. Hydrogen molecules are very small, and so they are able to very easily escape Earth's gravity and diffuse out into space. More crucially, because of the quantities of oxygen and carbon present on Earth, what hydrogen is still around is locked up as water or hydrocarbons. Because of this, hydrogen is more of a means to store energy, rather than be used directly. The hydrogen economy thus becomes a thermodynamics problem.
There are four major ways to obtain hydrogen:
- Refine methane. This problem gives rise to the issue of where to obtain methane. Methane is most accessible to humans via natural gas, which needs to be drilled for deep underground. Refining methane to hydrogen produces a by-product; carbon dioxide, making this method rather pointless if the goal is to reduce CO2 emissions. This is the most common means hydrogen is produced in industrial quantities today, and it is fundamentally inefficient as a fuel; Carbon-hydrogen bonds in methane are stronger than the hydrogen-hydrogen bonds in molecular hydrogen (hence the preponderance of hydrocarbons like methane over hydrogen gas to begin with), so there's more energy to be had by just burning the methane instead of bothering to refine hydrogen from it, even without the heat losses inevitable in an industrial process. Methane can also be found trapped in sediment on the ocean floor as the byproduct of the decomposition of dead plankton, algae and other marine life. However, we not only don't have the technology to extract this methane, the whole point is, again, that we need to REMOVE CO2 from the atmosphere, not add to it.
- Electrolyse water. This method has a problem of its own; electrolysis requires electricity, which needs to come from somewhere. Electrolysis is nowhere near 100% efficient; if the electricity comes from a thermal powerplant (fossil fuel, nuclear, or solar), the majority of the expended energy is lost as heat. Also, if fossil fuels are being burnt, this counteracts the notion of reducing greenhouse gas emissions with this.
- Thermally decompose water into hydrogen and oxygen. This has a chance to be a good deal more efficient than electrolysis, but no industrial facility has been built yet. Possible sources of heat include concentrating solar power and high-temperature nuclear reactors (see explosions at Fukushima). This is probably the most promising of the bunch.
- Cyanobacteria (blue-green "algae") sometimes use enzymes in order to break water down into hydrogen and oxygen going about their ordinary metabolism. To provide meaningful amounts of hydrogen, this would require vast areas of the sea to be devoted to aquaculture and outfitted with hydrogen collection systems to avoid the hydrogen running off into space or reacting with the first atmospheric oxygen molecule it bumps into and turning back into water.
These four alternatives, each with their unsavoury parts, indicate that hydrogen will require either a lot of energy from somewhere, add more CO2 into the atmosphere (which is what we want to avoid), and no matter what require a lot of new infrastructure and technology. Without development of clean energy sources, the hydrogen economy has little or no benefit over the current fossil fuel economy. Hydrogen, being highly volatile, also creates problems of storage and safety. Hydrogen would most likely be useful as a means to store energy, as it has an energy content approximately 200 times greater than the most efficient current battery technologies per unit mass. This is compensated by its low density. Even in liquid state, the volumetric energy density of hydrogen is no better than the best batteries per unit volume.
However, recent work at Virginia Tech  may make things much easier.
Hydrogen cars may be practical if hydrogen is treated as a form of electric battery, but thinking that the "hydrogen economy" is a magic bullet that will solve our energy problems is nothing more than falling for an elaborate perpetual motion scheme.
- Water-powered cars get hydrogen combustion backwards and claim it'll work... or something.
- Nuclear fusion is another way hydrogen could be used for energy, but there's a fair amount of fusion woo out there.
- White House press release promoting the hydrogen economy
- Otherwise, Earth would be a gas giant like Jupiter, which has an atmosphere made mostly of (guess what?) hydrogen.
- Strictly speaking, this true of anything. Fossil fuels store the energy of long-ago sunlight; nuclear fission fuels store the energy of long-ago supernovae; hydrogen stores the energy of the long-ago Big Bang. The difference is that the energy bound up in hydrogen atoms can only be tapped (partially) through the use of nuclear fusion; any other usage of hydrogen requires an input of energy to create an artificial energy potential.
- Madamwar et al., 2000
- A one-kilogram lithium-ion battery can store up to 0.95 MegaJoules of electric energy. One kilogram of molecular hydrogen, when combusted with oxygen from the air, releases 286 MegaJoules of heat.