--(www.USEquityNews.com)-- 03/10/2009 - Run your car on water? It sounds too good to be true; replacing one of the most expensive commodities with one of the cheapest. But they're starting to do it.

Well not exactly. Instead of actually replacing all the gasoline in the car with water, what they're doing is extracting hydrogen from water and then using that hydrogen to augment the gasoline supply, providing better mileage and a reduction in emissions. It's called Onboard Hydrogen Generation and Injection (OHGI).

Here's how it works. As a standard vehicle engine runs, part of the energy produced is used to generate electricity. This is normal, and is used to run the many electrical components of the car, as well as charge the vehicle's battery so you can later start the car after it's shut off. But with an OHGI system, a portion of that electricity is used for separating distilled water into its two base elements, hydrogen and oxygen. The system then injects the hydrogen (and oxygen) into the vehicle's engine, where it improves the combustion process, significantly increasing mileage while reducing emissions.

If this all sounds too simple, like some kind of parlor trick, it does have its critics. They say due to inevitable inefficiencies, it will take more energy to split the hydrogen from the water than could possibly be recaptured in the combustion process. But others are quick to point out that the process doesn't involve just the creation and burning of hydrogen, but rather with improving the efficiency of the overall combustion process, and that's where the net gain comes from.

In any event, there is no shortage of supporters, including corporations, pointing not only to their own experiences but to results from a variety of independent tests. There's no question in their minds that the technology does indeed boost gas mileage and reduce emissions.

There are a number of small players in this new field, almost all involved with producing kits to add on to cars, but some with more expanded applications.

• Air Products & Chemicals (NYSE: APD) is the world's largest supplier of merchant hydrogen and an industry leader in hydrogen fuel infrastructure. The company is working to bring safe, low-cost hydrogen production to the marketplace.

• Quantum Fuel Systems Technologies Worldwide Inc. (NASDAQ: QTWW) supplies hydrogen storage products for OEM vehicle applications, refueling systems for fuel cell vehicles, and hydrogen-powered concept cars built from the ground up.

• Ballard Power Systems, Inc. (NASDAQ: BLDP) designs and manufactures clean energy hydrogen fuel cells.