The primary fuels now used in automobiles, namely gasoline and diesel, are essentially derived from crude oil (petroleum). And using various technologies available today, it is also possible to produce liquid fuels having the same or very similar chemical and physical properties as natural gas, coal and other carbonaceous fuels. Examples of these liquids--such as Fischer-Tropsch Diesel, a mixture of hydrogen and carbon monoxide--are often referred to as "alternative" fuels, but they do not require a major shift from current automobile design. So to address this question, we will assume that "alternative" refers to those fuels that are produced from a nonfossil source or to those fuels (fossil or otherwise) that would require substantial changes in automotive design or in the distribution and marketing infrastructure.
Over the years, industry experts have proposed a number of compounds--including methanol, ethanol, hydrogen, compressed natural gas (CNG), liquefied petroleum gas (LPG), so-called biodiesel and hydrogen--as alternative fuels to meet one or more of the following objectives: decrease dependence on petroleum, which is an imported, nonrenewable resource; reduce air emissions associated with combustion products; and increase overall fuel utilization efficiency.
Ethanol and biodiesel are generally produced using corn or other renewable agricultural products, thus meeting the first objective. But they are more expensive than the petroleum-based products they displace (gasoline and diesel, respectively).
The technology exists today to operate automobiles on CNG and LPG, which would meet the second objective. In fact, buses and trucks in many urban areas of Asia and Europe operate on CNG and LPG. Expansion of the use of clean-burning gaseous fuels (CNG, LPG and hydrogen) for private automobiles, however, has been slow. Among the obstacles to overcome are low energy storage density (total miles driven per filling of fuel tank), poor economics (the low price of petroleum-based products have historically not provided much incentive for turning to these alternatives) and major engineering challenges in adapting the current internal combustion engine to these fuels. Switching to the gaseous fuels will further require a new infrastructure for fuel stations, which will undoubtedly undergo greater scrutiny in design, construction and environmental safety, as compared with current gasoline and diesel filling stations.
Despite these significant impediments, the situation is changing. New emission regulations on sulfur in gasoline and diesel coming in 2006--and our desire to reduce our dependence on imported crude oil--are driving automobile technology toward cleaner-burning alternative fuels and higher-efficiency (in terms of miles per gallon obtained) drivetrains. The internal-combustion engine may be replaced with a drivetrain consisting of fuel cells that operate on hydrogen, combined with an electric motor. Technologies are being developed for converting gasoline into hydrogen to feed to these fuel cells and utilize the existing gasoline pumping station infrastructure. In fact, it is not inconceivable that automobiles would be fueled directly with hydrogen at pumping stations. Significant use of these alternative fuels, however, is not expected before 2010.