The journalists were in Iceland because the country has big plans for hydrogen, and GM has become a leading player in developing fuel-cell vehicles. The latest GM test vehicle, the Sequel, is expected to combine both excellent durability (150,000-mile fuel-cell life) and range (300 miles or more). ¨We want to make sure that hydrogen-based vehicles go beyond meeting the technical specifications -- they have to be compelling to buyers,¨ Gross says.

Iceland may well be the first nation in the world with a completely clean, zero-emission energy economy based on geothermal hydrogen. This tiny volcanic island of just 300,000 people (descended from the Vikings) is already well on its way to achieving that national goal, with its entire home heating and electricity generation systems renewable today. The biggest remaining hurdles are Iceland´s 190,000 cars and trucks. Also at issue is the country´s fishing fleet, which presents major fuel storage challenges because the ships are at sea for several days at a time.

It´s an unusual place, Iceland. People pay the equivalent of $7 for a gallon of gas, but they also drive a surprising number of SUVs. (Nobody could adequately explain their popularity to me.) Despite the absence of trees, the place is spectacularly beautiful, with picturesque waterfalls, dramatic geysers and, at least when we were there, midnight sun. Environmental awareness is generally very strong, and there is widespread belief in elves that live in the rocks (which have been fitted with little doors).

Iceland has an abundant resource in geothermal energy, which provided 7,608 gigawatt-hours of electricity in 2005. Its geothermal plants often do double duty, supplying pipelined super-heated water for home heating, and using steam to turn turbines for electricity. Since the country is rich in rivers, hydro-electric power also provides electricity. Some environmentalists express concern about large dam projects, which could flood substantial territory.

Indeed, Iceland is actually over-supplied with electrical generation capacity; it could generate as much as 50 trillion watt-hours annually. Currently, some of that excess goes into aluminum smelting, but the country wants to stop importing expensive, polluting gasoline and use its electricity to produce hydrogen for fuel-cell vehicles. One Shell Hydrogen station is in place, and a total of 20 could meet the needs of 90 percent of Iceland´s drivers.

The public has gotten solidly behind the concept and there seems little in the way of making this dream become reality.

Jim Motavalli is the author of the book Forward Drive: The Race to Build ¨Clean¨ Cars for the Future .