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Fuel cells derive their electrical output by combining hydrogen and oxygen
more or less reversibly, thus bypassing the restrictions of thermodynamics
which diminish the efficiency of combustion engines which also combine
hydrogen and oxygen, but which must discharge waste energy to the
environment.
See http://www.engr.uvic.ca/~dbryan/fuelcell.html for some fuel
cell information. The leading producer of fuel cells is located right here
in Burnaby, BC. You might take a look at their web pages* which contain some
explanation of the proton exchange membrane fuel cell that is now powering
buses in Vancouver and Chicago as well as a Mercedes minivan which is the
forerunner of their low emission vehicle effort. Chrysler and Honda will
also be using Ballard's technology.