While the fossil-fuel era enters its sunset years, a new energy regime is being born that has the potential to remake civilization along radically new lines–hydrogen. Hydrogen is the most basic and ubiquitous element in the universe. It never runs out and produces no harmful CO2 emissions when burned; the only byproducts are heat and pure water. That is why it’s been called “the forever fuel.”

Hydrogen has the potential to end the world’s reliance on oil. Switching to hydrogen and creating a decentralized power grid would also be the best assurance against terrorist attacks aimed at disrupting the national power grid and energy infrastructure. Moreover, hydrogen power will dramatically reduce carbon dioxide emissions and mitigate the effects of global warming. In the long run, the hydrogen-powered economy will fundamentally change the very nature of our market, political and social institutions, just as coal and steam power did at the beginning of the Industrial Revolution.

Hydrogen must be extracted from natural sources. Today, nearly half the hydrogen produced in the world is derived from natural gas via a steam-reforming process. The natural gas reacts with steam in a catalytic converter. The process strips away the hydrogen atoms, leaving carbon dioxide as the byproduct.

There is, however, another way to produce hydrogen without using fossil fuels in the process. Renewable sources of energy–wind, photovoltaic, hydro, geothermal and biomass–can be harnessed to produce electricity. The electricity, in turn, can be used, in a process called electrolysis, to split water into hydrogen and oxygen. The hydrogen can then be stored and used, when needed, in a fuel cell to generate electricity for power, heat and light.

Why generate electricity twice, first to produce electricity for the process of electrolysis and then to produce power, heat and light by way of a fuel cell? The reason is that electricity doesn’t store. So, if the sun isn’t shining or the wind isn’t blowing or the water isn’t flowing, electricity can’t be generated and economic activity grinds to a halt. Hydrogen provides a way to store renewable sources of energy and insure an ongoing and continuous supply of power.

Hydrogen-powered fuel cells are just now being introduced into the market for home, office and industrial use. The major auto makers have spent more than $2 billion developing hydrogen-powered cars, buses and trucks, and the first mass-produced vehicles are expected to be on the road in just a few years.

In a hydrogen economy the centralized, top-down flow of energy, controlled by global oil companies and utilities, would become obsolete. Instead, millions of end users would connect their fuel cells into local, regional and national hydrogen energy webs (HEWs), using the same design principles and smart technologies that made the World Wide Web possible. Automobiles with hydrogen cells would be power stations on wheels, each with a generating capacity of 20 kilowatts. Since the average car is parked most of the time, it can be plugged in, during nonuse hours, to the home, office or the main interactive electricity network. Thus, car owners could sell electricity back to the grid. If just 25 percent of all US cars supplied energy to the grid, all the power plants in the country could be eliminated.

Once the HEW is set up, millions of local operators, generating electricity from fuel cells onsite, could produce more power more cheaply than can today’s giant power plants. When the end users also become the producers of their energy, the only role remaining for existing electrical utilities is to become “virtual power plants” that manufacture and market fuel cells, bundle energy services and coordinate the flow of energy over the existing power grids.

To realize the promise of decentralized generation of energy, however, the energy grid will have to be redesigned. The problem with the existing power grid is that it was designed to insure a one-way flow of energy from a central source to all the end users. Before the HEW can be fully actualized, changes in the existing power grid will have to be made to facilitate both easy access to the web and a smooth flow of energy services over the web. Connecting thousands, and then millions, of fuel cells to main grids will require sophisticated dispatch and control mechanisms to route energy traffic during peak and nonpeak periods. A new technology developed by the Electric Power Research Institute called FACTS (flexible alternative current transmission system) gives transmission companies the capacity to “deliver measured quantities of power to specified areas of the grid.”

Whether hydrogen becomes the people’s energy depends, to a large extent, on how it is harnessed in the early stages of development. The global energy and utility companies will make every effort to control access to this new, decentralized energy network just as software, telecommunications and content companies like Microsoft and AOL Time Warner have attempted to control access to the World Wide Web. It is critical that public institutions and nonprofit organizations–local governments, cooperatives, community development corporations, credit unions and the like–become involved early on in establishing distributed-generation associations (DGAs) in every country. Again, the analogy to the World Wide Web is apt. In the new hydrogen energy era, millions of end users will generate their own “content” in the form of hydrogen and electricity. By organizing collectively to control the energy they produce–just as workers in the twentieth century organized into unions to control their labor power–end users can better dictate the terms with commercial suppliers of fuel cells for lease, purchase or other use arrangements and with virtual utility companies, which will manage the decentralized “smart” energy grids. Creating the appropriate partnership between commercial and noncommercial interests will be critical to establishing the legitimacy, effectiveness and long-term viability of the new energy regime.

I have been describing, thus far, the implementation of hydrogen power mainly in industrialized countries, but it could have an even greater impact on emerging nations. The per capita use of energy throughout the developing world is a mere one-fifteenth of the consumption enjoyed in the United States. The global average per capita energy use for all countries is only one-fifth the level of this country. Lack of access to energy, especially electricity, is a key factor in perpetuating poverty around the world. Conversely, access to energy means more economic opportunity. In South Africa, for example, for every 100 households electrified, ten to twenty new businesses are created. Making the shift to a hydrogen energy regime–using renewable resources and technologies to produce the hydrogen–and creating distributed generation energy webs that can connect communities all over the world could lift billions of people out of poverty. As the price of fuel cells and accompanying appliances continues to plummet with innovations and economies of scale, they will become far more broadly available, as was the case with transistor radios, computers and cellular phones. The goal ought to be to provide stationary fuel cells for every neighborhood and village in the developing world.

Renewable energy technologies–wind, photovoltaic, hydro, biomass, etc.–can be installed in villages, enabling them to produce their own electricity and then use it to separate hydrogen from water and store it for subsequent use in fuel cells. In rural areas, where commercial power lines have not yet been extended because they are too expensive, stand-alone fuel cells can provide energy quickly and cheaply.

After enough fuel cells have been leased or purchased, and installed, mini energy grids can connect urban neighborhoods as well as rural villages into expanding energy networks. The HEW can be built organically and spread as the distributed generation becomes more widely used. The larger hydrogen fuel cells have the additional advantage of producing pure drinking water as a byproduct, an important consideration in village communities around the world where access to clean water is often a critical concern.

Were all individuals and communities in the world to become the producers of their own energy, the result would be a dramatic shift in the configuration of power: no longer from the top down but from the bottom up. Local peoples would be less subject to the will of far-off centers of power. Communities would be able to produce many of their own goods and services and consume the fruits of their own labor locally. But, because they would also be connected via the worldwide communications and energy webs, they would be able to share their unique commercial skills, products and services with other communities around the planet. This kind of economic self-sufficiency becomes the starting point for global commercial interdependence, and is a far different economic reality from that of colonial regimes of the past, in which local peoples were made subservient to and dependent on powerful forces from the outside. By redistributing power broadly to everyone, it is possible to establish the conditions for a truly equitable sharing of the earth’s bounty. This is the essence of reglobalization from the bottom up.

Two great forces have dominated human affairs over the course of the past two centuries. The American Revolution unleashed a new human aspiration to universalize the radical notion of political democracy. That force continues to gain momentum and will likely spread to the Middle East, China and every corner of the earth before the current century is half over.

A second force was unleashed on the eve of the American Revolution when James Watt patented his steam engine, inaugurating the beginning of the fossil-fuel era and an industrial way of life that fundamentally changed the way we work.

The problem is that these two powerful forces have been at odds with each other from the very beginning, making for a deep contradiction in the way we live our lives. While in the political arena we covet greater participation and equal representation, our economic life has been characterized by ever greater concentration of power in ever fewer institutional hands. In large part that is because of the very nature of the fossil-fuel energy regime that we rely on to maintain an industrialized society. Unevenly distributed, difficult to extract, costly to transport, complicated to refine and multifaceted in the forms in which they are used, fossil fuels, from the very beginning, required a highly centralized command-and-control structure to finance exploration and production, and coordinate the flow of energy to end users. The highly centralized fossil-fuel infrastructure inevitably gave rise to commercial enterprises organized along similar lines. Recall that small cottage industries gave way to large-scale factory production in the late nineteenth and early twentieth centuries to take advantage of the capital-intensive costs and economies of scale that went hand in hand with steam power, and later oil and electrification. In the discussion of the emergence of industrial capitalism, little attention has been paid to the fact that the energy regime that emerged determined, to a great extent, the nature of the commercial forms that took shape.

Now, on the cusp of the hydrogen era, we have at least the “possibility” of making energy available in every community of the world–hydrogen exists everywhere on earth–empowering the whole of the human race. By creating an energy regime that is decentralized and potentially universally accessible to everyone, we establish the technological framework for creating a more participatory and sustainable economic life–one that is compatible with the principle of democratic participation in our political life. Making the commercial and political arenas seamless, however, will require a human struggle of truly epic proportions in the coming decades. What is in doubt is not the technological know-how to make it happen but, rather, the collective human will, determination and resolve to transform the great hope of hydrogen into a democratic reality.