EDIT
"Of the two main methods for producing hydrogen, steam reformation of methane/natural gas and electrolysis of water, steam reformation is easily the cheapest. Reforming natural gas requires the natural gas feedstock, but also uses additional natural gas as fuel to create the steam that is integral to the process.
Basic thermodynamics tells us that the hydrogen coming out of the reactor will be more expensive, per unit energy, than the natural gas that went in, since any such process is less than 100-per-cent efficient. So, those waiting for a cheap, gaseous fuel that can be burned in automobiles already have one, and that fuel is called natural gas. Yet there is no significant use of natural gas in automobiles, likely because of the lack of filling infrastructure.
Some would argue that if the price of oil continues to rise, hydrogen will become economically viable. This is probably incorrect. As oil prices increase, natural gas prices will also likely rise since natural gas is a substitute, pushing up hydrogen prices as well. For those placing their wager on hydrogen from electrolysis of water, one can also count on electricity costs rising along with fossil fuel prices, since substitution is possible and the current supply of electricity is finite. The net result is that natural gas is almost certain to remain less expensive, per unit of energy, than hydrogen, at least in areas with the price structure of North America. No one talks about the viability of natural gas as a replacement for gasoline, and no one should consider hydrogen as anything but an even less likely alternative.
EDIT
Hydrogen is touted as an alternative to gasoline. However, even assuming inexpensive hydrogen, fuel cells to power vehicles are likely highly remote, despite decades of development. Power from internal combustion costs $100 to $200 per kilowatt (one kilowatt is about 1.34 horsepower.) Today's hydrogen fuel cells cost about $2,000 per kilowatt of power produced. If we need 40 kW of power in a small car, $80,000 for the power plant seems expensive.
The cost of fuel cells is strongly tied to the platinum catalysts needed to make the reactions in the cell occur at useful rates. Cutting costs means significantly reducing the use of platinum, but doing so to the required level without sacrificing the reaction rate will likely win the lucky researcher a Nobel Prize. While I can dream, setting government policy on this basis seems ill advised."
EDIT
http://www.fuelcellsworks.com/Supppage2744.html