High-performance electric sports car Tesla Roadster
High-performance electric sports car Tesla Roadster - 
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KAI RYSSDAL: Had you been wondering what's going to power cars in a post-oil world you can go ahead and cross hydrogen right off that list. Earlier this week the Department of Energy pulled the plug on hydrogen fuel-cell research. Ethanol is another contender for top alternative auto fuel. But a study in yesterday's Science magazine says despite the billions in government subsidies that ethanol fuel gets, it's really not all that efficient. Which leaves us with No. 3 on the list: Electricity. From the Marketplace Sustainability Desk, Jennifer Collins reports.

Jennifer Collins: Before we can pick a car of the future, we have to figure how we're going to distribute its fuel. Tesla motors is hoping it's picked a winner with electric cars. Diarmuid O'Connell is a vice president with the company. He says the electric grid is far closer to being able to power cars now. Any other type of fuel would need a new distribution system.

Diarmuid O'Connell: Something like a 50 percent conversion tomorrow into electric fuel electric or plug in hybrids would not unduly burden the current electric grid.

But experts say it also matters how you produce that electricity. An electric car's not all that green if it's getting its power from coal fired plants. There are other issues too: Electric cars are expensive and often have a limited driving range. But O'Connell says they'll soon have a less expensive sedan on the market.

O'Connell: The Model S, after the federal tax credit, will price at $49,900.

David Friedman at the Union of Concern Scientists says don't go out and buy a Tesla just yet. He's cautious about picking a winning fuel now.

David Friedman: Anyone who tells you that the answer is plug-ins or battery electric vehicles or fuel cell vehicles or biofuels, probably is trying to sell you one of them.

Friedman says he hopes the government will fund research for several new kinds of cars and distribution systems. Then, he says, we should let consumers choose the cheapest, cleanest and most fuel-efficient way of getting around town.

I'm Jennifer Collins for Marketplace.