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As high-octane gas prices settle in above $3 a gallon, the primacy of the gas guzzler is very much in doubt. A shift would take the auto industry on a wild ride as carmakers scramble to figure out what technologies will replace conventional gasoline engines.

The marketplace will determine which technologies win, but good public policy should require all future cars to get better fuel economy and emit fewer greenhouse gases than they do today. Carmakers long ago could have produced more efficient cars, but the chance to make simple changes to the conventional engine is being overtaken by events and technology.

Japanese manufacturers already sell hybrid car and SUV models that run partly on electricity and partly on gas. Sales could reach 1 million within five years, and the number of models using such engines may zoom from just three in 2000 to 74 by 2010, says PwC, a consulting firm spun off of PricewaterhouseCoopers.

Ford Motor Co. plans to make hybrid versions of half of its models by 2010 and will accelerate development of ethanol and hydrogen-fueled vehicles.

Ford is the first Detroit carmaker to really embrace the hybrid technology, but it may not be alone for long. General Motors, BMW and DaimlerChrysler are cooperating to produce a new hybrid engine that delivers both good gas mileage and better acceleration. It’s a paradoxical partnership. GM was late to the fuel efficiency game and saw sales slide as gas prices soared. BMW has invested in hydrogen technology but admits the vehicle it has created to date is impractical. DaimlerChrysler makes diesel Mercedes Benz models, but they struggle to meet strict new pollution standards in California.

Hybrids get from 30 to 60 miles per gallon, but they’re more sluggish than ordinary gas engines. Boosting performance means sacrificing fuel economy. That’s the puzzle the partnership wants to solve.

By contrast, diesel engines deliver both good mileage and performance, but historically, they’ve been filthy. However, U.S. Environmental Protection Agency directives will require future diesel engines and fuels to be cleaner, making such vehicles environmentally acceptable.

Motor Trend magazine predicts that to stay competitive, car companies will need to make all three technologies: hybrids, clean diesel and efficient conventional gas engines, a difficult balancing act for engineering and marketing alike.

The country needs federal leadership to set strict fuel and pollution standards that all new technologies must meet. Sadly, that element is still lacking.

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