There is no alt. fuel that has all the benefits of petroleum. Cost, availablity, ease of use, etc.
Period.
Ethanol? Please. I forget the exact figures but something like 1/2 the arable farmland in the world would have to be used to produce anually what the US alone uses monthly, in oil (and that's just for gasoline in cars - doesn't help at all for lubrication, plastics, heating oils, electricity generation, etc.)
Hydrogen? Not a terrible idea - it works, and it's clean. But it takes power to make hydrogen, and that power has to come from somewhere (like burning coal, for example). Hydrogen is just a way of transporting potential energy, not a true energy source. The lost emissions from gasoline/diesel etc would be more than made up for by the increased use of coal and natural gas at electrical plants. There are some small benefits from scaling, though.
LPG? Not really an improvement over gasoline; more expensive, less readily available, not much cleaner.
the rest of the alt. energy sources don't work in cars, (like solar, or biomass) and aren't feasible anyway.
The only realistic alternative to oil/gas/coal is nuclear fission. Unfortunately, political realities in this country keep us from using it as much as we could.
If we had 90% of the nation's power coming from fission, I think hydrogen powered cars would become a marketable alternative, and would eventually be a competitor for the internal combustion engine's market position.
The only way we're going to have alternatives as a market force before some leap in technology or major change in market realities is if the government
forces change on the market, whether it be through regulations or subsidies. Both of those actions are singularly unattractive to me.
So, in the meantime, I'll keep driving my gas-powered cars, and the environmentalists can get over it
There is some good commentary on alt fuels and energy sources in the archives
here