For a hundred years, the internal combustion engine has been the piston-powered heart of Detroit. But the auto industry did not always run solely on gasoline. At the beginning of the 20th century, more Americans drove electric cars than petroleum-powered ones.

A century later, the American car industry is entering a new age of innovation, and the supremacy of the gasoline engine is once again being challenged. The first serious rival out of the gate was the hybrid Toyota Prius, which runs partly on electricity. But because hybrids still burn gasoline most of the time, they do little to cure our addiction to oil. European carmakers, especially Mercedes-Benz, are wagering on new, more efficient diesel engines, but environmentalists still complain that “clean diesel” is an oxymoron.

That’s why the real action lies in the next wave of alternative fuels and motors. Here’s an insider’s guide to the leading contenders to dethrone the gasoline engine.

Flex-Fuel
Flex-fuel engines allow a car to switch easily between gasoline and alternative fuels like ethanol. This is here-and-now technology: In Brazil, about 80 percent of new cars (such as Volkswagen’s Gol) can run on either ethanol or gasoline. The U.S. already has 6 million flex-fuel cars, and since it costs less than $100 extra to build a car with flex-fuel capability, every major automaker is getting behind the technology. Ford Motor, Chrysler, and General Motors promise to accelerate Detroit’s yearly output of flex-fuel cars from the current level of 800,000 to 4 million—about half their total car output—by 2012. Only Japanese firms have been reluctant to embrace flex-fuel, perhaps because they believe it threatens their commanding lead in hybrid-electric technologies.

Though you can already buy flex-fuel cars, you can’t find ethanol to fill your tank in most of the U.S.  That has made the cars a running joke in Detroit, where auto companies built them only to meet government fuel-economy standards. Many of the millions who bought the cars didn’t even know they had flex-fuel capability. Now, with the huge investment boom in ethanol, flex-fuel proponents argue that the infrastructure for supplying the fuel to customers will spread.

Biofuel has two big advantages. The first is that politicians in Washington love to shovel subsidies to the Midwest’s politically powerful farmers, who grow the corn that is converted into American ethanol. Second, it’s easy to adapt to the technology. Small amounts of ethanol are already blended into gasoline to be burned in today’s engines. But precisely because ethanol can be blended into gasoline, the current boom in biofuels, like the Prius euphoria, may only perpetuate our dependence on oil.

What’s more, unlike Brazil, where sugarcane can be made into ethanol efficiently, America uses corn, which requires a lot of petroleum-based fertilizer to grow and a great deal of energy to convert to fuel. Environmentalists worry about the pesticides involved in a big scale-up of corn production, as well as the resulting soil erosion.

Will it take off? The coming boom in flex-fuel technology is as sure a bet as there is in clean energy. Detroit is very likely to ramp up production as swiftly as it has promised, because the additional costs of making cars flex-fuel-ready are trivial. It’s much riskier, however, to assume that the infrastructure will expand­. Currently, fewer than 1,500 of America’s 170,000 gas stations offer E85, a fuel blend that’s 85 percent ethanol and 15 percent gasoline.