Plug-in hybrid-electric vehicles (PHEVs) and battery-electric vehicles (BEVs) are the best means to reduce oil consumption and slash greenhouse-gas emissions, says a leading conservation organization that also questions the auto industry’s commitment to an electrified vehicle.

In addition, the World Wildlife Foundation shoots down hydrogen fuel cells and says there is no justification for “the wasteful and carbon-intensive alternative fuels from coal, natural gas or oil sands.”

“The only sustainable approach to the crisis is to tackle its root cause: the prevalence of the internal combustion engine (ICE) coupled to a mechanical drivetrain, an outdated combination which is inherently inefficient in converting stored chemical energy into kilometers,” the foundation says in a new report, “Plugged-in: The End of the Oil Age.”

Despite pledges from General Motors Corp. and Toyota Motor Corp. to bring electrified vehicles to market by the end of the decade, the foundation questions their commitment and asks for regulators to provide motivation.

“A century of (infrastructure) development based around the (ICE) has created ‘lock-in,’ which has enabled the incumbent suppliers to hold disruptive technologies at bay,” the report says. “It is no coincidence that nine of the 10 largest corporations on Earth are either oil companies or automotive manufacturers.”

The report adds, “Strong policies will be required to dismantle market barriers to superior technologies and to remove hidden and overt subsidies” that perpetuate the use of fossil fuels.

John Wolkonowicz, an analyst with industry consultant Global Insight Inc., warns against

such policies. “Don’t legislate,” he tells Ward’s. “If you do so, you will force the technology, and it will be more costly and less reliable.

“PHEVs are cool new technology and will be big someday, but it will be a slow start and a costly start – these aren’t going to come out of the chute in volumes of 25,000 (units) anytime soon,” says Wolkonowicz, who doesn’t see market penetration of electric vehicles on the level of current hybrid-electric vehicles (HEV) anytime before 2015.

To date, HEVs barely have made a dent in the U.S. market. Through the first quarter of this year, they accounted for 83,059 U.S. light-vehicle sales, or just over 2.3% of total deliveries, according to Ward’s data.

Wolkonowicz also thinks auto makers likely will bear the brunt of an estimated $10,000 per-unit premium on the price of producing PHEVs, once they come to market.

The vehicles “will be subsidized by the auto maker, and the auto maker will not be happy,” he says.

In addition to policy intervention, the report suggests auto makers switch from a miles-per-gallon rating as an expression of vehicle efficiency, to units-of-energy-consumed over distance traveled, such as kilowatt-hours per kilometer.

It also asks that energy suppliers be held responsible for the carbon-dioxide content of their energy and calls for consumer incentives to choose the cleanest, most efficient transportation.

While the foundation’s report issues support of PHEVs and BEVs – which it calls a “proven” technology that “requires no significant new infrastructure” – the group is decidedly less enthusiastic about hydrogen fuel-cell vehicles.

The foundation’s report says the hydrogen pathway makes no sense, “either energetically or economically. Hydrogen must first be manufactured from electricity and then recombined to create electricity within the fuel cell. As a carrier of sustainable renewable energy, electricity can be three times more efficient than hydrogen.

“Furthermore, an entirely new parallel infrastructure will need to be developed before hydrogen-powered vehicles can make any impression on the automotive market,” the study adds.

Several auto makers view fuel cells as the next significant horizon in propulsion systems. GM has spent more than $1 billion researching the technology and believes it has reached a developmental turning point that will allow production in “mass volumes.”

In a speed this week before the National Hydrogen Assn. conference in San Francisco, GM Vice President-Research and Development Larry Burns said current hydrogen output could fuel nearly 200 million vehicles, and production will grow 45% by 2011.

The WWF report also shoots down alternative-source fuels currently sought by energy providers, such as oil sands, or coal-to-liquid and natural gas-to-liquid.

“Their greatest strength is compatibility with existing infrastructure and engine systems, but this is also their fundamental limitation,” the report offers, “as they sustain our dependency on liquid hydrocarbon fuels and internal combustion engines.”

Extracting petroleum from oil sands, for example, emits three times the greenhouse gases of conventional refining.

“There can be no justification for the wasteful and carbon-intensive alternative fuels from coal, natural gas or oil sands,” the report concludes.