As the Senate prepares to take up a wide-ranging energy bill this week, including drilling in Alaska's Arctic National Wildlife Refuge, President Bush sounded a more environmentally-friendly note Monday saying that fuel cells are the "wave of the future."

"Fuel cells will power cars with little or no waste at all," Bush said. "Fuel cells offer incredible opportunity. Now, there a lot of obstacles that must be overcome in order to make fuel cells more economically viable."

Fuel cells are like batteries that never run down as long as they have an energy supply of hydrogen and oxygen, producing waste that consists only of water vapors.

Bush said Energy Secretary Spencer Abraham, who joined the president on the White House South Lawn along with Environmental Protection Agency Administrator Christine Todd Whitman, has already offered $150 million to businesses willing to develop fuel cell technologies, which are well on their way as a result of government research at the National Aeronautics and Space Administration.

"There's been some breakthroughs already. After all, NASA developed fuel cells to generate electricity, heat, and water in space vehicles. Businesses started using them in 1995. That's why we are optimistic that, within a reasonable period of time, that fuel cell technology will become more widespread."

Bush, who said his main concern is reducing the nation's reliance on foreign oil, also encouraged expansion of the hybrid car market. Currently, more than 50 percent of oil used in the United States daily — more than 10 million barrels — comes from foreign sources.

"This dependence on foreign oil is a challenge to our economic security because foreign dependence can lead to price shocks and fuel shortages. This dependence is also a threat to our national security. To put it bluntly, we sometimes rely on oil sources that don't particularly like us," he said.

Bush said the transportation sector consumes more than two-thirds of all the petroleum used in the United States so reducing consumption must include ways to make cars and trucks more fuel efficient.

Bush looked under the hood of four fuel-efficient automobiles, including some Chevrolet and Chrysler models, brought to the White House. Hybrid cars run on a combination of gas and electricity and some hybrids can get nearly 1,000 miles per gallon.

Several hybrids, including the Toyota Prism and Honda Insight, are already in showrooms. Bush said he wants to offer $3 billion in tax credits over the next 11 years to consumers who purchase hybrid cars.

The president did upset environmentalists by repeating his call for oil drilling in ANWR, a proposal backed by the Teamsters Union because of all the jobs it will create. Environmentalists say drilling for oil will ruin the pristine shoreline and disrupt habitats of Arctic wildlife.

The Senate is scheduled to take up the energy bill this week. The president unveiled his energy plan nine months ago and it passed the House last summer. The bill being presented in the Senate, however, is different from the House version and could have more than 200 amendments.