"The model of the 'hydrogen highway' might more accurately be termed as a 'hydrogen city,' Nichols said at the Summit. "There could be some stations strung out along major highway routes, but at least in the very early stages the stations are going to more likely be in areas where people who use their cars for commuting and driving normally will be able to come back to a centralized area to get fueled up."

Hydrogen fuel cell vehicles, which emit only water vapor, have long been touted as a way to reduce greenhouse gas emissions and reduce the United States' dependency on pricey crude oil. A problem with fuel cells, however, is the lack of refueling stations, and proponents of electric cars say hybrids and fully battery-powered vehicles are the most reliable and cheapest ways to reduce oil consumption in the short term.

In 2004, California Gov. Arnold Schwarzenegger signed an executive order to build a network of hydrogen stations across California by 2010. Four years later, however, there remain just a couple of dozen hydrogen stations in the state.

The automotive and energy industries have said a "chicken and egg" debate over what will come first -- the hydrogen cars or the stations to fuel them -- has slowed development of fuel cell vehicles.

Nichols, however, said she expected to see "a fairly rapid buildout of stations in the next couple of years," and expects there to be tens of thousands of hydrogen cars in California over the next decade or so.

Currently, automakers including General Motors Corp and Honda Motor Co Ltd are testing very small numbers of fuel cell vehicles in California.

"We're talking about going from a handful -- literally -- to hundreds to thousands to tens of thousands over the course of maybe a decade. That's a fast rampup," Nichols said. "Even the Prius (by Toyota Motor Corp), which is the most wild and successful new automotive technology, went from a very small number in the first couple of years to becoming a popular success." (For summit blog: http://summitnotebook.reuters.com/) (Reporting by Nichola Groom, editing by Richard Chang)