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Having watched a documentary recently about this style of energy generation, its very plausable to me.
(for those interested it is called 'runs of water' by Equinox, though it is a few years old).
The systems used to generate the energy are not based around traditional scientific theories, but rather appear to be going beyond what we already consider possible. For instance one guy was generated several thousand percent more energy (from Hydrogen) through electrolysis by running a rapidly (i.e. tens of thousands of cycles a second) alternating current through water at a low voltage. The science behind it was completly mystifying but he got a patent nonetheless. Tesla said that some of his biggest tesla coils had an output greater than the input he was giving them.
I believe the term zero point energy was being discussed, but i can't remember in what context.
To all those that say 'oh this is absoloutly impossible, your a crackpot, get off my lawn!' if we went back one hundred years and said you could create power from splitting the atom you'd be laughed at, if you went back another hundred you'd be laughed at for saying you could run a car on an internal combustion engine.
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You were duped by a pseudo-scientist.
Never in the history of science has a reaction taken place with 100% efficiency. In short, mix Hydrogen and Oxygen in a perfect 2:1 ratio and you will still have O2 and H2 molecules... there is no way around it.
So, first you convert H2O into H2^2 and O2. You then "burn" the hydrogen/oxygen in either a true combustion or cells taking the electrons through a motor. The water is then put back together, through this, releasing only water.
At 100% efficiency in said method (impossible already), you could only do this in a machine that does no work. This means that this machine could only separate/combine the two without losing power in the equation by doing absolutely nothing... and this reaction is already losing power because no 100% reaction.
Then you must factor in the resistance of the road, air, power to accelerate/ continue, heat generated by said motor, power for the lights/radio/etc........
You can see that even if it was possible to have 100% efficiency this would still be complete shit because there would be more power spent than power put into the equation. In essence he is telling you that he can lift you up in a balloon which is leaking hot air faster than it is put in. You can see it won't work. There MUST be a different power source involved which would separate the water molecules, at which the water is only a method of conveyance and is not a power source itself.
In said engine, the water would be more like the transmission than the gasoline. It does nothing itself, it only transfers power inputted into it.