I think this post contains mostly ideas that are imaginative, but terribly inaccurate or simply wrong.
I propose we replace our dependence on oil with two new dependencies; water and energy. When you take energy, in the form of electricity, and apply it to water at a specific voltage, you can actually split the oxygen and hydrogen bond, forming some good old Hydrogen and some pure Oxygen.
Hydrogen
nowadays is produced in refineries. The reason is that the dissociation of water in H and O2 is very energy consuming. Its easy to put forward solutions if you don´t have to do numbers.
A renewable way to solve this problem would be huge wind farms and solar panels to convert the local water source into hydrogen. However, it'll take a while to build all the turbines and solar that we'd require to replace gasoline with electric.
Again, the problem is the costs. It does not add-up.
The energy required depends on the state of the water, when it's in a vapor form, it requires less energy to split, because it already has heat energy.
With that in mind, there's another really, obvious solution. Just rig up a fancy steam engines with a nuclear reactor equipped. Not only do nuclear generators already have the requirement of water, it produces massive amounts of energy. Also, it's output is water vapor, exactly what we need to make a lot of hydrogen.
The reason why the nuclear power plants produce vapor is because they put it through a turbine to generate electricity in a quite efficient process. And before you suggest anything "obvious" with that, learn the basics of it. What you propose would cost x10 times more at least. Also, you will be generating even more radioactive waste that will last for centuries to come.
If that is not enough, simply know that the
water used is normally radiated. You don´t want that outside the reactor even if it is the secondary cooling circuit water.
Ideally, we could bootstrap our hydrogen production infrastructure with nuclear very cost effectively (as in $1.80 / GGE (gas gallon equivalent) in 100% clean fuel).
Nope.
Logistics
That leaves logistics, how do you transport hydrogen?
Well, there's actually several ways. I'm going to leave out the bootstrapping method, mostly because I lost my train of thought.
The idea way would be to use pipeline. I think it'd be a good idea to retrofit our existing pipeline infrastructure and build out where we can. We can use pipelines and work at phasing out natural gas lines (because hydrogen can be burned for heat, just like your natural gas heat).
Safety is normally highly regulated when it comes to gas lines, I don't see how this would be any different. I think it's safer than many existing pipelines. With your irrational fears annulled, let's continue on.
Get familiar with the liquefaction of gases and the cost implicated, the design parameters of oleducts and the engineering constrains. In a world without physics laws your idea is great. You are not mad, you simply think that engineering is what you see in the Discovery channel.
Missing concepts, filling in the gaps
I wouldn´t know where to begin honestly.