Engineers are putting hybrid drivetrains into everything from SUVs to locomotives these days, and General Electric wants to take the technology to sea in a tugboat that could burn 35 percent less fuel and emit 80 percent less pollution than anything else on the water.

The idea makes more sense than might first appear. The shipping industry generates twice as much C02 as aviation and has been criticized as slow to clean up its act. The feds are tightening emissions regulations on marine engines and California Sen. Dianne Feinstein has introduced legislation requiring vessels to burn cleaner fuels in port. So anything that makes the shipping business greener is sure to sell.

GE and the Texas maritime engineering and management firm C-MAR are starting with diesel-electric tugboats, but John Manison, GE's head of maritime stationary power division, says the technology could have "far-reaching applications for other sectors of the maritime industry."

"We believe there is strong demand for a hybrid technology to improve fuel efficiency and to help customers comply with increasingly stringent emissions regulations," he says.

GE says it could have the boat on the water within two years. But why start with tugboats?

There are about 4,000 tugboats in America, according to the American Waterways Operators, and Tom Kelly of C-Mar says they're well-suited to diesel-electric drivetrains. Tugs spend a lot of time idling on standby, then require a short burst of high power to escort freighters and tankers. Batteries would allow them to do both without burning loads of fuel or emitting lots of pollution.

GE and C-MAR are developing a series hybrid system that would use an electric motor to drive the prop and a diesel engine to drive a generator that would keep the batteries charged. It's a design similar in concept, if not scale, to the system General Motors is developing for the Chevrolet Volt.

"We are expecting significant savings in terms of increased fuel economy and a major reduction in emissions," Kelly says. "Our early estimates indicate fuel savings of up to 35 percent and a reduction in emissions of up to 80 percent." GE says "significant savings are expected," but it's too early to offer specific figures for technology still under development.

Under the partnership, GE will provide the engine, electric motor and batteries while C-MAR will design the vessel, provide the "Green Power Module" that will integrate them and manage the project. The tug will use a GE V228 or V250 diesel engine like those used in the Clear Point Point Clear (pictured) that produces more than 1,400 horsepower. There's no word on the electric motor or batteries, but earlier this year GE Financial Services invested more than $20 million in lithium ion battery maker A123Systems.

You don't have to be tugboat skipper to go green on the water, though. Earlier this year, Austrian boat maker Frauscher Bootswerft unveiled the first diesel-electric recreational boat. The vessel uses electric power up to 5 knots, then switches to diesel power.

Photo by GE.