the only reason petroleum is such a popular source of fuel, and the only reason that internal combustian engines are so neccessary is because:
a) they make it easy to produce a lot of energy with little human output (comparatively)
b)at the time they were beginning to become popular, it was easy to consume as much fuel and pollute as much as you wanted without seeing the harm it would cause in the future.
Because of these reasons, people began making massive amounts of money. And because those who have the money control the shape of society (in modern times), society was built to be dependant on fossil fuels and internal combustion (why are there few sidewalks in the suburbs? beacuse they were built under the assumption that everyone who lived there should have a car).
to answer the question of why a better source of energy (with respect to pollution, efficiency, and cost) hasn't been made popular yet, the oil and coal companies have been actively working to maintain their power in the market. They buy up patents on alternative fuel sources (and if they can't buy you out they use their power in the government and the media to make sure no one takes you seriously) and energy technologies and sit on them and quietly do research so that when the time comes that we must switch to a new source of energy, they will still be the ones who make all the money. But they're going to push that time back as far as possible b/c for right now, they can make a lot more money off of fossil fuels than any other form of fuel.

tim