A low pollution engine (500) is provided for delivering power for vehicles. The engine has an air inlet (510) which collects air from a surrounding environment. A portion of the nitrogen in the air is removed using a technique such as liquefaction, pressure swing adsorption or membrane based air separation. The remaining air is primarily oxygen, which is then compressed and routed to a combustion chamber. The chamber has an igniter and inputs for the pressurized oxygen and pressurized hydrogen containing fuel, including methane. The combustion products of water and carbon dioxide are expanded through a power generating device, such as a turbine or piston expander (560). The combustion products are then passed through a condenser (580) where the steam is condensed and the carbon dioxide is collected or discharged. A portion of the water is then routed back to the gas generator.