I'm getting a headache.

No-one is saying that incremental improvements are not possible, or that we have reached the limits of this technology. Improvements in internal combustion engine efficiency will continue until something better comes along. There are many trade-offs in the design of a modern engine. The cost-benefit of improving efficiency is always changing, and the state-of-the-art in engine controls and materials continues to move ahead. It is inevitable that efficiencies will increase as fuel prices increase. Design concepts such as hybrids are not new ideas, they have been around for many years, but they were not developed for production until they had a market. Companies are going to protect their intellectual property, even if they are not using it at the moment. I think everyone understands that there are new technologies out there that have not yet been commercialized. No-one is trying to bury useful technologies for some nefarious purpose.

However, we are talking about incremental improvements to the same basic 100 year old design, not doubling or tripling efficiencies with a single new concept. I think it's safe to say the internal combustion engine is a mature design, and that design improvements are well into diminishing returns. Historically, one of the biggest limitations has been materials. The ceramic engine concept (another idea that's been around forever) has just not reached the point where it is practical to implement. Maybe fuel prices will get to the point where it is cost-beneficial someday.

With regard to the laws of physics, we are not talking about unproven cutting edge theory here. These are fundamental laws which have been well established for a couple of hundred years now. Anyone who's designed any type of "heat engine" has bumped up against these limitations. For some reason, there seems to be an endless supply of "inventors" who believe they have found a loophole in these laws. There must be a whole department in the pattern office just to weed out these wing-nuts. Of-course, when industry tells them to get lost they assume that they are the victim of some vast conspiracy to silence them. Everyone seems to know someone who knows someone who had the solution to the worlds energy problems until they were silenced by "them." Classic urban legend.