The race is on to develop a commercially viable car that can travel 100 miles on a gallon of gasoline.

The same group that awarded $10 million to a team that built the first private spacecraft to leave the earth’s atmosphere is expected to announce today the rules for its automotive competition.

The group, the X Prize Foundation, says that the automotive contest, expected to carry a prize of more than $10 million, could have a significant effect on the automobile industry by speeding up efforts to use alternative fuels and reduce consumption. The average fuel economy of vehicles sold in the United States has remained nearly stagnant — around 20 miles a gallon — for decades.

“The industry is stuck, and we think a prize is perfect to disrupt that dynamic,” said Mark Goodstein, executive director of the Automotive X Prize. “Failure is frowned upon in this industry, and that doesn’t make for big advances. It makes for incrementalism.”

You could get a 100 mpg car now (“”If you combine a clean-burning diesel with a hybrid electric drive system in a lightweight car, I think 100 mpg is doable.”) but we need better. Plus, there’s this spinoff: “However, working out the requirements of a 100-mpg car makes it clear just how feasible it would be to build, say, a 75-mpg car–for far less money.”

UPDATE: This isn’t quite what the X-Prize is looking for, but it’s pretty cool.