Skoltech researchers have found a way to produce hydrogen from natural gas with 45% efficiency right in the gas field by injecting steam and a catalyst into a well and adding oxygen to ignite the gas. Catalyst-assisted combustion produces a mixture of carbon monoxide and hydrogen, from which the latter can be easily extracted. This technology will help accelerate the transition from fossil fuels to clean hydrogen power. The study was published in Fuel.
This article is a little old, but it explains the problems on the disposal side pretty well. This one covers the production side. Hydrogen powered vehicles avoid all that.