Rudolf W. Gunnerman has a tiger by the tail--the Exxon tiger. If the technology that the 66-year-old inventor has spent $6 million and the past seven years developing lives up to his claims, cars and trucks could one day be running on a fraction of the gasoline and diesel fuel they now use. Ditto for buses, planes, trains, and anything else powered by an internal-combustion engine--from lawn mowers to huge electrical generators. Gunnerman claims to have a technology that enables engines to burn a mixture of half fuel, half water. Yes, water. What's more, he says, the mixture gets 40% better mileage from the gasoline it contains and emits significantly less pollution because engines run cooler. In particular, tailpipes emit virtually no nitrogen oxides--the principal source of smog. Caterpillar Inc. is so intrigued that in early July it formed a joint venture with A-55 LP, Gunnerman's tiny, nine-person company in Reno, Nev. A-55 is short for aqueous 55%, the amount of water by weight in the patented fuels. But the key ingredient is 0.5% of a secret emulsifier that enables fuel and water to mix--and stay mixed. Gunnerman financed his work with royalties from other patents, especially those covering the making of pellets for woodstoves.