The world's energy demand is met mainly by the fossil fuels today. The use of such fuels, however, causes serious environmental issues, including global warming, ozone layer depletion and acid rains. A sustainable solution to the issues is to replace the fossil fuels with renewable ones. Implementing such a solution, however, requires overcoming a number of technological barriers including low energy density, intermittent supply and mobility of the renewable energy sources. A potential approach to overcoming these barriers is to use an appropriate energy carrier, which can store, transport and distribute energy. The work to be reported in this paper aims to assess and compare a chemical energy carrier, hydrogen, with a physical energy carrier, liquid air/nitrogen, and discuss potential applications of the physical carrier. The ocean energy is used as an example of the renewable energy sources in the work. The assessment and comparison are carried out in terms of the overall efficiency, including production, storage/transportation and energy extraction. The environmental impact, waste heat recovery and safety issues are also considered. It is found that the physical energy carrier may be a better alternative to the chemical energy carrier under some circumstances, particularly when there are waste heat sources.