Hydrocon System
The Hydrocon is a device which features new technology for transforming iron oxide (Fe2O3) into oxygen (O2) and hydrogen (H2); the oxygen is mainly used for turning Mars and the UAC Labs into habitable environments, but is also used for the production of oxygen canisters. The hydrogen is stored by the MFS.
The Hydrocon can be found in Alpha Labs - Sector 1: Union Aerospace Science Division.
The Hydrocon can be shot, and if shot will explode, causing widespread fire throughout the area, killing everything, including the player almost instantly. A single stray bullet into the glass casing is enough to cause the Hydrocon to explode violently.
Note: Rusts are typically actually iron oxide hydrates, Fe2O3.xH2O, and Mars has, since the making of Doom 3, been found to have abundant water ice which, while not nearly enough to terraform Mars, are enough to sustain colonies. Therefore, it would in reality be much easier for the Hydrocon to extract water, hydrogen, and oxygen directly from the hydrates in the rust and the water ice. In-game, though, the formula is given as Fe2O3, and it is implied that hydrogen is produced by advanced particle physics, like "the alchemists of old." This would be presumably done by breaking up iron nuclei into protons and neutrons which then transform into hydrogen atoms. In reality, iron is the end product of fusion and isn't fissile, so breaking it into subatomic particles is actually harder than for any other element.