Methanol an Unlikely Fuel Substitute — For Now

A federal official offers a skeptical view of the U.S. adopting methanol as a substitute for gasoline.

March 20, 2014

NEW YORK – A federal official offered a less than warm reception this week to the prospect of using methanol from natural gas as a substitute for gasoline, Bloomberg reports.

Patrick Davis, director of the Energy Department’s Vehicles Technology Office, said the methanol industry faces steep obstacles for the public to adopt methanol as a means to cut greenhouse gas emissions and boost engine performance.

“There’s a lot of choices out there and they’re all vying for a fairly limited market,” Davis said. “It is going to be a fight for any fuel to succeed.”

According to John Hofmeister, founder of Citizens for Affordable Energy and president of Shell Oil Co. from 2005 to 2008, using methanol would reduce reliance on imported oil and offer a hedge against oil-price shocks.

Globally, about 40% of methanol is used by energy companies, said John Floren, CEO of Vancouver-based Methanex Corp. (MEOH), the world’s largest supplier. The company is dismantling two plants in Chile and plans to reassemble them in Louisiana.” We expect a lot of new plants to be built here in the U.S.,” Floren said.

According to the Methanol Institute, methanol plants worldwide can produce roughly 100 million metric tons of product, with more than 100,000 tons used each day as a chemical feedstock or transportation fuel.

Industry expansion depends on automakers producing cars that run on methanol as well as approval by the U.S. Environmental Protection Agency, which will require a substantial lobbying effort, Hofmeister said.

“Methanol matters for the same reason that ethanol matters, which is it’s an alternative to oil,” Hofmeister said. “It would help if people on the Hill understood the value to the consumer and the importance in the fuel mix.”

Another significant hurdle is a lack of infrastructure to deliver methanol to fueling stations. “There are lots of competitors out there,” Davis said. “It’s not at all completely clear that methanol has the suit of attributes that would favor it as a winner.”

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