Methanol, a candidate for an ‘all of the above’ fuel policy

Source: Julia Pyper, E&E reporter • Posted: Thursday, March 29, 2012

The methanol industry hopes to become a growing source of alternative transportation fuel as gasoline prices continue to rise in the United States.

The United States’ reliance on foreign oil has declined from 60 percent in 2005 to around 45 percent today, but the price of crude oil has nearly doubled over the same period and gas prices have skyrocketed.

“It’s not enough to be self-sufficient if it doesn’t affect the global price of what you’re paying at the pump,” said Gal Luft, co-director of the Institute for the Analysis of Global Security, at the inaugural Methanol Policy Forum yesterday.

Luft said this issue stems from the transportation sector’s reliance on a single fuel. “A lack of fuel competition creates a situation where we do not have the ability to have other fuels compete on the market share and bring down the price of oil,” he said.

Unlike other fuels that enjoy strong political backing, methanol is still relatively unknown, he said. The Methanol Policy Forum was designed to shape the way people think about methanol and rally stakeholders in Washington around the new alternative fuel.

“I hope today will launch a national methanol movement,” Luft said.

Methanol, like ethanol, is a type of alcohol. Methanol is toxic and most often derived from synthetic processes, however, while ethanol is produced by the fermentation of biomass and can even be consumed in alcoholic drinks.

Both products can also be used as fuels, although ethanol has taken a larger share of the market, while methanol is most commonly used to make industrial chemicals.

But there are good reasons why bringing methanol into the transportation sector is attractive. It is cheap to make, for instance, has a high octane value and can be made from a variety of feedstocks, including natural gas, biomass and coal.

Cheaper, but corrosive and less powerful

David Sandalow, Department of Energy assistant secretary for policy and international affairs, said there are real advantages to using methanol as a transportation fuel, but a number of issues must be addressed before it can be used in substantial quantities

“There are important challenges, including the need for changes to the vehicle fleet, emissions issues and investments required in refueling infrastructure,” he said in a prerecorded video presentation.

The corrosive nature of methanol also means that it has to be shipped instead of delivered by pipeline, and for the same reason would require a few hundred dollars in vehicle upgrades to prevent damage.

Another challenge is that while methanol is cheaper than gasoline — at current natural gas prices, it could be made at well under $1 per gallon — methanol has half the energy content of gas, which means drivers would have to refuel more often.

But, Sandalow added, “As part of our ‘all-out, all-of-the-above’ strategy, methanol can play a role.”

Made from coal in China

The United States ran experiments on converting gasoline to methanol throughout the 1980s, but programs were set aside when petroleum prices dropped. Today, China, thirsty for more transportation fuel, leads the world in methanol development.

As in the United States, where methanol producers seek to take advantage of cheap and plentiful natural gas supplies, China’s program makes methanol from coal, leveraging its own resource advantage while raising some environmental concerns.

Methanol has become a “strategic new industry” in Shanxi province, located in northern China, said Wang Maolin, chairman of the Chinese Association of Productivity Science. Since testing started in the 1980s, China has produced more than 6 million tons of methanol fuel, which has saved 2.8 million tons of gasoline, he said.

Wang emphasized that China was also committed to reducing greenhouse gas emissions in order to mitigate the effects of climate change and said that methanol is part of this clean energy initiative. Methanol is “safe, clean and environmental,” Wang said.

But according to EPA estimates, methanol from coal is roughly two times more polluting than traditional petroleum.

China has already started to work with governments in Pakistan and Malaysia to develop methanol fuel, said Wang, and “earnestly” hopes the United States will adopt methanol in its transportation sector, too.

Congress seems open to methanol

The United States needs to take a cue from China and kick-start its methanol testing programs, said former Sen. Bennett Johnston (D-La.), a past chairman of the Senate Energy and Natural Resources Committee. Testing will help standardize and certify fuels and determine the most efficient and best ways to configure cars to be less polluting.

But U.S. EPA has been working on methanol technology for years, particularly for application in heavy-duty fleets, said Matthew Brusstar, director of the EPA Advanced Powertrain Center.

Congress is also looking to open a door for methanol through the “Open Fuel Standard Act” (H.R. 1687), introduced last year in the House. The legislation would require automakers to ramp up the production of flex-fuel vehicles to 50 percent of new automobiles in 2014 and 95 percent in 2017.

The Senate introduced a similar bill last September (S. 1603).

While the legislation is fuel neutral, Brusstar predicted that for methanol and other alternative fuels to really take off in the United States, they would have to ensure a high level of environmental protection. The public now places a lot of value on safeguarding public health and the environment, he said, pointing to the strong outcry against the Keystone XL pipeline.

“I think environmental protection will be a critical part of getting methanol as a transportation fuel in this country,” Brusstar said.

Methanol, given that it can be made from a variety of feedstocks, can be produced with less harm to the environment, he said. “If it’s controlled by China, I’d say no.”