Methanol as an Alternative to Gasoline – NYTimes.com

PRESIDENT Obama recently called the United States the “Saudi Arabia of natural gas” and asserted that it was time for our oil-dominated transportation fuel market to open the door to natural gas. He’s right. It would be cheaper for consumers and reduce the strategic importance of oil. But first we need cars that can run on methanol, a high-octane fuel made from converted natural gas.

We’re producing more natural gas these days than we can use, thanks to new techniques to extract gas from shale. A recent report from the M.I.T. Energy Initiative, “The Future of Natural Gas,” called methanol “the liquid fuel that is most efficiently and inexpensively produced from natural gas.” China has already taken notice. Automakers there, like Chery, Geely and Shanghai Maple, have all introduced vehicles capable of running on methanol. Indeed, methanol is so much less costly per mile than gasoline that illegal fuel blending is rampant in China…The current global spot price for methanol made from natural gas is $1.13 per gallon, without any subsidy. Methanol produces about half the energy per gallon as gasoline, so you need to burn twice as much to go just as far. But it is still cheaper than gas. It would cost approximately $3 today, including taxes, distribution and retail markup, to travel the same distance on methanol as on a gallon of gasoline, according to calculations by the Methanol Institute, a cost that is well below the current national average for gasoline. If the economics of natural gas change, a flex fuel vehicle could still run on methanol made from coal, biomass and possibly recycled carbon dioxide, if that technology proves economical.