Is Methanol the Key to Energy Independence?

Is Methanol the Key to Energy Independence?

Yossie Hollander has a concise way of summarizing our dependence on foreign oil. “We get 36 percent of our energy from petroleum in this country and 20 percent from coal,” says the California entrepreneur turned philanthropist. “Yet we spend only $35 billion a year on the coal and $780 billion on oil products – most of it going into foreign pockets.”

The successful founder of a software enterprise, the 54-year-old Hollander is co-founder of the Fuel Freedom Foundation, which is trying to open up the transportation sector to more competition and replace imported oil with cheaper, American-made fuels. One candidate that Fuel Freedom believes could be a game-changer – methanol.

“Methanol gets only two-thirds the mileage of gasoline but it’s a liquid and goes easily into your car engine,” says Hollander. “It would require the auto companies to make a factory adjustment that would cost only $100. It’s very similar to burning ethanol. But methanol has a much more abundant feedstock - natural gas.”

Running cars on methanol would be the logical conclusion to a chain of events that began in the 1970s when the Carter Administration decided that converting crops to ethanol was the road to energy independence. The federal tax deduction plus a variety of other incentives have produced 13.8 billion gallons of ethanol a year – and an environmental disaster. More than 40 percent of the American corn crop now goes into our gas tanks (it recently surpassed cattle feed as the principle use). This has pushed up corn prices around the world while producing only negligible energy savings. Even environmental groups now oppose ethanol and the UN Food and Agricultural Organization regularly calls such biofuels a “crime against humanity.” Yet with much of the Midwest now geared to ethanol production, change is not likely to come soon.

When the corn ethanol push began, natural gas was scarce and considered best suited for heating homes and a providing feedstock for the plastics and fertilizer industries. Supplies ran even lower after 2000 and a good portion of those gas-dependent industries left for Mexico and the Middle East. But all that has now changed. The hydraulic fracking of shale deposits has opened up previously inaccessible resources and the nation is suddenly awash in natural gas.

The glut has prompted several efforts to move methane into the transportation sector. A few companies are trying compressed natural gas (CNG) but the process is complicated since the fuel must be stored under very high pressure. 3M has developed a sturdy gas tank and the trucking industry is showing interest, but only a few models are available and conversion of older vehicles would cost $10,000 apiece.

To this, Hollander poses a simple question: “Why not add methanol to the mix?”

Methanol is the simplest alcohol molecule with one hydroxyl ion (OH) attached to methane’s one carbon atom. It does not require the expensive distillation if corn ethanol or high-energy catalytic cracking of oil refining. Methane can be “reformed” into methanol by bathing it in steam. “It’s early 20th century chemistry,” says Hollander.

We already have a thriving methanol industry. There are 18 production plants in the U.S. putting out 2.6 billion gallons a year. It is used widely as a manufacturing feedstock and makes up 30 percent of the windshield fluid in your car. Methanol is also the principle racing car fuel on the NASCAR circuit. The conversion began in the 1990s in order to avoid deadly gasoline explosions. But drivers have grown very fond of methanol because it burns cleaner and gives almost the same octane rating as gasoline.

Of course ramping up the industry to replace a significant portion of the 136 billion gallons of gasoline we consume every year would be a monumental undertaking. But it would not involve any technological breakthroughs. “You could build a conversion facility at the end of each gas pipeline and have tanker trucks transport it to every gas station in the country,” he says. “The infrastructure wouldn’t have to change much.”

So what’s the problem? Well, unfortunately putting methanol into car engines is illegal.

“When the EPA wrote its regulations for auto emissions it approved only one fuel – gasoline,” says Hollander. “Ethanol only makes it because it’s classified as an `additive.’ The EPA could easily add methanol to the list. It’s just a question of getting them to do it.”

Fuel Freedom is running a smart national campaign, enlisting both free market advocates and environmental organizations to the cause. “Methanol burns cleaner than gasoline,” says Hollander. “It would make a big improvement in air pollution.” With bi-partisan backing, the Open Fuel Standard Act is also making its way through Congress. The law would require automakers to produce cars that can run on multiple fuels, including methanol. “Right now the auto companies could produce flex-fuel vehicles any time they want,” says Hollander. “Their answer is always that they’ve tried before and nobody wanted to buy them.”

California actually put tens of thousands of methanol cars on the road in the 1990s through a state-sponsored program but the effort eventually fizzled because gasoline only cost $2 a gallon and natural gas was $6 per mcf. Now the price differential has reversed. “You could sell methanol today at the octane equivalent of $2 per gallon,” says Hollander. “You wouldn’t need any subsidies. The market would handle everything.”

The elements for this historic transformation are all in place. With a strategic push, the auto industry could soon be launching another methanol experiment, this time under much more favorable circumstances. If so, Yossie Hollander and the Fuel Freedom Foundation can claim at least part of the credit.


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