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Arctic Leaf

Why aren’t we using methanol?

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The more you look at the contemporary scene with gasoline and imported oil, the more you have to wonder why we’re not switching some of our fuel needs to methanol.

Look at what’s happening: Oil has become so plentiful that we’re reverting to the old situation of the 1950s, when the big concern among oil people was that some new discovery was going to be made in some far corner of the world and there would be a new “glut” that would cause the bottom to fall out of the market. It was during this era that we placed a 20 percent cap on our oil imports. The concern was that there was so much cheap oil in the world that the American oil industry would be decimated.

All that changed in 1970 when American production finally leveled off — right about the time geoscientist M. King Hubbert had predicted “Hubbert’s Peak” would occur. The import ban proved easy to circumvent, and before we knew, it we were importing 36 percent of our oil, most of it from the Persian Gulf. OPEC, first convened in Baghdad by Saddam Hussein in 1960, suddenly became more than a debating society and realized it had real market leverage. Instead of begging the oil companies for higher royalties, the OPEC nations suddenly realized they could raise their price and even withhold supplies. The era of the Energy Crisis had begun.

Congress did all the wrong things in responding. It extended President Nixon’s price controls on one commodity, oil, creating a domestic shortage — too much consumption, not enough production. We made up for this by importing more oil, in which the price controls didn’t apply. While President Carter mandated a “moral equivalent of war” and wore cardigan sweaters, the price controls had the exact opposite effect: Our imports swelled from 36 percent to 50 percent in 1980, and we were sitting ducks when the outbreak of the Iran-Iraq War suddenly cut short supplies. The result was the Second Gas Shortage.

President Reagan put an end to all this by striking down the oil-price controls his first week in office. Drillers went wild in Texas, and the Saudis flooded the market in trying to maintain market share. Soon prices had collapsed back to 1972 levels, and the “oil shortage” was pretty much forgotten.

Meanwhile, similar developments were taking place in natural gas. This commodity had been subject to federal price controls since the 1930s. Basically, it was an attempt by the Northern consuming states to rob Texas and Louisiana of their natural resources. In 1977 we actually experienced a “natural gas shortage” that caused factories and schools all over the North to close down in mid-winter, while Texas and Louisiana were burning natural gas for electricity — then considered horribly wasteful — because the price controls did not apply intrastate. This “crisis” was solved more slowly as natural-gas price controls were not phased out until 1988. Once again, supplies gushed forth. (We did learn a lesson. Nobody has talked about price controls on oil and natural gas since.)

Even with the market freely operating, however, the natural supplies of both oil and natural gas seemed to be diminishing, so that by 2005 we were running short of gas and back to importing more than half our oil. Then George Mitchell’s fracking revolution began. Suddenly, America was the world’s leading producer and oil and gas were once again in abundance.

Yet as far as freeing ourselves from further dependence on foreign oil, the results have been disappointing. Even though we are again producing 10 million barrels of oil a day, we are still dependent on imports for 30 percent of our oil, about one-quarter of this from the Persian Gulf. Low prices have stimulated consumption. People are going back to buying bigger cars and our gasoline use is hitting new records. Sales of electric cars and other alternative vehicles have nearly collapsed. Whatever impulse there is toward conservation is highly dependent on price.

Anything that requires a new infrastructure — electric cars, hydrogen vehicles, compressed natural gas and propane — will have trouble getting beyond a niche market. It’s simply too troublesome and expensive to get people to convert. But corn ethanol and methanol both slot easily into our current system of gas pumps and can compete.

The trouble with corn ethanol is that we are rapidly exhausting the potential supplies. We now use 40 percent of the corn crop to replace 3 percent of our gasoline. Cellulosic ethanol may expand supplies, but it is still basically experimental.

That leaves one fuel that could potentially replace vast amounts of our imported oil — methanol made from natural gas. We have enough natural gas supplies from fracking to make this a game-changer.

The great irony is that China sees this opportunity and is already seizing it. The Chinese are busy constructing two huge methanol conversion plants in Texas and Louisiana in order to take advantage of the abundant supplies coming out of the region. The Chinese have a million methanol cars on the road and will be carrying these supplies back to China to power their growing transport sector.

Yet the EPA continues to refuse to allow methanol to be used in car engines, mainly because of the reputation earned as a poisonous “wood alcohol” during Prohibition.

As Anne Korin of the Institute for the Analysis of Global Security once said: “I think methanol fares poorly in Washington precisely because it doesn’t need any subsidies or government assistance in making it economical. For that reason you have no big constituency behind it and no member of Congress crusading on its behalf.” The entire farm belt is working to support ethanol, but there is no “methanol state” or corresponding congressman working in its favor. For that reason it languishes.

For almost 50 years the Indianapolis 500 cars have run on methanol. Yet it is still forbidden in our commercial transport sector. Isn’t it time that somebody considered the general good and started crusading on behalf of methanol?

(Photo by Vivid Racing, posted to Flickr)

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Arctic Leaf

Methanol — the fuel in waiting

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Methanol is a bit of a mystery. It is the simplest form of a hydrocarbon, one oxygen atom attached to simple methane molecule. Therefore, it burns. Methanol is one of the largest manufactured trading commodities after oil, and has about half the energy value of gasoline (but its high octane rating pushes this up to 70 percent). It is a liquid at room temperature and would therefore fit right into our current gasoline infrastructure — as opposed to compressed natural gas or electricity, which require a whole new delivery system.

Methanol made from natural gas would sell for about $1 less than gasoline. Methanol can also be made from food waste, municipal garbage and just about any other organic source.

So why aren’t we using methanol in our cars? It would be the simplest thing in the world to substitute methanol for gasoline in our current infrastructure. Car engines can burn methanol with a minor $200 adjustment that can be performed by any mechanic. You might have to fill up a little more often, but the savings on fuel would be significant — about $600 a year. So what’s stopping us?

Well, methanol seems to be caught in a time warp. It is the dreaded “wood alcohol” of the Depression Era. Methanol is poisonous, as opposed to (corn) ethyl alcohol, which only gets you drunk. (In fact, commercial products such as rubbing alcohol are “denatured” by adding methanol so people will not drink them.) But if methanol is poisonous, so is gasoline, as well as many, many other oil products. Yet methanol is somehow caught up in old EPA regulations that make it illegal to burn in car engines — even though it is hardly different from the corn ethanol that currently fills one-tenth of our gas tanks.

Methanol’s main feedstock is natural gas, and for a long time that was seen as a problem. “Methanol wasn’t practical because the price of natural gas was so high and we seemed to be running out of it,” said Yossie Hollander, whose Fuel Freedom Foundation has been promoting the use of methanol for some time. “But now that natural gas prices have come down, it makes perfect sense to use it to make methanol. We could do away with the $300 billion a year we still spend on importing oil.”

The EPA actually granted California an exemption during the 1990s that allowed 15,000 methanol-powered cars on the road. The experiment was a success and customers were happy but natural gas prices reached $11 per million BTUs in 2005 and the whole thing was called off. Only a few months later, the fracking revolution started to bring down the price of natural gas. It now sells at $4 per mBTU. Yet, for some reason the EPA has not yet reconsidered its long-standing position on methanol.

At the Methanol Policy Forum last year, Anne Korin of the Institute for the Analysis of Global Security (IAGS), made a very insightful remark. “I think methanol fares poorly in Washington precisely because it doesn’t need any subsidies or government assistance in making it economical. For that reason you have no big constituency behind it and no member of Congress crusading on its behalf.”

That may be about to change, however. China has a million cars burning methanol on the road and wants to expand. In the past few weeks alone, Texas and Louisiana have been hit with what is being called “Methanol Mania.” The Chinese are planning to build six major processing plants to turn the Gulf Coast into the world’s biggest center of methanol manufacture. One project will be the largest methanol refinery in the world, two times the size of one located in Trinidad.

All this methanol is intended to be sent back to China. The Chinese want to employ it as a feedstock for their own plastics industry, plus use it in Chinese cars. They will be shipping it the expanded Panama Canal, which will be completed in 2015.

But at some point someone in this country is going to look around and say, “Hey, why don’t we use some of this methanol to power our own automobiles.” At that point the methanol industry, along with the Texas and Louisiana, may have enough political leverage to get the EPA off the dime and see a decision about using methanol in our cars as well.

(Photo credit: Stockcarracing.com)

Arctic Leaf

Outnumbered 100-to-1, Methanol Is Upbeat

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“Why is it that we hear every day some new story about Elon Musk’s electric car, about Clean Energy Fuel’s efforts to build a CNG highway, or about some laboratory breakthrough that is at last going to bring us cellulosic ethanol, yet with methanol now cheaper than gasoline, you still never hear anything about it?”

That’s the question I posed to the three-member panel while serving as moderator for the wrap-up session at the 2014 Methanol Policy Forum in Washington last week.  The sponsors were the Methanol Institute, the Institute for the Analysis of Global Security (IAGS) and the Energy Security Council.

Anne Korin, co-director of IAGS, who earlier had moderated an even bigger panel that included former U.S. Senator J. Bennett Johnston, former National Security Advisor Robert McFarlane and former Ambassador to the European Union Boyden Gray, had a very unusual answer.  “If I may be permitted to be a bit cynical here,” she said, “I think the reason may be because methanol doesn’t require any subsidies.”  The implication, of course, is that those who come to Washington begging for money receive a lot more attention from Senators and Congressmen than those who don’t.

The question of politics versus economics had been raised at the outset of the daylong conference by Korin’s co-director at IAGS, Gal Luft, in his opening remarks.  “We’ve all heard this business about the circular firing squad and how the various alternatives to foreign oil shouldn’t be fighting each other,” he told the audience of about 400.  “But you have to acknowledge the importance of what goes on in Washington.  You can’t just talk about production ― you need money.  If you’re not at the table, that means you’re probably on the menu.

Luft showed a chart illustrating that while corn ethanol production exceeds methanol production by a factor of only 5-to-1 (14 billion gallons/year as compared with 2 bg/yr), the amount of money spent lobbying for ethanol is 50-to-1 (less than $100,000 vs. $5 million).  “When you add in the politics of the farm belt, it’s probably closer to 100-to-1,” he added.

So was anyone discouraged?  Not at all.  The news from industry executives is that methanol production is ramping up everywhere due to the bonanza of the fracking revolution.  It seems like only a matter of time before the idea of replacing large portions of our fuel imports with domestically produced methanol begins to command attention.

“In the past decade we closed down five methanol plants in the U.S. and moved them all to China,” John Floren, CEO of Methenex told the gathering of 400 at the Capital Hilton.  “The price of gas had become just too high.  Now we’ve moved two plants back from Chile and are looking at a third relocation.  We’ve got 1000 people working on our Louisiana site.  The chemical industry is starting to build as well.”

Tim Vail, the CEO of G2X, another methanol producer, had a similar take.  “The U.S. is a great place to invest right now,” he told the audience.  “The argument was always that you had to go to the ends of the earth to build methanol plants because that gas wasn’t available here.  Now all that has changed.  Our big worry is labor shortages but the construction industry is responding to our needs.  It takes away a lot of anxiety about having your assets appropriated by other countries.  China may seem like a good place to invest, but can you really trust the rule of law?”

Philip Lewis, chief technology officer of Zero Emission Energy Plants (ZEEP) was equally upbeat.  “I think the whole shale thing is being underestimated,” he said at the close of the morning session.  “It’s another industrial revolution.  And it won’t happen anywhere else because we have the thing that makes it work – private ownership of the resource.  In France, the government owns all the mineral rights and no one wants drilling on their land.”

But governments do have control over other things in this country and there was some questioning of whether federal agencies will be receptive to methanol as a fuel substitute or additive.  Matt Brusstar, deputy director of the EPA’s National Vehicle and Fuel Emissions Laboratory, claimed that his agency had been in the lead of methanol development for 30 years.  “Charlie Grady, who was in our department, was a big supporter of methanol,” said Brusstar.  “He even wrote a book about it.”  (Unfortunately, a Google search for Charlie Grady and methanol turns up no mention of Grady or his book.)  Patrick Davis, the director of the Fuel Cell Technologies Office in the Department of Energy, was even less encouraging.  “The Office of Science does not currently have any projects to create methanol as an end fuel,” he said.  “It could take a decade to sell enough methanol-compatible vehicles before a widespread distribution network would be feasible.”

When I queried Brusstar about Robert Zubrin’s documentation of the multi-thousand-dollar fines that the EPA is imposing for unauthorized conversions of engines to methanol, [See “Making the Case for Mars and Methanol,” Feb. 11] several government officials, plus Fuel Freedom Foundation director of research Mike Jackson, argued that faulty conversions can increase air pollution.

Despite the notable lack of enthusiasm from government agencies, however, there was a strong sense among the rank-and-file that methanol may be about to find a place in the sun.  “This is a much bigger crowd than we’ve ever had,” said one veteran of previous conferences.  “It’s a very exciting time for methanol.”