Thursday, December 12, 2013

Methanol Fuel In China...And America?

There are now more than a million methanol cars on the road in China and estimates show the fuel substitutes for 5-8% of gasoline consumption — about the same proportion that corn ethanol provides in the United States.

In this country, the proposal has been that we derive methanol from our now-abundant supplies of natural gas. California had 15,000 methanol cars on the road in 2003 but curtailed its experiment because natural gas supplies appeared to be too scarce and expensive! Instead, the main emphasis has been on tax incentives and mandates to promote corn ethanol.

China has vast shale gas supplies and could benefit from America’s fracking technology. We could benefit strongly from China’s greater experience in developing methanol cars. The pieces of the puzzle are all there. Perhaps George Olah’s proposal may be the catalyst that puts them all together.

Ironically, all this began with a Chinese-American collaboration in 1996. At the time, China had little knowledge or interest in methanol but was persuaded by American scientists to give it a try. Ford provided a methanol engine and China began ramping up its methanol industry and substituting it for gasoline. As a result, China is now the world’s largest producer of methanol, with about one-quarter of the market.

A year ago the Chinese national government was about to mandate a 15% percent methanol standard for gasoline when it ran into opposition from executives in its oil industry. Those leaders have since been deposed, however, and the 15% mandate may go ahead this year. In the meantime, provincial governments  have developed their own standards, with the Shanxi province west of Beijing in the lead.

Ironically, because methanol is only half the price of gasoline, many local gas stations are diluting their gasoline with methanol anyway in order to shave their costs. As a 2011 Energy Policy article by Chi-jen Yang and Robert B. Jackson of Duke University’s Nicholas School of the Environment reported, “Private gasoline stations often blend methanol in gasoline without consumers’ knowledge… In fact, its illegal status makes methanol blending more profitable than it would be with legal standards. Illegally blended methanol content is sold at the same price as gasoline. If legalized, standard methanol gasoline would be required to be properly labeled and sold at a lower price than regular gasoline because of its reduced energy content. Such unannounced blending is now common in China.”

So both countries are feeling their way toward a methanol economy. As Olah points out, the problem in the U.S. is that the various advantages given to ethanol have not been extended to methanol. “One means of addressing this inequity would be for Congress to pass the bipartisan Open Fuel Standard Act of 2013, which would put methanol, natural gas, and biodiesel on the same footing as ethanol (but without subsidies and without telling consumers which one to choose) for use in flex-fuel cars.”

The above is excerpted from the article, The U.S. and China on Methanol: Two Roads Converge by William Tucker.

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