Methanol and the U.S. Government

GAO has assigned a high priority to reviewing federal programs and activities aimed at developing and commercializing alcohol fuels, both ethanol and methanol. GAO has concluded that alcohol fuels have vast potential for replacing petroleum fuels, particularly in the automotive sector, and the technology to produce alcohol fuels is here today. GAO work has shown that: (1) sufficient economically recoverable coal reserves exist to enable enough methanol production to replace gasoline for about 100 years and to allow for a doubling of coal demand for other uses; (2) although no commercial-size methanol plant operates in the United States today, the technology has been commercial for years; (3) methanol could be produced at a cost competitive with gasoline; (4) methanol can be used as fuel for electric generation; (5) vehicle design changes necessary for the use of straight methanol are achievable; and (6) methanol is superior to gasoline for environmental and health reasons. However, the problem of developing methanol production capacity and converting the fuel supply and automobile industries will not be easily overcome. Past federal activities to promote the development and use of methanol have been fragmented and relatively modest in scope, and methanol has received less federal assistance than ethanol. Federal methanol activities have been confined mainly to low-level research and development efforts, market and production studies, and limited testing. Federal support for energy commercialization activities in general is being reduced, and the Administration has not undertaken any new methanol initiatives. However, the Environmental Protection Agency has recently taken steps to remove restrictions on the use levels of methanol in gasoline which removes a major obstacle to the marketing of methanol as a motor vehicle fuel. The Synthetic Fuels Corporation also is currently considering financial support for a number of methanol projects. Department of Energy efforts will be confined primarily to research and development. Antitrust restraints may be removed to enable representatives of the auto and fuel supply industries to work together in resolving the problems of methanol use. If methanol is to be widely commercialized as an automotive fuel, the private sector will have to bear the primary responsibility.