In midst of oil boom, perhaps U.S. should look to another fuel: Methanol

American energy executives and policymakers are basking in the country’s newfound oil production clout. They’re reveling in the comeback story, written by improved techniques for shale oil and gas extraction, that have made the United States the largest oil producer in the world, ahead of Saudi Arabia and Russia.

But amid the congratulations, some smart people are offering a warning. Being an oil and gasoline giant is nice, they say, but it also presents a problem: It lulls Americans into believing that there’s no harm in relying almost exclusively on gasoline and diesel as transport fuel. Outside of a few wealthy people who can afford an $85,000 Tesla, our transportation sector and ergo our whole economy, they say, is addicted to petroleum. This is why they’re urging U.S. energy policymakers and industrialists to return to the complex work of getting more of us into cars and trucks that can run on alternative fuels.

Two of the smart people raising this issue are Anne Korin and Gal Luft. They’ve been hammering away at this theme since 2012, when they published their book “Petropoly: The Collapse of America’s Energy Security Paradigm.” Petropoly, to Korin and Luft, means wholly ceding the liquid-transportation-fuels market to crude-oil-derived gasoline and diesel fuel — even while worthy alternatives exist.

While executives and policymakers revel in oil’s comeback story, some energy experts are offering a stark warning about America’s addiction to petroleum. (AP Photo/Elise Amendola) Korin and Luft ask why, even with big increases in domestic oil production, America has become poorer and deeper in debt. Their answer: “The real problem is that first, while oil demand has fallen and supply has grown in the U.S., globally neither is the case, and second, we are not a competitive [liquid fuels] market.”

Korin and Luft set the background this way:

… oil price(s) went up and foreign oil expenditures climbed by almost 50 percent, from $247 billion in 2005 to $367 billion in 2011. The share of oil imports in the overall trade deficit grew from 32 percent in 2005 to 58 percent in 2011. Worse: the price of a gallon of regular gasoline in 2005 was $2.30. By the spring of 2012 [it was $4 on average] …

They say the country should take a more democratic approach to fueling mobility, one that allows people and businesses to shift away from gasoline if and when there’s trouble in the oil market. If not, they fear the United States will be relegated to the role of Bill Murray’s character in the movie “Groundhog Day,” forever awakening to discover that he has not succeeded in ending his long winter or solving any of his problems.

The numbers hold up to scrutiny. Petroleum accounts for about 95% of transportation fuel today. That’s a “petropoly.” And despite a bevy of encouraging facts — domestic oil production is way up, cars are much more fuel efficient, and imports are at their lowest level since 1996 — Americans are still spending half a trillion dollars per year on oil. The United States uses about 19 million barrels a day, and even at today’s lower price of about $68/bl, that translates into $1.29 billion a day.

So what should be done? The answer is obvious to Korin and Luft: bring more choices for transportation fuel to the market. Compressed Natural Gas is an obvious possibility, but its traction has been poor — only 987 CNG fueling stations existed in the United States at the end of 2012. Today there are more than 1,500, which is still a small number — and only about half of those stations are open to the public.

Beyond CNG, Korin and Luft champion a lurking giant: methanol.

Methanol, other than being a carbon-based molecule that can be used for fuel, has little to do with ethanol, the corn-based fuel that has received plenty of deserved scorn during the last several years. Methanol is a basic alcohol — a simple hydroxide molecule paired with CH3, creating CH3OH. Fortuitously for the United States, the authors say, about two-thirds of worldwide methanol production comes from natural gas, something the U.S. has in abundance at the moment. Methanol can even be made from coal, another feedstock that’s bountiful in the U.S.

A white paper produced by TIAX, a technology development company, puts forward a trenchant case for introducing methanol as a core transportation fuel in North America. The paper was produced for the Methanol Institute, an industry advocacy group, but its findings are robust. Not only is methanol easily and cheaply produced from organic materials, the research says, but it can also significantly reduce greenhouse gas emissions from the transportation sector by 65% to 95%. Such a reduction would greatly affect our overall footprint, as the transportation sector accounts for 27% of all U.S. carbon emissions — just behind electricity production’s 31%.

By volume, methanol contains roughly half the energy content of gasoline, but combustion engines more efficiently capture its energy because of its lower burning temperature. Modifying normal gas engines to consume methanol costs only about $100 to $200 more than outfitting vehicles to be ethanol-gasoline flex-fuel ready, a common factory feature these days.

Various methanol blends ranging from 5% (M5) to 100% (M100) are already being used abundantly in China, where it is made from coal. The Chinese, of course, don’t make energy policy for show; they’re focused on efficiency and cost. So it’s more than intriguing that methanol already accounts for about 8% of China’s transportation fuel slate, mostly in light-duty trucks and public transit. In 2012, China had 1,200 methanol service stations and 200 methanol factories. If the United States doesn’t make more methanol, China will go it alone, right on American shores, as Chinese companies have plans to build six new plants on the Gulf Coast of the U.S. to produce methanol for export to China.

Methanol detractors say that it takes more energy to make methanol than it yields when used as a transportation fuel. Also worrying to this group: Because methanol has half the energy of petroleum per volume unit, producing it can be uneconomical, and methanol’s sharply corrosive properties mean it requires better storage and delivery mechanisms than gasoline.

Many of these problems may be solvable with the right political will and R&D. China’s program suggests that’s the case. So why isn’t methanol getting a closer look as a domestically produced alternative to crude-based gasoline in the transportation sector? Some groups, of course, put methanol in the abhorred “greenhouse gas” category because it can be derived from the mining and processing of fossil fuels like coal. But the big reason is that methanol as of yet has no strong constituency pushing it in Washington like ethanol does (i.e., the entire agricultural sector). There is a bill in Congress now worth watching. The Fuel Choice and Deregulation Act of 2015 was introduced in the Senate by Sens. Rand Paul (R-KY) and Chuck Grassley (R-IA),and in the House by Rep. Rod Blum (R-IA). The bill aims to provide regulatory relief to alternative fuel producers and consumers by providing Corporate Average Fuel Economy (CAFE) credit for automakers that produce vehicles allowing for methanol as a preferred alternative fuel. But until methanol possesses the kind of support on Capitol Hill that ethanol has had for decades, it’s unlikely to play a large role in U.S. transportation.

http://www.forbes.com/sites/michaelkrancer/2015/05/19/in-midst-of-oil-boom-perhaps-u-s-should-look-to-another-fuel-methanol/?ss=energy