It’s Time to Open the Fuel Market to Methanol

By: Dr. Robert Zubrin.

Here's a fact that is worthy of lawmakers' attention: Methanol is currently selling internationally, without any subsidy, for $1 per gallon.

Why is this important? Because methanol is a clean-burning fuel that can be made anywhere, from anything that either is or was once a plant, including natural gas, coal, recycled urban trash, crop residues, forestry residues, fallen leaves, seaweed, algae, swamp weeds or any other kind of biomass without exception. In other words, the potential global supply of methanol is unlimited, and with such varied sources of supply, it is immune to cutoff by any cartel. And it can be used, along with gasoline and/or ethanol, in any car with flex-fuel capability – a feature that can be added by manufacturers at a cost of $100 per vehicle.

To be sure, a gallon of methanol contains only about half the energy of a gallon of gasoline, so methanol at $1 per gallon is equivalent in miles per dollar to gasoline at $2 per gallon, but that is still a very attractive price. If a law were passed that all new cars sold in the USA had to be methanol-compatible flex-fuel vehicles, then this mark – $2 per gallon of gasoline equivalent – would represent a permanent competitive constraint on future gasoline prices. In fact it would do much more than protect Americans from a return of $4-per-gallon gasoline, because if such flex-fuel capabilities were made the standard required for new vehicle sales in the U.S., it would become the global standard, as foreign automakers would be impelled to conform to it to stay in the U.S. market.

Thus, in a very short amount of time, all cars being marketed in any serious way internationally would be flex-fuel, and gasoline would be forced to compete at the pump against both methanol and ethanol made from any number of possible sources, all over the world. This would put an enduring competitive constraint on the price of oil internationally at roughly the $60-per-barrel level, ending forever the ability of the Organization of Petroleum Exporting Countries to loot the world via artificially rigged up oil prices.

With unemployment exceeding 10 percent, the U.S. economy today is operating at levels well below normal. Similar observations can be made of the current economic status of Europe, Japan and many other nations. Yet even so, because of the removal from the world market of several million barrels of oil per day by OPEC, oil prices are already hovering around the $80/barrel level. If the economy should actually begin to substantially recover, prices will shoot back up to $150/barrel or more. In fiscal 2008, with oil prices averaging near $110 per barrel, Americans shelled out close to $1 trillion for oil, an amount (up from $80 billion in 1999) equal to 40 percent of what they pay the Internal Revenue Service.

This enormous tax increase – paid to Uncle Saud instead of Uncle Sam – sent our economy into recession, while the $4 trillion extorted globally by the oil cartel had similar effects on most of our customers and trading partners internationally. Unless the monopoly power of OPEC to conduct such raids is broken, the world economy is going to get slammed right back down again as soon as it tries to rise off the mat. The creation of an open fuel market is thus essential to protecting our prospects for economic recovery.

A bipartisan group of lawmakers, led by Sens. Maria Cantwell (D-Wash.), Sam Brownback (R-Kan.), Joe Lieberman (ID-Conn.), Susan Collins (R-Maine), John Thune (R-S.D.), Amy Klobuchar (D-Minn.), and Reps. Henry Waxman (D-Calif.), Steve Israel (D-N.Y.), Bob Inglis (R-S.C.) and Roscoe Bartlett (R-Md.) have introduced a bill called the Open Fuel Standards Act (S. 835 in the Senate, H.R. 1476 in the House) that would effectively and rapidly give Americans and others the fuel choice necessary to defend our prosperity. The provisions of the bill would require that by 2012, 50 percent of all new cars sold in the USA be fully flex-fuel, capable of running equally well on gasoline, ethanol or methanol, with this number rising to 80 percent by 2015.

This bill will not cost the Treasury a nickel, and it will save American consumers billions of dollars and American workers millions of jobs. Congress should act swiftly to make it law.

Robert Zubrin is an astronautical engineer, a senior fellow with the Foundation for Defense of Democracies, and the author of “Energy Victory: Winning the War on Terror by Breaking Free of Oil.”