METHANOL HAS MOMENTUM
March 10, 2012 § 10 Comments
Currently there is national handwringing over the increasingly high price of gasoline. This appears to have Presidential election ramifications. A lower cost substitute for gasoline is good politics. Bills are pending in both houses of Congress to impose an Open Fuel Standard. This would require all new cars by 2017 to be able to operate on all proportions of gasoline, ethanol and methanol. From the standpoint of giving consumers choice for something approaching $100 per vehicle, this had always been a good idea. But persuading gas pumps to supply alternatives was going to be difficult because volume could not be guaranteed. Also, alcohols could not be predictably lower cost than gasoline. So, while the choice would be enabled by the legislation, unless at least a significant portion of the populace was likely to make the alcohol choice, fuel stations would not be persuaded to carry the product.
Cheap shale gas has essentially removed the uncertainty on methanol pricing. By contrast ethanol from corn and sugar will depend upon commodity prices and inherent variability in the same. Economical ethanol from biomass is not a sure thing. On the other hand methanol from biomass, or coal for that matter, is straightforward. Of the two, ethanol is preferred because of higher energy density. It has about 33% fewer calories than gasoline of equivalent volume, whereas methanol is disadvantaged by about 45%. Ethanol is also easier to store and handle.
Methane can be oxidized to a mixture of carbon monoxide and hydrogen known as synthesis gas or syngas for short. Syngas is a basic building block from which a variety of chemicals can be synthesized. The simplest of these is methanol. Consistently cheap methane equates to consistently low cost methanol. Because of the mileage penalty of about half in comparison with gasoline, methanol will need to be less than half the price of gasoline. Assurance of this boils down to the relative prices of oil, from which gasoline is derived, and natural gas. We have predicted that natural gas will remain low cost provided shale gas development is permitted. Oil on the other hand we forecast as likely to see a sustained increase in price in the ten year time frame. Furthermore, oil pricing will be subject to the whims of Middle East turmoil, as evidenced today with Iran/Israel war drums. This will cause uncertainty in gasoline price at the pump. Natural gas on the other hand is a regional commodity and US pricing will by and large be impervious to world events. The upshot of all of this will be sustained favorable ratios of methanol to gasoline prices.
At the time of this writing retail gasoline was at $3.79 and methanol wholesale at $1.13, so let us increase that to $1.50 to include retail margins, tax and the like. This is well below the factor of two. Furthermore, almost all the methanol is currently imported. Several companies have announced plans to add domestic capacity, driven by cheap natural gas. When this happens, we can expect a drop in price of methanol. Ongoing research is targeting direct conversion of methane to methanol, skipping the syngas intermediate step. One less unit operation is likely to drop the price.
Consumers given choice are likely to find a sustained low price for methanol compared to gasoline. However they will drive only half the distance on the full tank, a bit more with M85 (an 85% methanol 15% gasoline blend). This range penalty will be a minus. The plus in addition to price, will be substantially lower emissions, which could be a driver for some consumers. They will essentially be trading more frequent refueling for the green feeling. Eventually, new cars may install larger fuel tanks to accommodate the demand.
A wild card in the longer term would be engines that took advantage of the higher octane rating of methanol, 117 as compared to 87 for regular gasoline. Today dragsters and Indy race cars use methanol because with high compression ratios they get a power boost. A 2010 report from the MIT Sloan School (see comment below for the link) suggests the feasibility of an engine that injects methanol on a programmed basis. This technique causes an effective compression ratio even greater than the number mentioned above. The result is a small spark ignition engine with mileage that exceeds that of a gasoline fueled machine by about 35%. So, harnessing the higher octane rating goes even beyond wiping out the calorific penalty. They also believe that the cylinders would not need to be excessively heavy, and so will be lighter than the ones for high compression diesel engines. This appears to offer the promise of an engine not costing much more than a normal one, and likely less than a diesel engine. This would involve re-tooling by automobile manufacturers but not radically. A significant attraction in the medium term will be in meeting CAFÉ goals with lower emissions. In the long term, biomass derived methanol will make for a truly sustainable transportation future.
Vikram Rao, Executive Director