Methanol auto fuel strong in China, dead in US

18 October 2007 23:42  [Source: ICIS news]

TORONTO (ICIS news)--Methanol has a bright future as a transportation fuel in China but faces steep obstacles in the US market, an industry consultant said on Thursday.

 

Richard Bechtold, senior programme manager with US-based consultants Alliance Technical Services, told the 2007 Methanol Forum that blending methanol with gasoline in the US would require refiners to make production process changes they oppose.

 

In addition, he noted that in the US market methanol is associated with methyl tertiary butyl ether (MTBE) and environmental problems stemming from the leakage of MTBE from storage tanks into groundwater in California.  California launched an MTBE ban which eventually led to the phase-out of that product across the US, Bechtold added.

 

Bechtold said in the 1970s through early 1990s US carmakers had done a lot of work on methanol’s use as transportation fuel and the country at one point even had a small fleet of cars running on methanol-blends on its roads.

 

But with relatively low oil prices in the 1990s and a methanol price spike in mid-1990 the impetus to further develop methanol cars and associated infrastructure was gone, he said.

 

The bleak outlook for the US contrasts sharply with China, where increasing methanol volumes are being used in transportation fuels, Bechtold said

 

Bruce Aitken, chief executive of Methanex, also noted that “The Chinese government is exploring the energy value of methanol in ways that will profoundly change our industry.”

 

The country’s authorities were examining national blending standards and methanol was being blended into gasoline in the country’s coal-producing regions, Aitken said.

 

Jim Jordan, of Houston-based consultants Jim Jordan & Associates (JJA), said Chinese methanol market sources indicated that China is consuming as much as 2.5m tonnes of methanol annually for automotive fuel use.

 

Co-sponsored by JJA and the Washington, DC-based Methanol Institute (MI), the two-day 2007 Methanol Forum ends on Thursday.

By: Stefan Baumgarten
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