Timing of methanol supply and demand: Implications for alternative transportation fuel policies

The use of methanol as a transportation fuel may help the United States substantially reduce oil imports. However, significant reductions in U.S. oil imports will require that the current world methanol industry be much larger than it now is. This paper examines potential expansion rates of the world methanol industry. These expansion rates are used to determine the potential underutilization of flexible fuel vehicles caused by limitations on methanol supply. Depending on the specific comparison, methanol supply can be a constraint in the earlier years of methanol’s use which limits the ability of the United States to substitute large volumes of oil with methanol.