A joint effort by the Jet Propulsion Laboratory and the California Institute of Technology Division of Chemistry and Chemical Engineering has brought together sponsors from both the public and private sectors for an analysis of the prospects for methanol use as a fuel in California, primarily for the transportation and stationary application sectors. Increasing optimism in 1982 for a slower rise in oil prices and a more realistic understanding of the costs of methanol production have had a negative effect on methanol viability in the near term (before the year 2000). Methanol was determined to have some promise in the transportation sector, but is not forecasted for large-scale use until beyond the year 2000. Similarly, while alternative use of methanol can have a positive effect on air quality (reducing NOx, SOx, and other emissions), a best case estimate is for less than 4% reduction in peak ozone by 2000 at realistic neat methanol vehicle adoption rates. Methanol is not likely to be a viable fuel in the stationary application sector because it cannot compete economically with conventional fuels except in very limited cases. On the production end, it was determined that methanol produced from natural gas will continue to dominate supply options through the year 2000, and the present and planned industry capacity is somewhat in excess of all projected needs. Nonsubsidized coal-based methanol cannot compete with conventional feedstocks using current technology, but coal-based methanol has promise in the long term (after the year 2000), providing that industry is willing to take the technical and market risks and that government agencies will help facilitate the environment for methanol.
Given that the prospects for viable major markets (stationary applications and neat fuel in passenger cars) are unlikely in the 1980s and early 1990s, the next steps for methanol are in further experimentation and research of production and utilization technologies, expanded use as an octane enhancer, and selected fleet implementation. In the view of the study, it is not advantageous at this time to establish policies within California that attempt to expand methanol use rapidly as a neat fuel for passenger cars or to induce electric utility use of methanol on a widespread basis
