METHANOL, ETHANOL, THE NGL'S, PLUG HYBRIDS AND AN INTEGRATED FUTURE
THE DESIGN OF TRANSPORT FUEL IN THE COMING DECADE

This year the Methanol Institute is holding the 6th annual methanol forum in November, in Dubai, UAE
http://www.methanol.org/

This seems somehow very fitting and speaks to the rising status of Persian Gulf nations in the pecking order, and to the influence they now wield in deciding the future of the energy industry. Of the prior 5 methanol forums, 4 had been held in Houston and 1 in Toronto.
The rise of NGL’s, or Natural Gas Liquids, ties into the subject of methanol in a fascinating way, and may point the way forward as an indicator of the coming structure of the fossil fuel industry, in particular as it relates to transportation fuel.

Rembrandt defines NGL’s thusly:
“Natural Gas Liquids (NGL) are a group of hydrocarbons that fall between natural gas and oil - which consist amongst others of ethane (C2H6), propane (C3H8) and butane (C4H10).”

“The important difference is that crude oil can be refined into gasoline, diesel and kerosene while NGL's cannot. These are mainly used as feedstock for the chemical industry.”

Methanol is “a chemical compound with chemical formula CH3OH (often abbreviated MeOH). It is the simplest alcohol, and is a light, volatile, colourless, flammable, poisonous liquid with a distinctive odor that is somewhat milder and sweeter than ethanol (ethyl alcohol)” http://en.wikipedia.org/wiki/Methanol
The family resemblance of the NGL’s and methanol can be easily recognized, and the chemical reactions using natural gas and other light petroleum to create methanol are shown on down the page linked above on Wikipedia. Methanol can also be synthesized using methane contributed from waste recapture.

Methanol can be blended with ethanol in flex fuel type vehicles and blended with gasoline, although like ethanol, it’s corrosive nature creates a need for caution in the design of the engine and fuel system.

In the time period of 2010 to 2012 the automotive industry will begin to deliver the first generation of plug hybrid vehicles. The Chevy Volt is the most well known, but a variety of plug hybrid sedans and SUV’s and light trucks will be finding their way into the marketplace.
When combined with flex fuel vehicles that can consume alcohol, in either methanol, ethanol, or butanol blends, the amount of conventional gasoline needed to propel American vehicles will decline, with the rate of decline determined only by the turnover of the vehicle fleet. Since more and more vehicles will come with such drive trains, the American consumer will come to accept them in much the way we now accept emission control systems, as just part of the package. Due to the plug hybrid aspect of vehicles, the electric power grid will begin to provide more and more of a percentage of transportation energy requirements.

It is demonstrable by calculation that ethanol alone cannot possibly provide for a very large percentage of liquid fuel need for transportation. Ethanol production is already dislocating prices on natural gas and food, and if we attempt to raise ethanol production from food crops more, these dislocations will only get worse. The recent floods in the U.S., rapidly rising prices of natural gas and world grain demand has driven the costs of inputs to produce ethanol to astounding levels. We may very well reach peak ethanol long before we reach peak oil.

Given the scenario described above, the NGL’s will become a more and more important part of the transportation fuel mix. Methanol from NGL’s can offer a much needed relief valve. Combined with electric grid power, we see the next step in transportation fuels taking shape, and we see the developments being guided and encouraged by all the major power players. The GM flex fuel program, the ethanol program (love it or hate it, we will have a sunk cost in the ethanol effort for some time) the emerging NGL and methanol industry, and the plug hybrid program endorsed by the electric power utilities and advanced battery makers will actually be a system that can be integrated into a much a more efficient transportation system than has been seen to this date.

Even given the oil production declines envisioned by Rembrandt in the charts he sources, we can see the transportation fuel developments forming that will lead us through the next 15 years or so IF we are able to take advantage of the emerging NGL industry and the coming plug hybrid efficiencies.

To again quote Wikipedia, “ In 2005, California's Governor, Arnold Schwarzenegger, terminated the use of methanol after 25 years and 200,000,000 miles of success, to join the expanding use of ethanol driven by producers of corn. In spite of this, he was optimistic about the future of the program, claiming "it will be back."

It is to be recalled that of all world oil consumption the amount that is used to provide gasoline for American vehicles is only about 10% of the total (this leaves aside Diesel). The U.S. will become a smaller and smaller percentage of the world market for gasoline (and crude oil in general) as the developing Asian markets will grow in crude oil consumption. But we must assume that they will implement the same efficiency adjustments that are being made in the U.S., Europe and Japan, and current projections of crude oil (and particularly gasoline) demand may not materialize in nearly the volume that have been predicted.

Major transitions are beginning to take shape. If Europe, Japan, the U.S. and the rapidly developing nations would make efforts to coordinate activity and openly communicate knowledge and research, we can make the transitions far less painful and expensive than they could otherwise be. One of the first things I ever heard Matthew Simmons say that impressed me greatly was that we should not argue one type of energy production against the other (such as renewable vs. fossil). We would need them all.
Thank you
Rcoger Conner Jr
RC