Methanol is an alcohol derived from such renewable resources as wood or coal.  M85 (85% methanol and 15% gasoline) was thought to be a potential substitute to pure gasoline in the early 1990’s.  However, the emergence of ethanol led to a steady decline in M85 consumption.[1]  Ethanol has greater net energy content and a higher octane rating than methanol.  Additionally, the toxicity of methanol is slightly higher than both ethanol and gasoline. [2]  All of these factors explain why both pure methanol and M85 are not sold as fuels for general transportation in the United States, although in its pure form it is commonly used as racing fuel. 

Methanol is primarily mixed with isobutylene to create the chemical compound methyl tertiary-butyl ether or MTBE.  MTBE is almost exclusively used as a fuel additive in motor gasoline.   It is one of a group of chemicals commonly known as 'oxygenates' because they raise the oxygen content of gasoline.  However, the use of the additive MTBE has become controversial over the years since traces of the chemical were found in drinking water all over the country and especially in California.  As of August of 2007, 25 states had complete or partial bans on MTBE use as a gasoline additive.[3]  These bans have resulted in a significant reduction in MTBE consumption from 2004 to 2008. 

Although controversial, methanol does have its advantages.  Compared to gasoline, methanol has similar power and acceleration.  There are less maintenance costs because methanol burns cleaner, thus leaving less carbon deposits and reducing wear and tear on the engine.  In addition, the 102 octane rating helps prevent engine knock damage. 

However, there are disadvantages to methanol.  Compared to gasoline, methanol has 60 percent of the range of gasoline.  Additionally, even though the conversion costs for vehicles are not very expensive, methanol requires expensive lubricants.  Moreover, the fueling infrastructure is inadequate.  Like ethanol, methanol can be blended with gasoline to make a high-performance fuel.[5]  However, Methanol is also very corrosive and because of this, special materials and storage equipment may be needed to burn the fuel in a conventional vehicle. [6]

Recently several bodies, in particular the International Energy Agency, are actively researching the use of a form of methanol called Dimethyl Ether (DME).  DME is relatively unknown as a fuel.  DME is a colorless oxygenate with physical properties similar to LPG.  Until recently, it has been used as an organic solvent and an extraction agent in laboratory and particularly for industrial purposes as an aerosol propellant.  However, the properties of DME suggest that it could be a substitute for diesel vehicle fuel.[7] 

The features which make DME particularly attractive include the fact that it does not generate any particulate matter (PM) as exhaust when used as a diesel fuel substitute, and that it can be easily produced from a number of resources such as natural gas, coal, biomass and similar materials.[8]  Furthermore, according to DME fuel injection manufacturer Alternative Fuel Technologies, DME costs less than diesel on an equal energy basis.  In fact, the CEO of Alternative Fuel Technologies states that 1.8 gallons of DME will cost less than 1 gallon of diesel, assuming a $70/bbl or higher oil price.[9]

Unfortunately, America has been slower than Europe and Asia to catch on to DME as a motor fuel, as DME technology research and development in those areas are mostly government funded.  But it is the belief of DME supporters in the U.S. that DME has an important role to play in America’s security and energy sustainability.  At this time DME is very much in the research phase, particularly in the U.S.  Therefore, the infrastructure to support DME powered vehicles is virtually non-existent. 

Fleet managers that want more information on the availability and costs of methanol fuel on a more local level should visit the U.S. Department of Energy’s Alternative Fuels Data Center.  There fleet managers can find the DOE Alternative Fueling Station Locator and the Clean Cities Alternative Fuel Price Report. [10]^{, [11]}  Additionally, the Alternative fuel’s Data Center allows fleet managers to view their state's incentives and laws related to alternative fuel and advanced vehicle use.[12]