...AND CHEAPER...:

We're producing more natural gas these days than we can use, thanks to new techniques to extract gas from shale. A recent report from the M.I.T. Energy Initiative, "The Future of Natural Gas," called methanol "the liquid fuel that is most efficiently and inexpensively produced from natural gas." China has already taken notice. Automakers there, like Chery, Geely and Shanghai Maple, have all introduced vehicles capable of running on methanol. Indeed, methanol is so much less costly per mile than gasoline that illegal fuel blending is rampant in China.

Unfortunately, most cars sold in the United States offer consumers no choice beyond gasoline. The so-called flex fuel vehicles that are now on the market are warranted to operate only on gasoline and ethanol. If Congress were to enact an open fuel standard that required new cars to be warranted to run on all-alcohol fuels, including methanol, natural gas could compete with oil in the liquid fuels market. Producing these cars would cost about $100 more. And these fuels could be distributed through the current refueling infrastructure with only slight retrofits.

The current global spot price for methanol made from natural gas is $1.13 per gallon, without any subsidy. 

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