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Introduction
Today I will be discussing the pros and cons to utilizing methanol as an alternative fuel source, and highlight Methanex Corp (NASDAQ:MEOH) as a potential investment in the industry. I will provide a data-heavy list of the pros and cons for you to appreciate the rabbit hole of research in this often overshadowed use-case. Interestingly enough, there is a growing demand for methanol fuel use, especially in China, and multiple endpoints already in operation, such as marine vessels, that allows for some concrete foundational support.
Methanol has been promoted as an alternative transportation fuel from time to time over the past forty years. In spite of significant efforts to realize the vision of methanol as a practical transportation fuel in the US, such as the California methanol fueling corridor of the 1990s, it did not succeed on a large scale… It has not become a substantial fuel in the US because of its introduction in a period of rapidly falling petroleum price which eliminates the economic incentive, and of the absence of a strong methanol advocacy. — US Department of Energy Report.
Pros to Methanol as Energy Source
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Less carbon monoxide, nitrogen oxides, and particulate matter pollution compared to gasoline and ethanol fuels (IEA report).
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Multiple ways to generate in a renewable manner are already developed, leading to potential carbon neutrality.
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Ample production around the world, and especially China and US.
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Endpoints of Marine Vessels and Fleet Vehicles that run on 100% methanol already completed and successful.
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Wide range of potential alternative energy fuel mixes and uses, from vehicle fuel to utility scale power generation.
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Faster at biodegrading and slightly less toxic in the event of a spill than gasoline, in-line with ethanol.
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Competitive pricing now compared to historical attempts to market (DoE).
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Wider range of feedstock for the production of methanol than ethanol.
IEA-AMF
Cons to Methanol as Energy Source
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Requires further development of methanol fuel delivery systems if used for significant volumes of vehicles.
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Still releases CO2, but “even when produced from natural gas, methanol has a slight greenhouse gas emission benefit over gasoline” (IEA report).
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Burns invisibly in daylight (visible at night …….
