Is There a Government Role in Methanol Market Development?

Given that a transportation fuel transition away from oil will occur, this paper explores fuel selection and government involvement. Arguments are made for choosing a petroleum replacement now, establishing methanol as the fuel of choice, planning for the transition and involving government in market readiness. Mandatory introduction of methanol compatible fuel vehicles and a national fuel distribution system, so that the marketplace can accommodate methanol when it is economically viable, is proposed. The cost of this approach is comparable to that of other energy activities designed to deal with transportation's oil dependence. This approach is consistent with a free market based energy policy and offers the opportunity to limit petroleum price increases.