The methanol economy is a suggested future economy in which methanol replaces fossil fuels as a means of energy storage, ground transportation fuel, and raw material for synthetic hydrocarbons and their products.
In the 1990s, Nobel prize winner George A. Olah advocated a methanol economy; in 2006, he and two co-authors, G. K. Surya Prakash and Alain Goeppert, published a summary of the state of fossil fuel and alternative energy sources, including their availability and limitations, before suggesting a methanol economy.
Methanol can be produced from a wide variety of sources including still-abundant fossil fuels (natural gas, coal, oil shale, tar sands, etc.), but also agricultural products and municipal waste, wood and varied biomass. It can also be made from chemical recycling of carbon dioxide.
Methanol is a fuel for heat engines and fuel cells. Due to its high octane rating it can be used directly as a fuel in flex-fuel cars (including hybrid and plug-in hybrid vehicles) using existing internal combustion engines (ICE). Methanol can also be used as a fuel in fuel cells, either directly in Direct Methanol Fuel Cells (DMFC) or indirectly (after conversion into hydrogen by reforming).
In an economy based on methanol, methanol could be used as a fuel:
In internal combustion engines (ICEs). Methanol has a high octane rating (RON of 107 and MON of 92), making it a suitable gasoline substitute. It has a higher flame speed than gasoline, leading to higher efficiency as well as a higher latent heat of vaporization (3.7 times higher than gasoline), meaning that the heat generated by the engine can be removed more effectively, making it possible to use air cooled engines. Methanol can have an efficiency increase of 5% to 10% relative to gasoline engine efficiency, if the compression ratio is increased. Methanol burns cleaner than gasoline and is safer in the case of a fire, but has only half the volumetric energy content of gasoline (15.6 MJ/L vs. 32.4 MJ/L).
In compression ignition engines (diesel engine). Methanol itself is not a good substitute for diesel fuels. Methanol can, however, be converted by dehydration to dimethyl ether, which is a good diesel fuel with a cetane number of 55-60 as compared to 45-55 for regular diesel fuel. This improves its cold-start ability in winters and reduces its noise. Compared to diesel fuel, DME has much lower emissions of NOx and CO and emits no particulate matter, SOx. Methanol can also be, and is in fact already, used to produce biodiesel via transesterification of vegetable oil (SVO).
In advanced methanol-powered vehicles. The use of methanol and dimethyl ether can be combined with hybrid and plug-in vehicle technologies allowing higher gas mileage and lower emissions. These fuels can also be used in fuel cells either via onboard reforming to hydrogen or directly in Direct Methanol Fuel Cells (DMFC).
For electricity production. Methanol and DME can be used in existing gas turbines to generate electricity. Fuel cells (PAFC, MCFC, SOFC) can also be used for electricity generation.
As a domestic fuel. Methanol and DME can be used in commercial buildings and homes to generate heat and/or electricity. DME can be used in a commercial gas stove without modifications. DME can also be blended with LPG and used as a cooking or heating fuel as is already the case in China. In developing countries methanol could be used as a cooking fuel, burning much cleaner than wood and thus mitigating indoor air quality problems.
Precursor. Methanol is already used today on a large scale as raw material to produce a variety of chemicals and products. Through the methanol-to-gasoline (MTG) process, it can be transformed into gasoline. Using the methanol-to-olefin (MTO) process, methanol can also be converted to ethylene and propylene, the two chemicals produced in largest amounts by the petrochemical industry. These are important building blocks for the production of essential polymers (LDPE, HDPE, PP) and like other chemical intermediates are currently produced mainly from petroleum feedstock. Their production from methanol could therefore reduce our dependency on petroleum. It would also make it possible to continue producing these chemicals when fossil fuels reserves are depleted.