Summary: GAO has determined that alcohol fuels have vast potential for replacing petroleum fuels, particularly in the automotive sector. Unlike some other synthetic fuels, the technology to produce alcohol fuels, both ethanol and methanol, is here today. Concerning ethanol GAO found that: (1) there is an expanding use of blending ethanol with unleaded gasoline which is helping to stretch gasoline supplies; (2) as more efficient distilleries are put to use, the price of ethanol could decline; (3) because of feedstock constraints, ethanol's potential will most likely be limited to the role of a gasoline extender; and (4) ethanol commercialization has benefited substantially from a waiver of Federal and some State gasoline taxes. Methanol offers a synthetic fuel option with highly promising production potential that the Nation could begin implementing within existing technology. It can be produced from almost any organic feedstock, but it is expected to be primarily produced from coal. Methanol production potential could be further expanded with the use of renewable feedstocks. Almost four times as much methanol as ethanol could be produced from the same feedstocks. Sufficient water is available to meet these energy development needs through the year 2000. Methanol production is not constrained by undeveloped technology. Production cost estimates are highly encouraging. Methanol can be used as an automotive fuel within existing technology. Vehicle modifications necessary to perfect automobile use of methanol fuel would be achievable on the assembly line within existing technology at relatively minor cost. Methanol marketing will not be constrained by restrictions on new fuels set forth in the Clean Air Act. In terms of its environmental and health characteristics, methanol is possibly superior to gasoline. Compared to other synthetic fuels, methanol has a number of advantages: (1) technology to begin methanol production is here today; (2) it offers the opportunity to utilize coal not recoverable for other purposes; (3) has the potential for transition to other renewable feedstocks; and (4) engines designed for its use will likely burn more efficiently. Neither methanol from coal nor vehicles designed for its use are being domestically produced today. An early step to solve this problem might be the use of methanol in the Federal fleet to provide a demonstration medium and an early market. Some environmental concerns still exist concerning its production.
