Methanol: ready to muscle its way into US gas tanks?

It may not be long before methanol, an alcohol fuel, could take a big chunk of the market from petroleum-based motor fuels.

Methanol -- also known as sour or wood alcohol -- can be made from coal, wood , agricultural and municipal wastes, natural gas, and even from petroleum. Methanol advocates argue that greater use of the fuel in the United States will benefit national security by reducing America's dependence on Middle East oil.

Because methanol is a premium fuel that burns more cleanly and efficiently than gasoline -- it is currently used on the racing car circuit -- proponents tout its environmental benefits.

Methanol's one disadvantage is that it contains half the energy per gallon of gasoline. To a large extent this is offset by the fact that methanol can be burned one-third more efficiently. And new methods are being developed that could greatly increase the efficiency with which the methanol can be put to work.

Although far more attention has been lavished on ethanol -- ''sweet'' alcohol fermented from grain and blended with gasoline to make gasohol -- there is a good chance you may have burned methanol in the family car without knowing it.

Some experts say many gasoline jobbers have been illegally mixing methanol, which they can get for 50 to 65 cents a gallon, with unleaded gasoline. A blend with 5 percent methanol does not affect how a car drives, but adding it to gasoline is against the law because the Environmental Protection Agency (EPA) has not approved it.

''We were able to trace 60 million gallons of methanol into gasoline in 1980, '' says William A. Stevenson of Evergreen Energy Corporation, which has looked into the allegations of mixing methanol and gasoline.

''Methanol is a very interesting fuel. It's advantages are so overwhelming that I'm convinced it will happen,'' says the Solar Energy Research Institute's (SERI) Clayton S. Smith, referring to methanol's potential for widespread use.

Currently, US industry has the capacity to produce more than 1 billion gallons of methanol a year. This is extremely pure ''chemical grade'' methanol made from natural gas, half of which is normally used in plywood glue. Because of the current recession in the housing industry, however, there is a methanol glut so it is selling at or below cost.

Adding methanol to gasoline has been forcefully opposed by General Motors and Exxon. They have claimed that adding large quanities of methanol to gas results in a number of problems, including corrosion, separation of gasoline and alcohol when mixed with small amounts of water, and other problems.

But a waiver for a 12 percent methanol blend called Petrocoal was slipped through the EPA last September. Although taken by surprise, GM and the Motor Vehicle Manufacturer's Association have attacked the waiver in court.

''The reason the motor makers don't want 12 percent methanol is because they don't understand the problems can be solved,'' says Garvin De Shazer of Energos, a methanol manufacturing firm. He claims that through a special blend of methanol, butanol, and other proprietary ingredients, these problems have been overcome. He says his firm is setting up a major demonstration program run by the Southwest Research Institute to reassure Detroit.

Besides beating back the lawsuit, Energos's strategy involves selling gasoline refiners on the idea of blending Petrocoal into gasoline. ''We are trying to show the most powerful industry the world has ever known how it can profit while helping to solve national security and environmental problems,'' says De Shazer. He claims that their blend can save refiners 2 to 5 cents a gallon.

This comes at an opportune time. Refiners are suffering financially from the recession-reduced gasoline consumption. Also, the EPA may shortly reduce the amount of lead refiners can use by 37 percent. This will make it more expensive for them to achieve satisfactory octane levels. Methanol boosts octane.

Informed sources say at least six major oil companies have large teams exploring methanol. Also, they claim that General Motors expects to be producing all alcohol-fueled automobiles by the year 2020. However, neither GM nor the oil companies are in a hurry to embrace this fuel.

Experts also foresee the production of methanol from coal. For almost a decade now, a number of groups have been trying to put together giant coal-methanol plants. Several are trying to get federal subsidies from the Synthetic Fuels Corporation. These range in size from 1.5 million to 7.5 million gallons per day and in cost from $1.4 billion to $7 billion.

The economic studies indicate that such monster plants can produce methanol for as little as 40 cents a gallon. But these plants represent ''bet-the-company''-sized investments -- a hefy financial risk unless a strong fuel market develops.

Coal-methanol people generally argue that the much smaller plants suitable for making methanol from wood and agricultural wastes cannot compete with the economic benefits large-scale, coal-fueled plants promise. But a number of experts question this.

Plants for producing methanol from wood, agricultural wastes, and other forms of biomass must be smaller than coal plants for two major reasons. First, these ''feedstocks'' are spread more thinly than coal. Second, biomass has less energy per pound than coal, so it cannot be economically transported over long distances. The largest wood-methanol plant proposed is 275,000 gallons a day, one-fifth the size of the smallest coal-methanol plant.

Another group bucking conventional wisdom is International Harvester. Despite its current financial problems, it has invested $2 million so far in development of a ''package'' methanol plant. This is a small, 6 million-gallon-a-year plant built in a factory and transported by truck or rail to the site rather than being built in the field.

Company studies indicate that a package plant could produce methanol for the same price as a plant 15 times its size built on-site. This is due primarily to the greater efficiency of building in a factory and the savings possible by building identical units rather than one-of-a-kind, Harvester's Steven Gage says.

Harvester is currently trying to line up financing for this project. If it is successful it hopes to begin marketing these plants within four years.

The farm equipment manufacturer chose methanol, rather than the ethanol, because methanol is made from the woody parts of crops rather than grain. As a result, it is not in potential competition with food production.