Could This Greenhouse Gas One Day Fuel Your Car?

Photo credit: Flickr/Philppe 2009.

Whether you agree that carbon dioxide is fueling climate change or not, it is pretty clear that we should be emitting less of this greenhouse gas. The problem with being a more green society is that it costs more than our current fossil fuel-based approach. That could be about to change as new breakthroughs in science and technology are turning carbon dioxide emissions into something that can be utilized to fuel an economic benefit.

The most recent breakthrough in chemistry has found a way to convert carbon dioxide into methanol, which is a simple alcohol that can be used as a transportation fuel among other uses. This new method would use captured carbon to create a fuel that would cost less than gasoline. Further, it could replace the current costly approach, where this captured greenhouse gas is injected into the ground to sequester it by utilizing it to fuel our economy.

Methanol is a high-performing fuel with an octane rating of 100. The original methanol-to-gasoline process was developed by ExxonMobil (NYSE: XOM  ) in the 1970s during the oil crisis. At one point automakers were even developing flex-fuel vehicles capable of running on methanol. Not only that, but it was long favored by the racing industry, fueling the Indianapolis 500 for decades. Overall, it's much cheaper per mile than gasoline or ethanol. Further, unlike ethanol, it wouldn't cut into the corn supply needed for food production.

Methanol has a variety of uses such as in the production of formaldehyde, acetic acid, and other chemicals. Unfortunately, we don't produce a whole lot of it in the U.S. and are therefore required to import about 89% of our supply. Overall, the U.S. represents 10% of the global methanol market, which is growing about 7% per year, meaning there's a lot of opportunity for American companies to increase production.

Refining giant Valero (NYSE: VLO  ) is planning to do just that. The only difference is that it plans to upgrade natural gas into methanol, which is a much more proven approach. Not only would Valero's planned construction of a world-scale methanol plant help meet growing U.S. demand, but its products could serve the growing export market, with Asia an especially strong market for methanol. Valero has expansive export capacity already as it's a leader in exporting gasoline and diesel.

Overall, methanol is a more cost-efficient way to export natural gas as it's a higher-value product and already liquefied. That's part of the reason why there is still a lot of debate as to whether we should allow unabated natural gas exports. Many manufacturers believe we should use our low-cost natural gas to produce a higher-valued product like steel or other chemicals and export those instead. Upgrading natural gas to methanol instead of exporting just raw natural gas is another example of why some suggest we should keep our gas for our own consumption as it would be more of an economic benefit to upgrade gas first. 

Taking that a step further and one day exporting our waste greenhouse gasses to the world in a form of viable gasoline substitute would be a real coup. Many cars in Europe already run on gasoline mixed with methanol. That's really the only viable option at the moment as it will be tough for the fuel to break ethanol's current dominance in the U.S. due to the federal subsidies it receives.

A lot still needs to happen to see a greenhouse gas like carbon dioxide someday fueling our cars. First, the playing field needs to be leveled giving a carbon dioxide-based methanol a chance to even compete against ethanol. In addition to that, there would have to be a real concerted effort that this is the fuel the nation wishes to use in the future.

That's no sure thing. Natural gas and electric are vying to be what fuels our vehicles. While both emit less greenhouse gases than the gasoline that currently fuels our cars, neither option solves the problem of what to do with captured carbon other than spending money to have it sequestered. That's why it would be nice to see this greenhouse gas utilized instead of just stored away. It's certainly something to watch, but I don't expect to see any greenhouse gases fueling my car for the foreseeable future. 

We might already have our fuel of the future
Instead, I see natural gas playing a much larger role in fueling our economy. From being upgraded to methanol to being used as a transportation fuel, natural gas looks to have a big future. That's why I'm so intrigued by this little-known company which holds the key to the explosive profit power of the coming "no choice fuel revolution." Luckily, there's still time for you to get on board if you act quickly. All the details are inside an exclusive report from The Motley Fool. Click here for the full story!


Read/Post Comments (5) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 17, 2013, at 5:03 PM, cwon14 wrote:

    What a pile of Greenshirt drivel.

  • Report this Comment On October 17, 2013, at 5:43 PM, akeyedoc wrote:

    COP and other majors are also studying algea to oil. It has the potential to sequester CO2 and energy from sunlight to form into long change hydrocarbons (practically the same as diesel). The slow part is extracting the algae membranes and water from the oil. It works fine and is being used now but scaling efficiency will eventually be there. Would love to see this tech employed adjacent to large scale generating facilities and pump CO2 straight into the system without being released to the atmosphere.

  • Report this Comment On October 17, 2013, at 6:04 PM, tigerade wrote:

    Cwon, is this you by chance?

  • Report this Comment On October 17, 2013, at 9:09 PM, anyon wrote:

    Let me get this straight. We're going to convert carbon dioxide to methanol and then burn the methanol to produce carbon dioxide again. Sounds like a circular process that by the second law of thermodynamics results in a net loss of energy.

  • Report this Comment On October 18, 2013, at 8:12 AM, SchraderBrau wrote:

    You lost me at we should emit less of this gas.

    CO2 has not been proven to force climate. In fact the opposite, CO2 lags temperature. That was Al Gore's big lie and has since been roundly debunked. CO2 is a trace gas, at 400ppm it's like us looking at the Sun and saying the Argon must be causing all that heat. In addition the current concentration is dramatically lower than at other times through Earth's history. On the benefits side, CO2 fuels plant growth. Crop yields are improved. Deserts are "greening" as CO2 increases. Some how CO2 is bad but fertilizer is ok.

    I would expect the Fool to look at facts that would show a cooling trend and drivers, PDO, Sun activity, etc. and then consider the investment strategies for that. I would expect the Fool to point out that the temperature record we are looking at before 1980 has been "adjusted" many times to fit the story (look up Hansen and GISS adjustments). Maybe I missed it.

    I can't figure out why the Fool is suddenly shilling for this fertilizer of a story.

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