$4000 Versus $2250 With Existing Technology: What Are We Waiting For?

Monday, March 26, 2012

The following is a comment made yesterday by Kevin D'Arcy on the OFS Facebook page (reprinted here with his permission):

I just did some quick math using Robert Zubrin's data from his methanol experiment with his Opal. Using a $4.00 per gallon price for gasoline and a $1.50 price per gallon of methanol, if Zubrin drove his Opal 36,000 miles it would cost him $2250 if he consumed methanol. If he consumed gasoline it would have cost $4000. That is almost half the price — and all of the profits and associated revenues would remain in America. And we would have the added benefit of cleaner air. So why is this so difficult for people and politicians to understand? Are we led by traitors and crooks?


Walter Breidenstein March 27, 2012 at 4:46 AM  

You may want to consider adding in the taxes to the methanol price as well. The Methanol Institute has a breakdown comparing methanol with gasoline, including taxes and fees.

As a methanol producer ourselves, we do want to properly represent our value. The quote above is not really entirely accurate.

I do hope this email is published as some blogs only allow what they want to tell the public, and not really what are the facts. My hope is that this blog will give people the facts on methanol...as there is so much negativity on methanol that we face as a American producer, it is best to set the record straight on fees.

darcyfamily March 27, 2012 at 2:26 PM  

Dear Mr. Breidenstein,

Thank you for your correction regarding the price of methanol. I wrote the original Facebook comment above and tried to be reasonable in my numbers. My understanding is that the spot price for methanol is approximately $1.13. I added 37 cents in taxes to that price. If those numbers are far off, I apologize. Perhaps you can post a link to the more accurate pricing. I certainly do not wish to mislead anyone.

darcyfamily March 27, 2012 at 4:33 PM  


Okay, I found the methanol/gasoline price comparison on the methanol.org web site (link above.) According to that study, methanol would have a retail pump price of $1.85 per gallon. I would be interested in seeing a breakdown of that price, but I assume it is accurate. So here are the numbers based upon the corrected price for methanol, and still using Zubrin's data from his experiment. Driving 36,000 miles on methanol at $1.85 per gallon would cost $2,706. Driving 36,000 miles on $4.00 gasoline would cost $3,967. That is still more than a 30% savings. And still a no-brainer.

Thanks again for your correction, Mr. Breidenstein.

Kevin D'Arcy

Matt March 30, 2012 at 7:21 AM  


Feel free to reach out to us at the Methanol Institute anytime to answer these types of questions. Here is an answer I emailed to another curious mind recently.

Dear XXX,

Here is how the number is developed. Methanol costs $1.12 a gallon right now for the Gulf Coast spot price.

You would add $0.46 for taxes, retail, distribution and markup. This number was developed by TIAX in a study of methanol fuel. So methanol (M100) at the pump would retail for about $1.58. The more likely blend we would see at the pump though would be M85 (15% gasoline) – this would cost about $1.90 with all taxes and markup included (raw 83 octane gasoline is at $3.25 a gallon right now).

Methanol contains about half of the heating value (BTUs) of raw gasoline, a touch more than half of the BTUs of reformulated gas with ethanol. Now if you don’t take advantage of the higher octane of methanol, and burn it in a standard vehicle set up – this means you will get less mileage per gallon. To factor this in, we do what is called a Gasoline Gallon Equivalent (GGE) cost, and do a straight ratio of energy.

So M85 fuel ($1.90 at the pump) would have a GGE cost of $3.25 – the number quoted at the conference was $3.16, but since the cost of gasoline has risen in the last couple of days, the 15% in M85 that is gas has made the price higher.

AAA Fuel Gauge has regular gasoline at $3.93 today, and E85 (adjusted for GGE) selling for $4.43.

This means you would save about $0.68 a GGE on M85.

Let me know any other questions.

Also Kevin - your closing comment about traitors and crooks is incredibly unproductive, and attempts to oversimplify what is actually a very complex issue. Let's stick to disseminating accurate information for now (like the fact that Zubrin was using a Cobalt, not an Opal), and leave the name calling to the Sunday talk shows. I am surprised that the OFS website would even publish something like that.

Based on these inputs defined above - the spread would be more like $4415 for gasoline and about $2,600 for methanol, depending on the actual performance of the Cobalt.


Matt Roberts
Government Affairs - Americas/Europe
Methanol Institute

Styrke Vennlighet April 5, 2012 at 11:56 PM  

Mr. Roberts, you say it is unproductive to call politicians traitors and crooks, but you don't say whether it is true. If you know something about senators' and representatives' motivations and character, let us in on it. But I think Kevin said what many of us feel. Especially when the Natural Gas bill got so many cosponsors so fast while the Open Fuel Standard bill is gaining cosponsors so slowly, and after reading Robert Zubrin's comparison of the two bills, it makes you wonder. What could these politicians be thinking?

Now, personally I don't think most of them are crooks or traitors. I've met a few before and they seemed like regular people trying to make complex decisions with endless amounts of tradeoffs and compromises. Especially after watching Sandalow's videotaped address to the Methanol event recently, one can realize how complex this issue is, and that was just for methanol, which is only one aspect of the Open Fuel Standard bill.

But it would also be naive to think that oil money is not influencing these politicians and the Open Fuel Standard would not be good for oil companies. Even if the politicians sincerely think they're not influenced by campaign money, they're probably just fooling themselves. I remember reading a study about how doctors who owned their own X-ray machines ordered a lot more X-rays for their patients than doctors who didn't own their own. And when the doctors took a totally anonymous questionnaire, they answered, probably truthfully, that they didn't believe owning their own machine influenced their decisions. But obviously it did. And from the outside it would not be too farfetched to say those doctors were crooks for ordering more X-rays and exposing their patients to more radiation than other doctors.

One thing I think is unproductive is your criticism of both Kevin and the blog people. They're on our side. I'm GLAD they posted this comment. I've learned a lot from these comments by Walter and Kevin. It sparked a productive conversation, except for maybe your overly harsh criticisms. But I even learned something from the rest of YOUR comments. When people come to this site, they'll be able to read all these comments and they'll be engaged and educated. Isn't that what this is supposed to be for?

Anonymous,  May 19, 2012 at 9:37 AM  

Inasmuch as the US government derives income from fuel sur-charges and taxes one wonders if they will actually promote methanol as a possible alternative to gas(from foreign entities - much less the Bakken and Three Forks shale oil reserves in MT and ND). After all for a fuel that's 43% LESS than gas they'd also take in FAR LESS in tax revenues...and fewer taxes are already a major concern in this economy, aren't they?

Abe Shackleton May 19, 2012 at 12:45 PM  

That's an interesting thought: Will the government promote methanol as an alternative to gasoline?

One thing I can say is: There is no single, monolithic government. It is made up of individuals with widely varying opinions and backbone and character. Some would definitely promote it, and some would not.

But there are always consequences to new laws, and that would probably have to be one that needs to be worked out: Where will that tax income come from if we use less gasoline? Probably it would be added to the new fuels.

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