Rationale: The world’s major automakers have all announced plans for the market introduction of fuel cell vehicles by 2003/2004. These fuel cell vehicles will require a source of hydrogen fuel. As a liquid fuel rich in hydrogen, methanol is the leading candidate to power tomorrow’s fuel cell cars and buses. A comprehensive needs assessment should be performed to determine how best to provide methanol fuel to an emerging market for fuel cell vehicles.

1. Methanol Fuel Supply and Demand Requirements for a Fuel Cell Vehicle Market

Issue: In a report titled “Looking Beyond the Internal Combustion Engine: The Promise of Methanol Fuel Cell Vehicles,” the Methanol Institute estimated that by 2020, the worldwide fleet of fuel cell vehicles could reach 35 million cars and buses, creating a demand for 15.4 billion gallons of methanol annually (roughly 135% of current world capacity). While detailed marketing plans for fuel cell vehicles have yet to be announced by the world’s major automakers, most have stated that 2003/2004 is their target for initial vehicle introduction. The infrastructure requirements to provide methanol fuel for fuel cell vehicles will be largely dependent on anticipated vehicle introductions.

Need: Based on discussions with officials in the automotive and fuel cell development industries, a market assessment will be completed to estimate a potential schedule for the introduction of fuel cell vehicles over the next 20 years. The vehicle market assessment will include an attempt to geographically qualify the future distribution of fuel cell vehicles. Based on this assessment, estimates of the potential demand for methanol fuel to serve these vehicles will be derived, including an estimate of the retail fueling requirements. The study also will include a review of available and anticipated methanol production capacity. In addition, this assessment will attempt to forecast methanol fuel pricing issues at both the wholesale (spot market) and retail (pump price) levels. This estimate also will include the potential retail sales margins for methanol sold for use in fuel cell vehicles compared with margins for gasoline sold for use in internal combustion engines.

2. Methanol Fuel Specifications for Fuel Cell Vehicles

Issue: Supplying hydrogen for fuel cells using methanol can be accomplished either by using reformers to convert the liquid fuel into a hydrogen gas stream or introduced directly to the fuel cell (direct methanol fuel cell). Both applications are likely to have very stringent tolerances for the methanol fuel feedstock. While methanol is produced at a purity in excess of 99.95%, there is a potential for contaminants to be picked up in the distribution chain. In addition, there may be justification for certain additives to be used that would impart odor and/or taste to methanol, or improve the visibility of a methanol flame. The Methanol Institute is leading efforts by the public/private Methanol Specification Council for Transportation Fuel Cells to produce a consensus specification for methanol that meets the needs of the automotive, fuel retailer, and methanol industries. In addition, the Methanol Foundation is supporting projects to test various grades of methanol fuel, potential contaminants and additives in both fuel cell reformers and the direct methanol fuel cell.

Need: There may be significant data gaps in the quest to design a methanol fuel specification for fuel cell vehicles that are being left unmet. For example, a satisfactory additive to impart luminosity to a methanol flame has yet to be identified. While the Specification Council is focusing on methanol produced from current processes using natural gas as a feedstock, there may be issues left unresolved that are specific to methanol produced from renewable feedstocks such as landfill methane gas, dedicated woody biomass crops, sawdust and even marine seaweed. This study will attempt to fill any data gaps regarding methanol fuel specifications, and take a forward look at their impact on renewable-based methanol. Finally, once a consensus specification has been determined, it would be extremely useful to obtain the support of an international standard setting body.

3. Underground Storage Tank Inventory for Methanol Compatibility

Issue: Given California’s requirements that replaced and upgraded underground storage tanks (USTs) feature double-walled containment, it is widely assumed that these tanks are largely methanol compatible (the storage of methanol requires the use of double-walled tanks). Nationally, a significant portion of the newly replaced and upgraded USTs in compliance with federal requirements, also feature double-walled tanks.

Need: A two-phased inventory of the methanol compatibility of existing USTs will be completed, focusing first on California and then nationally. The inventory will determine what proportion of existing USTs feature double-walled containment, survey UST manufacturers to assess warrantee coverage for methanol fuel containment, and evaluate the potential for existing USTs to store neat methanol (M-100) for use in fuel cell vehicles.
4. Comprehensive Costs Analysis of Adapting Existing Gasoline Fueling Stations to Dispense Methanol

Issue: In 1996, the California Energy Commission released “Methanol Fueling System Installation and Maintenance Manual” (updated November 1998), providing a comprehensive guide to installing methanol dispensing equipment. In 1999, a report on “Methanol Refueling Stations Costs” was prepared by EA Engineering for the Methanol Foundation quantifying the costs for adding methanol fueling capability to an existing fueling station. This report concluded that refueling stations for dispensing methanol will be very similar to today’s gasoline fueling stations, having the same layout and employing the same types of equipment. The capital costs to adapt existing stations to dispense methanol are moderate, ranging from less than $20,000 to $70,000, under varying scenarios using either underground and above-ground storage tanks.

Need: Retail service station operators will require detailed information to design, specify and install methanol dispensing equipment, and a good estimate of anticipated capital equipment and installation costs. A comprehensive review of the costs of adapting existing gasoline fueling stations to dispense methanol will be conducted. This review should include costs for tanks, associated piping, dispensers, controls and installation expenses under several station configurations, with complete listings of methanol compatible equipment and pricing (per unit and bulk).

5. Innovative Methanol Fueling Station Designs

Issue: Methanol fuel cell vehicles will offer a radically different propulsion system from the internal combustion engine that has been dominant for a century. Over the past few years, there have been significant changes in gasoline dispensing technology (such as stage two vapor recovery), and new technologies are emerging (such as the use of radio frequency identification or “RFID” as used in Mobil’s “Speedpass” system). There may be significant marketing and environmental benefits from exploring different design strategies for methanol fueling stations that take advantage of the latest state-of-the-art technology.

Need: An assessment will be conducted to determine the potential benefits of adopting state-of-the- art technology for dispensing fuels. This assessment will include, but not be limited to: the use of RFID for activating methanol dispensers and preventing misfueling of conventionally fueled vehicles; various strategies for “closed loop” fueling systems that prevent the release of evaporative emissions; and innovative structural designs for methanol fueling dispensers.

6. Methanol Distribution Infrastructure Needs

Issue: Methanol is one of the world’s most widely distributed fuel and chemical commodities. Today, methanol is shipped across oceans, barged up rivers, carried in rail cars and moved by tanker truck. To serve a potentially vast market for fuel cell vehicles, the methanol distribution and storage infrastructure will require some change. Throughout the U.S., gasoline is distributed via pipeline, and early testing indicates that methanol also may be shipped via pipeline.

Need: An assessment of the distribution needs for providing methanol to a growing market for fuel cell vehicles will be conducted. This assessment will first begin with an inventory of existing marine and rail transport capability, and an inventory of methanol bulk storage/terminal facilities. This inventory should be examined for its proximity to potential retail fuel markets. Once the existing infrastructure is inventoried, an analysis should be performed to overlay the vehicle market introduction and methanol supply/demand assumptions to determine the need for distribution facility expansion. This analysis would include looking at the use of existing pipelines for distributing methanol regionally and nationally.

7. Methanol Fueling Station Fire Safety Practices

Issue: Pure methanol is much harder to ignite than gasoline and burns at a much slower rate -- about 60% slower. Methanol also burns much cooler, releasing its energy at one-fifth the rate of burning gasoline. While under ideal daylight conditions methanol does burn with an invisible flame, fuel related fires typically combust some type of material that will impart color to the flame. Methanol fires are contained in a much different manner than gasoline. For example, when an engine fire occurs in a methanol fueled Indy racecar, pit crews simply pour water on the engine to put out the fire. Gasoline fire suppression systems at existing service stations may not be suitable for extinguishing methanol fires that may occur during refueling or bulk fuel off-loading.

Need: Different fire suppression systems will be considered for fueling stations adding methanol dispensers. Consideration will be given for luminosity additives to methanol fuel, or on-board vehicles systems that can automatically inject an additive into the fuel tank if a fire is detected. This effort will be coordinated with fire safety agencies, such as the National Fire Academy.

8. Methanol Fueling Stations Codes and Standards

Issue: Gasoline stations are highly regulated by federal, state and local agencies. The addition of methanol dispensers and storage tanks may require changes to these ordinances. Revisions to existing codes and standards also may offer an opportunity to require the use of methanol compatible materials in the design of storage tanks, piping and dispensers.

Need: A comprehensive review of existing federal codes and standards for fueling stations will be conducted, as well as reviews of typical state and local codes. Existing codes and standards will be analyzed for their compatibility with methanol fueling systems. Model codes and standards will be designed to accommodate the use of methanol fuels, including the establishment of methanol tolerance standards that can be incorporated in the design of new fueling stations or the retrofit of existing facilities.
9. Full Fuel-Cycle Emissions of Methanol Fuel Cell Vehicles

Issue: A number of organizations have or are currently reviewing the full fuel-cycle emissions of methanol fuel cell vehicles, the so-called “well-to-wheel” emissions, including Argonne National Laboratory, Union of Concerned Scientists, Massachusetts Institute of Technology and the University of California, Davis. These reviews have largely focused on greenhouse gas emissions of carbon dioxide, with some attention paid to emissions of volatile organic compounds, oxides of nitrogen and particulate matter. It is generally agreed, that full fuel-cycle emissions of methanol fuel cell vehicles will produce roughly half the carbon dioxide produced from using gasoline in an internal combustion engine. Recent advances in methanol production technology from natural gas will improve this further. Much of the current research fails to consider using renewable feedstocks for methanol production such as flared natural gas, wood, coal, municipal solid wastes, agricultural material and even seaweed, that would have enormous benefits in reducing greenhouse gas production.

Need: A comprehensive review will be performed of existing full fuel-cycle emission studies for methanol fuel cell vehicles. Based on this review, a report will be prepared to summarize the findings of existing research, offer a critique of the current literature, and identify any future research needs. The report also will focus on the use of renewable feedstocks for methanol production and the implications on greenhouse gas production.

10. Fate and Transport of Methanol in the Environment

Issue: In January 1999, a report titled, “Evaluation of the Fate and Transport of Methanol in the Environment” prepared by Malcolm Pirnie, Inc. for the Methanol Institute was released. The report examined the fate and transport of methanol released into the environment under several conceptual release scenarios. The report found that the fate and transport of methanol in the environment is well understood. Methanol spills to the soil, groundwater, and surface water will quickly biodegrade under both aerobic and anaerobic conditions and, consequently, methanol is not expected to persist. Methanol exhibits a lower toxicity to both humans and indigenous microbes than conventional gasoline. Therefore, based on this analysis, methanol appears to be a more environmentally benign fuel compared to conventional gasoline. The Malcolm Pirnie study did identify several areas where additional research would be useful.

Need: An analysis will be conducted of past methanol releases that may have occurred at methanol fueling areas, storage facilities, production plants, or during transportation to verify that methanol does not accumulate in the environment, nor does it pose a threat to drinking water resources. The fate and transport of a methanol plume may become commingled with a gasoline plume, and the potential effect of this interaction will be studied. If any of these studies indicate that methanol may persist in the subsurface, an evaluation will be completed to determine the best technology for remediation and treatment.

11. Public Policy Options for Encouraging the Use of Methanol Fuel

Issue: At the urging of the Methanol Institute and other alternative fuel industry representatives, the Taxpayer Relief Act of 1997 changed the excise tax structure for methanol by basing the rate of tax on its BTU equivalence with gasoline. California is the only other state that makes a similar adjustment, every other state taxes methanol on a volume basis just like gasoline. Since methanol has roughly half the energy content of gasoline, the excise tax is effectively doubled for methanol. A strong case can be made for the need to offer tax incentives for the use of methanol fuel. Existing federal tax credits for the purchase of electric and fuel cell vehicles are set to expire in 2004, just as fuel cell vehicles are entering the marketplace. Many states offer a variety of incentives for the use of alternative fuel vehicles. Federal laws such as the Energy Policy Act and the Clean Air Act contain a number of goals and requirements regarding the use of alternative fuels. However, the implementation of these federal laws has not had the desired effect of stimulated broad markets for alternative fuel vehicles.

Need: Current federal and state public policies effecting alternative fuels will be analyzed. A series of public policy options will then be offered to encourage and accelerate the successful market introduction of methanol fuel cell vehicles. These public policy options will focus on federal legislative and administrative initiatives, as well as what can be done at the state level.

12. Methanol Fuel Cell Vehicles and Fueling Stations Education and Outreach

Issue: Fuel cell vehicles are a radically different form of propulsion, and a significant amount of education will be required to inform consumers about the operation and benefits of fuel cell cars. While methanol is a liquid and is handled just like gasoline, it is a different fuel that consumers are largely unaccustomed to using. We can fully expect the automotive industry to use its considerable marketing resources to lead consumer education efforts in support of the introduction of fuel cell vehicles. Past efforts to educate consumers about the use of alternative fuels have too often been haphazard and incomplete.

Need: A marketing plan will be prepared to provide direction and tools for consumer education efforts regarding the use of methanol in fuel cell vehicles. This effort will focus on both fleet operators and the general public. The plan will be shared with a broad audience of stakeholders including oil companies, automakers, retail service station operators, government officials, environmentalists and the news media.