Non-petroleum based liquid fuels are essential for reducing oil dependence and greenhouse gas generation. Increased substitution of alcohol fuel for petroleum based fuels could be achieved by 1) use in high efficiency spark ignition engines that are employed for heavy duty as well as light duty operation and 2) use of methanol as well as ethanol. Methanol is the liquid fuel that is most efficiently produced from thermo-chemical gasification of coal, natural gas, waste or biomass. Ethanol can also be produced by this process but at lower efficiency and higher cost. Coal derived methanol is in limited initial use as a transportation fuel in China. Methanol could potentially be produced from natural gas at an economically competitive fuel costs, and with essentially the same greenhouse gas impact as gasoline. Waste derived methanol could also be an affordable low carbon fuel. In this paper we describe modeling studies of alcohol fuel operation in highly turbocharged direct injection spark ignition engines operated at high compression ratio. The studies suggest that these engines could be as or more efficient than diesel engines while also providing advantages of lower vehicle cost, lower emissions and higher power. The strong knock suppression resulting from the alcohol evaporative cooling enables operation with power densities (horsepower per liter) up to three times that which can be provided by diesel engines, due to increased torque and higher engine speed. This makes possible highly downsized alcohol engines (e.g. a 15 liter diesel engine could potentially be replaced by a SI engine with a displacement of 7 liters or less). M85 (around 85% methanol, 15% gasoline by volume) has roughly 60% of the range of diesel fuel for a given fuel tank size. However, the weight reduction from the highly downsized engines could essentially compensate for the increased alcohol tank and fuel weight needed to obtain the same range as a diesel vehicle. We discuss alcohol fueled vehicle operation with various mixtures of gasoline and alcohol and the possibility of an additional increase in efficiency by onboard alcohol reforming using exhaust heat. Tri-fuel (methanol/ethanol/gasoline) flexible fuel operation is also discussed.