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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.

The transportation sector in the United States is a major contributor to global energy consumption and carbon dioxide emission. To assess the future potentials of different technologies in addressing these two issues, we used a family of simulation programs to predict fuel consumption for passenger cars in 2020. The selected technology combinations that have good market potential and could be in mass production include: advanced gasoline and diesel internal combustion engine vehicles with automatically-shifting clutched transmissions, gasoline, diesel, and compressed natural gas hybrid electric vehicles with continuously variable transmissions, direct hydrogen, gasoline and methanol reformer fuel cell hybrid electric vehicles with direct ratio drive, and battery electric vehicle with direct ratio drive.

Long-haul and other heavy-duty trucks, presently almost entirely powered by diesel fuel, face challenges meeting worldwide needs for greatly reducing nitrogen oxide (NOx) emissions. Dual-fuel gasoline-alcohol engines could potentially provide a means to cost-effectively meet this need at large scale in the relatively near term. They could also provide reductions in greenhouse gas emissions. These spark ignition (SI) flexible fuel engines can provide operation over a wide fuel range from mainly gasoline use to 100% alcohol use. The alcohol can be ethanol or methanol. Use of stoichiometric operation and a three-way catalytic converter can reduce NOx by around 90% relative to emissions from diesel engines with state of the art exhaust treatment.