China isn’t waiting for us to move

Some very exciting news that should also serve as a dire warning to US policymakers: China sees the writing on the wall and is rapidly moving to reduce its need for oil in the transportation sector, which accounts for the bulk of the growth in Chinese oil consumption, by diversifying its transportation fuel supply.  China is not waiting for the US to move on fuel choice, it is taking action to harness its own domestic resources to produce transportation fuel and most assuredly is making a shift toward true flexible fuel vehicles that can use gasoline, ethanol, AND methanol. This is exactly the sort of tranformation that the Fuel Choices for American Security Act based on the Set America Free blueprint would achieve, and Congress had better recognize that fuel choice is China’s Sputnik, and if we do not act now, its rumbling engines will leave us in the dust.

Here is the latest news:

Beijing has settled on a national standard for methanol as an automotive fuel, a decision which will legitimise and bolster a market that has been growing rapidly without central government approval.

The standard, which has yet to be officially announced, was reported in a trade magazine and confirmed yesterday by an official attached to the National Development and Reform Commission (NDRC), the economic planning body responsible for the standards.

Local companies have under construction, or are awaiting approval to build, plants to produce methanol equivalent to about 20 per cent of China’s present oil consumption, according to Jim Brock, a Beijing-based energy consultant.

By the time the plants, which convert coal to liquids, start producing in 2011 to 2013, China’s oil demand will have doubled, allowing methanol to supply about 10 per cent of the market.

“It will be a major alternative fuel which does not exist in any other country in the world,” said Mr Brock.

Methanol, a chemical usually derived from coal, can be added to petrol to create a cleaner-burning fuel. When oil prices are high, it is also cheaper.

China has abundant coal but declining reserves of oil and is expected to become ever more reliant on imports. Imports now account for about 40 per cent of Chinese oil consumption.

Several of China’s coal-rich provinces, impatient with the NDRC’s long deliberations over thestandard, have issued interim standards for methanol over the last year.

Shaanxi, in north-central China, which produces about 600m tonnes a year of coal – just over a quarter of national production – has issued stickers allowing cars using pure methanol free passage on the province’s toll roads.

“Shaanxi is doing the best job in China in promoting the use of methanol as fuel,” said Peng Zhigui, head of the provincial methanol office, in Taiyuan.

“Our aim is to solve the problem of China’s oil shortage. We are creating a new kind of energy.”

Shaanxi officials had complained that the NDRC had been holding back the development of methanol in favour of ethanol, which is mainly made using corn in China.

The complaint largely reflects provincial rivalries. Ethanol is produced using corn grown in the country’s north-east – China’s poor rustbelt – an area that has been given priority by the central government.

The two methanol standards issued by Shaanxi use fuel with 15 per cent and 85 per cent of methanol respectively.

Mr Peng said the province already had 100 buses using the “M85″ fuel and is in discussions with Chery, a local car company, to build a fleet of taxis designed to run on the fuel.

Production of ethanol is also soaring in China, partly driven by the high prices available for exporters on the world market.

Critics of ethanol say it is inappropriate to use corn to make fuel at a time when China is struggling to keep precious agricultural land in production to ensure “food security” for the country.

Methanol and ethanol are different alcohol fuels that can both be used in flexible fuel vehicles, cars that look and perform just like gasoline only cars but can be powered with a variety of fuels and cost less than $150 extra to manufacture.  Ethanol in the US is primarily made from corn.  In Brazil it is much more efficiently made from sugarcane, and that are many countries with a suitable climate for growing sugarcane that could also produce ethanol and export to the US should we decide to remove the protectionist 54 cent a gallon tariff on ethanol imports.  Methanol can be made from biomass, natural gas, and coal.

Additional information:

The Methanol Economy

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