90
Alternative Fuels for Transportation
when its value was around one-half that of gasoline. Offsetting this was the
phasing out of leaded gasoline in developed countries that required the use
of reformulated gasoline, as in the United States, which promoted the use of
MTBE derived from methanol (Chemlink Consultants 2009).
The global market in methanol has seen considerable structural changes
since the early 1990s. By the 1990s, methanol awareness seems to have had
gradually diminished along with the strong urgency that was created during the by then long-forgotten oil crises. Global demand for methanol, however, continued to increase in accordance to growing industrial production of
chemical commodities and the widespread use of MTBE as a gasoline additive. By the mid-1990s, however, market outlook prognoses began to view the
long-term prospects for this major methanol outlet as a growing uncertainty.
The global methanol demand increased about 8% per year from 1991 to 1995,
then 3–4% per year over the next 10-year period following 1995. The methanol production capacities installed throughout the world increased from 25
million tons per year in 1990 to 33.5 million tons per year in 1997. The industry has evolved from a relatively large number of fragmented producers to
a group of much larger, sophisticated international distributors and marketers. This structural change has seen the emergence of such market leaders
as Methanex and SABIC and consolidation of production in major hub countries such as Chile, Trinidad, Saudi Arabia, and New Zealand.
World methanol demand reached 31 million tons in 2000, having grown at
an average rate of nearly 6% in the 1990s. World methanol capacity growth
has more than kept pace with world methanol demand over 1990s. In 2000 the
world capacity for methanol production was about 40 million tons per year
while capacities in the United States and Western Europe were 6.6 and 4.1
million tons, respectively. The capacity additions focused on methanol production in areas with access to low cost or stranded gas. During the period
1995–2000, more than 5 million tons of new methanol capacity was added
in Chile, Trinidad, and Saudi Arabia. Significant expansions also occurred
in the countries of Norway, New Zealand, and Venezuela during the same
period (Hamid and Ali 2004; Weissermel, Arpe, and Lindley 2003). In 2005,
the global demand for methanol amounted to about 32 million tons per year
while it was 29.4 million tons in 2001. In 2006, worldwide methanol production
capacity was over 46 million tons and nearly 35 million tons are consumed
per year. A detailed analysis of methanol market is published annually by
Chemical Market Associates, Inc. (CMAI). The report provides information
on supply, demand, production, history, and forecasts for methanol capacity,
trade, and pricing (Lee Speight, and Loyalka 2007; Nouri and Tillman 2005).
The CMAI consultants assess that the methanol industry stumbled in 2008
although year-over-year growth was seen in the last few years. Highly crude
oil prices have resulted in a disastrous housing market in the world and a
visibly slumping automobile sector have negatively impacted 2008 methanol demand. China’s appetite for methanol across much of the derivative
slate, plus methanol blending into gasoline and DME will continue to fuel
Alternative Fuels for Transportation
when its value was around one-half that of gasoline. Offsetting this was the
phasing out of leaded gasoline in developed countries that required the use
of reformulated gasoline, as in the United States, which promoted the use of
MTBE derived from methanol (Chemlink Consultants 2009).
The global market in methanol has seen considerable structural changes
since the early 1990s. By the 1990s, methanol awareness seems to have had
gradually diminished along with the strong urgency that was created during the by then long-forgotten oil crises. Global demand for methanol, however, continued to increase in accordance to growing industrial production of
chemical commodities and the widespread use of MTBE as a gasoline additive. By the mid-1990s, however, market outlook prognoses began to view the
long-term prospects for this major methanol outlet as a growing uncertainty.
The global methanol demand increased about 8% per year from 1991 to 1995,
then 3–4% per year over the next 10-year period following 1995. The methanol production capacities installed throughout the world increased from 25
million tons per year in 1990 to 33.5 million tons per year in 1997. The industry has evolved from a relatively large number of fragmented producers to
a group of much larger, sophisticated international distributors and marketers. This structural change has seen the emergence of such market leaders
as Methanex and SABIC and consolidation of production in major hub countries such as Chile, Trinidad, Saudi Arabia, and New Zealand.
World methanol demand reached 31 million tons in 2000, having grown at
an average rate of nearly 6% in the 1990s. World methanol capacity growth
has more than kept pace with world methanol demand over 1990s. In 2000 the
world capacity for methanol production was about 40 million tons per year
while capacities in the United States and Western Europe were 6.6 and 4.1
million tons, respectively. The capacity additions focused on methanol production in areas with access to low cost or stranded gas. During the period
1995–2000, more than 5 million tons of new methanol capacity was added
in Chile, Trinidad, and Saudi Arabia. Significant expansions also occurred
in the countries of Norway, New Zealand, and Venezuela during the same
period (Hamid and Ali 2004; Weissermel, Arpe, and Lindley 2003). In 2005,
the global demand for methanol amounted to about 32 million tons per year
while it was 29.4 million tons in 2001. In 2006, worldwide methanol production
capacity was over 46 million tons and nearly 35 million tons are consumed
per year. A detailed analysis of methanol market is published annually by
Chemical Market Associates, Inc. (CMAI). The report provides information
on supply, demand, production, history, and forecasts for methanol capacity,
trade, and pricing (Lee Speight, and Loyalka 2007; Nouri and Tillman 2005).
The CMAI consultants assess that the methanol industry stumbled in 2008
although year-over-year growth was seen in the last few years. Highly crude
oil prices have resulted in a disastrous housing market in the world and a
visibly slumping automobile sector have negatively impacted 2008 methanol demand. China’s appetite for methanol across much of the derivative
slate, plus methanol blending into gasoline and DME will continue to fuel