Methanol was first explored as a viable alternative after the '73 Oil Crisis, but it never really caught on. Methanol is the simplest form of alcohol, and while it can be found in coal, the air, and even wood, these days it is mostly derived from the methane component of natural gas. But unlike say, ethanol, there is no major lobbying effort to use methanol as fuel despite its abundance in American natural gas reserves. In fact, methanol is regularly used in performance cars and heavy-duty vehicles as something of an octane booster. It burns cleaner and better than gasoline, though it has even less energy than ethanol. Methanol can be created from any organic matter though, and its half-life is much less than that of gas, and it burns cleaner (though you must burn more of it to get the same energy, probably negating any environmental benefit).
There certainly is a case to be made for methanol, though I'd argue it'd be better to blend it with gasoline, much the same way we are blending ethanol, then try to use it as a stand-alone fuel. China mixed in over a billion gallons of methanol fuel into its fuel supplies last year, and it'll probably out pace that even next year. Sure, modifications to cars are minimal, and since it is a liquid the infrastructure is already in place. But perhaps it'd be better to focus on the alternatives that are already making headway like electricity, hydrogen, and ethanol. Sorry methanol, looks like you missed the bus this time.
Source: Green Car Congress
