Consumer Demand for Methanol
This paper explores the conditions under which consumers are willing to purchase non-petroleum fuels and vehicles in order to enhance the understanding of consumer purchasing behavior. The role of fuel prices, fuel availability, engine power, and air pollutant emissions is examined as well as the role of government in the fuel and vehicle purchase decision. After careful analysis, the authors are skeptical about the hypothesis that new fuels must be introduced incrementally and that methanol must pass through an extended transition period of flexible-fuel vehicles. Dedicated (single-fuel) vehicles can be optimized to take advantage of the unique attributes of a particular fuel and thus result in fewer emissions, more power, and less cost. Therefore, a quick transition to dedicated vehicles would be highly superior to prolonged reliance on inherently inferior flexible-fuel vehicles. This paper discusses why concerns about consumer acceptability of dedicated vehicles are exaggerated and how marketing and investment strategies can be designed to overcome the reluctance of consumers to purchase dedicated methanol vehicles. This paper is neither about the economics of methanol and other alternative-fueled vehicles nor about the legitimate profit making concerns of fuel and vehicle suppliers. The underlying premise of the paper is that low-emitting fuels and vehicles are desirable and inevititble—and that it is only the time frame of such a transition that is debatable. The paper focuses on how behavior might or could change and on the role government and industry can play in altering behavior and attitudes. This understanding of behavior and attitudes will provide the basis for minimizing the financial and temporal investment in flexible-fuel vehicle and help to create an efficient strategy for introducing cleaner burning, dedicated methanol vehicles.
Published in Methanol as an Alternative Fuel Choice: An Assessment, ed. W.L. Kohl, chapter 15.