The big picture - a North American gas consumer's challenge in a global market

World methanol uses, production capacity for 1996 to 2000, and the overall fundamental facts about methanol consumption and supply are reviewed. Results suggest that the use of methanol as a fuel is growing rapidly and it is also tied directly with the MTBE fuel oxygenate. Methanol is competing directly with liquefied natural gas, particularly as the average cash cost of production is decreasing. Fundamentals of methanol economics are outlined, showing that with minor exceptions, methanol pricing reflects commodity products in general. There is no historical reason to expect that these fundamentals will change in the near future. In view of that, the best strategy to maintain market share is to be the lowest cost producer, keeping up efforts to enlarge markets, focusing on reliability of the product, and on economics of scale, technology and finance. Reducing capital and operating cost, and paying close attention to freight costs are equally important strategy components. Issues concerning traditional gas purchasing strategies for North American chemical companies, factors responsible for gas price volatility, and approaches to gas purchasing are also addressed. tabs., figs