The United States faces a dilemma in its dealings with Iran. The mullahs have become ever more provocative, not only seizing ships, but recently going so far as the launch a strike that knocked out half of Saudi oil production (5 percent of the world’s). In principle we could easily retaliate in kind. Iran’s oil terminal on Kharg Island handles 65 percent of the nation’s petroleum exports. It is a sitting duck that could be transformed into a blazing inferno with a dozen cruise missiles. But doing so would set off an oil price spike that would inflict massive damage on the world economy. While American oil production has climbed over the past decade from 5.5 million barrels a day to 12 million barrels, we consume more than 20 million barrels daily, making us the world’s largest oil importer. Moreover many of our key trading partners, including Europe, Japan, and China, would also be forcibly hit, making things even worse. So no matter what mischief they make, we can’t hit Iran where it would really hurt. But that’s not even the worst of it, because the decision to retaliate might not rest with us. From the Saudi point of view, the Iranian attack was not the equivalent of the 1941 raid on Pearl Harbor. It was more like a Japanese attack that destroyed every factory west of the Mississippi. Can we really count on the Saudi response to remain restrained forever?

We, and our friends all over the civilized world, depend for our critical fuel supplies on a region that can well be described as an explosives-filled madhouse. This vulnerability has been evident since 1973. It should have been corrected long ago. It needs to be fixed now.

But how? Some say electric cars are the answer. But newsmakers though they may be, electric vehicles comprise less than 1 percent of global auto sales, barely register among trucks, and are essentially zero among aircraft and ships. While a substantial fraction of trains are electric powered, virtually all other transportation systems are nearly 100 percent dependent on petroleum-derived liquid fuels.

The answer is to open the transportation fuel market to methanol and its derivatives. Methanol is the simplest alcohol, with chemical formula CH₃OH. It can be made from anything that is, or was once, part of a plant, including coal oil, natural gas, biomass, cellulosic or plastic trash, or even CO₂. It can be burned in automobile engines with trivial modification. It can also be readily transformed into a secondary product known as dimethyl ether (DME), a superior fuel for the diesel engines that power trucks, ships, and many trains.

Replacing gasoline with methanol made from coal would increase carbon emissions, but using methanol made from natural gas, biomass, trash, or CO₂ would decrease them. At this time, the most economical way to produce methanol is from natural gas, as the world is currently awash with it, so much so that hundreds of billions of cubic feet of it are being flared globally every year.  Turning trash into methanol could sharply reduce harmful ocean dumping. Creating a massive global market for methanol would allow the transformation of such wastes into resources.

However it is made, replacing petroleum fuels with methanol would improve air quality, as internal combustion engines burn much cleaner on methanol than gasoline, emitting sharply reduced amounts of carbon monoxide, NOx, hydrocarbons, and particulates. It was for this reason that in 1970s and 1980s, the state of California initiated a pilot program that demonstrated the use of tens of thousands of methanol cars for smog reduction. The cars worked very well, cutting smog and satisfying drivers with their excellent pickup (methanol is 105 octane.) They also demonstrated superior safety, since methanol fires can be put out with water. However few outside the state government wanted to buy methanol cars, because there were very few places to fill up. The state solved this problem by getting the Ford Motor company to develop the flex fuel car, which could run equally well on methanol or gasoline. Such vehicles had no restricted-supply downside. Far from it, by offering customers fuel choice, they allowed drivers to shop for bargains, buying whichever fuel was cheaper at any given time. Unfortunately, during the 1990s, the methanol advocates who had led the program all retired, leaving the flex fuel cause to be picked up by the ethanol industry, as flex fuel cars can also use that fuel as well. As a result, about 7.4 percent (20 million, compared to 1 million electric) of American cars are now flex-fuel, with a particularly large percent owned in corn growing states where the ethanol cause has a lot of support. Flex-fuel cars have also become very popular in Brazil, where sugar ethanol is frequently cheaper than gasoline.

Currently, flex-fuel cars can be produced at identical cost to non-flex-fuel versions of the same vehicle, as now that there is computer controlled electronic fuel injection the only difference is the use of different seal materials to insure methanol compatibility. If Congress passed a law requiring that all new cars and light trucks sold (not made–sold) in the United States be fully flex-fuel, able to run equally well on methanol, ethanol, or gasoline, within three years there would be about 60million such vehicles on the road. (20 million such vehicles are already on the road; and about 13 million new cars and trucks are sold annually in the United States).

At that point, methanol pumps would start appearing at filling stations coast to coast, in response to the market. Since methanol is cheaper than gasoline on a miles per dollar basis (it’s current spot price is $1.03/gallon—made from $0.15 worth of natural gas—with about two-thirds the miles per gallon as gasoline), drivers of older cars would have a strong incentive to convert their vehicles to flex fuel, as such conversions can be done for less than $5 in parts and about $100 in labor. In this way, the U.S. fleet could be substantially flex-fuel in less than 5 years. Furthermore, since foreign car makers would need to switch to producing flex fuel models in order to sell in the United States, car sales worldwide would quickly switch to meet the flex-fuel standard.

The strategic consequences of this transformation would be profound. By giving consumers worldwide fuel choice, such an “open fuel standard” would put a permanent competitive constraint on the price of oil. This would protect the world economy from destructive oil price shocks, as well as price manipulation by OPEC and associated bad actors. This would destroy the strategic leverage enjoyed by Iran and Saudi Arabia, among others, forcing them to conform their behavior to international norms or face the consequences. It would relieve poor developing sector countries from the harsh regressive consequences caused by OPEC price fixing, allowing them to use more of their precious foreign exchange to buy technology. This would benefit us as well. U.S. oil producers would also benefit compared to their foreign competitors, because we produce much more associated natural gas per barrel, and have much better pipeline systems for gathering it. The benefits for air quality, and thus public health, as well as other environmental issues, would also be marked.

As noted, methanol can also be made from CO₂. This requires energy, which could come from nuclear, solar, wind, hydroelectric, or other emission-free sources. So, while transforming our vehicle fleet to flex fuel won’t solve the problem of rising global CO₂ emissions, it will make the problem much more solvable.

It is sometimes said that “we are addicted to oil.” This is not accurate. We are not addicted to oil. Our cars are addicted to oil. Our vehicles are like people who can only eat sardines, who must suffer the consequences if there is a shortage of this one commodity. One is much better off being omnivorous.

To paraphrase Shakespeare, the fault is not in ourselves but in our cars that we are made vulnerable. Let’s do something about it.