The Energy Policy Act that was being "reformulated" last year on Capitol Hill had several curious provisions.

The Clean Air Act Amendments of 1990 required reformulated gasoline to be used at various times of the year in nine major metropolitan areas of the United States.Methanol made from natural gas is currently used to produce billions of gallons of methyl tertiary butyl ether to "reformulate" gasoline.

The Energy Policy Act would have required all gasoline distributors in every state to reformulate all gasoline with ethanol - rather than MTBE - irrespective of cost -- and irrespective of whether reformulated gasoline was actually needed to meet Clean Air Act requirements.

Another provision was to build more interstate natural-gas pipelines, despite the "shortage" of gas needed to fill the 285,000 miles we already have.

The third curious provision was to build additional U.S. liquefied natural gas, or LNG, import terminals. Both these provisions benefit U.S. natural gas pipelines, which are increasingly becoming regulated "common carriers" that "earn" a guaranteed return on their investment.

The entities that own the pipelines frequently don't own the gas they transport. Hence, it is to their advantage to build new pipelines at whatever cost, and not worry about how much gas they actually transport or at what cost. The world's supply of natural gas is practically inexhaustible, but much of it is "remote" and can't be pipelined. The very small amount of "remote" gas that is produced at all, is "liquefied" at the wellhead. Liquefied natural gas is expensive and hazardous to store and ship.

The U.S. produces some LNG in Alaska, but it is so expensive, we ship it to Japan. Well, Gov. Schwarzenegger, the solution to the natural gas crisis that helped bring your predecessor down is not to subsidize the construction of a pipeline in Alaska or LNG terminals on California's coasts. Rather, shift from pipelined natural gas and reformulated gasoline to methanol made from "remote" or "stranded" natural gas.

Virtually anything stationary that will run on natural gas will run on methanol. Virtually anything mobile that will run on gasoline or diesel will run on methanol. But here's what's really important. Once produced, methanol can be transported and distributed in the existing mobility fuel system.

The Energy Policy Act of 1992 required federal and state governments and certain private-sector entities to purchase fleets of Alternative Fuel Vehicles. EPAct provided tax credits and subsidies to the purchasers of AFVs, as well as to owners and operators of AFV refueling stations.

Now, Ford had already developed vehicles that could run on methanol or gasoline or any mixture thereof. Called "fuel-flexible vehicles," these FFVs qualified for EPAct subsidies and tax credits. So, the California Energy Commission - in association with auto manufacturers and oil companies - sited M-85 (85 percent methanol, 15 percent gasoline) service stations all around the state. An M-85 FFV, when it is actually running on M85, produces about one-half the smog-forming emissions of a comparable vehicle running on gasoline.

By 1997, there were more than 20,000 M-85 FFVs operating, mostly in California. What a success story! According to the Methanol Institute, 38 retail service stations continue to dispense methanol fuel to the fleet of FFVs in California. At the pump, methanol prices range from about 88 cents to $1.10 per gallon. But, remember that requirement in the Energy Policy Act that didn't pass last year to make all distributors in every state reformulate all gasoline with ethanol? Well, the Energy Policy Act might pass this year. But, not to worry, governor. Forget about reformulated gasoline.

Forget about subsidizing Archer-Daniels-Midland and Daschle's farmers. You can even forget about subsidizing Bush-Cheney natural gas pipeliners. Take all that methanol now being used to make MTBE - which is already being phased out in California - and make M-85 with it. Encourage the major oil companies to provide M-85 at more California gasoline stations. Encourage California soccer moms to rush out and buy a heavily subsidized - through 2005, at least - M-85 FFV.

But wait a minute. You've got a problem. Inexplicably, Ford quit making M-85 FFVs in 1998 and Daimler-Chrysler, General Motors and Mazda soon followed suit. Why? Well, E-85 (85 percent ethanol-15 percent gasoline) FFVs got the same subsidies as did M-85 FFVs and satisfied the fleet-purchase requirements. But what's more important to Congress, the farm-lobby hates M-85, almost as much as it hates MTBE.

However, Congress and the farm-lobby love E-85 - almost as much as they love E10, gasohol.

So, governor, maybe you ought to have a tough talk with Ford.