In 1979, W.R. Grace and Co. began work with Energy Transition Corporation to assess the feasibility of constructing a coal-sourced methanol plant in the Axial Basin of northwest Colorado. These studies envisioned construction of a plant to produce 537 million gallons of methanol per year. However, it became clear that a plant of this size would have to capture an unrealistically large share of the early market available to it. Accordingly, Grace believes that the most promising project development strategy is to begin with an initial module producing about 67 million gallons of methanol per year. During 1981, Grace conducted a study of this concept at its own expense, which established the feasibility of this approach. Also during 1980, Grace received a grant from the Department of Energy primarily to assess the environmental impact and regulatory requirements of the project. In addition, this study updated the design basis and economics of the large plant. This report summarizes the results of the DOE-funded feasibility study. This report concludes that the environmental impacts of both the initial and expanded plants are acceptable, and that all regulatory requirements can be met. In summary, all the physical and technical resources for the project are fully in hand, and the environmental and regulatory risks are small. Engineering and financial analysis are sufficiently complete to conclude that the project is economically attractive. Market risks can be minimized by beginning with a small initial module, followed by plant expansions to serve a growing methanol market.