That was tried in the late 20th century in places under oil embargo, and it failed to scale up for several reasons.

Generally, bio-fuels proved more practical using fermented alcohols or fat transesterification into B100. A genetic engineering solution for salt-water tolerant fuel crops or microbes is highly probable.

If I recall correctly, methanol powered vehicles would get significantly lower mileage per tank of fuel, and tended to damage petrol engines. =3