Methanol is extracted from a feedstock (a.k.a fossil fuel), such as oil products (naphtha, gas oils), natural gas, or coal.
Natural gas: catalytic reforming uses heat and a catalyst to produce syngas (mainly CO and H2).
Coal or oil: gasification uses higher heat than catalytic reforming, but no catalyst to produce syngas.
Once syngas is produced, impurities are removed through conditioning processes such as reforming (heat and catalyst), addition (adding hydrogen in place of impurities), and the water gas shift, which turns carbon monoxide and water into carbon dioxide and hydrogen (CO + H2O -> CO2 + H2). Goal is to produce twice as many hydrogens as carbon monoxides.
Copper oxide, zinc oxide, and/or chromium oxide catalysts are used to convert syngas into methanol. (CO + H2 -> CH3OH)
Methanol is used because...
Very common and versatile
Can be used in many products and used to make other chemicals