The German process was real and worked, although it was expensive.
South Africa use a similar process called SASSOL to make liquid fuels during the UN embargo over apartheid.
While the chemistry is apolitical, the opponents of even maintaining our lifestyle point to the non-PC nature of the previous users of the process to discredit it.
While I usually dislike government intervention, one of the ideas I really like is a US Government price support of liquid fuels at an equivalent of $100/barrel of oil. Essentially a variable tax on lower production cost fuels. One of the big drawbacks to investment in alternative energy sources is that if the price of oil goes down, you lose all of your money. A government price support prevents that. Of course with the current oil price the tax would be zero.
Once we develop a liquid fuel technology other than oil, the economies of scale will eventually reduce the price significantly.
Wouldn’t it be wonderful for the US to lead the world in alternative fuel production? We could be selling to other nations and collecting obscene profits instead of a bunch of camel-jamming muslims.
http://fossil.energy.gov/news/techlines/2003/tl_liqphasemethanol_success.html
The DOE and Eastman have been working on this for at least 20 years.