He is right on most counts
During WW2 and immediately after there were quite a few vehicles in Europe that were converted to run on dry distillation from wood. You heat up wood chips and you get a mix of carbon monoxide, methanol, formaldehide and and a few others. Not particularly energy rich, but if you have the choice of "nothing" (as there is no petrol) and this it is quite obvious what you will chose. In theory you can probably capture the methanol from this process and reuse it as fuel while burning off the rest to produce energy. Once again, not particularly efficient, but something that has been done 60 years ago should be doable today.
As far as the engine "conversion" and compliance this is simply a matter of materials. The only thing that prevents petrol engines from running on "strange" mixtures like this is the choice of materials in the fuel tank, pipework and injection systems. Essentially, there is nothing to "convert" like in an LPG conversion. All that is needed is a couple of simple pipework and seal replacements.
As far as the Saudis - he has a point. He is presenting it from a slightly biased perspective. There is no such thing as a "right" or "wrong" in the Middle East or Caucasus. Still if on one hand we have the option of interfacing naso-rectally Chaves, King Saud, Kazah, Tadjik dictators or Ahmadinedjad. On the other hand we have the option of trying to get away from this dependency. You have to be an idiot to chose the first one (no comment about our politicians, but hey lobby money is lobby money).
As far as Opec, sorry Opec is hardly in control nowdays. Even if someone like Carlos manages to succeed tomorrow nothing will change.