I should have used the phrase “natural monopoly,” as I do not believe there are any structural or permanence to oil’s dominance of the transportation fuels market. As you note, its possible to produce ethanol/methanol/electric vehicles/etc., but they aren’t cost competitive.

Again, if there were a monopoly in oil production, this would imply higher than average prices, which would benefit fuels like methanol which compete with oil.

The 2010 update found “The most recent study using this model shows that the U.S. economy suffered the greatest losses in 2008 when wealth transfer and GDP losses (combined) amounted to approximately half a trillion dollars.” http://www1.eere.energy.gov/vehiclesandfuels/facts/m/2010_fotw632.html

You say, “there are plenty of alternatives to oil that vehicles can run on but they are not cost competitive.” However, contrary to your additional statement, oil does have a “monopoly over the provision of a good where there are no substitutes.” MIT’s comprehensive report on The Future of Natural Gas, at P., 99, shows that 93.9% of transportation is fueled by petroleum, and only 2.9% by natural gas. http://web.mit.edu/mitei/research/studies/documents/natural-gas-2011/NaturalGas_Chapter5_Demand.pdf

Also, as the MIT study finds at P. 126:
“With deployment of plants using current technology, on an energy-equivalent basis, methanol could be produced from U.S. natural gas at a lower cost than gasoline at current oil prices.”