Mist coolants for milling machines, such as Koolmist, can be used to advantage when sanding knife blades. Water based coolants possess all the desirable traits needed when sanding blades.
I use it because it is not oily, therefor much cleaner to work with, has rust inhibitors in it. It keeps the paper from clogging and pools the metal that is being removed and keeps it suspended so it can be removed easily.
I buy it by the gallon; it takes 1/4 cup of the concentrate, added to a gallon of water for sanding. I keep it in a spray mist bottle.
Mist coolant liquid is far superior to any of the tapping or cutting fluids I have ever used.