A ‘new’ natural gas
Several years ago geologist Brad Boyce was drilling for coal-bed methane in east-central Utah, near the coal-mining town of Price. An outdoorsman by inclination, he makes his living finding, but also helping develop, oil and gas deposits.
What he and his company, Oso Oil and Gas, found was the Aberdeen, one of the deepest coal mines in the United States, and a major source for emissions of methane, a greenhouse gas.
Partly using money from Aspen and Pitkin County, that methane is now being trapped, instead of being vented into the atmosphere. After removal of impurities, it is compressed and put into a natural gas pipeline, for eventual use in heating homes and producing electricity.
It is the first large-scale capture of methane from a coal mine west of the Mississippi River, government and business officials say. The mine is projected to continue operations 15 to 20 years. As methane is among the most potent of greenhouse gases, the value to reducing greenhouse gas emissions is equivalent to operations of a $300 million wind farm.
“I think it is a real compelling story, in that you have this gas that was just going into the atmosphere, a clean source of energy that is just being wasted,” said Pamela Franklin, team leader for the U.S. Environmental Protection Agency’s coal-bed methane outreach program.
Franklin said that 10 billion cubic feet of methane are simply vented into the atmosphere by coal mines, landfills, and other sources.
Methane is 21 times more potent than the most common greenhouse gas, carbon dioxide, in its ability to absorb heat. But the gas has a chemical life in the atmosphere of only nine to 15 years. Carbon dioxide remains in the atmosphere for 100 to 200 years.
The Aberdeen Mine, one of the deepest coal mines in the United States, is also one of the largest emitters of methane, in the top 20, according to the EPA inventory.
The case also illustrates the mechanics of the emerging market for the reduction of greenhouse gases. The Aberdeen capture project is driven primarily by the sale of natural gas, but also the desire of Aspen ” and possibly others ” to pare back greenhouse gases, and who are willing to buy credits to help do so.
Aspen’s Community Office for Resource Efficiency provided $100,000 for the Aberdeen Mine program, representing the first four months of carbon offsets, and the city of Aspen, through its Canary Initiative, provided another $100,000.
“A project like this would not make economic sense without being able to monetize the carbon offsets,” Boyce said. “Having CORE and the city of Aspen be our first purchaser is wonderful.”
Coal-mine methane projects offer high-quality credits, he explained, because the methane can be accurately measured.
The greenhouse gas reductions from the mine, packaged as credits, are worth up to $3 million a year. A major market for such credits is Europe, where countries that signed the Kyoto Treaty have adopted a mandatory cap-and-trade system. Such systems don’t necessarily specify local curbing of gases, because the gases themselves do not remain local, but within weeks get mixed together in the Northern Hemisphere.
European countries are helping to pay for similar greenhouse gas reductions in China, where large emissions can be curbed with relatively small amounts of money.
Similar projects to reduce methane emissions from the Rockies could be in the works. Earlier this month Delta-Montrose Electric Association announced a memorandum of understanding with the U.S. Forest Service that identified emissions of methane from coal mines near Paonia as one future area of partnership. One of Paonia-area coal mines, the West Elk, produces two to three times as much methane daily as the Aberdeen, and sometimes more.
The origins of the project at Aberdeen Mine go back several years. Carbondale-based Randy Udall, who recently left CORE after 13 years as the director, had been exploring ways to reduce greenhouse gases.
CORE distributes funds from the Aspen/Pitkin County Renewable Energy Mitigation Program. REMP has collected $8 million since its introduction in 2000. The money comes from fees paid by people who build houses that are large or energy-consumptive, or both, and who choose not to install solar collectors or other offsetting technologies.
While the money has always been spent locally, such as in grants for solar collectors on homes or public buildings, Udall reasoned that the ultimate goal is to reduce greenhouse gases. As such, it does not entirely matter where the reductions occur ” and coal mines, he knew, were a major source of methane.
Udall’s search for maximum leverage of REMP money led him to Utah. But Boyce, from Durango-based Oso Oil and Gas, had already seen the same opportunity and was assembling an agreement with the mine owner, UtahAmerican Energy Inc.
Methane is often, but not always, a problem at coal mines. At concentrations of between 5 and 15 percent, it becomes explosive. One mine explosion near Price killed 200 people, and another killed 124. Such numbers are common in Colorado and other coal-mining states.
Others miners have died in another ugly way, as methane can displace oxygen in an enclosed space, asphyxiating those within.
When methane builds up within mines, operators are required by the federal government’s Mining Safety and Health Administration to vent the gas in some way. It can be blown out, which had been done at Aberdeen, but by 2005 that wasn’t enough. The next step was to vent the mine with wells. Boyce’s firm installed equipment that captures and processes the methane.
Impurities ” nitrogen, oxygen, and carbon dioxide ” are removed at the multimillion-dollar facility, and the gas is then compressed and fed into a natural gas pipeline. The facility captures between 3 million and 7 million cubic feet of methane per day.
The remoteness of the mine and the difficult terrain made this more expensive. “It’s incredibly rugged topography,” said the EPA’s Franklin. “It’s definitely quite a ride in a four-wheel-drive vehicle from the mine site to where the wells are located.”
Planning for the project took about a year, and construction six months. Methane capture began last January, although technical problems have allowed it to run at only 30 to 40 percent of capacity.
For somebody like Aspen to buy carbon offsets for projects such as this, the value must be documented. That means measuring. That’s where a Grand Junction-based environmental engineering firm, Ruby Canyon Engineering, comes in.
Michael Cote, vice president of Ruby Canyon Engineering, said his company has oversight of the monitoring, to ensure that the methane being diverted from the atmosphere is, in fact, being diverted. He also can testify that the methane would not be diverted if it were not for the financial assistance of those purchasing the so-called credits. In other words, Aspen is not paying for something that would have been done anyway.
“This methane would normally be vented to the atmosphere during the mining process,” he explained. “In addition, Oso had to overcome several technical barriers in order to bring the low-quality gas to market.”
Gary Goodson, the new director of CORE, called the Aberdeen mine project “one of the most successful “REMP-financed projects out there.”
The Aberdeen Mine also illustrates both the voluntary and involuntary market for reduction of greenhouse gases that has evolved since 2005, when the Kyoto Protocol went into effect.
The treaty required ratifying countries to start reducing their greenhouse gases. But unlike the think-local, act-local mantra of environmentalism, the nature of greenhouse gases argues for what is usually described as the lowest-hanging fruit. In other words, because greenhouse gases are so immediately global in their effects, it doesn’t matter whether the emissions are crimped in Germany or Belgium or China or Utah.
But although the United States did not ratify the Kyoto Protocol, there’s a voluntary market where credits, called verified emission reductions, can be traded. The best-known is the Chicago Climate Exchange. Both the city of Aspen and the Aspen Skiing Co., are members. However, another exchange, called the Climate Registry, was formed this year, with 40 states becoming members.
Ruby Canyon’s Cote said there are varied motives for private companies in the United States to become involved in the voluntary market.
“We are seeing companies doing this for corporate and social responsibilities. That’s why they are buying the credit,” he explained.
“At the same time, they’re positioning themselves for a cap-and-trade system.”
In other words, companies expect the federal government will eventually agree to strategies to minimize greenhouse gases using the Kyoto model. They want to grab what is invariably called the low-hanging fruit of reducing greenhouse gas emissions.
The methane project at Aberdeen Mine therefore is being driven by three market forces: the value of the natural gas being captured, the value of the Kyoto-mandated reductions to European countries, and the U.S. voluntary market ” of which Aspen and Pitkin County are a part.
Ruby Canyon was formed in 1998 to facilitate reduction of greenhouse gases. It can verify the reductions, as it is doing at the coal mine in Utah, or in other ways assist companies with the strategies or projects. It is based in Grand Junction because some major clients ” Duke Energy and Peabody Energy ” have projects in the area.
But the firm is also working at projects elsewhere in Colorado, such as landfills, wastewater-treatment plants and feedlots, all of which emit methane. Colorado is thick with abandoned coal mines, and they also emit methane, although not in the large quantities of operating mines.
Ruby Canyon also is working on mining projects in coal mines in Illinois and Appalachia, not to mention China and the Ukraine.
Taking the long view, Udall and Cote both say projects such as the Aberdeen Mine matter a great deal, because they offer immediate reductions in greenhouse gases. Meanwhile, there are no easy alternatives to the emissions form coal-fired power plants.
“What has happened in the last year to 18 months is the emergence of a carbon market in the United States,” explained Franklin. “I don’t pretend to completely understand the dynamics of that market, but basically there are companies that are willing to purchase the offsets from these types of projects, and pay money for any reduction in greenhouse gas emissions.”
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