Home Corporate Services CDM Projects Coal Mine Methane CMM

Acknowledgement

This report relies heavily on material from Trexler and Associates Inc (www.climateservices.com) and their extensive experience in Coal Mine Methane projects.

Background

Mine MethaneThe process that forms coal also leads to the formation of methane.  The presence of methane in coalmines has long been known; historically, it has often been seen as a “nuisance” or safety hazard due to its potential explosiveness.

Coalmine methane (CMM) is also a valuable energy resource and a significant greenhouse gas (GHG).  Because methane has a relatively short lifetime in the atmosphere and is such a potent greenhouse gas having 21 times the global warming impact (radiative forcing) of carbon dioxide (CO2) on a ton-for-ton basis measures that mitigate methane emissions can have an important effect in reducing contributions to climate change.

Both surface and underground coal mining release methane; underground mining emissions predominate, however, emitting 70 to 95 percent of global CMM emissions.  Generally, the deeper the coal, the more methane it contains.  Coal seams formed deep underground tend to contain more methane than seams closer to the surface, due to higher pressures and carbon contents.  Methane deep underground has also had less chance to seep to the surface over time.

Methane is a potent greenhouse gas, with a global warming potential (GWP) 21 times that of CO2.  As a result, global methane emissions reductions can disproportionately contribute to global emissions reduction objectives.  They also offer opportunities for significant carbon returns in the developing GHG market, as reflected in the attached Table, based on Trexler and Associates Inc reference case GHG price curve.

 

Table:  Project Value: Activities During Mining
(Forecast Market Development)

Emissions (per hole or well)

Project Life

Methane

CO2-equiv.

5 years

10 years

15 years

20 years

(m3/day)

(tons/year)

PV of Credits (per borehole or gob well) USD

2,500

13,000

$0.2 M

$0.5 M

$0.9 M

$1.4 M

5,000

26,000

$0.4 M

$1.0 M

$1.9 M

$2.7 M

7,500

39,000

$0.7 M

$1.6 M

$2.8 M

$4.1 M

10,000

52,000

$0.9 M

$2.1 M

$3.7 M

$5.5 M

12,500

65,000

$1.1 M

$2.6 M

$4.7 M

$6.9 M

15,000

78,000

$1.3 M

$3.1 M

$5.6 M

$8.2 M

17,500

91,000

$1.5 M

$3.6 M

$6.5 M

$9.6 M

20,000

104,000

$1.7 M

$4.1 M

$7.5 M

$11.0 M

22,500

117,000

$2.0 M

$4.7 M

$8.4 M

$12.4 M

25,000

130,000

$2.2 M

$5.2 M

$9.3 M

$13.7 M

27,500

143,000

$2.4 M

$5.7 M

$10.3 M

$15.1 M

30,000

156,000

$2.6 M

$6.2 M

$11.2 M

$16.5 M

The above figures are indicative only and based on Trexler and Associates GHG price curve. This may differ markedly as the market price evolves through the existing market places such as C02e.com The price curve would need to be revised to reflect ability to ‘bank’ credits into the Kyoto Protocol first commitment period.

(1)         Assessment

The use of mine methane is just one option in a larger set of mitigation options that will be available to governments and the private sector as part of a climate change mitigation strategy under any future greenhouse gas emissions reduction regime. CMM will need to compete with other technology approaches in a competitive marketplace.  This makes it important to think about specific characteristics of CMM mitigation as they relate to the future market for mitigation services.  These characteristics include the cost, timing, persistence, risk, quantifiability, leakage potential, additionality, and ancillary benefits.

Briefly, our assessment reports the following:

Cost: The cost of CO2 mitigation through CMM projects is relatively low ($0.45-$2.50/ton of CO2 equivalent) when compared with other energy-sector GHG projects.  This includes the assumption that full costs are paid for projects rather than only an increment of funding to make a project viable.

Timing: The climate mitigation benefits of CMM use occur immediately and can include not only mitigation from destroying methane, but additional CO2 offsets (i.e., from switching fuels from coal to methane.

Persistence: There is no question that the methane is destroyed through combustion.  As long as there are commercially recoverable amounts of CMM, the gas can be destroyed.

Leakage: Leakage is a function of the boundaries drawn around a particular measure and the market feedback that might counteract or dissipate the measure’s calculated benefit.  Thus far, we have not been able to construct a compelling argument that leakage would occur from a CMM project.

Risk: Risk is a function of physical, economic, and political variables that can interfere with a project.  One major risk in CMM projects is mine closure, but only if the project is capturing gas from an active mine.  Political risk variables that could exist are country-specific and must be taken into account when projects and countries are initially evaluated.

Quantifiability:  Virtually all CMM use can be measured.

Additionality: Most CMM projects are clearly additional since CMM primarily is vented to the atmosphere.

Ancillary Benefit: Production of energy from CMM can provide a range of environmental, economic, and social benefits where energy is in short supply.

(2)         Large-Scale vs. Small-Scale Coalmine Resources

Small-scale resources can still be significant from a climate change mitigation perspective, particularly given the global warming potential (GWP) of methane is 21 as compared to CO2 at 1 .  In addition, small-scale resources may be able to provide reasonable rates of return, whether from a gas sale or power production perspective.  Smaller resources tend to be overlooked by larger entities seeking bigger projects, potentially creating a market opportunity with less competitive pressure.

(3)         Estimated Magnitude of Coalmine Methane Emissions

The estimates of methane releases associated with coal mining range from 27 billion to 70 billion cubic meters per year (423 million to more than one billion metric tons of CO2 equivalent).  Relative gassiness of the coals is an indicator of areas where the greatest CMM opportunities will be; all other factors being equal, it is more attractive to develop CMM from a coal with high emissions rates rather than lower emissions rates.  The attached Table indicates that, on average, the countries with the gassiest coals are Germany, the United Kingdom, China, and the United States.  Not surprisingly, CMM development has been the greatest in these countries.

 

The lower emission rates for South Africa can be offset by the fact that properly structured project credits can be ‘banked’ in the first commitment period of the Kyoto Protocol (CP1) 2008-2012 where the prices paid for such credits are markedly higher. (order of 2-3 times that of the pre 2008 price)

Table: Relative Methane Emission Rates
From Countries with Highest Emissions[i]

Country

Emission Rate (Kilograms of Methane per Ton of Coal)

Australia

0.5

China

6.7

Czech and Slovak Republics

3.5

Germany

8.3

India

3.0

Poland

3.6

South Africa

1.5

United Kingdom

7.4

United States

5.0

(4)         Current Disposition of Coalmine Methane Resources

This section summarizes ways in which CMM emissions can be avoided.  CMM may be emitted in advance of mining, during active mining, and post-mining.  Although the data does not support exact figures, a rough distribution of current CMM emissions is as follows:

 

  • pre-mine degasification:                                                5 percent of total CMM emissions
  • emissions during mining:                                            94 percent of total CMM emissions
    • ventilation air:                                                 66 percent of total CMM emissions
    • other emissions:                                               28 percent of total CMM emissions
  • emissions from closed and abandoned mines:              1 percent of total CMM emissions

(5)         Utilisation Options for Coalmine Methane

Key variables that determine the likely commercial viability of a CMM resource are:

 

  • Concentration: Methane concentration in the CMM gas is of key concern since the methane gives the gas its energy content.  Too low an energy content may make the gas unsuitable for pipeline injection or any use at all.  Higher concentrations must be diluted for combustion in power generating equipment.

 

  • Magnitude and variability of flow: Gas from abandoned or active mines has unique flow characteristics.  Some CMM resources vent to the atmosphere with little variation over years; others vary hourly and daily.  Still others must be pumped to achieve flow rates necessary to support a specific energy project.

 

  • Quality: Lower-quality CMM that does not meet pipeline standards for purity is harder to market because its BTU content is lower and because it tends to be mixed with non-methane contaminants such as nitrogen and carbon dioxide.

 

  • Distance to markets: Potential use of CMM gas depends on whether or not the market for the gas is local, either at the mine or nearby, or at a distance.

 

  • State of the coal market: Demand for coal determines whether a mine stays open or closes.  Any CMM projects that depend on gas levels from an active mine need to recognize what may happen if the mine shuts down or is idled for a period of time, since methane emissions drop significantly when mining ceases

 

  • Coal rank: Coal is ranked by carbon content.  Coals of a higher rank generally have higher methane content.  The capacity to store methane increases as pressure increases with depth.

 

  • Permeability: Permeability describes the speed at which methane flows through the coal. In coals with high permeability, methane can flow easily.

 

  • Regulatory treatment:

 

  • Legal and ownership status of the methane

(6)         Technology for Methane Drainage, Utilization, and Disposal

To better understand methane usage and disposal options, it is important to understand the technologies used.  “Methane drainage” refers to degasification of a mine by mechanical means, such as a well.  Ventilation systems are also a used to keep methane at safe levels.  It differs from methane capture, which implies collection of the drained methane for potential use. As noted previously, methane drainage without capture is common.  At each mining stage, differing approaches or technologies can be applied to deal with CMM.

 

  • Pre-mining: Vertical wells are drilled to begin draining gas from areas to be mined.  Depending on the drainage objectives, gas resources, and interests of the mine owner in using the gas, these wells can produce large amounts of gas that can be vented or produced for pipeline injection.  At this stage, but more dependent on the schedule for mining through an area, gob wells are drilled just above the area to be mined.  The wells are then capped.  When the mining comes through the area, the underground structure above the mine collapses.  The gob well caps are then unsealed and the gas moving from the surrounding underground area is vented.

 

  • Active mining: The gob wells are activated.  Also, in-mine boreholes are placed to drain gas, which typically is vented to the atmosphere.  Ventilation air methane from the ventilation system would be used during this stage, although equipment to destroy the dilute methane concentration is not commercially available.

  • Post-mining: Most CMM available from closed or abandoned mines is from existing vents or shafts that may or may not be fully sealed.

 

Flaring methane that otherwise would be vented to the atmosphere because of lack of economic end uses is a potentially important option for CMM mitigation.  Combustion of methane results in CO2, a less potent greenhouse gas.  Although flaring is routinely done in a number of industries, CMM flaring is not a common practice in the coal-mining industry.  Gas flaring was more common in the earlier part of the century, there has been a total cessation of flaring at mines.

(7)         Coalmine Methane Utilisation Potential

Only a fraction of total CMM methane emissions currently are being utilized or disposed of, including simple conversion from methane to CO2. This reduces its greenhouse gas impact significantly. Based on research, utilisation rates in countries for which utilization and emissions data are available indicate that the utilization rate is now around 13 percent, although uncertainties remain.  The global utilization rate probably is somewhat lower, since it is believed that some countries have no current utilization.

B.               Barriers to Additional Coalmine Methane Utilization

This section discusses economic, institutional, legal, and technical barriers that can impede efforts to reduce CMM emissions.

(1)         Economic Barriers

Lack of capital for project development typical impedes development of coalmine methane resources, especially in economies in transition and developing countries.  Project developers must accurately assess the economics and financial benefits of the project in order to have a chance at convincing the owner of the resource that a project is viable and would benefit the CMM owner.

(2)         Institutional Barriers

Institutional barriers can be site-specific or related to location.  Both the mine’s interest and the local or national government’s interest in developing the CMM resource affect the feasibility of having a carbon offset project at a particular mine.  The main institutional barrier to participation in CMM projects by the mine owner or operator is that this activity is not seen as central to their main mission of producing coal.  It may even be seen as potentially interfering with mining activities and production goals.

(3)          Legal Barriers

Lack of clear rules on methane ownership can be a major impediment to development of coalmine methane projects.  This is because methane historically has been considered a hazard rather than a resource to be harvested and utilized.

(4)              Potential Environmental Barriers

Development of CMM as an energy source can have positive implications for the local environment, particularly if it is used in the local coal-mining area where the fuel of choice is likely to be coal.  Methane is a much cleaner fuel than coal, and thus can have ambient pollution reduction benefits.  It can also negatively affect local air quality if the utilization means is not specifically regulated or is subject to much weaker emissions standards than a centralized plant.  In addition, like any energy development activity, development of coalmine methane can have negative environmental impacts.

(5)         Summary

Coal Mine Methane has significant potential to generate Clean Development Mechanism credits under the Kyoto Protocol in RSA.

A project plan can be instituted to create such credits. A key element of such a project would be to quantify the amount of methane emitted and create a feasibility study prior to running a pilot program.

Part of the pilot program could be the pre sale of some or all of the credits to assist with the project funding. Once the pilot program is running the project can be leveraged over many locations.

The technology to implement CMM removal is readily available and able to be implemented in Africa.

A substantial flow of credits or cash flow from the sale of such credits is possible.

Addendum

How is CMM is Trapped/Collected?

Obviously varies quite a bit due to circumstances.    A lot of gas is in ventilation air, and technologies are developing to catalyse the methane in that air.  But generally we're talking about ventilation holes or old bore holes that are simply venting the methane to the atmosphere.   Depending on the characteristics of the gas flows (can be quite dilute to almost pure), you can cap the hole, clean up the gas, burns the gas right there (in a flare or engines), or pipe the gas to another vent or to a pipeline (if its sufficiently pure).   It turns out that mine operators often have no clue how much methane is escaping and where its coming from.   We recommend an on-site review with portable measuring equipment to pin things down.  And you have to assess the likely methane resource, and for how long it will continue to flow.

CMM as a GHG Mitigation Strategy

With respect to CMM as a GHG mitigation strategy, a lot depends on whether we're talking about active or abandoned mines, etc.   Collecting the gas from abandoned mines is a pretty safe crediting bet.   Collecting gas from an operating mine may be suitable for crediting (probably depends on commercial viability and normal practice).   Collecting gas before mining a bit more questionable (again a lot depends on normal practice, or potentially what practice "should" be from the standpoint of the CDM Operational Entity.

Care must be taken when characterizing a CMM resource from a crediting perspective, without comprehensive information or on-site review.

 

 


  • [i] J. Gale and P. Freud (2000), “Reducing Methane Emissions to Combat Global Climate Change: The Role Russia Can Play,” in Methane Mitigation: Proceedings of Second International Conference, Novosisbirsk, Russia, June 18-23, 2000, p. 77.