Challenging Misconceptions Surrounding Coal Mine Methane
Ecoal, January 2009, Volume 67
There are a number of misconceptions surrounding coal mine methane (CMM) and the manageability of CMM projects. Part of the problem surrounding CMM has been the perceived slow progress of such projects through the Kyoto Protocol’s project-based “Flexible Mechanisms”, such as the Clean Development Mechanism (CDM).
There have been a number of criticisms directed at the “under delivery” of carbon credits from CMM projects1, raising concerns in the carbon credit market about reliable carbon credit supplies from these projects. To tackle these misconceptions, the United Nations Economic Commission for Europe (UNECE) Ad Hoc Group of Experts (AHGE) on Coal Mine Methane, has put together this article examining some of the concerns surrounding CMM projects2 and offering guidance on these criticisms, which it believes are based partly on anecdotal evidence instead of a full understanding of CMM projects.
1. Only about 10 of more than 60 CMM projects have been registered by the Clean Development Mechanism Executive Board (CDM EB) to date, which questions the role of carbon credits from this sector as a major source of supply
True. Not only is the registration quota poor, so is the number of total projects submitted for registration, given the large volume of methane emissions from coal mines. In this context it has to be noted that China is the host country for probably more than 95% of possible CMM projects within the CDM framework. Therefore when it comes to assessing the total number of CMM CDM projects submitted, one has to look at project development in China. With the exception of a few flagship projects, the Chinese CMM market is dominated by a “do-it-yourself” approach with international companies acting as buyers of Certified Emission Reductions (CERs) but with those companies having limited influence on project execution and operations. If a coal mine operator is not funding and managing the CMM project properly, the project will inevitably get delayed, postponed or even fail to be implemented. Further, the majority of methane emissions from Chinese coal mine drainage systems are in or near explosive concentrations. This raises serious mine safety concerns, as well as making utilisation either impossible, when adhering to international safety standards, or unreliable, due to complications in safely transporting and handling explosive gas mixtures when in default of such standards.
AHGE believes that the low registration rate by the CDM EB might also be due to a lack of understanding of the specifics of CMM projects making it difficult for the CDM EB to assess baselines and additionality. AHGE believes this is not necessary, as the CDM EB should be able to rely on the project’s validation report. To a lesser extent, some PDDs lack consistency and clarity, leading to a more time consuming project review process.
2. The technology used is relatively new, expensive and complicated
False for the utilisation of CMM from drainage systems, but partially true for the utilisation of ventilation air methane (VAM).
CMM from drainage systems producing a concentration of 30% methane or more in air can be used in Combined Heat and Power (CHP) plants, boilers, flares or can be upgraded to pipeline quality etc. These technologies are mature and proven over many years in many countries. The Methane to Markets Partnership has catalogued over 200 existing CMM and abandoned mine methane projects, almost all of which use conventional technologies. CMM-handling can be challenging, but this is a management issue rather than a technology one.
The core technologies for utilisation of VAM, such as flameless oxidation, are also mature; however their application for VAM utilisation is relatively new and expensive when compared to CMM utilisation. Despite this, regulatory barriers, rather than technical ones, have been a greater hindrance to deployment. With an active commercial operation in Australia and commercial deployment under way in the US, regulatory concerns are being addressed and there are several projects in the planning stages.
3. There are strict rules about the concentration of the gas that can be used
True. The rules governing the permitted concentration of methane in air in most countries are driven by the physical properties of gas mixtures of methane in air. Common international practice prohibits the transportation and utilisation of gas mixtures within the explosive range including a safety margin. These limits are country specific and range from 1% to 25-30% of methane in air under ambient conditions. These restrictions apply not only for CMM but for any gas mixture of methane in air.
4. Mining companies direct most of their money towards their core activity of mining, with money from CDM projects being only a minor revenue stream at most mines
True. CMM utilisation projects are very small when compared to the scale of coal extraction and are outside the core business of coal companies. However, safe gas extraction is in the best interests of the operators of any gassy coal mine because it enables them to maximise coal production. There are many companies in the market with the expertise and experience needed, and some are willing to fund CMM projects. Coal companies could outsource this activity and benefit by receiving value from the CMM, which they have to manage anyway due to safety and productivity considerations, as well as the additional benefit of reducing methane emissions to the atmosphere. This, in fact, is the spirit of Flexible Mechanisms, whereby outside investors wanting to offset emissions supply capital, technology and know-how in exchange for carbon credits. The general trend toward do-it-yourself projects is a significant departure from the original intent, and becomes a basis for criticism that the process could become a subsidy for business as usual.
5. Project Design Documents (PDDs) tend to be over-optimistic about future emission reductions as demonstrated by lower credit issuance levels than projected in PDDs
True. Very often, Project Design Documents (PDDs) rely on point estimates of CMM production provided by the mine operators and a detailed resource assessment is often omitted. Furthermore, fluctuations in CMM quantity and quality can lead to downtimes or even to over-sizing of the methane utilisation system. Some PDDs estimate operating hours for power generation projects to be above 8400 hours per year, a figure which is unlikely to be achieved by most CMM projects. Sometimes the technology employed lacks the characteristic of reliable and constant operations, for example if gas treatment is omitted or if heating systems supply only seasonal demand. AHGE recommends conducting a detailed technical feasibility study addressing the CMM resource and technology to be used on an individual project level. A PDD is not intended to, and indeed cannot, replace a detailed technical review of a particular project. Surprisingly, few PDD’s are written by project developers or technology providers that possess the know-how and experience to make judgements as to how appropriate a technology is for a given situation.
6. Forecasting emission reductions is very difficult
False. Coal mine operations require high levels of investment and investors put great emphasis on the technical feasibility and the accuracy of coal production forecasts. Generally a mine plan exists which gives all information needed for a reliable gas production forecast to be made. Forecasting of emission reductions is only then difficult if the coal mining operations and forecasts are not taken into consideration. For example, longwall changeovers, which every mine must plan, have an impact on gas availability, as well as other operating specifics of a particular coal mine. Without this knowledge, forecasts of emission reductions become impossible.
7. Monitoring of CMM projects is perceived to be more complex than for other CDM projects
False. To measure emission reductions from coal mines means knowing the quantity and quality of the emissions avoided, e.g. the emissions used or destroyed. As in any project activity this requires a “fit for purpose” and well maintained monitoring design and system. Monitoring plans generally require that data be acquired and maintained for audit at a later date, much of which may be accomplished by automated systems. However, this is not a substitute for oversight by dedicated and well-trained operators. Technology transfer is, in fact, only one of the aims of the Flexible Mechanisms and capacity building is another. Too often this part is overlooked and results in poor project implementation and operation.
8. Audits by third-party verification companies can be time consuming
True. Validators and verifiers are generally not experts in associated coal mining activities. However, a reliable and straightforward monitoring system should allow for a more timely verification process. Perhaps one solution would be for validators and verifiers to seek outside specific technical expertise or develop such expertise in house. Sector specific coursework is becoming available and AHGE recommends that some sort of sector specific
technical background be required.
9. Methane content of CMM differs widely from one mine to another and even within one particular project
True. Every coal mine is different and when it comes to drainage of CMM, no single standard would be universally applicable. Even within one coal mine, gas quality fluctuations occur daily or even more frequently. However, modern utilisation equipment is designed to deal with different methane concentrations and can adapt to fluctuations as fast as they occur. If CMM is distributed via pipeline, as is the practice in some countries, fluctuations are less likely to occur because the pipeline acts as a mixing and storage tank. In addition, in many countries which may become hosts to the flexible mechanism projects, standard gas drainage protocols are employed. This results in sub-optimum production of gas with fluctuating concentrations. Project developers should look up-stream to determine what additional measures may be taken to improve delivery of a reliable fuel source. This is particularly critical factor that should be considered in China where, as has been mentioned, much of the gas produced, remains unused because it is low concentration methane that is dangerous to transport and use.
10. Higher risk exists for CMM projects than for most other project types because of the imperative for mine safety and real and perceived safety risks, both from an operational as well as from a reputational perspective
True. Just as hydro projects depend on hydro geology and weather, wind projects depend on wind patterns, landfill gas projects depend on professionally-managed landfills, CMM projects depend on the gas supply from a coal mine, which is gas that is vacated from the mine primarily for health and safety reasons. Coal mine methane projects are not unique in this regard; most CDM activities rely on circumstances which are beyond the control of the project sponsor who therefore cannot control the risks. However, one can argue that CMM projects are less risky because safe gas supply can be managed – more than some other natural resources such as wind and hydro. Reputational risk is an issue, however, because despite the fact that a particular utilisation project is separate from and does not interfere with mine safety (as long as it utilises safe CMM), the CMM project’s reputation might be damaged if a gas related accident occurs.
AHGE believes that the main reason for under-delivery of carbon credits from CMM projects is a lack of integration of the mine drainage operations with the utilisation project. Many hundred megawatts of installed power generating capacity is now fuelled by CMM, along with other uses for CMM in countries like the US, Australia, Germany, UK, and the Czech Republic, and are proof that under-delivery of emission reductions is not inevitable.
There is no doubt that CMM projects have an enormous potential for emission reductions. It is possible to access this potential by employing the expertise available in the market place and by taking into account the needs and specifics of coal mining operations, especially gas-related coal mine safety.
A task group sponsored by the World Coal Institute (WCI), UNECE and Methane to Markets (M2M) is collating the skills, attitudes, concepts and knowledge accumulated by CMM practitioners and managers in every coal-producing country over the last five or six decades. The group will produce a “Best Practices” handbook that it hopes will be adopted by CMM operators around the world and which will lead to a set of international safety and efficiency standards against which every CMM project and CMM PDD can be evaluated.
Notes
The AHGE is comprised of over 200 individuals from governments, industry, investors, and international and intergovernmental organisations, which meets regularly and addresses mine safety issues and methane emission reduction potential.
For further information, visit: www.unece.org/energy/se/cmm.html
The UNECE website contains other valuable information on CMM, such as the results of a worldwide survey on the main issues, opportunities and obstacles associated with CMM projects, case studies and a glossary of terms specific to the CMM industry.
1. e.g. Point Carbon, 4 September 2008, “Coalmine projects make slow progress through CDM”
2. The concerns are listed here in the order in which they appear in the Point Carbon article
