Firm wants to burn methane leaking from Utah coal mine — creating credits to sell to carbon-emitting companies

By burning the greenhouse gas escaping from the retired West Ridge mine, a Colorado firm plans to help California companies that need to account for their own carbon emissions. <br>

(Courtesy | Utah Division of Oil, Gas and Mining) Utah's West Ridge coal mine near East Carbon is being retired, but its extensive underground workings still emit methane, a powerful greenhouse gas. Now a Colorado company proposes to flare some of this methane in a plan to generate carbon offsets to sell through California's cap-and-trade program that harnesses market forces to reduce emissions.

Coal and trona mines are a big source of methane emissions, a potent greenhouse gas. Long after land that has been mined is restored, heat-trapping methane can still leak into the atmosphere.

Now a Colorado business is developing a plan to make money by burning methane that would otherwise seep out of Utah’s recently retired West Ridge coal mine near East Carbon.

Flaring the gas creates an environmental benefit — one that the state of California recognizes and considers a financial credit, called an offset. Companies in that state are required to reduce carbon emissions in an effort to keep the state’s aggregate emissions beneath a threshold that gets lower over time. Companies may purchase carbon offsets to help account for their own emissions.

Global Carbon Strategies Corp. (GCS), based in Grand Junction, Colo., is aiming to tap the Utah mine’s ventilation system to flare up to 400,000 million British thermal units of methane a year, under a five-year contract with Utah trust lands officials.

“Instead of just venting methane, we are spending money to generate offsets,” said GCS vice president Collon Kennedy. “It’s a pro-business thing. … Instead of a regulatory requirement, we are giving you an economic incentive.”

Under federal safety laws, the mine operator has a legal right to vent the methane without penalty. And that, said Kennedy, qualifies the proposal to flare the seeping gas as a carbon offset under the system California adopted to limit emissions, called cap-and-trade.

Carbon offsets are currently selling for $5.80 per ton of carbon dioxide equivalent. Kennedy’s firm is being underwritten by a major California business that he declined to identify.

“We raised money through them. In return we will provide a certain number of offsets,” Kennedy said.

In the deal with the Utah School and Institutional Trust Lands Administration, Kennedy’s company will pay a 12.5-cent royalty on every million British thermal units flared, plus $5,000 in annual rent, resulting in as much as $55,000 a year added to Utah’s school endowment.

The West Ridge flaring could become the nation’s only carbon-offset project in which a fossil fuel is burned without producing energy.

While no one doubts the project would benefit the environment, the plan has run into regulatory hurdles, since agencies are unsure how to permit it and not everyone thinks it’s a good idea to pay mine operators to torch a valuable resource.

In 2013, the California Air Resources Board, or CARB, included flaring of coal-mine methane in its carbon-offset program over the objections of climate activists.

The Natural Resources Defense Council argued the system “rewards” coal companies for doing nothing to stem the flood of methane from their mines, while paying them for what they should be required to do anyway.

“This is a total scam, and it’s just another example of how California fundamentally does not understand coal mines and the nature of coal mine regulation,” Jeremy Nichols, climate and energy program director for WildEarth Guardians, wrote in an email. “But the real issue is, why in the hell do state and federal regulators allow coal mines, both active and inactive, to just vent methane willy-nilly?”

The main ingredient in natural gas, methane is the simplest, lightest and cleanest fossil fuel. It also packs 72 times the short-term potency of carbon dioxide for trapping heat in the atmosphere, according to Dave Clegern, spokesman for CARB’s climate program. Accordingly, it is preferable to burn methane, which does release some carbon dioxide, rather than simply releasing it.

Coal mines represent 12 percent of all human-caused methane emissions, the nation’s second largest source of greenhouse gas emissions after carbon dioxide, according to the Environmental Protection Agency.

Yet methane emissions from mines are exempted from regulation under the Clean Air Act because the gas has to be vented from underground coal deposits to prevent lethal explosions. And for safety reasons, mines do not flare the gas as oil wells typically do.

The West Ridge project targets five so-called gob wells that vent part of its 2,100-acre SITLA mineral lease. The larger federal portion of the mine’s lease is not involved.

GCS proposes opening the mine’s now-plugged bore holes, which are clustered in a 3-acre area, and piping seeping gas to an enclosed burner, which would consume 98 percent to 99 percent of the methane, according to Kennedy.

Equipment would quantify how many British thermal units enter the burner, which would be used to determine royalty payments. To calculate the carbon offsets the methane destruction is worth, GCS is relying on Salt Lake City-based consulting firm Bluesource, which advises firms on mitigating environmental impacts.

Bluesource will register the offsets with the Climate Action Reserve. They could then be issued California Air Resources Board if the underlying project passes muster and sold on the open market.

Operated by Murray Energy Corp., West Ridge is among the West’s “gassiest” mines, venting nearly 1 billion cubic feet in 2014, according to federal records. It ceased production in 2015 after yielding about 2.5 million tons a year. For geological reason, mines in Utah‘s Wasatch Plateau are not nearly as gassy as those in the Book Cliffs, where West Ridge is located.

Other retired Utah mines on EPA’s list of leading methane emitters are Aberdeen, Soldier Canyon and Willow Creek.

The EPA estimated that venting from Western mines’ produced 2.9 billion cubic feet of methane in 2014, but only 1.1 billion cubic feet was actually used for producing energy. The portion that was not used could have provided 531.5 gigawatt hours of power generation capacity, according to EPA estimates.

In 2007, Murray Energy began a methane capture program at Aberdeen in what was the first large-scale program of its kind west of the Mississippi, processing 3 million to 7 million cubic feet per day. The gas was compressed and injected into a natural gas pipeline, but technical problems limited its operation to 30 percent to 40 percent of capacity and the project was eventually abandoned.

According to Kennedy, it is not economically feasible to otherwise use the West Ridge methane because it would be difficult to process it for market and there are no pipelines nearby to transport it.

CARB has authorized seven mines to join the offset program, including Colorado’s Elk Creek and Wyoming’s active Green River Trona Mine. Soda ash, processed from trona, is a crucial ingredient in glass, detergents and other industrial products.

The agency said it has yet to receive an application for the West Ridge project.