EPA’s CMOP Event Educates on Mine Methane Capture Project Development and Verification
The U.S. Environmental Protection Agency’s (EPA’s) Coalbed Methane Outreach Program (CMOP) held its annual conference in Pittsburgh, PA on October 6-7 in conjunction with the larger International Pittsburgh Coal Conference. CMOP is an EPA-sponsored program founded in 1994 to support the development of mine methane recovery and utilization projects in the U.S. The event was attended by coalbed methane (CBM) project developers, technology providers, representatives from industry and academia, and other stakeholders in the market. First Environment attended and contributed to two panels on the topic of verification for mine methane projects.
Of particular interest at this year’s conference was the opportunity for mine methane projects to participate in the California Air Resources Board’s (ARB’s) Compliance Offset Program using their recently approved protocol for Mine Methane Capture projects. ARB is responsible for the administration of California’s economy-wide cap and trade program to control greenhouse gas (GHG) emissions in the state. In 2014, ARB approved a protocol for mine methane projects that allows them to generate offset credits for the destruction of fugitive mine methane emissions at underground, surface, and abandoned coal mines. Offset credits can generate additional revenues for project owners from their sale for use as compliance instruments by obligated parties in the cap and trade program.
I represented First Environment on two panels, hosted by the Verified Carbon Standard (VCS) and the Climate Action Reserve (CAR), respectively. Both focused on the California compliance offset market and the role of mine methane projects, aiming to provide an introduction to project developers and other market participants on ARB’s Mine Methane Capture protocol. Liang Zhang of VCS moderated the panel entitled, “Coal Mine Methane Destruction in the California Compliance Offset Market: Introduction to the California Compliance Offset Program.” Presentations by panelists focused on general requirements for the project development process in ARB’s compliance offset program, as well as the roles of various actors in the offset project program. Michael Coté provided a general overview of the ARB compliance offset program and its rules and requirements. Will Ferretti’s presentation focused on the role of offset project registries and their administrative functions in the compliance offset program. I summarized the program’s verification requirements and offered some high-level considerations for project developers beginning the reporting and verification process, including reporting timelines, verification timelines, and lessons learned. A full copy of my presentation is available here.
Max DuBuisson of CAR led the afternoon session entitled, “Coal Mine Methane Destruction in the California Compliance Market: Insight into Developing and Implementing a Successful Offset Project.” While VCS’s panel provided a general overview of the offset program and mine methane protocol, CAR’s panel focused on specific issues encountered by developers who have implemented an emission reduction project and have taken it through the registration and verification process. Representatives from Vessels Coal Gas and Sindicatum described the challenges they faced in bringing mine methane offsets to market. Both companies have a record of successful development of mine methane recovery and utilization projects. I shared my perspective on common issues encountered during project verifications. In particular, I highlighted the need for project developers to develop and execute robust monitoring plans for project data collection to ensure a smooth verification process. I also discussed the requirements for projects to demonstrate compliance with relevant laws and regulations, emphasizing the need to engage regulatory authorities proactively in order to prepare for verification activities.
One crucial issue facing project developers was highlighted in both panels as well as in after-hours conversations with conference attendees; namely, the significant uncertainty that exists in the market due to a lack of information of what the California Cap and Trade program will look like after 2020, and what role offsets will play in a post-2020 compliance market. A theme reiterated by numerous attendees and speakers was that the revenue stream associated with carbon offsets was essential to the financial viability of projects. However, due to the magnitude of capital investment and short payback periods required, the lack of clarity on post-2020 offsets has made it unlikely that any new projects will be implemented in the short run. As ARB’s thinking for the post-2020 landscape becomes clearer, the market should resolve these questions.
Given the importance of carbon offsets as a driving force in the financial model for mine methane projects, continued support for this nascent market is critical to ensure their success.
