An Overview of Offsets from Mine Methane Capture and their Role in California Cap-and-Trade. June 19, 2014

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Transcription:

An Overview of Offsets from Mine Methane Capture and their Role in California Cap-and-Trade June 19, 2014

Agenda Introduction & Overview of Project Type Project Eligibility Monitoring and Reporting Requirements Important Deadlines for Early Action and Compliance Projects Guest Speaker: Ron Hughes, Solvay Chemicals, Inc. CAR 629 Green River Trona Mine Methane Destruction & Utilization Project Questions 2

A cautionary note from our lawyers Much of this presentation is based on the Climate Action Reserve s understanding of the California Cap and Trade Regulation and the Mine Methane Capture Protocol. As the implementation of the Regulation is the responsibility of the California Air Resources Board, you should be aware that anything presented here may be interpreted or applied differently by the Board. Moreover, this presentation does not constitute legal advice. Information presented here should be regarded as informational and does not have a legally binding effect.

Introduction to the Climate Action Reserve The largest, most experienced, and best known carbon offset registry in North America with over 52 million offsets issued from 15 different project protocols Independent NGO, serving both voluntary and California compliance carbon markets since 2001 Accredited in California as both an Offset Project Registry (OPR) and an Early Action Offset Program Depth of knowledge & established procedures Attentive, high-quality customer service & competitive pricing 4

Introduction to the Climate Action Reserve Extensive experience in Mine Methane: Developed and implemented the Climate Action Reserve Coal Mine Methane Protocol First adopted in October 2009 Versions 1.0 and 1.1 approved for Early Action in California s Compliance Program Reserve s CMM Protocol informed ARB s Mine Methane Capture (MMC) Compliance Offset Protocol Staff participated in ARB s Technical Working Group to support MMC Protocol development Staff attended ARB s Verification Training for MMC Protocol Reserve has issued 529,843 CRTs for the CMM protocol from 3 CMM projects (2 VAM, 1 Drainage) 3 additional new or listed CMM projects with the Reserve 5

Emissions from Coal Mining Methane (CH 4 ) is the second largest source of greenhouse gas in the US, after CO 2 CH 4 is a potent short lived climate pollutant (GWP of 21) Coal mining is the 4 th largest source of human related methane emissions in the US (11%) Landfills 17% Coal mining (all mining activities) 11% Enteric Fermentation 23% Manure mgmt 9% Other 7% Wastewater treatment 3% Natural gas & petroleum systems 30% US Methane Emissions by source 1990 2011 (source US EPA) 6

Emissions from Coal Mining Coal mine methane is emitted from five sources: Degasification (or drainage ) systems at underground coal mines Ventilation air from underground mines Abandoned or closed mines Surface mines Fugitive emissions from post-mining operations Ventilation systems required at all underground coal mines for safety VAM typically contains <1% methane, but is largest source of CMM emissions in US (60% of CMM emissions from active underground mines) In a recent survey of 50 of the gassiest mines in the US, 23 of them utilize Drainage; and 14 of the 23 already recover some or all of methane drained Some mines have over 1 million metric tons CO2e/year potential from implementing an MMC project 7

Coal Mine Degasification 1. Horizontal pre-mining 2. Surface pre-mining 3. Post-mining 4. VAM Source: US EPA Identifying Opportunities for Methane Recovery at U.S Coal Mines 2009 8

Major U.S. CBM Basins Source: US DOE, cited in US EPA, Coal Mine Methane Recovery: A Primer, 2009 9

Overview of the MMC Compliance Offset Protocol ARB Compliance Offset Protocol Mine Methane Capture Projects (MMC) Adopted April 25, 2014 Currently under review by Office of Administrative Law Expected effective date: July 1, 2014 Also approved three Early Action Protocols Purpose: to quantify greenhouse gas emission reductions associated with the capture and destruction of methane that would otherwise be vented into the atmosphere as a result of mining operations at active underground and surface coal and trona mines and abandoned underground coal mines 10

Overview of the MMC Compliance Offset Protocol Protocol includes four mine methane capture activities: Active Underground Mine Ventilation Air Methane (VAM) Active Underground Mine Methane Drainage Active Surface Mine Methane Drainage (SMM) Abandoned Underground Mine Methane Recovery (AMM) Both coal and trona mines are eligible for these project types, except abandoned mines, where only coal mines are eligible Excludes (for all project types): Coal bed methane Mines that use fluid/gas to enhance MM drainage 11

Early Action Protocols Three early action protocols approved (all 4 project types): Climate Action Reserve Coal Mine Methane Project Protocol versions 1.0 and 1.1 Two project types: Active Underground Mine Methane Drainage and Active Underground Mine Methane Ventilation Verified Carbon Standard: VMR0001 Revisions to ACM0008 to Include Pre-drainage of Methane from an Active Open Cast Mine as a Methane Emission Reduction Activity Methodology, v1.0 VMR0002 Revisions to ACM0008 to Include Methane Capture and Destruction from Abandoned Coal Mines Methodology, v1.0 Projects with EAOCs generated from fossil fuel reductions from either VCS methodology may require revision for conversion to compliance 12

Active Underground Mine Ventilation Air Methane (VAM) Protocol applies to MMC projects that install a VAM collection system and qualifying device to destroy the methane in VA otherwise vented into the atmosphere through the return air shaft(s) as a result of underground coal or trona mining operations. Methane sources eligible for VAM activities include: Ventilation systems Methane drainage systems from which mine gas is extracted and used to supplement VA. Only the mine methane sent with ventilation air to a destruction device is eligible. Destruction of VAM via any end-use management option is eligible Applicable to active coal and trona mines 13

Active Underground Mine Methane Drainage Protocol applies to MMC projects installing equipment to capture and destroy methane extracted through a methane drainage system otherwise vented into the atmosphere (section 2.2) Methane sources eligible for Active Underground Drainage activities include: Pre mining surface wells Pre mining in mine boreholes Post mining gob wells Destruction of MM via any end-use management option is eligible, except for the pipeline injection of mine methane Applicable to active coal and trona mines 14

Active Surface Mine Methane Drainage (SMM) Protocol applies to MMC projects installing equipment to capture and destroy methane extracted through a methane drainage system otherwise vented into the atmosphere (section 2.3) Methane sources eligible for SMM Drainage activities include: Pre mining surface wells Pre mining in mine boreholes Existing CBM wells otherwise shut in and abandoned Re activated abandoned wells Converted dewatering wells Destruction of SMM via any end-use management option is eligible Applicable to active coal and trona mines Mines using mountaintop removal mining methods are NOT eligible 15

Abandoned Underground Mine Methane Recovery (AMM) Protocol applies to MMC projects installing equipment to capture and destroy methane extracted through a methane drainage system otherwise vented into the atmosphere as a result of previous underground mining operations (section 2.4) Methane sources eligible for AMM activities include: Pre mining surface wells, pre mining in mine boreholes and post mining gob wells drilled into the mine during active operations Surface wells drilled after active mining operations have ceased Applicable to abandoned underground coal mines only Must not occur in flooded mines or flooded sections of mines Mine must be classified by MSHA as abandoned or abandoned and sealed to be eligible 16

Abandoned Underground Mine Methane Recovery (AMM) Destruction of AMM via any end-use management option is eligible Pipeline injection of mine methane is an eligible end-use management option only if pipeline injection was not taking place prior to the project AMM recovery activities at multiple mines with multiple mine operators may report and verify together as a single projects, if: A single Offset Project Operator is identified and emission reductions are credited to that Operator Methane recovered is metered at a centralized point prior to destruction Offset Project Operator meets all monitoring, reporting and verification requirements All mines are in compliance with regulations 17

General Eligibility Offset projects that use this protocol must: Involve a qualifying methane capture and destruction device, or set of devices Qualifying Device means a destruction device that was not operational at the mine prior to offset project commencement, except as specified in section 2.4(b) & was not used to combust mine methane via an ineligible end-use management option Non-qualifying devices must be monitored and accounted for Capture methane that would otherwise be emitted to the atmosphere Use an eligible end use management option to destroy the captured methane (per Section 3.4) 18

Who can be the OPO / APD Offset Project Operator s (OPOs) or Authorized Project Designees (APDs) must: Have legal authority to implement the offset project Be either the entity owning or leasing the equipment used to capture and destroy methane or the mine operator Mine operator defined as any owner, lessee, or other person who operates, controls, or supervises a coal or other mine or any independent contractor performing services or construction at such mine; the operating entity listed on the state well drilling permit Be responsible for project listing, monitoring, reporting and verification 19

Eligibility Rules Location Project Commencement Project must be located in the US. Eligible projects include those at mines: Located on Indian or tribal lands (with waiver of sovereign immunity, meeting other requirements) Located on federal lands For Compliance Protocol: Date when the project s mine methane capture and destruction equipment becomes operational upon completing an initial start-up period of up to 9 months For Reserve Protocol: Start date is self-defined, but no more than 3 months after methane first destroyed. Crediting Period For Compliance Protocol: 10 reporting periods (w/ initial RP of up to 24 months), renewable once. Must be after December 31, 2006 For Reserve protocol: 10 years, renewable once Regulatory Compliance Compliance with all applicable laws 20

Eligibility Rules: Additionality Performance standard evaluation Assessed once at beginning of crediting period Based on end-use management option: All VAM projects are eligible All SMM projects are eligible Active Underground Drainage projects: any end-use management, except pipeline injection AMM: any end-use management including pipeline injection, except if the mine employed pipeline injection while active Legal Requirement Test Assessed once at beginning of crediting period Must exceed legal requirements 21

Quantifying Emission Reductions Emission reductions from an MMC project are quantified by comparing actual project emissions to project baseline emissions at the mine Protocol provides four sets of activity type-specific calculation methods to determine baseline and project GHG emissions Baseline emissions Emissions from methane destruction of non-qualifying devices (if any) Methane released into atmosphere Project emissions Emissions from additional energy consumed to capture & destroy methane Emissions from destruction of captured methane Emissions from uncombusted methane 22

Monitoring and Metering VAM projects Continuous flow and CH 4 % recorded every 2 minutes, hourly destruction device operation Drainage projects Continuous flow and CH 4 % recorded every 15 minutes, hourly destruction device operation Flow, CH 4 %, T, and P of mine gas from each methane source (i.e. surface wells, boreholes) must be monitored separately before being interconnected and sent to the destruction device(s) different from Reserve s CMM V1.1 requirement of each drainage system 23

QA/QC Requirements Quarterly inspections: Must document as found/as left Calibration check: Required each reporting period (~annually) Must take place no more than 2 months before or 1 day after the end of the Reporting Period Full calibration: Required every 5 years or per manufacturer s guidance No calibration necessary, if explicitly stated in manufacturer s guidance 24

Reporting & Verification Project records kept for at least 15 years Initial reporting period can be 6 24 months in length, with all other reporting periods of up to 12 consecutive months Crediting period is 10 reporting periods, which can be renewed one time The Offset Project Data Report (OPDR) must be submitted to the OPR (i.e. the Reserve) within four months of the end of each reporting period and prior to the commencement of verification. Each reporting period must be verified by an ARB accredited offset verification body 25

Listing a Project Early Action Open a Project Developer account with the Reserve Complete and upload a CMM Project Submittal Form Reserve will review; if approved, the project is listed Compliance Open a CITSS account with ARB Open a Project Developer account with the Reserve Complete and upload ARB s listing form (not yet posted) and the APD designation form, if applicable Reserve will review and ARB will confirm CITSS info 26

Deadlines for Early Action Projects Early Action MMC projects must be listed with the Early Action Offset Program (i.e. the Reserve) prior to Jan. 1, 2015 EAOCs (i.e. CRTs) may be generated on emission reductions taking place between Jan. 1, 2005 and Dec. 31, 2014 EA projects must list as a compliance project by Feb. 28, 2015, be verified under EA by Sept. 30, 2015, and convert EAOCs to ARBOCs by Aug. 31, 2016 Conversion process entails a desktop re-verification of emission reductions by an ARB accredited verifier 27

Solvay Chemicals, Inc. Green River Wyoming Ron Hughes Executive Vice President, Sodium Technologies 28

Mining Operation Fundamentals 4.5 million tons trona annually 1,600 feet depth Longwall, bore miners, solution MSHA Class III gassy mine 3.1 million tons finished products 2.6 million soda ash 0.5 million other products 460 employees ~7 million ACF daily waste methane emissions ~2 million ACF captured presently Expansion to ~4 million in fall 2014 29

Waste Mine Methane Capture Project listed with Climate Action Reserve 2009 251,666 CRT s registered to date Additional ~130,000 in verification Will apply for early action credits in California system using CAR as our registry Phase I Mine gas incinerator Commissioned May 2010 ~1 million ACF capacity Phase II Compression / dehydration station Expanded GVB network 4 mile pipeline to refinery Dryers and calciners added as incineration devices Commissioned July 2012 ~2 million ACF capacity Expansion to ~4 million ACF 30

Cross Section of Conceptualized Waste Mine Methane Capture Process Overburden WMM extracted under vacuum Direction of mining Longwall Miner WMM released from strata rubble

Waste Mine Methane Collection

Phase I WWM Incineration Process Methane Pump Incinerator 33

Phase II Compression, Transmission, Combustion 34

Completed Compression & Transmission Facility 35

WMM Destroyed Via Combustion in Process Kilns 36

Contact Teresa Lang Policy Manager 213-891-6932 tlang@climateactionreserve.org Mark Havel Program Associate 213-542-0298 mhavel@climateactionreserve.org www.climateactionreserve.org 37