New report says Virginia could incentivize methane capture from coal mines – Virginia Mercury

A new report says Virginia could create financial incentives for coal mines to capture and use methane, one of the most potent greenhouse gases, as a way to reduce emissions, but environmental groups are wary about further incentivizing coal mining.

The report is a result of 2023 legislation that initially sought to classify coal-mine methane as a renewable source of energy under the Virginia Clean Economy Act, a 2020 law that seeks to transition the state’s electric grid away from fossil fuels by midcentury. 

But lawmakers balked at the definition and instead scaled the measure back to say Virginia should “encourage” the use of captured coal mine methane, or CMM. The final legislation also created the workgroup that produced the report, which details how capturing and using methane in Virginia could be beneficial.

Methane is 25 times more potent than carbon dioxide at trapping heat in the atmosphere. Scientists say the resulting temperature increases are causing more intense rainfall and sea level rise, among other climate impacts. 

Methane captured from coal mines can be burned through a process known as flaring or converted to natural gas. The methane can also be used for electricity generation, transportation fuel and foodware and apparel manufacturing. 

“Coal mine methane is a highly potent greenhouse gas that is venting into the atmosphere at high volumes from active mines through degasification for miner safety and from abandoned mines where it escapes over time from the mined-out areas,” the report states. 

The workgroup concluded that the capture of coal-mine methane for flaring or other industrial uses “has a clear environmental benefit in terms of reduced [greenhouse gas] emissions as the highly potent methane is converted to less potent carbon dioxide or otherwise eliminated.”

That conversion creates an economic opportunity for investment and job creation in Southwest Virginia, which has struggled to maintain its economic vitality as the country weans off of fossil fuels, said the Waste Gas Capture Initiative, a group that advocates for the capture and use of coal mine methane.

“Investing in the power of mine methane capture will lead to a cleaner environment and job creation for families and communities across Virginia,” said WGCI Executive Director Mike Moore in a statement. “We look forward to working with Virginia lawmakers to ensure a better future.”

But Peter Anderson, director of state energy policy with the environmental nonprofit Appalachian Voices, said embracing coal-mine methane could not only encourage the continued use of coal but also lead to stranded coal mine methane assets as the electricity sector moves more toward renewables.

“We can’t just shift our methane pollution from coal mines to the electric power sector, call that power ‘renewable’ and pat ourselves on the back,” Anderson said.

Methane capture in the U.S. and Virginia 

A majority of the coal in Virginia is metallurgical coal, or “met coal,”  that is used for steel production. Coal used for electricity production is called thermal coal.

Regardless of whether the coal is thermal or metallurgical, methane is released into the atmosphere from coal seams during mining operations as a safety measure to relieve pressure, as well as from mines that have been shut down. In 2022, Virginia had 6,110 coalbed wells extracting methane in Buchanan, Dickenson, Tazewell, Russell, Wise, Lee and Scott counties in Southwest Virginia. 

The U.S. Environmental Protection Agency has recognized a need to reduce methane emissions from coal mines because of its risk of explosion and heat-trapping capabilities. Around the country, the federal agency oversees 25 coal mine methane capture projects at 16 active mines and 35 projects at 66 abandoned mines.

“CMM emissions represent a wasted potential source of energy (when not captured) and a safety hazard,” the EPA states on its website. “The recovery and use of CMM emissions have benefits for local and global environments.”

In Virginia, two methane capture projects are underway at  Buchanan Mine #1 — the state’s largest coal mine, which produces met coal — and one abandoned project at seven mines that have been closed, according to the EPA. The Buchanan project, which has been operating since 1994, avoided the emission of approximately 326,000 metric tons of methane in 2022. It uses its captured methane to generate electricity onsite or sells it to natural gas pipelines.

The report produced by the Virginia workgroup details multiple ways to incentivize coal mine methane capture and use.

They include a range of possible mechanisms such as a fund operators could tap into to pay for infrastructure, green energy job tax credits or a market where companies could sell environmental credits given for harvesting methane. The EPA has estimated that the infrastructure needed to capture and convert coal mine methane into pipeline-ready natural gas or other energy sources could cost millions, the Virginia report notes. 

Virginia has already experimented with a green energy job tax credit, with legislators last session making businesses in the Southwest Virginia-based Planning District 2 that create methane extraction jobs eligible for it. However, if eligibility was expanded, the credit could only help operators offset about 4% of capture costs, so it would need to be paired with other measures to have an impact, the report notes.

The workgroup also noted sales of captured methane could incentivize operators to adopt the practice. If coal mine capturers could be compensated at a rate of $15 per metric ton of methane, the report found, then $80 million in annual investment could more than halve the state’s coal mine methane emissions.

Virginia could also incentivize coal mine capture by adding captured methane to the state’s list of renewable energy sources, which would allow utilities to count it toward their renewables targets under the VCEA. Other states that have adopted this approach, in varying forms, include California, Ohio, Utah, Indiana and Colorado. 

Reactions

Reactions to the report have been split, with members of the coal industry in favor of encouraging methane capture and members of the environmental community concerned about encouraging more coal mining.

Companies like CNX Resources, a Southwest Virginia natural gas producer, say incentivizing capture could not only reduce millions of tons of methane emissions but also create hundreds of jobs.

“Companies that want to meet their environmental and sustainability goals are looking for ways to utilize energy resources as their feedstock that can be counted toward their emissions avoidance targets,” said CNX Resources Vice President of External Relations Brian Aiello in a statement. “CMM capture can meet that demand.“

But Anderson of Appalachian Voices said new incentives could provide coal mines an additional revenue stream that could help further sustain them.

“If the sale of CMM adds a revenue stream that can extend the economic viability of a coal mine, then in the future we could end up with this perverse incentive where we’re continuing to dig more for the methane that can be sold than for the coal that can be sold,” Anderson said. “And that’s methane that would otherwise have stayed in the ground.”

But the use of captured coal mine methane as a feedstock by manufacturers that also sequester carbon should be considered “very closely,” Anderson noted. 

The industrial sector is responsible for 16.9% of the state’s emissions, according to the Virginia Department of Environmental Quality’s latest greenhouse gas inventory.  Because the manufacturing sector is difficult to decarbonize, Anderson said, a tax break could help incentivize businesses to focus on reducing emissions.

Appalachian Power Company, Virginia’s second-largest electric utility, said it’s willing to consider the use of coal mine methane  if it is available to them, but it has no current plans to adopt the potentially “costly” practice.

“We’re always open for discussion,” utility spokeswoman Teresa Hall said. “A couple of questions we would need to explore include capital expense – this could be a costly endeavor – and, ultimately, of course, would it be cost efficient to meet the needs of customers.”