Coal Mine’s Methane Powers Ski Area; Others Send It Into Air

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By Tripp Baltz

A shuttered Koch Industries Inc. coal mine in Colorado operates as a power plant that uses the mine’s methane to make electricity for ski operations in Aspen—demonstrating one way for gassy coal mines to avoid venting a potent greenhouse gas.

But the Elk Creek Mine operations may be difficult to replicate, federal and state regulators say.

Not all companies see the same incentives. A nearby mine owned by a subsidiary of Arch Coal Inc.—the single biggest source of methane in Colorado—already has permission from federal regulators to vent, which is its cheapest option for disposing of the gas.

Surmounting these challenges is the goal of a local working group grappling with ways to mitigate the climate change impacts of underground coal mine methane, which is dangerous for miners but also a potent greenhouse gas when vented.

Members of the North Fork Coal Mine Methane Working Group say their efforts are important since they are focusing on reducing methane from three of the gassiest mines in Colorado.

Path Forward Uncertain

“There’s a lot of uncertainty about how to navigate this process,” Lisa Dawson, chief of the branch of solid minerals in the Bureau of Land Management Colorado state office, said Feb. 7 at a meeting of the working group in Hotchkiss, Colo. “We’re trying to navigate how to make it work. It’s something we’re going to evaluate on a case-by-case basis.”

The former Koch Industries coal mine, West Elk Mine and one other called Bowie #2 are all in the North Fork Valley of the Gunnison River. Only West Elk is still active. There exhausters pull methane from underground and vent it into the air.

West Elk is owned by Arch subsidiary Mountain Coal Co.; Elk Creek is owned by Koch subsidiary Oxbow Mining LLC; and Bowie #2 is owned by Bowie Resource Partners Ltd.

The group working on issues related to methane emissions from the three mines, formed in 2017, is made up of representatives of the mines, county officials, environmentalists, electric utilities, the Forest Service, the Bureau of Land Management, state agencies, congressional staff, and a representative of Colorado Gov. John Hickenlooper (D).

Royalty Reduction

Hickenlooper in 2017 supported a royalty rate reduction for Mountain Coal, but made it contingent on the company’s commitment to explore a methane capture strategy. The BLM approved the royalty reduction before the company agreed to any methane mitigation.

Logan Bonacorsi, spokeswoman for Arch Coal in St. Louis, did not return Bloomberg Environment’s queries. Calls placed to a Mountain Coal Co. phone number in Somerset, Colo., were unanswered. Weston Norris, engineering manager at West Elk who participated in the Feb. 7 work group meeting, declined to comment.

The working group has no legal or regulatory authority. Its stated mission is “the support of coal mines in the North Fork Valley through the development of a comprehensive strategy for education, capture, exploration of mitigation, and economic utilization of coal mine methane.”

Methane emissions from oil and gas operations are regulated by state law in Colorado. By contrast, methane vented from coal mines is not regulated by federal or state agencies.

Methane is 28 to 36 times as potent as carbon dioxide for trapping heat over 100 years, according to the Environmental Protection Agency.

Mine Expansion

The Forest Service recently approved Mountain Coal’s plan to build roads in a Colorado roadless area to gain access to West Elk’s gas vents to monitor and maintain them. A permitting decision is pending from the BLM on the company’s request to expand coal mining operations there.

Environmentalists object to the company’s venting at the mine and have sued the Forest Service and the BLM over what they call inadequate environmental analysis at West Elk.

The working group said the top three alternatives to venting methane are to flare it, capture it to generate electricity or heat, or pump it into pipelines to be sold as a commodity. The group also is considering less conventional options such as exploring the use of methane to make fertilizer or bricks.

Venting Cheapest

Still, putting heat-trapping methane gas in the atmosphere is the cheapest alternative.

The costs associated with the other options makes them less than attractive for mining companies. But Elk Creek found it a way to make it work.

The mine shut down in 2012 after an underground fire caused the company to suspend operations and abandon its longwall mining equipment, a 68-ton piece of coal extraction equipment worth tens of millions of dollars. The mine had operated for two decades, producing nearly 4 million tons of low-ash, low-mercury coal annually, according to the Gunnison County assessor’s office.

After the fire, Vessels Coal Gas Inc.—in collaboration with Oxbow, Aspen Skiing Co. and Gunnison Energy Corp.—built the nation’s first methane gas-fired power plant of its scale at the site.

The plant is set up to extract, clean, compress and convert the mine waste methane gas into 24 million kilowatt hours of power, enough electricity to power the four ski areas in and around Aspen that are owned by Aspen Skiing Co. and several other buildings and restaurants that are part of the company’s ski operations.

Emissions Reduced

The operation eliminates some 96,000 tons of carbon dioxide equivalent from the atmosphere annually, the equivalent of the greenhouse gases emitted by some 17,577 cars, the assessor said.

Revenue from the Vessels operation comes primarily from the generation of California Air Resource Board offset credits, the company said on its website. The credits are generated by measuring and recording the methane the company destroys in the process of generating electricity, it said.

“The Company will destroy methane emissions by electricity generation and injection into natural gas pipelines if positive economic incentives are sufficient for development,” it said.

Unique Project

Participants in the work group said the Elk Creek project is unique, especially in terms of how its coal leases are administered by the BLM.

“The Vessels project took a lot of work to get off the ground,” said John Whitney, a regional director for Sen. Michael Bennet (D-Colo.).

“It took a lot of one-time temporary authority in order to do that. At some point, we might need to fix the law to make it a lot easier to get these projects off the ground.”

Meanwhile, environmentalists have low expectations for the work group. High Country Conservation Advocates recently withdrew as a member, citing the language in the mission statement about “support for coal mines” as the reason.

“I’ve seen no evidence that the West Elk mine is worried about the climate or public health impacts of its pollution of methane or smog-forming compounds, or that the mine will address its pollution unless it can clear a tidy profit by doing so,” Ted Zukoski, staff attorney for Earthjustice in Denver, told Bloomberg Environment.

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