Test 2

On behalf of CNX Resources, we thank the Virginia Department of Energy for undertaking this important study and would like to thank the General Assembly and the Governor’s office for their leadership on the passage of HB1643 and SB1121.  We appreciate the opportunity to comment.

CNX Resources is the largest natural gas producer in the Commonwealth of Virginia, with our operations stretching across Buchanan, Russell, and Tazewell counties. Within Virginia we employee approximately 70 employees and have over 400 contractors working at our sites on any given day.

It’s important to distinguish traditional coal bed methane from coal mine methane. Coal mine methane (CMM), as defined by the law, is “methane gas captured and produced from an underground gob area associated with a mined-out coal seam that would otherwise escape into the atmosphere.” The definition of coal mine methane covers mines that emit methane for safety purposes and the methane still emitting from abandoned or closed mines, which would otherwise be going to atmosphere.  Whereas Coal Bed Methane (CBM) is a resource unrelated to mining degasification or safety.

CMM is not required to be captured. MSHA requires that a written ventilation plan, with specified content, be developed for each underground metal or non-metal mine. Accordingly, the venting of methane is necessarily standard industry practice.[1] As shown below in Graphic 1.1, CMM accounts for 8% of all Methane Emissions in the US. [2]

There are over 539 operating coal mines and less than 2% of underground active coal mines are capturing and using methane as of 2022, and only 13 mines with capture projects reporting to EPA’s Greenhouse Gas Reporting Program.[3]^,[4]

Fewer than 8 active mines are utilizing the CMM for beneficial use today due to high costs of capture and cleaning.⁴ One of those happens to be in Virginia at the Buchanan #1 Mine, but so much more can be done. There are still significant methane emissions across Virginia mines, even still at Buchanan. It is a necessary part of the mining activity, and ensuring the viability of these mines should be of utmost importance. Due to the large capital expenses associated with capturing methane, these efforts need to be incentivized or encourage, and if done correctly, can establish an entirely new stream of capital deployment, infrastructure build out and jobs, all while addressing an environmental concern from an otherwise wasted resource. CNX estimates that if CMM capture for beneficial was incentivized, private industry could address the >10M tons of co2e annually liberated from underground coal mines in Virginia by enabling private investors to invest over $400 million and create 400 jobs in coal communities primarily in Southwestern Virginia.

 Currently, there are no federal incentives for the capture and utilization of coal mine methane, unlike the Renewable Fuel Standard for biogas, and only five (5) states currently recognize CMM for their alternative or renewable portfolio standards. For nearly two decades, Pennsylvania has designated CMM as a tier 1 energy source. Other states that include some form of mine methane in their portfolio standards include Ohio, Indiana, Utah and Colorado. Virginia, like several other states, should recognize the positive environmental attributes of this method of capturing methane emissions that would otherwise go into the atmosphere.

Historically, the Section 45K(a) (formerly Section 29)[5] provided a credit for producing fuel from a nonconventional source, measured in barrel-of-oil equivalent of qualified fuel (including methane from coal mines), the production of which is attributable to the taxpayer and is sold by the taxpayer to an unrelated person during the taxable year. The credit was enacted in 1980 by the Crude Oil Windfall Profit Tax Act in response to the energy crisis causes by the cut off of crude oil from the Middle East. The credit, which was extended and modified at different times, ultimately expired in 2007 for qualified fuels produced from coal seams.

Due to this expiration, coupled with the lower natural gas prices due to the advent of unconventional shale development, capture projects for beneficial utilization are decreasing, and in some cases those same mines are now venting to atmosphere and / or pursuing flare projects due to economic conditions as shown in Graphic 1.2⁸.

Under California’s program, CARB, California Air Resources Board, coal mine methane does qualify as a valid source for emissions offset, however, only if that methane is destroyed via flaring[6]. It is important to note, that the methane abatement impact of flaring is limited.  Despite the incentive at CARB and a handful of other carbon offset markets, today, flare projects capture only ~1.3MM tCO2e per year, or 2.5% of methane liberated from active underground coal mining in 2021. ^{[7], [8]}The increase in flaring is not having a material impact on reducing emissions to atmosphere due to the small scope, low adoption, and temporary nature of the practice. [9]

Due to the methane release occurring during and after active mining of coal, and released methane migrates to the atmosphere within a timeframe that is within life cycle analysis (LCA) boundaries.[10] ^[11]This is important because more and more companies, electric generators, and manufacturers are focusing on life cycle analyses and carbon intensity of feedstocks. When coupled with the global focus on methane emissions reductions, this fuel source and its low carbon attributes can help attract manufacturing and electric generation to the state. For example, CNX has announced projects with Newlight, Adam’s Fork ammonia, and the Pittsburgh International Airport where on-site consumption of low carbon intensity gas is a priority that brought investment to OH, WV, and PA respectively. These project developers 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 – CMM can meet that demand, while utilizing a potent gas that would otherwise be vented into the atmosphere.

Each new MW of solar and wind capacity requires between 35-45 and 120-180 tons of steel respectively.  70% of steel production globally relies on coal for manufacturing. According to Ember, 27% of the climate impact of steel comes from methane.  The capture and beneficial use of CMM will drastically lower the climate impact of the renewable energy supply chain and scope 3 emissions.[12]^,[13]^,[14]

The technology is available, the workforce is here and there is an appetite to capture and use this methane, which creates jobs, helps the environment, and utilizes an energy source that would otherwise be wasted – providing more energy security.

As company, CNX is committed to an Appalachian First vision to energy production.  That means produce it here and use it here, first.  We need to leverage this resource and strategic advantage that Virginia has to attract better paying jobs to the Coalfields region. Recognizing the positive environmental effects of capturing CMM can translate into significant capital investment for our region.  However, the key to unlocking this potential is to treat CMM the same as other low carbon intensity gases, like landfill and renewable natural gas from a public policy perspective.

Supporting Graphics:

CommentID: 220478

To Whom It May Concern:

Anew Climate, LLC (“Anew”) was formed through the merger of Element Markets and Bluesource in February 2022. Anew is one of the largest climate solutions providers in North America and, through its legacy companies, has a successful track record over the past two decades in  developing and marketing carbon credits, renewable natural gas, low carbon fuels, electric vehicle credits, emissions credits, and renewable energy credits, in both compliance and voluntary markets, and in supporting client companies in quantifying and reporting on their greenhouse gas (“GHG”) inventories and developing corporate climate strategies and targets. 

Anew applauds the Virginia Department of Energy for evaluating policy options to encourage the capture and beneficial use of Coal Mine Methane (CMM). We appreciate the opportunity to submit the following comments:

1. Virginia Should Incentivize the voluntary Capture and Use of Coal Mine Methane Because of its Significant Environmental and Economic Benefits

A well-designed Virginia policy program could significantly reduce the amount of methane that is vented into the atmosphere. This would:

• contribute to federal and state climate goals by reducing US GHG emissions,
• improve local safety and air quality, and
• create new economic opportunities in rural areas facing challenges from the energy transition.

CMM is defined as voluntarily captured methane that is liberated from coal mines. Methane is released before, during and after coal mining activities take place; in active, closed, as well as abandoned mines. For safety reasons, federal laws require mine operators to actively vent methane at underground mining sites to assure that concentrations of this explosive gas do not reach harmful levels. Even after active mining has ceased, waste methane may continue to seep for many years. Under current federal regulations, waste methane from mining activities may be released into the atmosphere unmitigated.  This methane is a greenhouse gas that is more than 28 times more potent than carbon dioxide on a mass basis over a 100-year period. According to the US EPA, methane emissions from coal mining and abandoned coal mines accounted for 8% of total US methane emissions in 2019, making it the fifth largest source of this powerful greenhouse gas.[1]  According to the U.S. EPA’s GHG Inventory, about 41.5 million tons of GHG emissions (CO2e) could have been avoided in 2021 through CMM capture from underground coal mines[2].

• In addition, when CMM emissions are not captured, they are not only a potent GHG contributor but also represent a wasted potential source of energy. In 2022, thirteen mines in the US reported destruction or capture devices to EPA’s Greenhouse Gas Reporting Program. 2022 EIA reports cite 539 active US coal mines. Therefore, only 2.4% of 2022 US active coal mines have some form of capture equipment and there is substantial opportunity to leverage this wasted resource under properly incentivized beneficial use programs. [3]^,[4]

Importantly, the majority of CMM potential is in Justice40 areas covering large segments of Virgina, West Virgina, and Kentucky [5]. There are significant socioeconomic benefits associated with the development of CMM as it creates jobs in communities that are hit hardest by the energy transition.[6]

2. Overview of Existing CMM Capture and Use Incentives

The following state, voluntary, and federal programs and initiatives are focused on creating avenues for beneficial use of CMM as a low carbon fuel resource. While these pioneering programs create a welcome recognition of the benefits of waste gas capture, we highlight that most place restrictions either on the qualifying end use or sourcing (e.g. from abandoned mines only) of CMM, so no comprehensive framework for driving beneficial use of CMM in the US exists today:

• Pennsylvania Renewable Portfolio Standard Recognizes CMM as a qualified resource for the generation of Tier 1 Alternative Energy Credits. Under this program, CMM displaces traditionally extracted natural gas for use in power generation, taking full advantage of the thermal and environmental benefits of methane capture for beneficial use.
• CMM is recognized as a recommended resource under the Colorado Clean Heat Standard for both its thermal and environmental benefits.  The legislation directs gas distribution utilities in Colorado to submit “clean heat plan” to cut CO2 and methane emissions from delivered gas. Reduction measures include energy efficiency programs, biomethane, hydrogen, recovered methane from active and abandoned mining projects, leak detection, and electrification.
• Ohio’s Renewable Portfolio Standard allows for the generation of compliance renewable energy certificates (RECs) associated with pipeline-injected gas from abandoned coal mines.
• Since 2104 California’s Cap and Trade program, AB23, compliance protocol also recognizes the GHG benefits of CMM destruction under a flaring protocol, but crucially the maximal benefit of injecting CMM to a common carrier pipeline for beneficial use is not recognized.  
• The American Carbon Registry (ACR) has recognized CMM for carbon offset generation since 2014. This protocol does allow for common carrier pipeline injected CMM to qualify under specific circumstances, however these circumstances place significant financial and operational burdens on projects, leading most sites and project developers to elect to flare waste methane[7],[8].
• Since 1994, EPA's Coalbed Methane Outreach Program (CMOP) has been working with coal mining sector in the U.S. to reduce CMM emissions. As of January 2023, EPA’s CMOP had identified 25 coal mine methane projects at 16 active mines and 35 abandoned mine methane projects at 66 abandoned (closed) mines nationally. Its mission is to promote the profitable recovery, utilization, and mitigation of coal mine methane, which the EPA recognizes as a valuable energy resource[9].

3. Recommendation

Programs targeted at supporting the beneficial use of CMM through gas capture, upgrade, and pipeline injection are an essential component of reducing emissions associated with necessary mine safety precautions. Beneficial use of CMM – alongside its GHG impact and social, economic benefits – is a powerful tool for the remediation of coal mines. By incentivizing the capture and use of CMM, state and local governments and communities will reduce costs and impacts associated with environmental mitigation from closed or abandoned mine operations, which do not cease to produce waste methane at the cessation of mining operations. If not captured and put to beneficial use, CMM would otherwise be wasted; released into the atmosphere rather than as an alternative source of methane for power generation, heating, transportation, and key energy transition fuels such as SAF, hydrogen, and ammonia. With proper programmatic support at the state level, CMM could become a driver of economic and environmental success in Virgina.

We therefore recommend that the Virginia Department of Energy design a policy that would incentivize the capture and beneficial use of CMM. As an established leader in the environmental markets with broad experience navigating different policy programs, Anew would welcome the opportunity to engage in further dialogue with the Department to support the analysis of different policy options and scenarios.

Thank you for the opportunity to provide these comments. 

October 26, 2023

To Whom It May Concern:

As the Virginia Department of Energy evaluates policy options to encourage the capture and beneficial use of coal mine methane (CMM), I am kindly submitting a comment on behalf of the Waste Gas Capture Initiative (WGCI) in support of the effort of utilizing CMM.

Promoting the capture and utilization of CMM, which accounts for around 8% of total U.S. methane emissions annually., offers the potential for Virginia to clean the environment, diversify energy sources, and create jobs simultaneously. According to the EPA, the methane emitted from active mines alone amounted to 33 million tons CO2e100 of methane to the atmosphere. Coal mine methane capture significantly reduces harmful greenhouse gas emissions and creates needed jobs in areas that have been economically impacted by the energy transition.

Additional benefits include enhanced energy security, as Virginia has the opportunity to tap into an abundant and underutilized resource. This strategy strengthens the resilience of our energy supply. Despite these benefits, less than 2% of active U.S. coal mines today capture and utilize the vented methane. Encouraging such efforts through policy incentives enables innovative projects that can power homes and industries, driving Virginia's sustainable energy goals forward and making progress toward emissions reduction objectives.

Scaling mine methane capture operations is a commonsense and ready solution to support local economies, reduce overall U.S. methane emissions, and strengthen America’s energy security. As an organization dedicated to securing America’s sustainable energy future through mine methane capture, the WGCI stands ready to support this effort and to be a partner with the Virginia Department of Energy as you undergo this process.

Sincerely,

Mike Moore

Executive Director

Waste Gas Capture Initiative

https://wastegascapture.com/

PUBLIC COMMENT LETTER

Re:    Evaluating policy options to encourage the

capture and beneficial use of coal mine methane

To Whom It May Concern:

Thank you for the opportunity to comment on House Bill 1643 and Senate Bill 1121 as the Department of Energy investigates methods of promoting the capture and beneficial use of coal mine methane.   I am Aaron Davis, Senior Engineer with Keyrock Energy, LLC, a methane capture and destruction company with projects spanning six states, including Virginia.  Keyrock is responsible for generating nearly 80% of all coal mine methane offsets in the United States.  With a background in engineering, law, and business, my perspective on the issue at hand is both varied and balanced.  In particular, my experience with Keyrock has allowed me to fully appreciate the widespread, positive impact of methane capture and destruction.  To that end, I would like to present the following points of comment:

1. Keyrock embraces methane pipeline injection but acknowledges that this is rarely the most feasible option.
2. Methane destruction is an excellent alternative that positively impacts the environment in the present and future.
3. Methane destruction is a proven alternative that promotes and ensures the safety of coal miners.

Arguably, the best use of captured coal mine methane is its injection into pipelines for public and private consumption.  Keyrock fully supports pipeline injection and utilizes the same where a project produces quality methane and has access to adequate infrastructure that makes processing the gas for injection a viable option.  One Keyrock property in Illinois extracts gas from 16 abandoned underground coal mines using over 30 wells and a collection system comprising more than 50 miles of pipeline.  Mine gas is transported to a centralized gas processing plant, where contaminants are removed and the gas is pressurized for delivery into the natural gas pipeline.  This is the exception, however, not the norm.  The reality is that many projects result in gas that is simply not injectable because of its quality and/or quantity.  Nearly all methane projects are located in remote areas, such as rural Appalachia.  The notorious lack of infrastructure makes construction of a cryogenic gas improvement facility – and consequently pipeline injection – not only economically impractical, but unfeasible.  

While injecting methane into a pipeline may be ideal, conditions (namely methane quality and adequate infrastructure) rarely are.  Consequently, methane destruction is a viable alternative.  Methane is a known greenhouse gas that is 28 times more potent than carbon dioxide over a 100-year period and 84 times more potent than carbon dioxide over a 20-year period.[1]  Methane is continuously emitted from coal mines, both active and abandoned.  It leaches into the ground, contaminates water sources, negatively impacts surface vegetation, and creates perpetual concerns for fires and explosions for the surface owners.  According to the E.P.A., coal mining and abandoned mines produce approximately 8% of the United States’ total methane emissions.[2]  Destroying methane alleviates these concerns.  Further, the by-products of methane combustion are proven to be better and much less detrimental to our environment than the emission of methane.   Essentially, coal mine methane destruction can circumvent decades of negative environmental impact.

In addition to its environmental benefits, methane destruction also plays a critical role in ensuring coal miner safety.  Mines liberate methane as operations are conducted.  As a result, it is continuously monitored and maintained according to state and federal regulations.  But despite extensive regulations and oversight, methane has still been the cause of innumerable explosions and fatalities since the inception of mining.  As coal mine operations develop, areas that have already been mined are sealed off from the rest of the active mine.  Regardless of these precautions, though, all seals leak into the active mine ventilation system and continue to threaten the lives of miners.

For reference, at one active West Virginia coal operation, a sealed area was leaking methane into the active mine.  Every barometric pressure drop forced methane through the seals into the active mine.  At times, this was so significant that the mine operator was forced to cease production and remove miners from the affected area.  Keyrock was contracted to drill into the mine and destroy methane from this sealed area.  The requisite permits and licenses were quickly secured and Keyrock was able to drill, apply a negative pressure to the sealed area, and set up a flare to destroy methane.  This negative pressure created an equilibrium such that the decreases in barometric pressure no longer resulted in methane leaking into the active mine.  The MSHA data immediately preceding the flare installation showed that a staggering ~7 million cubic feet of methane per day was being liberated from the mine.  However, after the installation of the Keyrock flare, the MSHA data showed that the methane liberation dropped to 5.5 million cubic feet per day (“cfd”).  This is an astonishing 1,500,000 cfd reduction in methane liberation!

And the emission of lethal amounts of methane are by no means isolated.  Consequently, deadly mine disasters have continued into this century – disasters that never fail to garner an onslaught of media attention and scrutinization of the mining industry.  Consider the following recent disasters:

• Sago Mine Explosion
  • 12 fatalities, January 2, 2006
  • This mine’s daily methane emission was 92,460 cfd.[3]
• Darby Mine No.1 Explosion
  • 5 fatalities, May 20, 2006
  • This mine’s daily methane emission was 38,707 cfd.[4]
• Upper Big Branch Mine Explosion
  • 29 fatalities, April 5, 2010
  • This mine’s daily methane emission was 1,067,510 cfd.[5]

We could only speculate as to the lives that might’ve been spared if methane destruction techniques had been implemented at any of these mines.

Of the six states where Keyrock engages in methane operations, Virginia has proven to be the most challenging both in terms of regulatory procedures and the length of time it takes to follow the same (often up to 18 months).  In the state of Virginia, a coal mine can secure all the necessary permits and licenses, and comply with all the regulatory requirements to begin mining operations…all while continuously emitting methane, creating imminent risks to the environment and to the lives of miners.  But the moment a flare is set up to destroy that same deadly gas and protect the lives of those working at the face of that same coal mine, the methane destruction process comes to a screeching halt.  The presence of the flare triggers the involvement of the Virginia Oil and Gas Board and, under the current legislative framework, its processes and procedures can be exceedingly tedious and time-intensive.  The result?  Tens of thousands of dollars and countless hours spent in title searching, document drafting, and regulatory hurdle-jumping. 

The enormous task of conducting a thorough oil and gas title search is evidenced by the tens of millions of dollars that are currently tied up in escrow waiting for a determination of the proper royalty owner.  At the same time, thousands of opportunities for methane destruction are ripe throughout the coal fields where methane poses either a danger to the environment, a threat to human life, difficulties for the landowner, or all three.  In addition to the important work of destroying methane, these operations could provide much-needed job opportunities.

There is a tremendous need for viable methane capture, use, and destruction in Virginia.  Keyrock is already involved in promising operations within the state, but this involvement has highlighted several serious difficulties.  I believe that an alternative could be devised whereby methane destruction operations could commence in a provisional manner as the title searching is being conducted and regulatory compliance is being achieved.  It is not uncommon for such temporary or conditional permits to be issued in a variety of circumstances.  By issuing such a permit, the state of Virginia could allow the critical function of methane destruction to be performed, subject to oversight, until all requirements are met.  This scenario would allow for thorough compliance, as well as the protection of the environment and the saving of lives.

Sincerely,

/s/ Aaron R. Davis

Aaron R. Davis, P.E., J.D., MBA