Coal Mine Methane Offsets Don't Belong in California's AB 32 Clean Energy Law

The California Air Resources Board is scheduled to decide tomorrow whether to allow the state’s largest polluters to use reductions from methane emissions from coal mines as a way to comply with California’s AB 32 clean energy law. We think it’s a bad idea and we hope the board agrees.

One of the key components of AB 32, the state’s landmark Global Warming Solutions Act to reduce emissions below 1990 levels within the next seven years, is the cap-and-trade program. The program limits carbon pollution from California’s major emitters by enabling them to buy and sell pollution “allowances” to comply with the gradually declining emissions target. The program also includes a limited “offsets” component to recognize emission reductions achieved in sectors not included under the cap. This gives the big industries required to reduce emissions under the clean energy law another way to comply – they can purchase credits for attaining pollution reductions at projects in other sectors of the economy. 

So far, the California Air Resources Board (ARB) has approved offsets protocols for forestry and urban forestry projects; projects that destroy ozone-depleting substances; and projects that capture methane from livestock. The CARB staff is now proposing to add coal mine methane offsets as an eligible AB 32 compliance measure.  But since California has no active coal mines and only a few small abandoned mines, virtually all of the methane-capturing projects would be outside California.

A draft protocol and staff report were recently posted online in advance of this week’s ARB meeting.

What is coal mine methane?

The rock from which coal is mined often contains methane. When coal is mined, the methane – a potent greenhouse gas pollutant – is vented into the atmosphere. If the methane is captured and destroyed or injected into a pipeline, instead of being vented, the impact on the climate can be substantially reduced. The offset protocol before the Air Resources Board is intended to provide detailed guidance on how to measure, report, and verify the actual reduction in emissions from projects that reduce coal mine methane emissions.

Issues with the proposed offset protocol

A number of significant, substantive concerns have been raised about the proposed coal mine methane protocol. The environmental law clinic at Stanford Law School has pointed out problems with the analysis of how much methane will be captured from abandoned mines without the protocol as well as potential conflicts with future federal regulation under the Clean Air Act. In particular, the opportunity for coal mines to be paid to reduce emissions may make it more difficult to adopt regulations that require them to reduce emissions. And the Sierra Club has raised concerns about the potential that increased revenues for coal mine owners from offset sales could increase coal production, a point that was also raised by the Stanford clinic. Coal-fired power plants are responsible for much of the climate-warming carbon pollution in this country.

Coal mine methane offsets not a good fit for AB 32

In addition to these concerns, we believe that coal mine methane offsets are simply not a good fit for California’s AB 32 clean energy program.

The primary argument in support of adoption of the coal mine methane protocol is price containment for the pollution allowances in the cap-and-trade program. Adoption will help keep allowance prices low by adding tens of millions of tons of potential emissions reductions to the carbon market. But there is no need right now for further cost containment. ARB has proposed an additional safeguard to ensure allowance prices stay within a reasonable range and recent forecasts suggest that, if anything, the concern may be in the other direction, as allowances are projected to stay near the floor price for the foreseeable future.  

Because virtually all of the methane-capturing projects would be outside California’s borders,  none of the additional benefits that can accompany greenhouse gas emission reductions – like jobs and decreases in co-pollutants that also harm our health – will occur in our state. For example, installing and operating equipment to capture methane emissions from livestock manure at central valley farms creates jobs and improves local air quality. Instead, coal mine methane offset projects will provide increased revenues to primarily out-of-state coal mines for capturing methane --upwards of $300 million by the end of the decade -- creating the appearance, if not the reality, of the potential for incentives for increased mining and coal consumption.

Finally, coal mine methane offsets are not needed to help develop or demonstrate the feasibility of an innovative new way to reduce emissions because the technology to capture and destroy coal mine methane is already commercially available and used in a number of mines.  

There are better approaches  

While AB 32 isn’t a good vehicle for it, it’s important to reduce coal mine methane emissions, which represent nearly 12% of all human-caused methane emissions. Methane is the second-largest source of U.S. greenhouse gas emissions after carbon dioxide. Given that the capture technology is available and the cost is reasonable, NRDC shares the belief of many environmental advocates that a mandatory regulation to reduce coal mine methane emissions is well-justified. NRDC also believes that coal mine methane might be an appropriate option in a federal market-based greenhouse gas regulation, if and when one is implemented.

But it doesn’t belong in AB 32. That’s why NRDC is recommending the Air Resources Board reject coal mine methane offsets as an AB32 compliance option. It would move California’s landmark cap-and-trade program in the wrong direction.

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