Ohio’s Abundant Renewable Energy Supply is Right Under Our ...cbmethane.com/CMM Ohio Briefing Document final 3309 pm.pdf · successful RPS policy namely: Availability of sufficient

Ohio’s Abundant Renewable Energy Supply is Right Under Our Feet

Abandoned Coal Mine Methane Recovery – the ideal

opportunity to meet Ohio’s Renewable Portfolio Requirements

Prepared by Mark O’Brien and Cal Peters

Final Draft

March 2, 2009

Tappan Lake, Harrison County, Ohio

Page 1 Ohio’s Abundant Renewable Energy Supply is Right Under Our Feet

What is Coal Mine Methane

Coal mine methane is a low-grade form of methane, which is the primary ingredient in

natural gas. Coal mine methane is easily recovered and processed into clean burning

natural gas and has the added benefit of limiting methane seepage into the atmosphere

and damaging our environment.

“Methane is the primary constituent of natural gas. Thus, the collection and

utilization of methane provides a valuable, clean-burning energy source that

improves quality of life in local communities and can generate revenue and

improve living standards. Producing energy from recovered methane can also

replace higher-emitting energy resources such as wood, coal and oil…

Capturing methane from coal mines can also improve safety conditions by

reducing explosion hazards.” Source: US EPA

The United States Environmental Protection Agency describes Methane as the following:

A hydrocarbon that is a primary component of natural gas that can be used as energy.

A “greenhouse” gas that is 23 times as potent as carbon dioxide and a major

contributor to global warming. Reducing emissions can lead to important energy,

safety, economic and environmental benefits.

A gas emitted from a variety of both anthropogenic (human-influenced) and natural

sources. Anthropogenic emission sources include agriculture, coal mines, landfills and

natural gas and oil systems.


Methane is a “renewable” fuel

U.S. Congress

The 109th US Congress defined a “renewable fuel” in P.L. 109-58 (H.R. 6, 1501) or the

Energy Policy Act of 2005 as follows:

“Renewable fuel” to include ethanol, biodiesel, and natural gas

produced from landfills, sewage treatment plants, and certain

other sources.

Pennsylvania Legislature

In November of 2004 Pennsylvania passed S.B. 1030 to establish their Renewable Portfolio

Standards. Those standards included coal mine methane as a tier 1 renewable fuel source

and provided it the REC incentives that have resulted in significant clean energy production

and reduced greenhouse emissions.

Pennsylvania, like Ohio, has vast abandoned and working coal mines that have varying

levels of recoverable methane.

Leading Scientific Research

Scientific research is suggesting that anaerobic microbes in coal mines convert

hydrocarbons to methane. A number of companies including Synthetic Genomics and Luca

Technologies are working to understand how methane is created. Research by a number

of firms is ongoing.


Abandoned coal mine methane delivering the right results -

Renewable clean fuel, energy efficiency and reduced greenhouse gas emissions

Pennsylvania

Multiple projects are ongoing in Pennsylvania. Coal Gas Recovery LP has ongoing projects in

Southwestern Pennsylvania. Their projects are expected to eliminate almost 600,000 tons of

methane emissions per year and generate enough pipeline quality methane gas to heat 15,000

homes a year. Source: EPA Transcripts of Statement of Kathleen A. McGinty April 13,2004

Alabama Project

A CMM project at four mines in Brookwood, Alabama is reducing emissions by 1.5 million

metric tons of carbon equivalent annually through the sale of 13 billion cubic feet of methane

each year to local gas company. Source EPA

Illinois

The Corinth Abandoned coal mine methane project in Franklin County Illinois started on June

3, 2005 and has reduced annual green house gas emissions by 180,000 metric tons carbon

dioxide equivalent. All methane gas recovered was processed into clean burning pipeline-

quality gas.

Source: http://www.netjets.com/About_NetJetsrinth_coal_mine_methane_project.asp

Ohio

Harrison County Ohio has an ongoing project recovering abandoned coal mine methane from

three mines. This project has significant upside potential, however, at current market prices

for natural gas it is not commercially viable and production has been significantly reduced.

CBM Ohio, LLC, the operators of the project have provided the following projections for full

development of their mines under contract. The project is projected to recover 800,000,000

cubic feet of methane per year, 239,000 megawatts of electricity equivalents or the ability to

heat nearly10,000 Ohio homes annually. Additionally, the projects will safely capture and

process the equivalent of 323,200 metric tons of carbon. Finally, CBM estimates that the

regional economic impact of the abandoned mines at full production will be $6,000,000

annually including royalties to land owners, service contracts, supplies, and payroll.


Benefits of Amending the Ohio Energy Act of 2008 to include the

recovery of abandoned coal mine methane as a renewable fuel

(Senate Bill 221)

Ohio has hundreds of square miles of underground coal mines.

Abandoned coal mine methane is arguably the most cost-effective renewable energy for

Ohio when compared to all other sources readily available in the state.

Abandoned coal mine methane is considered a dispatchable base-load source of

consistent energy for utilities (available 99.5%+ of the time) and is not subject to

variations in weather patterns.

Abandoned coal mine methane recovery is a safe and proven technology based on

successful projects in Alabama, West Virginia, Pennsylvania, Illinois and Ohio and these

projects are close to commercial viability. At current natural gas prices, a history of large

price swings, and a bleak energy outlook in terms of pricing, private investors are

reluctant to fund and develop new projects. The designation of CMM as a renewable

energy source with REC incentive will allow for pricing stability and bring many of these

projects back to commercial viability and help Ohio achieve their RPS goals. CMM

recovery projects should not require additional state subsidies or grants.

CMM recovery in most areas of Ohio will use existing natural gas pipeline infrastructure

which has excess capacity.

Pennsylvania has several active projects recovering and using methane in energy

production and the developers are receiving renewable energy credits. It is expected

that Pennsylvania will compete regionally in CMM as the REC market matures.

CMM fits the criteria recommended by the National Renewable Energy Laboratory on

successful RPS policy namely:

Availability of sufficient energy resources

Balancing a State’s goals for fuel diversity, economic development, price effects

and environmental benefits

County Square Miles of Underground Mines

Belmont 220

Jefferson 89

Harrison 63

Athens 61

Perry 51


Methane Recovery and Distribution Process

The Methane Recovery process is safe and can leverage existing underutilized

infrastructure.


A new broader focus on overall energy versus an electricity-only

strategy using renewable fuels

The new Obama Administration’s Energy agenda is focused on expanding renewable energy

sources and increasing energy efficiency by “deploying the cheapest, cleanest, fastest

energy source.” The recovery of abandoned coal mine methane can significantly help Ohio

meet the Administration’s new renewable energy targets while providing reliable, efficient,

and clean fuel.

Additionally, Speaker Nancy Pelosi and Senate Majority Leader Harry Reid requested, in

a letter dated February 26, 2009 to the Capital Architects, that they need to develop a

plan and cost estimate to retrofit the Capital Power Plant from coal to100% natural gas.

The leaders believe that this project would “quickly reduce emissions and petroleum

consumption through energy efficiency, renewable energy, and clean alternative fuels.”

In order to meet its renewable energy challenges, consumers and governments need to

utilize a wide variety of fuel sources to meet their energy needs. Concentrating solely on

creating renewable electricity significantly reduces the opportunity for Ohio to meet its

goals.

Consumer Energy Needs

The first states that implemented renewable energy strategies were focused on the

generation of electricity. In fact, the first two dozen states to implement RPSs didn't have

abandoned coal mines. Pennsylvania was the first state to develop an RPS that had

hundreds of square miles of abandoned coal mines and they wisely included this abundant

resource into their portfolio. Obviously, wind and solar must be used in the generation of

electrical power for utilities but other renewable sources such as ethanol, biodiesel and

methane from landfills or coal mines would be better used and much more efficient to

power gas appliances, home heating, transportation, and other uses.

Electricity

Natural Gas Lighting, heating Heating

Small appliances – TVs, toasters,

microwaves, computers, etc.

Major appliances – dryers, ovens,

stoves,


Using the “right” energy source returns the greatest efficiency

The following illustration provides an example of developing a consumer energy strategy

that maximizes efficiency by proper renewable resource allocation.

Electrical power generation, distribution and transmission is less efficient and more

detrimental to the environment, than is natural gas.

Consumers and businesses require both electricity and natural gas to meet their

energy needs.

From production to delivery to the consumer, natural gas is 90% efficient versus

electricity at 27% efficiency.

Clean natural gas produces 2/3 less emissions than coal and will help reduce Ohio’s

carbon emissions.

Source : Energy Efficiency benefits of Natural Gas Programs by Paul Raab, presented on June 24, 2008.


Not all renewable fuels are used in electricity production

Government incentives and investment should focus on developing multiple renewable fuel

sources and provide incentives to meet energy needs state- and nation-wide. Renewable

Portfolios should be based on the following factors:

Available today with a consistent supply

Affordability today and into the future

Flexibility to meet multiple energy needs

Potential to meet renewable energy targets

As the following table suggests, Ohio’s portfolio would be greatly enhanced with the

inclusion of methane recovered from abandoned mines because it would more efficiently

provide direct energy to power plants, households and/or to the transportation system by

flowing it directly to the end user. Furthermore, these projects are “shovel-ready” and

should not require additional Federal or State subsidies or grants.

Renewable Fuel

Predominant Usages

Solar

Electricity only

Wind

Electricity only

Biodiesel and Ethanol

Transportation

Bio Mass

Electricity

Methane

Electricity, heating, appliances,

CNG/transportation


Ohio Strategic Energy Plan

Ohio has developed ambitious renewable energy goals over the next 40 years. The

following chart summarizes the proposed power generation fuel mix to reach their

renewable and greenhouse emissions.

Source: National Wildlife Foundation

The 2020 Green Investments projection assumes that, using current available technology,

Ohio makes:

1. Improvements in efficiency to reduce overall demand by 25%

2. Shifts away from fossil fuels so that 20% of power generation is from renewable energy

sources.

The 2050 goal assumes that hydro and nuclear are unchanged, continued efficiency

improvements keep total demand flat and renewable energy replaces at least 65% of power

generation formerly done through fossil fuel burning.

Ohio’s new energy plan could be achieved by:

1. Expanding solar power using photovoltaic systems and concentrating solar power

systems

2. Expanding wind power even though Ohio ranks 36th in the U. S. in wind power potential

3. Expanding Biomass power using 19 million dry tons of biomass available each year to

generate 3,800 MW of electricity


Current Renewable Energy Products Many states are in the process of subsidizing the development of renewable energy projects

and Ohio can learn from the successes and failures of these projects. Ohio, nor any other

state for that matter, has unlimited financial capabilities to fund any and all projects so

resources must be invested wisely.

New Jersey Solar 4 All Program

Goal: Generate120 megawatts of solar power to communities and customers at a cost of

$773 million.

PSE&G proposes four segments to reach this goal including:

Neighborhood solar – installing 200,000 solar panels on utility poles

Local Government solar – roof-mounted solar on government buildings

Centralized Solar – develop solar farms on brown fields, non-profit real estate,

underdeveloped real estate and PSE&G properties

HMFA Solar – roof mounted solar on affordable housing communities

Source: Press Release from PSE&G on Solar 4 All Program

The City of Lansing Michigan’s Solar Project

Goal: To generate electricity to 50 homes in Lansing, Michigan (does not include heat energy

needs).

Source: Lansing newspaper articles and project vendors

Initial Cost $600,000

Estimate Annual Production 83,804 kWh

Actual efficiency rating with average of 4.1 hrs of

sunshine year round*

.17%

Estimated Revenue Generation $10,056

* Solar hour calculation based on First Look Look Software


Solar Hot Water Heating

Using solar energy to heat hot water is a typical residential project. A typical solar hot water

heating system will cost approximately $5,200 installed and will deliver approximately 73% of

hot water energy needs. The following table provides the savings for each fuel and the

calculated simple payback for a solar water-heating system. As you can see the ROI is

extremely long especially in Ohio which consistently has less sunshine per day than the South

and Southwestern regions of the United States. The chart below has been specifically

calculated for Ohio.

Electric example: Annual Savings = 12,080,000 Btu/3413 Btu per KWh*$0.10

per KWh = $353.94 savings per year.

$5200.00 installed cost / $353.94 annual savings = 14.7 years simple payback

Natural gas example: Annual Savings = 12,080,000 Btu * $6.00 per

DKT/1,000,000 Btu per DKT * .70 Efficiency = $103.54


Fuel oil example: Annual Savings = 12,080,000 Btu * $2.50 per gallon of fuel

oil/130,000 Btu per gallon of fuel oil * .70 Efficiency = $331.86 savings per year.


Source: Green Energy Ohio, Solar Electricity in Ohio Newletter.


The Challenges for Ohio’s Renewable Energy Initiative Ohio has renewable resource constraints in terms of solar and wind that will result in increas-

ing project costs and lower energy generation potential.

Resources for Renewable Fuels in Ohio

Wind Power in Ohio

Ohio ranks 36th in terms of future wind power potential based on the map below created by

the United States Department of Energy. While wind is promising in the central and mountain

states it seems to have only limited viability in Ohio and results in higher costs per Mega Watt

hour than in other more wind prone states.


This issue is highlighted by the relative cost and output of the Ohio Green Mountain Wind

Farm. The project’s goal is to generate electricity for 1,750 houses per year. The project

details are below:

Ohio will have to make substantial initial and ongoing investments in wind power to achieve

their renewable energy goal.

Solar Power in Ohio

Solar power generation plants are being built and resources used to incentivize consumers

and businesses to install solar. Ohio has limited solar power generation capability based on

data supplied from the National Renewable Energy Laboratory. The following map show the

existing large-scale solar facilities in the U.S.:

Initial Cost $10,000,000

Maximum Capacity 7.2 mega watts

Actual Effective Output* 1.8 mega watts

Annual Voluntary Subsidy $200,000

Electrical Generation 14 million kWh/year

* Intermittent wind estimated at approximately 25%.

Source: Paul G. Brock P.E., Asst Director of Utilities, Bowing Green Ohio


Solar power generation will cost approximately $7,000 to $10,000 per kilowatt when installed

on a residential home and based on a report from Green Energy Ohio, a 2 kilowatt system

will save the homeowner $375 annually. Ohio has a marginal solar base and will need to

enhance incentives to generate investment by individuals. Plus, large scale solar projects will be

very costly.

While no direct comparison exists for Ohio the chart below provides the EIA projections for

renewable energy costs in NJ, a state with a similar Solar Profile. Solar is one of the most

costly renewable energy sources in New Jerseys’ RPS.

EIA Projections of NJ Renewable Energy Costs for Proposed 20% RPS

$0

$2,000

$4,000

$6,000

$8,000

Solar Biomass Landfill Gas Coal Wind NGCC

EIA Projections of Renewable Energy CostsForum on the Economical Impact

Analysis of NJ's Proposed 20% RPSCost Per Kw


One Solution -

Amending the Ohio Energy Plan to Include Coal Mine Methane

One example of recovering CMM is in Harrison County, Ohio. There is currently a pilot project

to collect abandoned coal mine methane from the abandoned Portal mine. The project is

projected to produce 800,000,000 cubic feet of methane, and 239,400 megawatts annually in

electricity equivalents. Furthermore, carbon emission reduction from safely capturing and

processing the methane is projected at 323,200 metric tons.

Ohio has 484 square miles of known abandoned mines in the five highest-mined counties and

could potentially deliver a significant amount of clean natural gas for use in energy generation

and should not require state or federal grants, subsidies or loans.

The following table provides a summary of Ohio’s energy needs and renewable targets and how

the addition of a single CMM project can help meet renewable energy targets and carbon

reduction.

Ohio Energy Consumption (2005)

160,176,000,000 kWh yearly

5% renewable energy by 2012

8,008,800,000 kWh yearly

2006 Ohio Renewable Energy power

generation from Wind and Biomass

(included Bowling Green Wind Farm)

408,246,978 kWh yearly

2006 current renewable energy

generated to meet 5% 2012 renewable

energy goal

5%

With addition of Harrison County CMM

Recovery only

239,400,000 kWh yearly

2012 Goal of 5% with Harrison CMM

added into the renewable portfolio

8%

Source: US DOE Energy Efficiency and Renewable Energy Website


One Solution -

Coal Mine Methane Recovery is a cost effective renewable source

According to the National Renewable Energy Laboratory, “successful Renewable Portfolios

should be developed with fuel diversity, economic development price effects and environmental

benefits.” CMM recovery will enhance Ohio’s RPS through fuel diversity, price and

environmental benefits. The following table illustrates a strong rationale to amend Senate

Bill 221 and expand the RPS to include a fuel that is abundant in the state, cost-effective and

environmentally-friendly.

Based on similar renewable projects both in Ohio and the region, Ohio will have difficulty

achieving their goals without the inclusion of abandoned coal mine methane recovery.

Lansing

Solar

NJ Solar Residential

PV 2 kW

Bowling Green

Wind Farm

Project Cost $600,000

$770,000,000 $20,000 $10,000,000

Rated Megawatts 0.056

120 n/a 7.2

Effective Megawatts 0.17

22.8 n/a 1.8

Revenue/yr @

$0.11 kWh

$9,218 $24,637,500

$375 $1,468,000


Bibliography

USA. US Department of Energy. Energy Efficiency and Renewable Energy Http://

apps1.eere.energy.gov/states/electricity.cfm/state=OH#fuel. 02 Mar. 2009.

USA. U.S. Environmental Protection Agency. Http://www.epa.gov/methane/. 26 Feb. 2009.

USA. White House. Http://www.whitehouse.gov./agenda/energy_and_environment/. 2 Mar. 2009.

USA. The General Assembly of Pennsylvania. Senate. USA. White House. Http://

www.whitehouse.gov./agenda/energy_and_environment/. 2 Mar. 2009. 2 Mar. 2009.

Dolan, Kerry A. "Gassy Bugs." Forbes.com (2007). 2 Mar. 2009 <http://

www.forbes.com/2007/10/10/kleiner-perkins-green-technology-

cz_kd_1011gassybugs.html>.

Brock, Paul G. "Ohio Wind Farm." E-mail interview. 26 Feb. 2009.

EPA Transcripts of Statements (2004) (testimony of Kathleen A. McGinty).

Solar Electricity in Ohio. Columbus: Green Energy Ohio.

USA. Department of Energy. National Renewable Energy Laboratory. 2 Mar. 2009 <http://

www.nrel.gov/wind/>.

Charting A new path for Ohio's Electricity Generation and Use. National Wildlife Federation

USA. Department of Energy. Energy Information Administration. 2 Mar. 2009 <http://

www.eia.doe.gov/fuelrenewable.html>.

.


Bibliography (cont’d)

USA. EPA. Power Partners Resource Guide. 2 Mar. 2009 <http://

www.uspowerpartners.org/Topics/SECTION6Topic-CoalMineMethane.htm>.

Corinth Coal Mine Methane Project. 2 Mar. 2009 <http://www.netjets.com/About_NetJets/

corinth_coal_mine_methane_project.asp>.

USA. Ohio Legislature. Senate. Http://lsc.state.oh.us/coderev/sen127.nsf/Senate+Bill+Number/0221?

OpenDocument. 2 Mar. 2009.

PSE&G. "PSE&G Solar 4 All Program." Press release. Public Service Electric and Gas Company.

USA. Ohio Department of Natural Resources. Http://www.dnr.state.oh.us/.

kWh yearly

Http://www.dnr.state.oh.us/


Proposed Changes to the Senate Bill 221 to include CMM

127th G.A.

Am. Sub. S.B. No 3221 Page 10

Section (35)

"Renewable energy resource" means solar photovoltaic or solar thermal energy, wind energy,

power produced by a hydroelectric facility, geothermal energy, fuel derived from solid wastes, as

defined in section 3734.01 of the Revised Code, through fractionation, biological decomposition, or

other process that does not principally involve combustion, biomass energy, biologically derived

methane gas, methane gas emitted from abandoned coal mines, or energy derived from non-treated

by-products of the pulping process or wood manufacturing process, including bark, wood chips,

sawdust, and lignin in spent pulping liquors. "

Section (25)

"Advanced energy project" means any technologies, products, activities, or management practices or

strategies that facilitate the generation or use of electricity or energy and that reduce or support

the reduction of energy consumption or support the production of clean, renewable energy for

industrial, distribution, commercial, institutional, governmental, research, not-for-profit, or

residential energy users. Such energy includes, including, but is not limited to, wind power;

geothermal energy; solar thermal energy; and energy produced by micro turbines in distributed

generation applications with high electric efficiencies, by combined heat and power applications, by

fuel cells powered by hydrogen derived from wind, solar, biomass, hydroelectric, landfill gas, or geo-

thermal sources, or by solar electric generation, landfill gas, coal mine methane, or hydroelectric

generation advanced energy resources and renewable energy resources. "Advanced energy project"

also includes any project described (25) described in division (A), (B), or (C) of section 4928.621 of

the Revised Code.


For more information or questions concerning this report, please

contact:

Mark O’Brien

President, CBM Ohio, LLC

[email protected]

502-228-9698

For more information on CBM Ohio, please visit our website at www.cbmohiorenewable.com.

Note: The information contained in this document is based on the best data available at the time.

The data has not been audited by environmental engineers for accuracy.

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