430F98084
&EPA
United States
Environmental Protection Agency
Air and Radiation Draft
6202J April 1998
EPA Coalbed Methane Outreach Program Technical Options Series
USING COAL MINE METHANE TO HEAT MINE VENTILATION AIR
Coal mine ventilation air intake shaft heated by a coal-fired boiler, Kuznetsk Basin, Russia
BENEFITS OF USING COAL MINE METHANE TO HEAT VENTILATION AIR. ..
* Reduces costs by displacing other fuels that are used to heat ventilation air
* Uses a fuel that is readily available at gassy coal mines
4 Reduces emissions of methane, a greenhouse gas, to the atmosphere
4 Heating ventilation air in winter increases worker comfort and productivity, and reduces
equipment problems
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Use of coal mine
methane on-site for
heating ventilation air
at gassy mines is
potentially profitable
CMOP can provide
technical and
financial modeling
support to coal
companies interested
in a site-specific
analysis
Use of coal mine
methane reduces
emissions of this
greenhouse gas to the
atmosphere
Why Consider Using Coal Mine Methane to Heat Ventilation Air?
Coal mines must force large quantities of air through their workings to dilute methane
for safety reasons. During the winter months, this ventilation air can become very
cold, causing discomfort to miners, lowering worker productivity, and resulting in
mechanical problems. In cold climates, such as that of the Russia's Kuznetsk Basin,
heating of ventilation air is essential. In less severe climates, such as the northern
United States, ventilation air heating is not as critical, but can be beneficial in terms of
comfort and productivity.
The use of coal mine methane, rather than other fuels, to heat ventilation air can be
an economical choice for gassy mines interested in this opportunity. Rather than
purchasing natural gas, propane, fuel oil or diesel to heat mine ventilation air, it may
be cheaper for the mine to use recovered methane. Some coal mines (for example,
those in the Kuznetsk Basin) currently use coal-fired boilers to heat their ventilation air.
Replacing some or all of this coal with coal mine methane would allow the mine to
sell more coal. Use of coal mine methane is also beneficial to the environment, in
that it reduces emissions of methane, a greenhouse gas, to the atmosphere.
Gassy coal mines that currently drain methane and wish to recover it for heating mine
ventilation air could accomplish this goal in several ways. The mine could use direct-
fired heaters installed in the ventilation duct or mine shaft. An alternative approach
would be to burn the coal mine methane in some type of combustor containing a
flue for venting combustion products, and use a heat exchanger to heat the
ventilation air. The financial analysis below assumes the use of a direct-fired heater.
EPA Financial Analysis
EPA's Coalbed Methane Outreach Program (CMOP) prepared an analysis to compare
the cost of using recovered coal mine methane for heating ventilation air to the cost
of using purchased fuel for this purpose. The analysis of any coal mine methane
recovery project requires estimates of methane flow and availability at the mine. This
case study builds on the following gas and financial assumption information:
Gas Availability and Use
For this illustration, the study assumes that the mine:
produces an average of 4 million tons of coal each year;
liberates 550 cubic feet of methane per ton of coal mined;
uses approximately 375,000 cubic feet of ventilation air per minute;
does not currently heat its mine ventilation air, but desires a ventilation air
temperature increase of 20°for 6 months/year;
would require 29,400 mmBtu of fuel annually to achieve this temperature; and,
produces enough methane from existing gob wells to meet this demand
(nearly 33 million cubic feet annually).
Cost1
The study assumes that project costs are as follows:
For Methane Use: Capital costs are $94,000 (including direct-fired heater with
controls, skid mounted compressor, and 1000 ft. of installed pipeline); annual
operating cost is $8,000.
For Other Fuel Use: Capital costs are $50,000 (for a direct-fired heater); it was
conservatively assumed that there are no operating costs.
'These are standard cost assumptions used in most first-order CMOP financial analyses of ventilation air use.
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Financial Assumptions
The analysis makes the following financial costs and assumptions:
the project will have a 20-year life;
annual inflation rate is 4%;
the real discount rate is 6%;
the tax rate is 27.5%; and
100% equity project financing.
Results of the Analysis
Because the mine is not currently heating its ventilation air, the analysis is a comparison of the cost of using
recovered methane to heat ventilation air vs. the cost of other fuels. The following tables list the results of
the analysis. Because it is strictly a cost comparison, the analysis does not include an internal rate of return
or years to payback. The net present value for all fuel prices is negative, since the mine is not currently
heating its ventilation air, and the model does not attempt to quantify benefits.
Use of Coal Mine Methane
Capital Cost
C$000)
$94
Annual Operating
Cost f$000)
$8
NPV
('$000)
$-150
Use of Alternative Fuel
Fuel Cost 1
($mmBtu)
$3.00
$5.00
$8.50
Capital Cost
C$000)
$50
$50
$50
Annual Fuel
Cost C$000)
$92
$153
$260
NPV
C$ooo)
$ -783
$-1.272
$-2,128
'To put these purchased fuel costs in perspective, following
are typical purchase prices for various fuels, in $US per
mmBtu: Natural gas - $4.75-5.75; Fuel Oil (Diesel) - $4.00-
$5.00; Propane - $6.50-8.50; Electricity- $13.00-14.50.
The results of this analysis suggest
recovering coal mine methane to heat
mine ventilation air would be cheaper
than using purchased fuels, even when
the cost of purchased fuel, and
equipment costs associated with using
purchased fuel, are unusually low. The
model does not attempt to quantify the
productivity benefits that the mine could
realize as a result of providing a more
comfortable working environment for
underground personnel. However, these
productivity benefits could be significant
for mines located in areas with cold
winters.
To refine this analysis would require additional inputs such as actual methane emissions data, the cost
of displaced fuel, and actual capital and operating costs for all alternatives. CMOP can provide fhe
necessary technical and financial modeling support to coal companies interested in a site-specific
analysis.
Contact EPA's Coalbed Methane Outreach Program for information about this and other profitable
uses for coal mine methane:
Coalbed Methane Outreach Program
U.S. EPA
401 M Street, SW (6202J)
Washington, DC 20460 USA
(202) 564-9468 or (202) 564-9481
Fax: (202) 565-2077
e-mail: fernandez.roger@epamail.epa.gov
schultz.karl@epamail.epa.gov
http://www.epa.gov/coalbed
METHANE
OUTREACH
1 R O G R A M
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