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Office of Air and Radiation
6203-J
COALBED METHA
5 United States
° Environmental Protection Agency
A Publication of the Coalbed Methane Outreach Program (CMOP)
www.epa.gov/coaibed
EPA-430-N-00-004
Summer 2006
M
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Financing Coal Mine Methane Recovery and
Utilization Projects
Introduction
Global methane emissions from the coal mining sector can be reduced by recovery and utilization projects that collect
methane gas from coal mines and use it productively, for example to generate electricity or to provide fuel to
households and industry. Often, the critical barrier to developing such coal mine methane (CMM) projects is securing
financing.
U.S. EPA's Coalbed Methane Outreach Program (CMOP) estimates that over 200 CMM projects are already in operation
around the world. Many more project opportunities exist, especially in developing countries and countries in transition.
These opportunities are being eagerly pursued and encouraged by project developers, technology vendors, coal mine
companies, and government officials. Several factors have prompted the resurgent interest in CMM projects around the
world. First, the steep growth in global energy demand has catalyzed the search for new, unconventional sources of natural
gas and power. Second, programs such as the Kyoto Protocol's Clean Development Mechanism (CDM) and Joint
Financing, continued on page 2
Methane to Markets Update
4th Coal Subcommittee Meeting
held in Tuscaloosa, Alabama
On May 22-23, over 30
representatives from M2M Partner
countries, the Project Network, and
other private-sector companies and
NGOs participated in the 4th Coal
Subcommittee meeting, held in
conjunction with the International
Coalbed Methane Symposium in
Tuscaloosa, Alabama, USA. Coal
subcommittee members from
Argentina, Australia, China, India,
Italy, Japan, Mexico, Russia, and the
U.S. provided updates on country-
specific activities and projects, and
identified key items for the action
plan. Project Network members and
other attendees also provided
valuable input to guide the
Subcommittee's activities over the
coming year and beyond. One of the
key outcomes was to set a strategy for
ensuring strong participation from the
Coal Mine sector at the 2007
Methane to Markets Partnership
Expo. Visit the Methane to Markets
website to download all
presentations made at the meeting
along with updated action plan and
meeting minutes (http://
www.methanetomarkets.org/events/
past.htm). The next Coal
Subcommittee meeting is scheduled
for October 6, 2006, in Brisbane,
Australia, just prior to the COAL21
Conference in Australia's Gold
Coast.
Asia-Pacific Partnership on
Clean Development and
Climate (APP)
The Asia Pacific Partnership (APP)
comprises representatives from
Australia, China, India, Japan, South
Korea, and the United States, and
focuses on promoting technologies
M2M, continued on page 7
In this issue...
1 Financing Coal Mine
Methane Recovery and
Utilization Projects
1 Methane to Markets
Update
8 CBM/CMM News
9 Upcoming CBM/CMM
Events
10 Four New Publications
Available
To obtain CMOP reports,
call 1 888-STAR-YES.
Access documents electronically
From the "Documents, Tools, and
Re sources" pages on our Web site
at www.epa.gov/coalbed
To subscribe to CBM Extra provide
contact information to Pamela
Franklin at franklin.pamela@epa.gov
or to Barbora Jemelkova at
Jemelkova.Barbora@epa.gov
To subscribe to CBM Notes, email a
sub scription request to
energystar@optimuscorp.com with
"SUBSCRIBE" in the subject line.
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Summer 2006 nnrarannn
Page 2 COALBED METHANE EXTRA
Financing, continued from page 2
Implementation (Jl) have created
financial incentives to develop
projects that reduce greenhouse gas
(GHG) emissions. Third, multi-national
collaborative initiatives such as the
Methane to Markets Partnership (http:/
/www.methanetomarkets.org) have
focused on overcoming the policy,
regulatory, legal, and technical
barriers that inhibit project
development.
In order to secure project financing for
CMM projects in countries such as
China, India, Ukraine, or Mexico, a
project developer or investor must
demonstrate the potential project's
technical and financial viability,
usually through pre-feasibility studies
(PFS), full feasibility studies (FS), and
technology demonstrations. These
analyses may be financed by the
project developer or investors,
although some financial support may
be available (e.g., through the U.S.
government). Actual project financing
consists of a mixture of direct project
investment (equity), loans (debt), and
carbon financing, which may provide
a revenue stream based on mitigated
carbon emissions. Another critical
component of project financing is
reducing the project or financial risk
through capital guarantees, as well as
risk insurance.
Many funding and investment sources
emphasize sustainable development,
environmental protection, and climate
change mitigation as important
components of projects that they
finance. CMM projects are attractive
because they can support all of these
objectives.
This article describes types and
sources of funding that may be
available to project developers and
investors that are interested in
pursuing CMM project opportunities
particularly in developing countries or
economies in transition. It briefly
summarizes pre-feasibi lity and
feasibility studies and technology
demonstrations. It provides a guide to
key parties involved in project
financing (equity, debt, or carbon
financing) as well as project risk
reduction support. This article
provides an update to the information
contained in two previous guides
Catalog of Coal Mine Methane
Project Finance Sources (2002) and A
Guide to Financing Coalbed
Methane Projects (1997)both
available on the CMOP Web site
http://www.epa.gov/cmop/resources/
reports/finance, html.
Pre-Feasibility and Feasibility
Studies
One of the first steps in project
development typically involves
performing a prefeasibiIity study (PFS)
to evaluate potential project options.
The PFS is a first-order analysis of
possible project configurations
including location, size, technology to
be employed, market(s) to be served,
costs, and revenues. It identifies one
or more options that appear to be
technically feasible and economically
attractive. Typically the PFS will be
conducted at a level of detail
adequate to broadly identify project
finance needs. It will consider
varying levels of debt and equity, as
well as expected revenues, to roughly
estimate cash flow under various
scenarios. Should the PFS indicate a
potentially viable project, a more in-
depth analysis such as a full
Feasibility Study (FS) may be
conducted. The FS focuses on the
project configurations that provide the
least risk and greatest return on
investment.
Depending on the location and nature
of the project, prospective project
developers may be able to access U.S.
government funding to support the
PFS/FS efforts for CMM projects.
The U.S. Trade and Development
Agency (USTDA) provides funding
to facilitate the export of U.S.
technologies, products, and seivices
to developing and transitional
countries. Applications for USTDA
feasibility study grants and
technical assistance grants can be
submitted via two mechanisms: (1)
sole source by a US company
partnering with a project abroad, or
(2) competitive bidding by a foreign
grantee. USTDA has provided grant
funding to assess the feasibility of
several CMM projects. For
instance, USTDA funded a study of
potential ventilation air methane
(VAM) utilization projects in
Poland. In addition, the agency
supplied the grant funding for
project design and related planning
at the Jincheng Anthracite Coal
Mining Group's Sihe Mine in
Shanxi, China, which involves a
120 MW CMM- and coalbed
methane (CBM)-based power
generation project. Most recently,
the agency provided about
US$500,000 in grant funding for a
feasibility study of CMM/CBM
development potential in Ukraine.
U.S. EPA's CMOP supported
prefeasibi lity analysis of VAM
development potential at five mines
in the Huainan Mining Group in
2005. This study identified one
What do you want to know about?
If you have suggestions or requests for future CBM content, please drop us a li ne.
http://www.epa.gov/coalbed
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Summer 2006 nnrarannn
Page 3 COALBED METHANE EXTRA
location as offering a technically
feasible and economically
attractive project opportunity.
The U.S. Agency for International
Development (USAID), as part of its
Methane to Markets commitment,
also has offered funding support for
methane mitigation projects.
USAID missions in countries such as
India and Ukraine have offered
Global Development Alliance
(GDA) funding support to energy
industry representatives, research
and academic groups, financial
institutions, and non-governmental
organizations to assist in promoting
methane capture and productive
use.
Demonstration Projects
Often field demonstrations of new
technologies or new applications of
existing technologies are necessary to
provide tangible evidence of the
technology's operational efficacy to
regulators, project developers, project
hosts, or investors. Such emonstrations
can generate the confidence needed
to commit time, materials, and
funding to technology deployment at
commercial scale.
Grant funding may be available to
support technology demonstration
projects. Examples of grant-supported
technology demonstrations for CMM
projects include the following:
USA: Field trials of (1) pressure
swing absorption (PSA) and (2) high-
throughput continuous PSA gas
upgrading technologies conducted in
the Appalachian coal fields,
supported by Department of Energy
funding in the late 1990's.
Australia: the world's first large-
scale VAM-to-power demonstration
project is under construction with
funding in part provided by
Australia's Greenhouse Gas
Abatement Programme. Also,
Australia's Commonwealth
Scientific Industrial Research
Organization (CSIRO) and the
Australian Greenhouse Office are
collaborating with China's Shanghai
Jiaotong University and the Huainan
Coal Mining Group to support a
pilot-scale demonstration of CSIRO's
VAM catalytic turbine (VAMCAT) in
China. Initially demonstrated with
grant funding from the Australian
Coal Association Research
Programme, the VAMCAT
demonstration in China will be
conducted under Australia's Bilateral
Climate Change Partnerships
Program and the Australian
Government International Science
Linkage Program.
Equity and Debt
Project developers typically will need
to obtain part of the requisite project
finance by securing a loan. Lenders
usually will require that the developer
invest equity in the project to
demonstrate their confidence in the
project's success and willingness to
risk their own financial resources.
Acceptable debt-to-equity ratios vary
from lender to lender. For example,
CMOP's experience indicates that
debt to equity ratios of 60:40 (debt:
equity) or 75:20 are not uncommon for
international CMM projects under
consideration in China. The actual
ratio preferred by any given lender
usually reflects the project's perceived
risk as well as the borrower's financial
stability.
Following are brief descriptions of
some key sources of debt finance
whose mission and focus are consistent
with CMM emission mitigation
projects, and which have provided
CMM project financing in the past.
Asian Development Bank (ADB -
http://www.adb.org/) - The ADB is
a multi-lateral development
organization of 65 member
countries that strives to improve the
social welfare of people in the Asia
and Pacific regions. It can provide
projects with technical assistance,
grants, and loans. In recent years
the ADB has given particular focus
to supporting clean energy projects
under its Energy 2000 policy which
seeks to reorient the energy sector
in member countries to address
regional and global environmental
effects.
The European Bank for
Reconstruction and Development
(EBRD - http://www.ebrd.com) -
Owned by 60 countries and two
intergovernmental institutions, the
EBRD invests primarily in private
enterprises, usually with
commercial partners. Among the
types of projects that are eligible to
receive EBRD financing are
technology upgrades. In addition,
the EBRD has joined FondElec
Group, Inc., (a global infrastructure
funds manager) and the Dexia Bank
of France to create the Dexia-
FondElec Energy Efficiency and
Emissions Reduction Fund, L.P, a
private equity fund focused on
environmental protection. The fund
offers an investment vehicle to fund
projects in Central and Eastern
Europe that will utilize clean,
renewable energy and/or energy
efficient technologies to improve
industrial processes and mitigate
climate change.
The Global Environment Facility
(GEF - http://www.gefweb.org) -
Working through three
implementing agencies (the World
Bank, the UN Development
Programme, and the UN
Environment Programme), the GEF
provides cost-sharing grants and
concessional funding to help
developing countries fund projects
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Summer 2006 nnrarannn
Page 4 COALBED METHANE EXTRA
and programs that protect the
environment, such as climate
change mitigation projects. The
GEF Operational Strategy requires
that any GEF-funded activity
relating to climate change be fully
compliant with the directives of the
UNFCCC.
The World Bank (http://
www.worldbank.org) - In addition
to its carbon funds, The World Bank
also can provide traditional finance
for projects that are consistent with
its mission. Projects that are
smaller than the bank's preferred
minimum lending threshold of
~US$50 million may be bundled
with other development activities
to construct a finance package of
adequate size.
investment opportunities. The sale of
Emission Reduction Units (ERUs)
generated by JI projects or Certified
Emission Reductions (CERs) generated
by CDM projects can offer project
developers an attractive supplemental
revenue stream. In most cases carbon
credit revenues alone will not be
adequate to provide the level of
funding necessary for project planning
and implementation. Carbon credits
are particularly useful for improving
the cash flow of projects that are
otheiwise economically marginal and
unattractive to investors. In fact, with
world carbon prices now ranging from
US$5.00 to $10.00 per tonne of C02
equivalent and above, carbon finance
can add substantially to a project's
balance sheet.
by multilateral institutions, and yet
others by private sector business
entities.
Government Sponsors:
Austrian JI/CDM Program (http://
www.ji-cdm-austria.at) - Launched
in September of 2003, the Austrian
JI/CDM Program allows Austrian
entities to invest in Jl and CDM
climate protection projects in
central and eastern European
countries as well as in developing
countries and those with economies
in transition (EIT) in exchange for
the carbon emission reductions.
Qualifying projects include those
involving combined heat and power,
energy efficiency, and waste
management.
Baltic Sea Region Testing Ground
Facility (TGF - http://
www.nefco.org/
page.asp?headerid=70&subid=71) -
Supported by Denmark, Finland,
Germany, Iceland, Lithuania,
Noiway, and Sweden and managed
by the Nordic Environment Finance
Corporation, the TGF invests in
projects that can provide cost
effective emission reductions.
Potential host countries are those
located in the Baltic Sea Region,
including Poland, Russia, and
Ukraine. Although the TGF's focus
is on energy-related projects,
eligible projects also include those
that reduce greenhouse gases such
as methane.
Belgian JI/CDM Programme (http://
www.klimaat.be/jicdmtender/) -
Under this program, launched in
May of 2005, the Belgian State is
purchasing carbon emission
reductions from Jl and CDM
projects. Although the first tender
has closed, a second tender is
Carbon Financing
Many CMM utilization projects will
be capable of offering economic
returns that are sound enough to
attract investors and lenders. Others,
however, may be too marginal on their
own to offer
attractive Canada USA
1% 1%
Other
2%
Other Europe
5%
Recent carbon market activity is
reflected in Figure 1. A considerable
number of organizations have been
involved in creating and defining the
various carbon markets currently in
existence. The fact that new carbon
funds continue to emerge demonstrates
the vitality of the current global
carbon market. Some markets have
been created by governments, others
Australia
l
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Summer 2006 nnrarannn
Page 5 COALBED METHANE EXTRA
expected to be issued in Fall of
2006. The State can offer up-front
payments of up to 50 percent of the
contract value to facilitate project
implementation and also can offset
some of the cost of preparing
requisite documentation. Eligible
projects are those that were not
implemented prior to 2000, that
mitigate greenhouse gas (including
methane) emissions, and that will
generate carbon emission reductions
at least in the 2008-2012 period.
Danish Carbon Tender (http://
www.DanishCarbon.dk) -
DanishCarbon.dk purchases carbon
emission reductions from Jl and
CDM projects in Central and Eastern
Europe. Remaining deadlines for
submitting Project Idea Notes under
the current tender are August 1,
2006, and November 1, 2006.
Eligible projects include methane
capture and use, and those with an
approved CDM methodology (such
as CMM projects) will receive
higher priority.
Finnish Drive for Emission
Reductions (Finnder - http://
www.environment.fi/
default. asp?node=18806&lan=EN) -
Finnder strives to purchase carbon
emission reductions from Jl and
CDM projects (especially those with
existing CDM methodologies) in any
geographic locale. The organization
seeks projects that can generate at
least 250,000 tonnes of greenhouse
gas emission reductions by 2012.
Finnder is willing to provide up-front
payments up to 50 percent for
projects that can offer delivery
guarantees.
Private Sponsors:
European Carbon Fund (http://
www.europeancarbonfund.com/
about ecf.php) - The ECF purchases
primarily project-based carbon
emission reductions from developing
and EIT countries. The Fund invests
in projects that can generate from
50,000 to 1,000,000 tonnes per year
of carbon emission reductions for
vintages from 2005 through 2012.
Forward payments are possible.
Natsource GHG Credit Aggregation
Pool (GG-CAP - http://
www.natsource.com/news/
index.asp?n=453) Natsource, a
broker of carbon emission
reductions, announced in May 2003
that it would establish a Greenhouse
Gas-Credit Aggregation Pool (GG-
CAP). The GG-CAP is intended to
allow its members (including some
of the largest energy and utility,
consumer product, and
manufacturing companies in Europe,
Japan, and North America) to obtain
carbon emission reductions from a
diverse portfolio of international
CDM and Jl-derived emission
reductions. Eligible projects will
provide reductions in the 2005 -
2012 period, and will include
fugitive emission reduction.
Icecap Carbon Portfolio (http://
www.icecapltd.com/index.asp) -
Launched in March of 2004, Icecap
Ltd purchases Jl and CDM carbon
emission reductions for its clients
and partners. In so doing it strives to
apply innovative pricing strategies
to secure reductions at a discount to
prevailing market prices.
Japan Greenhouse Gas Reduction
Fund (JGRF - http://
www.jcarbon.co.jp) - This fund was
established in 2004 and includes
over 30 commercial and financial
entities. The JGRF purchases carbon
emission reductions from projects in
many countries. It is managed by
Japan Carbon Finance Ltd and
invests in a variety of project types,
including fuel switching and fugitive
emission mitigation.
KfW Carbon Fund (http://
www.kfw.de/carbonfund) -
Germany's KfW Bankengruppe has
established the KfW Carbon Fund to
purchase Jl and CDM project-
derived carbon emission reductions.
Projects in sectors other than large
hydropower, nuclear, C02 sinks, or
forestry and land use can qualify so
long as they generate at least 50,000
tonnes of C02e per year.
Multilateral Organization Sponsors:
ADB Clean Development
Mechanism (CDM) Facility (http://
www.adb.org/cdmf/) - In addition
to providing loans and technical
assistance, the ADB's CDM Facility
focuses on supporting projects that
reduce greenhouse gas emissions,
that are located in an ADB
developing member country, and
that contribute to poverty reduction
and sustainable development in the
member country. The CDM Facility
can assist in project development as
well as facilitate the sale of project-
based carbon credits.
IFC-Netherlands Carbon Facility
(INCaF - http://www.ifc.org/
carbonfinance) - The International
Finance Corporation and the
Government of the Netherlands
formed the INCaF to benefit the
Netherlands by purchasing GHG
emission reductions created by
projects in developing countries.
Methane recovery projects are
among the project types listed as
being potentially eligible.
CMOP Press:
The Methane to Markets
Partnership was featured in the
May 2006 issue of International
Longwall News. Check it out.
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Summer 2006
Page 6
COALBED METHANE m-itiii
rjTMCwwara
2"a Western States Coal
Mine Methane
Recovery and Use
Workshop
Presented by EPA's Coalbed
Methane Outreach Program
and Raven Ridge Resources,
Incorporated
September 26-27, 2006
Two Rivers Convention Center,
Grand Junction, Colorado
Representatives from coal
mining companies, technology
vendors, and US and state
governments will share their
perspectives
on coal mine methane
opportunities in the Western U.S.
To view the complete workshop
agenda and to register, please
visit www.ravenridge.com/
workshop2006.htm
This workshop is cosponsored by:
BCCK Engineering, Inc.
Colorado Oil and Gas
Association (COGA)
EPA's Coalbed Methane
Outreach Program
Noiwest Corp./Norwest Questa
Engineering/Noiwest Applied
Hydrology
Oxbow Mining, LLC/Gunnison
Energy Corp.
Peabody Natural Gas, LLC
REI Drilling
Schauenburg Flexadux Corp.
SGS North America, Inc.
Target Drilling, Inc.
Multilateral Carbon Credit Fund
(MCCF - http://www.ebrd.com/
new/pressrel/2006/57may21 .htm) -
The European Bank for
Reconstruction and Development
established this fund to assist its 27
member countries in securing
carbon emission reductions from Jl
and CDM projects. Although it
does not specifically mention
methane reduction, it does support
fuel switching projects among other
types.
World Bank Carbon Funds (http://
carbonfinance.org) - The World
Bank has followed its landmark
Prototype Carbon Fund (PCF) (now
closed) with eight other carbon
funds that were created to secure
high-quality greenhouse gas
emission reductions from specific
sectors and geographic locations.
Of the eight, five may be
appropriate for CMM emission
reduction projects:
o Danish Carbon Fund - In January
of 2005 the Danish Carbon Fund
was initiated to assist the Danish
public and private sectors to meet
the country's carbon emission
reduction commitment.
Qualifying projects are those that
contribute to sustainable
development in the host countries
while delivering cost-effective
emission reductions.
o The Netherlands CDM Facility -
This fund purchases carbon
emission reductions solely from
CDM projects.
o The Netherlands European Carbon
Facility (NECaF) - This fund
purchases carbon emission
reductions solely from Jl projects.
o Spanish Carbon Fund - This fund
was established in 2004 to
purchase carbon emission
reductions from climate change
mitigation projects that
contribute to sustainable
development in developing and
EIT countries. Among eligible
projects are those that reduce
industrial emissions of
greenhouse gases.
o Italian Carbon Fund - This fund
was established in Fall of 2003 to
provide Italian public and private
sector entities with a means of
purchasing greenhouse gas
emission reductions from Jl and
CDM projects.
Project Risk Reduction Support
Certain U.S. institutions offer
assistance to reduce the risks that
domestic companies may face when
exporting their products or services
abroad. For example, in addition to
traditional loans, the Export-Import
Bank of the United States (Ex-lm Bank
- http://www.exim.gov) can provide
working capital guarantees and credit
insurance. It also offers certain
specialty financial products to
companies that export environmental
goods to foreign companies that are
unable to obtain traditional financial
support. Similarly, the Overseas
Private Investment Corporation (OPIC -
http://www.opic.gov/) helps U.S.
businesses deal with the risks inherent
in doing business overseas. OPIC
provides a range of traditional finance
resources, such as loans and loan
guarantees. In addition, it offers
financial products specifically
designed to reduce export risk, such as
Political Risk Insurance in emerging
markets where political drivers are
developing or uncertain.
Examples of Integrated Project
Financing
The 120 MW Shanxi CMM/CBM-to-
power project offers an example of
how a mix of finance sources can
Financing, continued on page 11
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Summer 2006 _
Page 7 COALBED METHANE EXTRA
IM.mMmMML}
M2M, continued from page 1
to reduce greenhouse gas emissions
from eight key sectors, including
coal mining. On April 18-21, in
Berkeley, California, the U.S.
government hosted a meeting of the
Policy Implementation Committee
(PIC) and Task Force Members. The
purpose of this meeting was to
advance the development of Action
Plans for the eight program areas
identified at the Sydney Ministerial
meeting in January 2006. Task Force
Guidelines and Action Plan
Guidelines were adopted by the PIC,
and each of the Task Forces met for
the first time with the objective of
identifying Action Plan projects and
activities. FPA's Acting Assistant
Administrator for Air & Radiation, Bill
Wehrum, represented EPA on the PIC.
A second PIC meeting was
announced for October 2006
The U.S. delegation to the Coal
Mining task force includes
representatives from U.S. Department
of Interior, Office of Surface Mining;
U.S. Department of Energy; U.S.
EPA, Coalbed Methane Outreach
Program; the National Mining
Association; Peabody; and CONSOL
Energy. The Coal Mining Task Force
was chaired by the U.S. and co-
chaired by India. The Task Force
reviewed country coal mining task
forces and identified preliminary
areas of interest to pursue for the
action plan, which is expected to be
completed by the end of August
2006.
Germany Becomes 18th M2M
Member Country
On 3 July, Germany signed the
Methane to Markets Terms of
Reference and officially
became a Partner of M2M. In
Co-Chairs Pamela Franklin and Subrata Chaudhuri and Acting Vice-Chair Liu Wenge
strong experience, technology, and
knowledge of advanced waste
management practices in landfills,
implementing gas pipeline
rehabilitation programs in local gas
distribution networks, and coal mine
methane-based power projects.
Germany is the fourth country to join
the Partnership since the initiative's
launch in 2004, joining 14 charter
Partners including the U.S. More
information is available in a M2M
press release.
Location Selected for
Partnership Expo
The Expo Committee has selected
Beijing, China as the location for the
Methane to Markets Partnership Expo
schedule for the fall of 2007. The
event will serve to showcase
methane project opportunities and
methane recovery and use
technologies across all
Partnership sectors. The
Expo will also include
technical sessions and
high-level
government participation. Stay tuned
for further details.
M2M Highlighted at
International Meeting on
Clean Energy and Climate
On May 2, the U.S. and Canada co-
hosted a successful Methane to
Markets side event at the United
Nations Commission on Sustainable
Development Meeting in New York
City. This interactive Partnership
event drew over 40 attendees from
the private sector, multi-lateral
development banks, NGO's, and
national and regional governments.
The event served to educate key
stakeholders about the Partnership
and provided a forum for discussion
of experiences in implementing
successful methane capture and use
projects, as well as the benefits and
opportunities associated with
participating in M2M. The side event
featured presentations by
Environment Canada, U.S. EPA, the
World Bank, the Alberta Energy and
Utilities Board, and Caterpillar Inc.
particular. Germany has Methane tO Ma fllCtS
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Page 8 COALBED METHANE EXTRA
CBM/CMM News
Busy Quarter of Conferences
for CMOP
CMOP staff participated in numerous
conferences this spring and summer.
On April 29, CMOP attended and
presented at the North American
Coalbed Methane (NACBM) Spring
2006 Forum in Canonsburg, PA. This
consortium of CBM and CMM industry
experts has been meeting bi-annually
for over twenty years. On June 6,
Dina Kruger, Director of EPA's Climate
Change Division, gave the keynote
speech at the 11th U.S./North
American Mine Ventilation
Symposium in University Park, PA.
From June 13-15, CMOP operated an
exhibit booth at the National Coal
Show in Pittsburgh, PA. In conjunction
with this event, CMOP also hosted a
Roundtable Breakfast on June 14 to
hold informal discussions with industry
participants about issues facing CMM
development in the U.S..
CMOP has been actively involved in
international conferences this quarter
as well. Staff made a presentation on
the Methane to Markets Partnership at
the International Coalbed Methane
Symposium on May 25 in Tuscaloosa,
AL. CMOP staff also traveled to
Kemerovo, Russia on June 19 and 20 to
participate in a conference on Coal
Mine Methane: Recovery,
Utilization, and Investment
Opportunities. This conference was
hosted by Uglemetan, a CMOP
grantee, to convene international
investors, NGOs, government
representatives, and coal mine
management interested in the
development of CMM projects in
Russia.
VAM Oxidation Demonstration
Project Scheduled in U.S.
MEGTEC Systems has signed an
agreement with CONSOL Energy Inc
to conduct a field demonstration of its
VOCSIDIZER technology for
oxidizing ventilation air methane.
The project, which is partly funded
by EPA'sCoalbed Methane Outreach
Program and the Department of
Energy's National Energy
Technology Laboratory, will be
commissioned in fall of 2006 at an
abandoned CONSOL mine in West
Virginia. The project will simulate
varying VAM concentrations and will
consume approximately 30,000
cubic feet per minute (~50,000 m3/
hour) of simulated ventilation air
from the mine. This demonstration
succeeds others previously
conducted in the UK and in
Australia. The first such
demonstration conducted at the
Thoresby Mine in Nottinghamshire in
the 1990's showed that the
VOCSIDIZER could oxidize a typical
VAM flow from a gassy underground
mine. More recently, projects in
Australia not only provided
additional proof of the ability to
oxidize VAM to produce heat but
also demonstrated that steam can be
produced from the methane
oxidation reaction. As a direct
outgrowth of those demonstration
projects, the world's first large-scale
VAM-to-power project is under
construction at the West Cliff
Colliery in New South Wales. The
CONSOL project will be the first
VOCSIDIZER application in the
United States.
Caterpillar Signs Contract with
Jincheng CMM Project
With support from EPA, TDA, and other
federal partners, U.S.-based engine
manufacturer Caterpillar Inc. has
landed a $58 million contract from
China to supply the power generation
equipment for the world's largest
power plant fueled by coal mine
methane (CMM). The power plant will
produce 120 megawatts (MW) of
electricity from coalbed and coal mine
methane from the Si he mine in
Jincheng, in addition to exhaust gas
heat that will be recovered to produce
usable hot water and steam for the
mining operations. This project is the
result of collaborative efforts between
the public and private sectors through
the Methane to Markets Partnership, a
U.S.-led initiative that now includes 1 7
partner countries, including China. This
project also supports the goals of the
Asia-Pacific Partnership on Clean
Development and Climate, of which
China and the U.S. are members.
Australians Offer Training on
Coal Mine Safety
On May 25, the government of the
northeastern Australian state of
Queensland announced it is offering
mine safety management training for a
number of overseas miners. Six officers
from the Vietnam Department of
Geology and Minerals will spend six
months at the government mine safety
research organization Simtars, mines
minister Henry Palaszczuk said. "The
aim of this project is to equip the
participants with a working knowledge
of the systems that we have in place in
News, continued on page 10
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Summer 2006
Page 9
COALBED METHANE EXTRA
OIXOQCDC]
Ev99HHEK3
Upcoming CBM/CMM Events
2006
6th European Conference on Coal
Research and Its Applications
5-7 September 2006
Canterbury,UK
Contact: Dr A.W. Thompson, School
of Chemical, Environmental &
Mining Engineering,
Tel: +44 115 951 4198
Fax: +44 115 951 4115
Email: alan.thompson@nottingham.ac.uk
Meeting World Energy Needs by
Improving & Increasing Coal
Utilization
11-12 September 2006
Meadowview Conference Center,
Kingsport, TN
Phone: 276-964-6363 or 9088
Fax: 276-964-6342
Email: ecc@netscope.net
URL: www.easterncoalcouncil.org
Clean Coal: Securing the Future
13-14 September 2006
London, UK
URL: http://www.coaltrans.com
Brown Coal and Power
Engineering International
Conference
13-15 September 2006
Most, Czech Republic
email: Filipikova@vuhu.cz
URL: http://konference.vuhu.cz
Fundamentals of Coalbed Methane
& Shale Gas
18-19 September 2006
The Fairmont Pal User, Calgary,
Alberta
Phone: 1-877-927-7936
URL: www.canadianinstitute.com/
FOCS
UNECE Workshop on
Geomechanical and Geodynamic
Aspects of High Efficiency
Extraction of Coalmine and Coalbed
Methane
20-22 September 2006
St Petersburg, Russia
Hotel Pribaltiyskaya and VNIMI
Institute
Contact: Alexandre Chachine, Clark
Talkington
e-mail:
alexandre.chachine@unece.org;
Clark.talkington@unece.org
telephone: +4122 91 7 2451/2671
URL: http://www.unece.org/ie/se/docs/
w_st pec m m. h t m I
2nd Western States Coal Mine
Methane Recovery and Use
Workshop (hosted by EPA's CMOP
and Raven Ridge Resources)
26-27 September 2006
Two Rivers Convention Center
Grand Junction, CO
Phone: (970) 243-3222
URL: www.ravenridge.com/
workshop2006.htm
Advanced Reserves Classification,
Reporting and Management 2006
28-29 September 2006
The Thistle Marble Arch, London, UK
Phone: +44 (0) 20 7368 9300; UK
Freephone: 0800 652 2363
Fax: +44 (0) 20 7368 9301
Email: enquire.iqpc.co.uk
URL: www.oilandgaslQ.com/2751a
Methane to Markets Partnership
Coal Mine Methane Technical
Workshop sponsored by USA,
Australia, and Japan
4-5 October 2006
Marriott Brisbane, Brisbane Australia
Information forthcoming at:
http://www.methanetomarkets.org/
events/index, htm
Methane to Markets Coal
Subcommittee Working Meeting
6 October 2006
Marriott Brisbane, Brisbane
Australia
Information forthcoming at:
http://www.methanetomarkets.org/
events/index, htm
China International CBM/CMM
Fall Workshop
17-18 October 2006
Empark Grand Hotel, Beijing, China
URL: http://www.coalinfo.net.cn/
english.htm
15th International Coal
Preparation Congress
17-20 October 2006
Beijing International Convention
Centre, Beijing, China
Contact: Kevin McMillan or Sun Jiaohua
Phone: 013 6915291 or +86 1 0 6422 9939
Email: kmcmillan@anglocoal.co.za
or sjiaohua@chinasafety.gov.cn
Second International Conference
on JI Projects in Ukraine,
"Climate Change and Business" -
Call for abstracts; deadline August
15, 2006,
23-25 October 2006
Kyiv, Ukraine
Phone: +(38 044) 453-28-56
Fax: +(38 044) 456-94-62
Email: jiconference@biomass.kiev.ua
8th Annual Unconventional Gas
Conference (hosted by the
Canadian Society for
Unconventional Gas)
15-17 November 2006
Telus Convention Centre
Calgary, Alberta, Canada
Contact: Kerri Markle
Phone: (403)218-7720
e-mail: kmarkle@csug.ca
URL: http://www.csug.ca
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Summer 2006 nnrarannn
Page 10 COALBED METHANE EXTRA
Announcemen t:
Four New Publications Available
News, continued from page 8
Queensland," Palaszczuk added.
The Queensland government added
it was also preparing to install,
commission, and train staff at the
Singareni Collieries Company in
India in the operation of Camgas
mine gas monitoring systems. Staff
in the Department traveled in May
to the company's site at
Kothagudem in south India to
undertake installation and training to
install the system. Developed by
Simtars, Camgas is an ultra-fast
micro gas chromatograph used in
analyzing complex mixes of gas.
Along with specialised software, it
determines the toxicity and
explosive potential of gases in
underground coal mines, and can
quickly detect dangerous conditions
and provide an early warning system
against a possible disaster. Six of the
latest Camgas systems were sold to
China early last year, the
government added.
CMOP Welcomes New
Environmental Engineer
CMOP is pleased to add a new
Program Manager to its staff. Jayne
Somers is a professional engineer
with 25 years experience in
sustainable energy, environment and
capacity building. She is a
specialist in mitigating climate
change, particularly air pollution
control and clean energy projects in
the United States, Africa, Asia, Latin
America, and East/Central Europe.
Dr. Somers joins us from the
Wisconsin Department of Natural
Resources Air Program and is
currently Vice-Chair of the Air and
Waste Management Association
News, continued on page 11
CMM Global Overview
Launched on M2M Website
A new publication has been finalized
and posted on the Methane to Markets
website. The CMM Global Overview
profiles the coal, coal mine methane,
and coal bed methane industries of all
18 Methane to Markets member
countries and 14 additional coal-
producing countries worldwide. The
publication's introduction contains
information and data on all 32 profiled
nations in one place for easy
reference. Developed by USEPA
(CMOP), the CMM Global Overview
is being posted in Final Draft For
Public Comment and Review form;
please forward any comments to
Jemelkova.Barbora@epa.gov. Visit the
M2M website to download the entire
document or individual country
profiles (http://
www.methanetomarkets.org).
Two new U.S. EPA Reports on
Global Non-C02 GHG
The EPA's Climate Change Division
has just released two reports on global
non-C02 greenhouse gas (GHG)
projections and mitigation. The non-
C02 GHG include methane, nitrous
oxide, and a set of fluorinated
compounds. These EPA reports have
undergone an external peer review
consistent with the guidelines of the
U.S. EPA Peer Review Policy. Both
reports are available at http://
www.epa.gov/nonco2/econ-inv/
international.html.
Global Anthropogenic Emission of
Non-C02 Greenhouse Gases
1990-2020 provides historical and
projected estimates of emissions
from over 90 countries and eight
regions for all major non-C02 GHG
emission sources. Historical and
future trends are shown by region
and by gas. The emissions data can
be downloaded in spreadsheet
format for further analysis.
Global Mitigation of Non-C02
Greenhouse Gases provides a
global cost analysis of all non-C02
greenhouse gases for 201 0, 2020,
and for a few sectors, 2030. The
results of this analysis are marginal
abatement curves (MACs) that
reflect aggregated breakeven prices
for implementing mitigation options
in over 15 key sectors and
disaggregated at the regional levels.
The MAC data sets can be
downloaded in spreadsheet format
for further analysis.
EPA Examines New Coal
Technology in Recent Report
A new technology can help provide
electricity from coal in an
environmentally sustainable way,
according to a technical report EPA
released on July 7, 2006. The
technology, known as Integrated
Gasification Combined Cycle (IGCC),
partially burns coal to generate gas.
EPA examined the environmental
impacts of IGCC technology as part of
the agency's continued efforts to
understand how the latest available
science and technology could lead to
a cleaner method to generate power
from coal. The report, Multipollutant
Emission Control Technology Options
for Coal-Fired Power Plants, is
available at http://www.epa.gov/
a i rm a r ke t s/a rt i c I e s/c ontrol.html
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Summer 2006
Page 11
COALBED METHA
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News, continued from page 10
(AWMA) Sustainable Development and
Global Climate Change
Technical Committee. In 2000, she
developed the Madison Climate
Protection Plan for the City of Madison
Engineering Division. Previously, Dr.
Somers managed USAID global energy
and environmental training programs
and implemented a USAID technology
transfer project in Ghana, West Africa.
Dr. Somers received her Ph.D. from the
University of Wisconsin - Madison in
integrated strategies for reducing
volatile organic compound and carbon
dioxide emissions.
She holds bachelor degrees in
Engineering and Environmental Science
from Rutgers University and a Masters
Degree in Energy Management from the
University of Pennsylvania. Jayne can
be reached at somers.jayne@epa.gov.
Financing, continued from page 6
combine to make planning and
developing even very large projects
feasible. A grant from USTDA (for
US$502,850) supported project design
and development of technical
specifications. The Asian
Development Bank provided a
US$11 7.4 million loan for project
implementation. To demonstrate their
commitment to the project, the
Jincheng municipal government and
two mining industrial groups are
providing roughly $60 million in
equity capital. The Japanese Bank for
International Cooperation (JBIC) also
provided $20 million in loan
financing. Project cash flow also will
be supplemented by the sale of carbon
credits (4.5 million tones C02
equivalent) to the World Bank's
Prototype Carbon Fund.
Another example is the ADB-funded
CBM/CMM development project to be
hosted by the Fuxin Mining Group in
Liaoning Province, China. The project
will improve CBM and CMM
extraction, distribution, and utilization
at the Fuxin mines. The ADB
provided a US$15.8 million loan to
supplement the private equity of a
local holding company. In addition to
the loan, the ADB's Clean
Development Mechanism Facility
helped to structure the sale of carbon
credits to two buyers (UK-based ICTJ
Limited and Natsource Europe
Limited). The project's cash flow will
be further supplemented by generating
power for the mine and selling
methane to local users.
Conclusion
A host of finance and revenue sources
are available to CMM project
developers in developing countries
and countries of transition. By tapping
appropriate sources, funding can be
secured for all phases of the project
development cycle, from prefeasibility
studies, to technical specification
development, to pilot/demonstration
studies and full implementation. The
organizations outlined in this article
contribute to the project development
process in several ways. Some
provide risk reduction products to
mitigate a technology or service
provider's concerns about entering
foreign markets. Others provide
lending and related financial
assistance for projects that offer
environmental benefits and contribute
to sustainable development and
poverty alleviation. Still others
purchase carbon credits and thereby
supplement a project's cash flow. The
preceding examples demonstrate that
by mixing equity investment with
financing available from a mix of
sources, project developers can
support even the largest CMM
development projects.
CBM Contacts
Address inquiries about the
Coalbed Methane Extra or
about the USEPA Coalbed
Methane Outreach Program to:
Pamela Franklin
Phone: 202-343-9476
E-mail: franklin.pamela@epa.gov
Barbora Jemelkova
Phone:202-343-9899
E-maiI: jemelkova.barbora@epa.gov
Jayne Somers
Phone: 202-343-9896
E-mail: somers.jayne@epa.gov
Our mailing address is:
U.S. Environmental Protection
Agency Coalbed Methane
Outreach Program, 6207J
1 200 Pennsylvania Avenue, NW
Washington, DC 20460
Visit our Web sites at:
www.epa.gov/coalbed and
www.methanetomarkets.org
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