THE NEGLECTED GREENHOUSE SOURCE:
CURBING EMISSIONS FROM UNCONTROLLED
COAL FIRES THROUGH CARBON CREDIT SALES
School of Public Policy
University of Maryland
June 2008
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PREFACE
This report was prepared by the policy analysis workshop at the School of Public
Policy of the University of Maryland. The policy analysis workshop is a course in the
master’s program of the School. Each student devotes a full semester of course work to
the study of an important public policy issue. This year there were six masters students
with undergraduate majors ranging from philosophy to environmental science, and with
advanced degrees ranging from a Juris Doctor to a Master of Science in Meteorology.
The combined efforts of the students amounted to more than 750 hours, including
review of the literature, meetings with experts on uncontrolled coal fires and on carbon
trading, and other methods of study. Professor Robert H. Nelson of the environmental
policy program of the School of Public Policy supervises the environmental section of the
policy analysis workshop. Laurel Ball served as a graduate assistant for the course.
The Executive Summary presents the principal findings, conclusions and
recommendations. The Executive Summary and the full report are available on the web
under “faculty papers” and “Robert Nelson” at www.publicpolicy.umd.edu.
Contributing Students
Guy W. Cole
James Goodwin
Elizabeth McNicol
Colleen Ruddick
Isaac Smith
Richard M. Todaro
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TABLE OF CONTENTS
Preface…………………………………………………………………………….. iii
Executive Summary………………………………………………………………. vii
Introduction……………………………………………………………………….. 3
Part I – Uncontrolled Coal Fires around the World
Chapter 1 – Coal Fires: A Leading Source of Greenhouse Gases………………….13
Chapter 2 – Putting Out Coal Fires: Methods and Costs……………………………21
Part II – Paying to Extinguish Coal Fires by Carbon Trading
Chapter 3 – The Workings of Newly Emerging Carbon Markets…..........................33
Chapter 4 – Certifying a Methodology for Putting Out Coal Fires………………… 45
Chapter 5 – Establishing a Baseline Scenario for Coal Fires………………………. 57
Chapter 6 – Additionality, Permanence, and Other Methodological Issues…………67
Part III – Three Case Studies: China, Indonesia, and the United States
Chapter 7 – China and Coal Fires……………………………………………………77
Chapter 8 – Indonesia and Coal Fires……………………………………………….101
Chapter 9 – The United States and Coal Fires………………………………………113
Conclusion…………………………………………………………………………..123
ABBREVIATIONS
A/R Afforestation/Reforestation
BAU Business as usual
CCX Chicago Climate Exchange
CDM Clean Development Mechanism
CER Certified Emissions Reduction
CH4 Methane
CO Carbon monoxide
CO2 Carbon dioxide
COP Conference of the Parties to the UNFCCC
DNA Designated National Authority
DOE Designated Operational Entity
ECX European Climate Exchange
EPA Environmental Protection Agency
EUA European Union Allowance
EU-ETS European Union Emissions Trading Scheme
GHG Greenhouse gas
GPS Global Positioning System
GWP Global Warming Potential
HFC Hydrofluorocarbon
JI Joint Implementation
LULUCF Land-use, Land-use Change, and Forestry
MOP Meeting of the Parties to the UNFCCC
NOx Nitrogen oxide
OTC Over the counter
PIN Project Idea Note
PDD Project Design Document
PFC Perfluorocarbon
REC Renewable Energy Certificate
RGGI Regional Greenhouse Gas Initiative
SF6 Sulfur hexafluoride
SO2 Sulfur dioxide
UNFCCC United Nations Framework Convention on Climate Change
USGS United States Geological Service
VCS Voluntary Carbon Standard
VER Voluntary Emissions Reduction
WCI Western Climate Initiative
WWF World Wildlife Fund
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EXECUTIVE SUMMARY
There is perhaps no more publicly neglected contributor to global climate change
than coal mine and other uncontrolled coal fires. Though the figure contains great
uncertainty, the authors of this report estimate that the world’s uncontrolled coal fires
could contribute as much as four percent or more of total global emissions of greenhouse
gases. Presently, however, most of the world’s coal fires are being left to burn out of
control with little or no effort to put them out. Except for a few fires that happen to
threaten the safety of citizens or valuable infrastructure, or are consuming commercially
valuable coal, the necessary financial and other resources are simply not being made
available.
The recent rapid emergence of carbon credit markets offers a potential solution.
Carbon markets have already been instrumental in raising funds for reforestation,
methane capture, and various other types of projects designed to mitigate greenhouse gas
emissions. If these markets could now be extended for use in a similar fashion for
extinguishing coal mine fires, it might be possible to obtain the needed financial
resources to put out many or even most of the uncontrolled coal fires around the world,
thereby achieving significant reductions in global greenhouse gas emissions.
The purpose of this report is to examine and evaluate the potential for using the
sale of carbon credits to finance the extinction of uncontrolled coal fires. The report
identifies two broad factors that will determine the general feasibility of using carbon
offsets to finance projects for extinguishing coal fires. First, the projects must be able to
put out coal fires at costs low enough to make the resulting carbon credits saleable at
prevailing carbon market prices. Second, a coal fire credit methodology must be
developed that is able to satisfy all of the accreditation requirements. There are
accreditation systems both for credits generated through the Clean Development
Mechanism (CDM), which was established under the Kyoto Protocol to the United
Nations Framework Convention on Climate Change, and for the various voluntary credit
programs in the United States, such as the Chicago Climate Exchange (CCX).
For the purposes of this report, the authors undertook case studies of three
countries in which many current uncontrolled coal fires are burning—China, Indonesia,
and the United States. Preliminary analysis of these case studies suggests that the costs
of extinguishing coal fires would likely yield carbon credits that would be competitive in
both the European Union carbon market (in which carbon credits are currently priced at
around $30 to $40 per ton) and in the CCX ( in which credit prices are now around $6 per
ton). Under the current Lieberman-Warner bill or other climate change legislation to
create a future U.S. carbon cap and trade system, many analysts expect prices of around
$25 to $50 per ton for carbon dioxide emissions allowances to emerge.
Many coal deposits are now burning uncontrolled in China. For coal fire
extinction projects in China, some analysts have calculated that greenhouse reduction
credits could be generated for less than $1 per ton . While the estimates are less precise
for Indonesia, the available data suggest that the cost of extinguishing coal fires there
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would often be quite low, resulting in a price of carbon credits that would be competitive
with other sources of credits.
There are two key conditions that are required by both the CDM and the U.S.
accrediting bodies for the voluntary credit markets: the conditions of “additionality” and
“permanence.” In order to satisfy the requirement for additionality, a carbon credit
project must produce greenhouse gas emissions that would not have occurred but for the
implementation of the carbon credit project and the revenues generated by the sale of the
credits. To satisfy the condition of permanence, there must be some way of verifying that
whatever greenhouse gas reductions achieved through the project will be maintained for a
significant period of time into the future.
A preliminary analysis suggests that the condition of additionality will not present
a large barrier for accreditation of coal fire projects. Indeed, the sheer number of
uncontrolled coal fires in many countries—particularly when compared to the limited
efforts these countries are now making to put them out—suggest that in the absence of
carbon credit sales most of these fires will be allowed to continue burning, and thus to
continue releasing large amounts of greenhouse gases into the atmosphere.
Satisfying the condition of permanence may prove more challenging in some
cases, however. To satisfy this condition, one would likely need to demonstrate either of
two circumstances exist: (1) the coal that was previously burning in a fire that was put out
will not be put to any commercial use in the near future or (2) even if the previously
burning coal will soon be put to some future commercial use, it will end up substituting
for other less economical coal deposits elsewhere, and the latter deposits will therefore
not be burned and remain in the ground. The ability to demonstrate the existence of
either of these circumstances will vary with the individual coal fire.
Potentially Low U.S. Costs of Carbon Credits
An especially important concern is whether credits for putting out uncontrolled
coal fires can be generated at a price that will be competitive in future carbon markets.
As suggested above, this seems likely to be the case for many uncontrolled fires in China
and Indonesia – and potentially other nations around the world with large coal resources.
In the United States, while no general conclusions were possible, data was reviewed for
the cost of putting out a number of current coal fires—including both underground fires
and surface fires.
As shown in Table 1 below, carbon credits for putting out underground fires
would typically cost in the range of $2 per ton of carbon dioxide in the United States.
Carbon credits for putting out surface fires would often be less expensive to generate—
less than $1 per ton of carbon dioxide in the majority of cases examined. In comparison
with many other nations, labor costs in the United States are likely to be much higher.
However, other costs—such as the procurement of any advanced technology that may be
used, or transportation costs to the site of a coal fire—may be less. Overall, the low costs
of averted CO2 emissions through the extinguishing of coal fires in the United States
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suggests that there may be a large number of uncontrolled coal fires around the world that
could be put out for much less than the current trading price of credits in existing carbon
markets .
Table 1 – U.S. Costs of Extinction, Underground Coal Mine Fires
State
Acres
Suppression
Cost ($)
Calculated Suppression
Cost per Ton of CO2
Colorado
176.5
10,750,000
$1.72
Kentucky
122.9
8,847,810
$2.00
Pennsylvania
Utah
Virginia
West Virginia
Wyoming
1,278.10
595,539,499
$13.20*
326
20,365,071
$1.75
50
4,037,500
$2.27
213,415,315
$3.09
1,400,000
$0.13
1,937.50
296
Costs of Extinction, Surface Coal Burning Fires
State
Acres
Suppression
Cost ($)
Alaska
19
Alabama
Illinois
Kentucky
Calculated Suppression
Cost per Ton of CO2
3,000,000
$4.50
62.5
445,125
$0.20
7
99,000
$0.40
4,232,805
$0.98
730,095
$0.27
5,166,202
$2.68
121.7
Ohio
76
Pennsylvania
54.5
Utah
8
170,000
$0.60
Virginia
9
180,000
$0.56
3,687,536
$1.30
220,000
$0.78
West Virginia
Wyoming
79.2
8
Source: Office of Surface Mining, U.S. Department of the Interior, Abandoned Mine Land Program n.d.
*
Higher relative cost is likely due to the massively expensive uncontrolled Centralia, PA coal fire
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OVERALL CONCLUSIONS AND RECOMMENDATIONS
This report reaches the following overall conclusions and recommendations.
Further conclusions and recommendations are presented in the individual chapters of the
report.
The prospects for using carbon credit projects to extinguish uncontrolled coal fires
are promising.
This report has identified two potential barriers to developing any carbon offsets
projects: costs and satisfaction of accreditation requirements. Preliminary
analysis suggests that both of these barriers are surmountable in the case of
projects for extinguishing many uncontrolled coal fires. Early indications suggest
that the cost per ton of carbon avoided in a number of these projects would be
well below the going rate in the existing carbon offsets markets around the world.
Furthermore, while the treatment of uncontrolled coal fires raises new challenges
with regard to the accreditation requirements of additionality and permanence,
these requirements can likely be satisfied in projects for extinguishing many
uncontrolled coal fires.
Initial efforts to develop carbon offsets projects should give a high priority to China
and Indonesia.
China and Indonesia offer excellent opportunities for developing initial credit
projects for extinguishing uncontrolled coal fires. Many of the coal fires in these
countries run along the surface or in relatively shallow coal seams. Accordingly,
these fires can be identified, located, and extinguished with relative ease and at
low cost. Moreover, the techniques for extinguishing these fires would likely rely
heavily on basic human labor rather than advanced technology. Thus, significant
cost savings for these projects could be achieved, since the cost of labor in China
and Indonesia tends to be relatively low.
A methodology for defining and calculating the levels of carbon credits from
extinguishing uncontrolled coal fires should be developed and accredited.
Since carbon credit projects to extinguish coal fires offer significant economic
promise, a methodology for these projects should be developed and accredited
either through the CDM review process or through the accreditation standards
used for the voluntary U.S. carbon markets. The process of developing and
accrediting a methodology requires access to technical expertise and may be
expensive, laborious, and time consuming. Thus, the World Bank would be a
good candidate for fulfilling this recommendation, since it has both experience
with and the resources for developing and accrediting new methodologies.
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Achieving accreditation for a new coal fire methodology will require particular
attention to meeting the requirements of additionality and permanence.
There are a number of opportunities for the private sector to become involved in
projects to extinguish uncontrolled coal fires. Steps should be taken to encourage
private sector participation in the selling of carbon credits based on the putting out
of coal fires.
The existence of carbon credit markets offers a good opportunity for introducing
market forces into the process of extinguishing uncontrolled coal fires. With
these credit markets, projects to extinguish uncontrolled coal fires have the
potential to be privately profitable undertakings. Thus, market forces can help to
provide the necessary incentives and funds to extinguish these fires. Accordingly,
the relevant governmental institutions—including the governments of countries in
which these fires are located and the governing body of the UNFCCC—should
take steps to encourage the participation of private-sector businesses and nonprofit organizations in the extinction of coal fires. Solving the worldwide
problem of uncontrolled coal fires introduces a win-win opportunity in which
both public and private interests can work together to their mutual benefit.
Chapter Summaries:
This report consists of three parts. Part I provides background regarding the
problem of uncontrolled coal fires. Specifically, it looks at how these fires contribute to
global climate change, and what technologies and other means are available for
extinguishing these fires. Part II sets out the relevant theoretical considerations for
incorporating projects to extinguish uncontrolled coal fires in future carbon credit
markets. Part III presents case studies of three countries in which there are a large
number of uncontrolled coal fires at present. These countries are China, Indonesia, and
the United States. The objective of Part III is to apply the considerations discussed in the
first two parts of this study to the concrete circumstances present in each country in order
to assess the prospects for developing carbon credit projects based on the extinguishing
of uncontrolled coal fires in these -- and potentially other -- nations.
Chapter 1 – Coal Fires: A Leading Source of Greenhouse Gases
Coal is one of the most abundant and most heavily used sources of energy in the
world. Moreover, worldwide annual coal production and consumption have been on the
rise; in 2005, over 6.5 billion metric tons of coal were consumed, a 55% increase over
1984 levels and a 25 % increase over 2000 levels.
In addition to coal that is intentionally burned in plants for electricity generation,
the unintended combustion of coal in the form of uncontrolled coal fires is also a
significant contributor to total greenhouse gas emissions. The authors of this report
estimate that this contribution of uncontrolled coal fires could be as much as four percent
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of global greenhouse gas emissions—though this estimate involves a great deal of
uncertainty. This contribution of coal fires to greenhouse gases has nevertheless received
significantly less attention than other major sources such as power plants and industrial
facilities.
Uncontrolled coal fires generally release three kinds of greenhouse gases: carbon
dioxide (CO2), carbon monoxide (CO), and methane (CH4). Coal seam fires can be
started though natural or anthropogenic means. Natural causes include lightning strikes
and forest fires. Anthropogenic causes tend to be related to mining and the clearing of
forests. Owing to the costs of putting them out, a lack of knowledge of their existence, or
other factors, many coal fires are left to burn uncontrolled over long periods. This is
especially true in developing nations where funding for such purposes is scarce or nonexistent and governmental capacity may be limited.
Recommendations:

Globally, since uncontrolled coal fires could account for as much as 4%
or more of total greenhouse gas emissions in the world, they should
receive greater attention in future climate change policy discussions, and
should receive greater analysis and other consideration in future IPCC
reports.

Contributions from uncontrolled coal fires should be included in future
world and national inventories of greenhouse gas emissions. For China,
for example, the releases from uncontrolled coal fires should be included
in future calculations of the total level of Chinese greenhouse gas
emissions.
Chapter 2 – Putting Out Coal Fires: Methods and Costs
The basics of coal mine fire control technology focus on the removal of one or
more sides of what is referred to as the fire tetrahedron: oxygen, heat, fuel, and the
chemical reaction. While every technique for putting uncontrolled coal fires is based on
this strategy, no single technique is appropriate for all fires. Instead, a wide variety of
factors specific to each fire—such as size, depth, overburden composition, slope, and
geological and geographic characteristics—will determine what method may work best
and what the scope of the extinguishing project will entail.
The most successful proven method for extinguishing coal fires is to excavate the
burning coal and surrounding overburden. Shallow surface coal seams can be excavated
rather simply. For deeper underground fires, the excavation method is unlikely to be
successful. Regardless of the technique employed, regular monitoring and maintenance
are necessary. Due to the chemical nature of fires, any seepage of oxygen into the ground
can cause a resurgence of fire activity, making returning to the site to verify suppression
with either visual confirmation or gas emission monitoring equipment desirable.
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No two coal fires are the same, and so too, no two costs for extinguishing them
will be identical. Factors that contribute to the variability of cost include the size and
depth of the coal deposit, the technology employed, the amount of extinguishing material
required, the remoteness of the site, and the time involved. In many cases, coal fires
around the world can be extinguished for less than $5 per ton of carbon dioxide emissions
averted –and in some cases for less than $1 per ton.
Recommendations:

In setting priorities for extinguishing coal mine fires, putting out surface coal
fires should command the highest priority. The most cost-effective projects
will typically involve surface coal outcrops, due to the lower cost of
extinguishing them as well as the ability to monitor them with a higher
degree of certainty. Underground fires often require much higher costs for
suppression as well as higher costs of monitoring.

The development of improved technology for controlling and extinguishing
coal fires should be included in the greenhouse gas research and development
programs of the United States and other nations. Compared with other
areas of climate change technological innovation, greater greenhouse gas
benefits might be achieved for less cost by efforts to improve (and
disseminate) the techniques of coal fire extinction.

Extinction costs can be lowered by encouraging bidding by suppression
contractors. As with any construction project, competition among
contractors can bring down the cost to the project coordinator. By accepting
and evaluating proposals based on cost efficiency and proven success rates,
the coordinating entity can ensure that it not only has a high certainty of
total suppression but also it is are getting a competitive price for work
completed.
Chapter 3 – The Workings of Newly Emerging Carbon Markets
According to the World Bank, carbon trading is expanding rapidly, with the total
value of all carbon market transactions amounting to more than $65 billion in 2007, more
than double that of 2006. In the United States there are, at present, no federal laws or
regulations governing greenhouse gases (GHGs); instead credits in GHG emissions are
traded on a voluntary basis (or in newly emerging regional markets that are now being
planned). In Europe, the member countries of the EU are parties to the Kyoto Protocol,
and an Emissions Trading Scheme (EU-ETS) there represents the largest effort to date to
use market mechanisms to reduce GHG emissions. Indeed, the vast majority of all
carbon credits are traded at present in the EU-ETS . The current price for an EU carbon
credit (December 2008 futures) is about 25 euros (US$37.50).
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The Chicago Climate Exchange (CCX) is the largest carbon market in operation
in the United States, as well as the largest voluntary market in the world. Members of the
CCX may meet their targets through either internal reductions of emissions or through
the purchase of carbon credits (known as Carbon Finance Instruments, or CFIs) from
fellow members who have exceeded their reduction requirements. The CCX has
standardized accreditation rules for eight different types of projects including agricultural
methane; coal mine methane; landfill methane; agricultural soil carbon; rangeland soil
carbon management; forestry; renewable energy; and ozone depleting substance
destruction. It also includes energy efficiency and CDM-eligible projects. The CCX also
reported a doubling of trading volume in 2007 over 2006 .
A federal climate policy is likely to take shape in the next few years. Currently,
the leading proposal in Congress is the American Climate Security Act, co-sponsored by
Senators Joseph Lieberman and John Warner. It would establish a cap-and-trade system
in CO2 emissions, with the aim of reducing emissions by seventy percent below 1990
levels by 2050. If the United States establishes a national cap and trade market, this is
likely to add significantly to the demand—and potentially the price—of future carbon
credits. Substantial funds to extinguish coal fires could be obtained by tapping into the
above existing and potential future carbon credit markets.
Recommendations:

The CDM, owing to its reach, technical resources, and relative transparency,
would be the best vehicle by which to create and sell carbon credits based on
the putting out of uncontrolled coal fires in developing countries.

The European Union Emissions Trading Market, the Chicago Climate
Exchange and other institutions for carbon credit sales and exchange should
publicly state that the extinguishing of uncontrolled coal fires is in principle –
assuming the requirements of additionality and permanence can be met – a
satisfactory method of generating acceptable carbon credits.

The various carbon credit markets should review their rules and procedures
to ensure that they are compatible with the circumstances of generating
carbon credits through putting out uncontrolled coal fires.

The World Bank, Carbonfund and other public and private brokers in
carbon credits should incorporate the extinguishing of coal fires within their
portfolio of available projects for generating carbon credits.
Chapter 4 – Accrediting a Methodology for Coal Fires
Selling carbon credits for uncontrolled coal fire abatement is a new area of carbon
finance—so new, in fact, that there have not been any such transactions to date and,
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indeed, there currently exist no accepted rules for operating a carbon credit program
based on the extinction of uncontrolled coal fires.
Each of the main current issuers of carbon offsets has developed its own
registration and validation processes. The main issuers include the Clean Development
Mechanism (CDM) under the Kyoto Protocol and the various voluntary programs such as
those of the Chicago Climate Exchange (CCX) and the Voluntary Carbon Standard. The
basic parameters for implementing the CDM were agreed upon at a followup meeting of
the Kyoto parties in Marrakech, Morocco in 2001. To date, over 1,000 CDM project
activities have been registered, generating an average annual total of 136 million GHG
emissions credits (known as Certified Emissions Reductions or CERs).
The first step in generating a CDM credit is for the project developer to draft a
Project Idea Note (PIN), including the estimated amount of GHGs that the project would
reduce, and the proposed sources of funding, both from the issuance of CERs and from
other sources. The project developer must also identify all the individuals, corporations,
non-profits, public agencies, or other organizations that will serve as project funders.
Each country participating in the CDM must choose a Designated National Authority
(DNA)—typically a government agency—that will be in charge of approving CDM
projects and ensuring that the project meets the country’s standards for sustainable
development.
The Executive Board of the CDM is in charge of developing and amending the
rules for CDM projects, accrediting Designated Operational Entities, registering projects,
approving new or revised methodologies, and actually issuing CERs. Other important
players in the approval process are the Designated Operational Entities (DOEs). DOEs
are independent organizations authorized by the CDM Executive Board both to validate
that a proposed project activity meets the CDM’s standards for additionality and other
criteria, as well as to verify that a specific project activity has in fact reduced GHG
emissions.
The CCX is run by the Committee on Offsets, a 12-member board that reviews
and approves potential offset projects. The most notable feature of the CCX’s offsets
program is the lack of a specific test for additionality. Instead, the CCX says that offset
projects must be “beyond regulations,” new, and best in class, if applicable. A second
notable feature is that CCX offset activities are validated only once by independent third
parties, not twice as in the CDM.
For voluntary markets like the CCX, a number of standards accrediting voluntary
carbon offsets have been developed. First, there is the Voluntary Carbon Standard
(VCS). Run by the VCS Board, the VCS issues Voluntary Carbon Units (VCUs) to any
project that is an approved GHG program or are supported by a VCS methodology. The
additionality test for the VCS closely resembles that of the CDM. It remains to be seen
whether the VCS will be widely adopted by the various voluntary markets.
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Second, there is the VER+ Standard. Much of the VER+ architecture was
borrowed from the CDM; the main differences are that eligibility criteria are the same as
that of the Joint Implementation (JI) framework, and that co-benefits of project activities
(sustainable development and the like) are not a motivating factor. The VER+ program is
small but growing rapidly.
Third, there is the Gold Standard. This accreditation standard has a narrow focus,
giving its approval only to renewable energy and energy efficiency projects. The Gold
Standard offers Voluntary Emissions Reductions (VERs), the certification process for
which is explicitly modeled on that of the CDM, albeit with some slight streamlining and
the consideration of environmental and social co-benefits.
Recommendations:

The United States government should support the development and
accreditation of a methodology for carbon credit projects to extinguish
uncontrolled coal fires.

The World Bank is also well positioned to undertake the development and
approval of a methodology for accrediting coal fire extinction as an accepted
form of carbon market credit.

If the CDM accredits a methodology for uncontrolled coal fires, the other
markets for carbon credits should adopt this methodology as at least one of
the acceptable ways of defining and establishing saleable carbon credits.
Chapter 5 – Establishing a Coal Fire Baseline
In order to obtain approval by any of the accreditation systems for a methodology
for generating carbon credits, there must be a clear way to determine the avoided
emissions generated by the act of extinguishing a coal fire. The first step in establishing
a coal fire baseline is to identify a set of currently burning coal fires. In order to establish
carbon credits by future year, a projection of the path and rate of burn of a fire will also
be needed. Then, this projection can be combined with an estimate of the total volume of
coal presently exposed to the fire in order to develop an overall estimate of greenhouse
gas emissions that would be averted by putting it out.
The coal industry has invested heavily in the development of different
measurement techniques for determining the volume of coal in a seam. One method for
coal seam volume estimation involves the analysis of core samples. Cost is also a
function of the number of cores taken, so that certainty comes at an increasing cost. A
second method involves the use of gravimetric surveys. Gravitational pull is a function
of mass, not volume, so the coal generates more or less gravity than the surrounding soils.
One disadvantage is that the collection of data requires frequent reading of instruments
over a long period of time (potentially months) to average out interference in the
xvi
measurements. A third method involves the use of seismic measurement. To take a
seismic measurement, a mechanical pulse is generated at a point, and a shockwave
radiates outward through the ground. Sensors on the surface detect the direction, time,
and strength of these returning waves. Seismic measurement offers a spatial precision
that no other method can match.
Given the estimated volume of coal that is burning, a rough estimate of potential
future greenhouse emissions can be derived by applying a factor of 3.7 tons of carbon
dioxide released per ton of coal burned. Other more precise methods are available such
as remote sensing, but at present they are likely to be either too expensive or too
unreliable.
Recommendations:

Seismic methods offer the greatest promise as a way to determine the
volume of a coal seam on fire.

Chemical analysis methods offer the greatest promise for determining the
amounts of GHGs the fires are producing, and the future timelines, at
least until new techniques are developed.

The climate research and development programs of the United States and
other nations should commit greater funds to modeling and other study
of uncontrolled coal fires, including the development of more refined
methods of estimating the future path and timeline of coal fires and the
magnitudes of the future GHG emissions that could be averted by putting
out these fires.
Chapter 6 – Additionality, Permanence, and Other Methodological Issues
In order for the extinguishing of a coal fire to be sold as a carbon credit, there
must be a method for demonstrating that the uncontrolled coal fire would not have been
put out in the absence of the financing provided by the sale of carbon credits—thus,
meeting the criterion of “additionality.” One aspect of additionality involves the question
of whether a private or government actor would put out the coal fire, even in the absence
of carbon credits.
There are a number of ways in which one might demonstrate the unlikelihood that
a private actor would extinguish a particular coal fire. For example, one might show that
the mine has been abandoned or that the mine's owner has made no efforts to put out the
fire. Another possibility would be to develop specific calculations showing that it is
uneconomic to put the fire out—that the cost per ton of saving the coal from burning is
less than the typical market value of coal reserves in that area.
xvii
There are also a number of ways in which one might demonstrate the unlikelihood
that a government agency would extinguish a particular coal fire. It might be shown that
no government with jurisdiction in the area of the coal fire has any program or now
makes any expenditures for the purpose of putting out coal fires. Or, it might be shown
that extinguishing coal fires is not a high enough priority for the relevant government
agency. In many cases, governments will focus their attention on a small subset of fires,
which are often determined according to such factors as the degree of environmental
damage associated with the coal fire, the total availability of government funding , and
the cost of putting out any specific fire.
Putting out a coal mine fire presents an unusual feature in that it raises the
possibility that the extinguishing of the fire may allow the future mining of the coal and
thus the release of greenhouse gases from coal combustion in a power plant or other
industrial or commercial facility. If it appears that the putting out of the coal fire would
not achieve any permanent reduction of greenhouse gas emissions, no carbon credits
would be allowed. It might be shown, however, that there is no coal mining activity in
the surrounding area of the uncontrolled coal fire (usually a surface fire in such cases),
thus demonstrating the small possibility that the coal would be mined. Even if some
mining is occurring locally, it might be shown that there is no mining of similar quality
coal deposits.
It would also be possible to meet the requirement for permanence by showing
that, if a coal fire is put out, and this coal is then soon being mined, this will result in
other coal deposits in the same region being put out of production (thus still achieving a
net greenhouse gas emission reduction). Finally, permanence might be guaranteed by
contractual pledges not to mine the coal in the future.
Recommendations:

While the issuance of carbon credits for putting out uncontrolled coal
fires raises challenges with regard to meeting the approval
requirements of additionality and permanence, these requirements
can likely be satisfied for many coal fire projects. Compared with
some other methods of generating carbon credits, it may be easier to
demonstrate additionality and permanence for coal fire projects.

The World Bank, the World Resources Institute, private brokers in
carbon market credits, and other involved parties should seek out a
sample set of currently burning coal fires that could be used as
demonstration projects to establish and improve methodologies for
showing coal fire additionality and permanence.

Where issues of permanence arise, credits generated from putting out
coal fires should have shorter lifespans; they might be lengthened if
the mine owner can be persuaded to agree contractually not to mine
xviii
the coal or to only use it for low-carbon activities when the fire is put
out.
Chapter 7 – China and Coal Fires
China has the second largest amount of coal reserves and is the largest producer
of coal in the world , by some estimates accounting for nearly one-third of global
production . It also has a correspondingly large number of coal fires. China is an
especially promising possibility for generating carbon credits by extinguishing coal fires.
According to some estimates, fewer than 10 percent of China’s active uncontrolled coal
fires are currently being fought .
China’s uncontrolled coal fires are primarily located in the vast coal belt that runs
along the northern portion of the country. There are widely varying estimates of the
number of active uncontrolled coal fires in China. The mode estimate seems to be around
200 fires. The largest and most concentrated number of coal fires are located within the
coal mining belt in Ningxia Hui, Inner Mongolia (also called Nei Mongol), and Xinjiang
Uygur .. These regions are characterized by their sparse population, high levels of
poverty, and arid and semi-arid climates .
Most estimates place the amount being burned annually in China in uncontrolled
coal fires at around 100 million tons. According to one commonly cited estimate,
China’s uncontrolled coal fires account for between two and three percent of the world’s
total carbon dioxide emissions . According to some lower estimates, however, carbon
dioxide emissions from China’s uncontrolled coal fires could amount to as little as 0.1
percent of the total global carbon dioxide emissions.
The Deutsche Montan Technologie GmbH (DMT) has developed an estimate for
the cost of carbon offsets generated by putting out coal fires in China. Using as a case
study an uncontrolled coal fire in Xinjiang Uygur, the DMT estimated that the project
could produce carbon credits at a cost of approximately 0.95 euros (about $1.50) per ton
of carbon dioxide avoided . Other cost analyses have produced conclusions similar to
that of the DMT analysis. For example, one Chinese newspaper in 2004 cited a report
indicating that CDM credits generated through the extinguishing of uncontrolled coal
fires in China would cost between $0.70 and $2 per ton of avoided carbon dioxide.
China is not subject to the emissions reductions requirements of the Kyoto
Protocol but it is party to both the United Nations Framework Convention on Climate
Change (UNFCCC). Moreover, China has been relatively active in the Clean
Development Mechanism (CDM) established under the Kyoto Protocol. China’s main
coordinating agency for climate change policy, the National Coordination Committee on
Climate Change (NCCCC), has established a rigorous process for approving and
implementing CDM projects within its territory.
xix
Despite the relatively large number of CDM projects being implemented in China,
and despite China’s relatively high investment climate rating for CDM project
development, the implementation of such projects in China has been the subject of some
criticism. Nevertheless, the rapid increase in CDM projects undertaken in China suggests
that their profitability somewhat outweighs the burdens involved in the approval process
that foreign investors must undertake through the Chinese government.
Recommendations:

The existence of many uncontrolled coal fires in China and the urgency of
extinguishing them should be included by United States and other
international negotiators as important topics in future discussions of Chinese
actions to address world problems of greenhouse gas emissions and climate
change.

The Chinese government should be encouraged to establish transparent and
workable procedures by which CDM credits for extinguishing uncontrolled
coal fires can be established and certified within China.

The Chinese government should be encouraged to allow easier and greater
participation of foreign private companies and other foreign organizations in
projects to put out coal mine fires in China and to sell the resulting carbon
credits.

Steps should be taken to compile a complete inventory of the current
uncontrolled coal fires in China. This may help to address any potential
permanence and additionality concerns for future carbon credit projects
designed to extinguish coal fires in China.

Additional research and other studies should be undertaken to further refine
cost estimates for extinguishing coal fires in China.

One or more uncontrolled coal fires in China should be chosen as
demonstration projects to evaluate the feasibility of using the extinguishing
of such coal fires to generate cost-effective carbon offset credits.
Chapter 8 – Indonesia and Coal Fires
Indonesia has large coal reserves and is a major international source of coal
exports. In the forests of Indonesia there is a cycle of fire. The cycle is initiated when
humans set fires such as burning trash heaps or setting the forest on fire with the intent to
clear land. Once the forest is on fire, the cycle begins. The forest fire ignites coal
outcrops which are exposed at the surface. These coal outcrops can continue to burn for
decades, until all the coal is burned up, the fire runs out of oxygen, or it is put out through
xx
human intervention . Occasionally, fire moves through the coal seam, which can reignite forest fires, starting the cycle over again.
Most of Indonesia’s uncontrolled coal fires are burning underneath the tropical
forest, which makes it difficult to know how many fires are actually burning. Since the
1980s, government officials have investigated 263 coal fires in Indonesia, most of which
were in East Kalimantan, a province on the island of Borneo. Overall, however, it is
believed there could be anywhere from 760 fires to 3,000 fires burning at present. Given
the very large uncertainties, it is estimated that the total emissions from Indonesia coal
fires could range anywhere from 7 million tons of CO2-equivalent to over 503 million
tons CO2-equivalent.
A rough cost analysis indicates that the price of carbon credits yielded from
putting out coal fires in Indonesia would be low enough to be marketable. While it was
not possible to generate actual precise estimates for credit prices for coal fire extinction
projects in Indonesia, the available data demonstrate that the total costs of extinguishing
uncontrolled coal fires in Indonesia is often quite low.
Beyond the release of greenhouse gases, the uncontrolled coal fires in Indonesia –
and the cyle of forest and coal fire which they help to perpetuate -- are associated with a
number of other adverse impacts as well. Indonesia is largely covered by tropical
forests, home to endangered species such as orangutans and sun bears. The loss of forest
resources and the haze from the smoke has hurt Indonesia’s economy and can have a
large negative impact on the health of Indonesians (as well as the citizens of other nations
in some cases).
A number of factors concerning Indonesia’s government have prevented it from
establishing a comprehensive policy for extinguishing uncontrolled coal fires. There has
been an unwillingness of any government agency to assume responsibility for this task.
Also, the government is facing many other pressing issues, and coal fires are low on the
priority list. When sone coal fires were discovered that threatened homes or public
buildings, the government chose to relocate people, rather than put the coal fires out.
Recommendations:

The Indonesian government should be encourage to establish transparent
and workable procedures by which CDM credits for extinguishing
uncontrolled coal fires can be established and certified within Indonesia.

Steps should be taken to compile a full inventory of the current uncontrolled
coal fires in Indonesia. This may help to address any potential permanence
and additionality concerns for future carbon credit projects designed to
extinguish coal fires in Indonesia.
xxi

Additional research and other studies should be undertaken to further refine
estimates for the number of and the costs of extinguishing coal fires in
Indonesia.

One or more uncontrolled coal fires in Indonesia should be chosen as
demonstration projects to evaluate the feasibility of using the extinguishing
of coal fires to generate cost-effective carbon offset credits.

The United States government should offer financial assistance to the
government of Indonesia for the purpose of developing and implementing a
program of creating carbon credits based on extinguishing uncontrolled coal
fires.
Chapter 9 – The United States and Coal Fires
There are currently hundreds of coal mine fires in the United States covering
thousands of acres, posing risks both to public health and safety as well as to the world
climate. Both state Office of Surface Mining agencies and private mining companies
have commissioned drilling, heavy equipment, and firefighting contractors to aid in the
suppression operations. Three of these companies are Goodson & Associates
Incorporated, USF Technologies and Services, and CAFSCO. These three have welldocumented successes and have collaborated with the United States Office of Surface
Mining and the National Institute of Occupational Safety and Health (NIOSH).
In the United States, the mine company’s insurance, or the Abandoned Mine Land
Fund, may be available to pay for coal fire extinguishing. In December 2006, the
Abandoned Mine Land Fund was reauthorized to disperse most of its budget to state
governments, except for a part held by the Office of Surface Mining to manage
emergency programs . In many cases, however, the state funds are inadequate to insure
the successful suppression of current coal fires due to the costs of suppression,
monitoring and upkeep. Instead of thoroughly committing to a small number of fires and
their complete extinction, the Office of Surface Mining often provides for mitigating
efforts at the most sites it can afford, in order to protect the public’s safety from fumes or
overburden collapse. This leads to a number of dormant fires reigniting.
OSM estimates of the costs for putting out coal fires in the United States suggest
that the price of the carbon credits generated by these projects would be low in many
cases. Specifically, for coal fire extinction projects in the United States, offsets would
likely cost between $0.13 and $13.20 per ton of carbon dioxide emissions averted.
Underground coal projects would involve typical costs of $2 per ton and surface coal
projects would involve typical costs of less than $1 per ton. These costs of generating
carbon offsets would make them competitive on U.S. carbon markets.
In addition, many projects to extinguish coal fires in the United States would be
unlikely to have a major problem satisfying the condition of additionality. While some
xxii
fires are paid for by the ALM Fund, or by private insurance, the program has inventoried
a large number of fires that have gone unfunded.. For these fires, it is unlikely that they
would be extinguished in the absence of funding made available by the sale of carbon
credits.
Recommendations:

The U.S. Office of Surface Mining should support the development of a
methodology for creating carbon credits by extinguishing uncontrolled
underground and surface coal fires in the United States. These credits could
be sold at present in U.S. voluntary carbon markets and potentially in the
future in U.S. markets created by the possible enactment of federal cap and
trade legislation.

OSM should support efforts to have a methodology for coal fire extinction
projects recognized and validated by the various carbon credit accreditation
services in the United States voluntary markets.

State surface mining offices should designate specific coal fires in their states
for which actions to extinguish the fires would meet the requirement of
additionality and permanence in carbon trading markets.

OSM -- working with the states -- should establish a full inventory of existing
coal fires in the United States for the purpose of facilitating future
demonstrations of additionality and of enlisting private sector interest in
putting out these fires in order to sell carbon credits.
xxiii
xxiv
THE NEGLECTED GREENHOUSE SOURCE:
CURBING EMISSIONS FROM UNCONTROLLED
COAL FIRES THROUGH CARBON CREDIT SALES
2
INTRODUCTION
There is perhaps no more underappreciated contributor to global climate change
than coal mine and other uncontrolled coal fires. In China alone, according to one
estimate, China’s uncontrolled coal fires alone accounted for two to three percent of the
world’s total greenhouse gas emissions in 2004. If accurate, this estimate suggests that
China’s uncontrolled coal fires annually release as much greenhouse gas emissions as the
entire United States automobile fleet (Stracher and Taylor 2004). Extrapolating from this
statistic, the authors of this report estimate that the world’s uncontrolled coal fires could
account for as much as four percent or more of the annual global emissions of greenhouse
gases. This figure contains great uncertainty, however.
Accordingly, the extinction of uncontrolled coal fires around the world could play
a significant role in the global effort to stabilize “greenhouse gas concentrations in the
atmosphere at a level that would prevent dangerous anthropogenic interference with the
climate system” (United Nations Framework Convention on Climate Change 1992).
Preliminary research by Chinese scientists lends support for this view. For example, a
report prepared by the Xinjiang Scientific Research Institute concluded that extinguishing
coal fires in the Xinjang region could by itself reduce by up to eighteen percent the total
greenhouse gases that the region is projected to emit between 2005 and 2010.*
To date, the governments of countries in which these fires are located have taken
mostly incremental and often uncoordinated steps towards their remediation (see, e.g.,
Meyer 2005). One main obstacle is that extinguishing uncontrolled coal fires can be
technically challenging and expensive. This is especially true for those fires that rage
deep underground, such as in abandoned coal mines. Indeed, some of these underground
coal fires on the planet have been burning for centuries; no efforts have been made to
suppress them due to the high cost of doing so (Prakash 2007; Stracher and Taylor 2004;
Discover 1999).
In contrast, uncontrolled fires that occur along surface or shallow coal seams are
typically much easier to put out. Nevertheless, many of these surface fires continue to
burn in the world’s more remote areas, either because they are expensive to reach or
because their presence is unknown to the relevant government authorities. Among those
developing nations where these fires are especially prevalent, such as China and
Indonesia, there seems to be little incentive to spend the millions of dollars necessary to
suppress uncontrolled coal fires that pose no immediate threat to human safety or
valuable infrastructure. Despite the fact that these fires reduce a valuable natural
resource to smoke and ash, the cost-benefit analysis conducted by these countries still
seems to weigh in favor of allowing most uncontrolled coal fires to burn unabated.
Thus, there is a close connection between inadequate funding and the persistence
of uncontrolled coal fires, and this connection is not limited to developing nations alone.
*
Mr. Jianbo Ma, phone interview with James Goodwin, April 12, 2008.
3
Indeed, a number of uncontrolled coal fires continue to burn in the United States, where
remediation efforts have long been hampered by a lack of funding (see, e.g., Abandoned
Mine Land Program Inventory n.d.). The uncontrolled coal fire afflicting Centralia,
Pennsylvania, for example, has been burning for nearly 50 years. After decades of
unsuccessful attempts, federal and state policymakers concluded that it would be cheaper
to evacuate a nearby community than to take the necessary steps to extinguish the fire
completely (Quigley 2007; Revkin 2002).
The recent and rapid emergence of carbon credits markets offers a potential
solution to obtain the necessary funds to put out many currently burning coal fires. These
markets have already been instrumental in raising funds for other types of projects
designed to mitigate greenhouse gas emissions. As such, a properly designed project to
extinguish uncontrolled coal fires could potentially serve as a basis for carbon offsets
traded in the carbon offsets market. Though significant questions concerning cost and
logistics must still be resolved, the technology exists to extinguish most coal fires in both
surface seams and underground mines, and it is now consistently improving as new
technologies such as nitrogen-enhanced foam and gas emissions monitoring are further
developed. If the funds to apply the best technologies can be made available, it could be
possible to extinguish many or even most of the uncontrolled coal fires around the world,
thereby realizing significant reductions in greenhouse gas emissions.
The purpose of this report is to examine and evaluate the potential of using carbon
offsets as a means for generating the necessary funding to address uncontrolled coal fires
throughout the world. This report first examines the extent of uncontrolled coal fires in
the world and the amounts of greenhouse gases they are emitting. It then explores the
methods currently available to extinguish coal fires and their costs. Based on this
analysis, the report proposes a strategy of funding coal fire extinction projects through the
sale of carbon credits.
Presently, the two major institutions that issue carbon credits are the Clean
Development Mechanism (CDM), which was established under the Kyoto Protocol to
United Nations Framework Convention on Climate Change, and the voluntary offsets
programs, such as those of the Chicago Climate Exchange and other recently established
sources of carbon credits in the United States. This report will review the logistical and
practical issues involved in developing carbon offsets through both CDM and other
sources. Finally, this report includes three case studies of coal fires in China, Indonesia,
and the United States in order to examine the prospects for developing carbon offsets
projects for extinguishing uncontrolled coal fires in these nations.
Uncontrolled Coal Fires
Coal is the most abundant and easily accessible fossil fuel source of energy in the
world. Even in ancient times, this coal sometimes spontaneously ignited and could burn
for long periods. Many millions of years ago the geology of the American West was
significantly transformed by the burning of vast surface fires which converted thick coal
seams into atmospheric gases, causing widespread subsidence and otherwise leaving the
4
surface of the earth much altered. Even today, while no precise numbers are available,
there are many thousands of coal fires burning across the world, possibly consuming as
much as 300 million tons of coal per year—and releasing as much as 1,000 million tons
of carbon dioxide and other greenhouse gases.
Uncontrolled coal fires can start in a variety of ways, and in some cases the origin
of a specific fire may be unknown. For example, natural phenomenon such as lightning,
forest fires, and a process of spontaneous combustion are common ignition sources,
particularly among those coal fires afflicting shallow or surface coal seams. Spontaneous
combustion occurs when minerals oxidize, thereby releasing sufficient heat energy to
ignite nearby coal resources (Kuenzer et al. 2007, 43, 48; Stracher and Taylor 2004;
Discover 1999). Most uncontrolled coal fires, however, are the result of human
activities, such as land clearing, burning trash, and careless mining practices. In one
particularly common scenario, the coal fire starts after a coal miner accidentally sparks
combustible mine cases, such as methane, producing a large explosion (Stracher and
Taylor 2004; Wingfield-Hayes 2000; Discover 1999). The Centralia fire mentioned
above allegedly started after a waste disposal company carelessly burned trash on top of
an exposed coal seam.
Coal fires are found in every nation in the world that has coal reserves. The
single greatest concentration of uncontrolled coal fires is in the People’s Republic of
China (“China”). By most estimates, China has over 200 active uncontrolled coal fires
(Strangeland and Hauge 2007; Revkin 2002; Discover 1999). Coal fires are also active in
a number of other countries, including Australia, India, Indonesia, Russia, South Africa,
Ukraine, and the United States (Prakash 2007).
Beyond contributing to global climate change, uncontrolled coal fires contribute
to a host of other environmental problems as well. Some of these problems include
habitat destruction, including critical habitat for endangered species; the release of
harmful air pollutants, including toxic air pollutants and precursors to ground level ozone
and acid rain; and damage to vegetation, contributing to desertification, soil erosion, and
nonpoint water pollution (see, e.g., Nelson and Chen 2007, 32; Stracher and Taylor
2004).
A number of negative economic and social impacts can also be attributed to
uncontrolled coal fires. As discussed above, these fires destroy large quantities of coal
each year, which for many countries is an important source of energy for lifting their
citizens out of acute poverty (see Kuenzer et al. 2007, 43-44). Moreover, uncontrolled
coal fires also damage buildings and important infrastructure, such as roads and utility
lines; disrupt beneficial economic activities, such as agriculture; harm public health; and
displace entire communities (see, e.g., Nelson and Chen 2007, 32; Kuenzer et al. 2007,
51; Finkelman 2007, 104; Hilsum 2007; Stracher and Taylor 2004).
Yet, despite all the negative consequences of uncontrolled coal fires, the countries
in which they are located are often unable to assemble the necessary resources to locate,
define, and then extinguish them.
5
Carbon Market Funding Sources
One potentially promising source of funds for putting out uncontrolled coal fires
is the Clean Development Mechanism (CDM). This program, created by the Kyoto
Protocol, establishes a procedure by which developed countries can finance projects in
developing countries that will reduce the developing country’s greenhouse gas emissions.
Since developing countries are not bound to reduce their greenhouse gas emissions under
the Kyoto Protocol, they can sell these emissions reductions in the form of Certified
Emissions Reduction (CER) credits to the developed country, which can in turn use the
credits as an offset it in order to meet its own greenhouse gas reduction requirements
(Kollumuss, Zink, and Polycarp 2008; United Nations 2008). The United Nations has
established a system for reviewing and approving methodologies for determining
internationally acceptable and saleable carbon credits under the CDM mechanism.
According to figures from the World Bank, the total value of carbon credit sales in the
CDM market (both primary and secondary projects) reached $US 12.88 billion in 2007
and accounted for 791 million metric tons CO2-equivlent (Capoor and Ambrosi 2008).
Voluntary offsets programs offer a second potentially promising source of
funding for putting out uncontrolled coal fires. One voluntary carbon market is the
Chicago Climate Exchange (CCX), the largest such voluntary market in the world.
Although they are under no legal obligation to do so, the participants in the CCX have
voluntarily made legally binding commitments to reduce their greenhouse gas (GHG)
emissions. They may meet their targets through either internal reductions of emissions or
through the purchase of carbon credits (known as Carbon Finance Instruments, or CFIs)
from fellow members who have exceeded their reduction requirements. Moreover,
participants may also meet their requirements through the funding of offset projects.
A number of other programs have been developed to accredit carbon offsets for
the voluntary markets. These include the Voluntary Carbon Standard (VCS), the VER+,
and the Gold Standard. While establishing an accreditation process similar to that under
the CDM, these standards are generally recognized as being either less stringent, thereby
allowing for greater flexibility in the development and approval of carbon offsets
projects, or (in the case of the Gold Standard) more stringent, thereby providing a greater
assurance that the carbon offsets projects are producing genuine reductions in GHG
emissions (Kollumuss, Zink, and Polycarp 2008).
To be economically competitive with other carbon offsets projects, the cost of
extinguishing a coal fire must be low enough compared to the amount of greenhouse gas
reductions the fire extinction will yield. Specifically, the cost per ton of greenhouse gas
emissions avoided must be competitive with the current price of CER credits traded in the
European carbon markets or of carbon offsets in the voluntary markets, such as the CCX.
There has been limited analysis of this subject to date. In the case of China at least, a few
cost analyses have been conducted for uncontrolled coal fire extinction projects
indicating that such projects will be sufficiently cost effective to be competitive in these
various offsets markets. One analysis, produced by a German research institute,
6
suggested that carbon offset credits produced by projects for extinguishing uncontrolled
coal fires in China could cost as little as $0.70 per ton of carbon dioxide avoided
(Bandelow, Gielisch, and Schulz 2006, 56). This is well below the current price of about
$35 for CERs traded in the European Climate Exchange (ECX), the largest carbon
trading exchange in Europe. Although the margin is much less, it is also below the
current price of about $6.25 per ton for carbon credits in the CCX for its Carbon
Financial Instrument (Chicago Climate Exchange 2007). In short, based on the limited
cost analysis currently available, it appears that extinguishing uncontrolled coal fires
would offer cost-effective carbon offset projects in China.
An analysis undertaken for this report of the circumstances of the many surface
coal fires in Indonesia offers a similarly promising conclusion with respect to the carbon
market competitiveness of the greenhouse credits that might be generated there. Since
1998, the national government has been taking a more proactive approach to putting out
coal fires. These firefighting efforts have largely focused on those fires that threaten
public infrastructure, homes, and wildlife preserves (Whitehouse 2000, 1). These efforts
might be significantly expanded with the addition of funds from sale of coal fire carbon
credits. To be sure, conducting business in Indonesia raises a number of practical
concerns, especially with respect to the country’s past problems of widespread corruption
and poor law enforcement. These concerns notwithstanding, Indonesia seems offer a
great deal of potential for hosting carbon offsets projects for extinguishing uncontrolled
coal fires.
In the case of India, the prospects for developing economically viable carbon
credits may be less promising, since the uncontrolled coal fires there are more likely to be
in mines burning underground, and therefore to be more expensive to put out. Indeed, it
may not be feasible to extinguish some of India’s uncontrolled coal fires at almost any
price. Because they are often burning in highly populated areas, however, the total social
costs of uncontrolled mine fires in India—including the large negative health effects of
air pollution—may be quite large. In some cases, whole populations of people have had
to be moved. Hence, combining funds from Indian government public health resources
with the international sale of carbon credits may generate sufficient total resources to put
out more of the uncontrolled coal fires in India, even when this is an expensive task.
Before firmer conclusions can be developed with respect to the marketability of
coal fire carbon credits, further studies will be needed to obtain more precise estimates of
the costs of coal fire extinctions and the amounts of greenhouse gases that are now being
released by uncontrolled coal fires. Pilot projects in nations with diverse conditions
would offer a good vehicle for conducting these studies.
Accreditation Issues – Additionality and Permanence
In addition to the practical concerns of marketability and implementation, there
are also a number of conceptual concerns with which a proposal to use carbon credit sales
to finance uncontrolled coal fire extinction projects must contend. Specifically, the CDM
and the various accrediting standards for the voluntary markets require that all proposed
7
sales of carbon reduction credits satisfy a number of requirements, including meeting the
conditions of “additionality” and “permanence.” In order to satisfy the condition of
additionality, a carbon credit sale must produce greenhouse gas emission reductions that
would not have occurred but for the sale of the carbon credits and the provision of
additional funds. To satisfy the condition of permanence, there must be some way of
guaranteeing or verifying that whatever greenhouse gas reductions achieved through a
project will be maintained for a significant period into the future. There is a concern that
carbon credit sales for projects designed to extinguish uncontrolled coal fires may not
always satisfy these two conditions.
To begin with, many of the countries with uncontrolled coal fires within their
jurisdiction have successfully extinguished at least a few of these fires. This suggests
that meeting the condition of additionality might be problematic in at least a few cases.
Nevertheless, the sheer number of these fires—particularly compared to the limited
efforts most nations are making to put them out—also suggest that the requirement of
additionality would likely be met in most proposed projects that involve sales of carbon
credits for the purpose of extinguishing uncontrolled coal fires in less developed nations.
The condition of permanence, however, might present a greater conceptual
hurdle. If the remediation of a coal fire simply saves the coal for future use (i.e. resulting
in the later combustion of this same coal in an electric power plant), the total long run
greenhouse emissions from the coal deposit will not have been reduced. Approval of
long run total reductions of greenhouse emissions from extinguishing coal fires thus will
require demonstrating that one or another of two circumstances exist: (1) the coal that
was previously burning in a fire that was put out will not be put to any commercial use in
the future or (2) even if the previously burning coal will be put to some future
commercial use, it will end up substituting for other less economical coal deposits
elsewhere, and the latter deposits will therefore not be used and remain in the ground.
Demonstration of either of these circumstances may prove difficult in some cases.
Next Steps
Efforts to extinguish coal fires for carbon credits may benefit from at first
focusing on the “low-hanging fruit” of fires that occur in shallow or surface coal seams.
Such fires can typically be excavated at a much lower cost than underground fires. In
addition, these projects have a higher success rate and this success can be observed
without expensive remote gas or other monitoring efforts. Because many surface fires
are simply being allowed to burn at present, it should not be difficult in most cases to
meet the requirements for demonstrations of additionality and of permanence.
Many surface fires in China and Indonesia are among the low hanging fruit in
terms of world wide coal fires. Since these fires are close to the surface, they are often
much easier to put out. Moreover, the methods for putting out these surface fires tend to
rely on human labor rather than on advanced technology. Since human labor tends to be
inexpensive in these countries, extinguishing these coal fires promises to be a relatively
inexpensive endeavor as well. Accordingly, with respect to the many uncontrolled
8
surface coal fires at present, the prospects for developing economically viable greenhouse
credits in nations such as China and Indonesia for sale in world carbon markets would
appear to be high.
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January 15.
http://query.nytimes.com/gst/fullpage.html?res=9902E2DF1538F936A25752C0A
9649C8B63.
Stangeland, Aage and Frederic Hauge. 2007. Coal fires in China. Oslo, Norway: The
Bellona Foundation.
Stracher, Glenn B. and Tammy P. Taylor. 2004. Coal fires burning out of control around
the world: Thermodynamic recipe for environmental catastrophe. International J.
of Coal Geology 59: 7-17.
United Nations Framework Convention on Climate Change art. 2, May 9, 1992, 31,
I.L.M. 849.
United Nations. 2008. United Nations Framework Convention on Climate Change, Clean
Development Mechanism: Background,
http://unfccc.int/kyoto_protocol/mechanisms/clean_development_mechanism/ite
ms/2718.php.
Whitehouse, Alfred E. 2000. Coal fire management in Indonesia. Unpublished
manuscript, Office of Surface Mining/Ministry of Energy and Mineral Resources
Coal Fire Project Ministry of Mines and Energy, Jakarta, Indonesia.
Wingfield-Hayes, Rupert. 2000. China battles coal fires. BBC News, August 3.
http://news.bbc.co.uk/2/hi/asia-pacific/864588.stm.
10
PART I – UNCONTROLLED COAL FIRES AROUND THE WORLD
11
12
CHAPTER 1 – COAL FIRES: A LEADING SOURCE OF GREENHOUSE GASES
Coal is one of the most abundant and most heavily used sources of energy in the
world. According to the U.S. Energy Information Administration (EIA), as of June 2007,
the world has approximately 905 billion metric tones of economically recoverable coal,
split about evenly between higher grades (anthracite and bituminous; 480 billion metric
tons) and lower grades (lignite and subbituminous; 425 billion metric tons).*
Economically recoverable coal is that coal which can be extracted profitably at prevailing
market costs. Worldwide annual coal production and consumption have been on the rise;
in 2005, over 6.48 billion metric tons of coal were consumed, a 56.5% increase over 1984
levels and a 27.2% increase over 2000 levels.
Table 1 -- Worldwide Coal Reserves, Consumption, Production, and Growth, by Region*
Region
2007 Economic
Reserves
2005 Consumption
Average Annual
Growth
In Consumption
(2000-2005)
0.81%
2.26%
2005 Production
N America
250,693
1,100
1,084
Central & South
19,893
37
66
America
Europe
59,658
951
0.04%
740
Eurasia
227,254
379
0.49%
434
Middle East
419
15
3.56%
1.2
Africa
50,336
191
2.19%
248
Asia & Oceania
296,889
3,208
6.58%
2,956
World
905,142
5,881
4.92%
5,531
*All figures in millions of metric tons; Source: U.S. Energy Information Administration
As shown in Table 1, large economically recoverable coal reserves are found in
every region of the world except the Middle East (where low cost petroleum limits any
interest in possible coal development) (Energy Information Administration 2008). The
United States has the largest coal reserves of any nation, about 26.82 percent of the world
total, followed by China with about 12.65 percent. In the United States, coal supplies
about 50 percent of total electric power; in China the comparable figure is about 75 to 80
percent of total energy consumption. Around the world, there are also large coal reserves
in India (10.21% of the world total), Indonesia (0.55%), Australia (8.67%), South Africa
(5.39%), Poland (1.55%), Russia (17.35%), and Ukraine (3.77%) among other nations
(Energy Information Administration 2007).
*
See Appendix to Chapter 1, Table 2, for explanation of coal grades.
13
Table 2 -- Worldwide Coal Reserves, Consumption,
Production, and Growth for Selected Countries*
Country
Australia
China
India
Indonesia
Poland
Russia
South Africa
Ukraine
United States
2007 Economic
Reserves
2005 Consumption
Average Annual
Growth in
Consumption
(2000-2005)
2005 Production
78,500
143
2.33%
354
114,500
2,116
12.72%
1,956
92,445
460
4.69%
413
4,968
41
15.00%
132
38,600
136
-1.17%
161
157,010
234
-0.43%
271
48,750
175
1.96%
243
34,153
62
-1.11%
60
242,721
1,021
0.75%
1,009
*All figures in millions of metric tons; Source: U.S. Energy Information Administration
The greenhouse gas emissions from burning coal for electric power generation
and other industrial purposes has attracted wide attention. Worldwide, an estimated 20
percent of total annual greenhouse emissions are associated with the commercial uses of
coal (Pew Center on Global Climate Change 2007). There are also large emissions
worldwide from the unintended and uncontrolled burning of coal, although it has
attracted much less attention than emissions from power plants or industrial sources. In
some cases, the consequences of coal fires have received wide public attention such as
the Pennsylvania town of Centralia in the United States, where a mine fire has burned for
fifty years. In most cases, however, coal fires have remained out of sight and mind,
receiving little attention from world energy and climate policy makers.
Researchers in Germany and the United States have estimated that uncontrolled
coal fires in China alone may contribute two to three percent of total world greenhouse
emissions (Stracher and Taylor 2004). Since China has 12.65 percent of world coal
reserves and 35.37 percent of world coal production (Energy Information Administration
2007), and coal fires burn in many countries, even if uncontrolled coal fires affect a
smaller share of the total coal reserves in nations other than China, the total additions to
greenhouse emissions worldwide from coal fires is likely to be significant. Hence,
although the data is very poor, an extrapolation from the known facts suggests that,
conservatively, uncontrolled coal fires cumulatively in all nations may contribute as
much as four percent or more of total world greenhouse emissions per year.
Measurement Difficulties
Assessing where and how large a coal fire is can aid in choosing the best method
to put out the fire, and how many tons of green house gases are emitted. Surface coal
fires are easier to evaluate and extinguish than sub-surface fires, though their path can be
unpredictable. Coal outcrop fires move along with the contour of the terrain with the
prevailing wind. The speed the fire travels through the coal is dependent on the wind and
overburden type and thickness. As the coal burns, its volume decreases and the
14
overburden can collapse, providing a new source of oxygen for the fire, which allows the
fire to continue burning. While their path may be unpredictable, coal outcrop fire
extinguishing is far less costly than underground coalmine fire extinguishing. These
visual clues can help identify the location of uncontrolled coal fires.*
Sub-surface fires can be more difficult to track and extinguish. As the coal burns
it releases gases that can be detected above ground. Fissures develop ahead of the surface
expression of the fire as the coal burns. Gases vent through these fissures and
occasionally a flame can be seen in their depths. Other clues to a sub-surface fire are
deposits of unusual minerals and the prevalence of heat-tolerant vegetation in the area.†
Another source of difficulty in assessing the scope of coal fires is that the term
“uncontrolled coal fire” is not used in a uniform fashion in different reports. At times,
the term is used to describe all of the coal fires affecting a particular coalmine or coal
field, even if there are actually multiple isolated coal fires located in the area. (e.g. some
estimate that there are sixteen isolated uncontrolled coal fires affecting the Wuda
coalfield in Inner Mongolia Autonomous Region; see Meyer 2005). Other times the term
is used to describe a single coal fire that has not been contained, and continues to burn.‡
Given that there is no uniform usage of the term, and given that reports rarely, if ever,
specify which sense of the term they are using, it is difficult to determine with precision
an exact number of individual uncontrolled coal fires. In China, however, the typical
estimate seems to be around 200 separate coal fires.
Also complicating efforts at estimating the number of uncontrolled coal fires is
the dynamic nature of the fires (see Kuenzer et al. 2007, 55). Some fires might split into
multiple fires, while multiple fires may converge into one. Moreover, new uncontrolled
coal fires may be started through natural or anthropocentric means in the same seam.
How Coal Seam Fires Burn
Coal seam fires can be started though natural or anthropogenic means. Natural
causes include lightning strikes and forest fires. Anthropogenic causes tend to be related
to mining and the clearing of forests.§ The clearing of forest contributes both by
exposing the coal seam and because forests are often cleared using fire.
A coal seam can remain on fire nearly indefinitely, until it is starved of oxygen or
burs through the entire seam (Tetzlaff 2004). Once coal catches fire, it creates a selfsustaining release of heat. The heat release, coupled with a temporary increase in the
volume of the coal due to its conversion to gas, can cause the soil above to fracture,
allowing the re-entrance of atmosphere to the coal seam. An underground coal fire can
*
Mr. Alfred Whitehouse (Director, International Programs, U.S. Department of the Interior, Office of
Surface Mining) interview with authors, March 11, 2008.
†
Dr. Glenn B. Stracher (Professor of Geology and Chair, Coal Geology Division, Geological Society of
America, East Georgia College) phone interview with authors, February 26, 2008.
‡
Throughout this report we will use the term uncontrolled coal fire to refer to individual coal fires burning,
whether or not they have been contained by fire-fighters.
§
See the Indonesian case study of this report for further discussion.
15
also cause land subsidence. As the coal burns, it becomes gas (through the reactions
detailed below) that seeps through fissures in the soil. As the gas escapes, the total
volume of the coal seam is reduced and the overburden can collapse. Even if the
overburden doesn’t collapse, it can become heated to the point that no vegetation can
develop (Kim 2007).
Incomplete combustion is another problem associated with coal seam fires. Coal
seam fires usually occur with limited access to atmospheric gases, and certainly without
the ventilation systems of modern coal furnaces. The proper ventilation of industrial coal
fires allows for more efficient burning of the coal, producing more energy with more
carbon dioxide than other products. The conditions in uncontrolled coal fires tend to
create a deficit of oxygen, forcing the combustion to produce less carbon dioxide and
more methane (Schloemer 2007).
Uncontrolled coal fires generally release three kinds of greenhouse gases: carbon
dioxide, carbon monoxide, and methane (Kuenzer et al. 2007, 44). By concentration,
carbon dioxide is the most prevalent gas released from coal fires (Stracher and Taylor
2004). The amount of carbon dioxide released from an uncontrolled coal fire is by no
means constant over the course of the fire’s lifetime*, and the amount and concentrations
of carbon dioxide emitted can vary considerably from one coal fire to the next due to a
number of geologic factors (Kuenzer et al. 2007, 55; Stracher and Taylor 2004). These
geologic factors include the depth and density of the overburden, the chemical
composition of surrounding soils, and the chemical make-up of the coal.
Carbon dioxide, carbon monoxide, and methane are greenhouse gases, the release
of which presents a major environmental problem. By increasing atmospheric
concentrations of greenhouse gases, uncontrolled coal fires are a significant contributor to
anthropogenic global climate change. China’s uncontrolled coal fires are especially
significant in this regard, given their scope and magnitude. As noted above, according to
one commonly cited estimate, China’s uncontrolled coal fires account for between two
and three percent of the world’s carbon dioxide emissions (Stracher and Taylor 2004). If,
however, one were to assume that the amount of coal being burned in China’s
uncontrolled coal fires is towards the lower range of available estimates (i.e. 10-20
million tons of coal per year), then carbon dioxide emissions from China’s uncontrolled
coal fires would only amount to around 0.1% of the total global carbon dioxide emissions
(Kuenzer et al. 2007, 52).
Recommendation:

Globally, since uncontrolled coal fires could account for as much as 4%
or more of total greenhouse gas emissions in the world, they should
receive greater attention in climate change policy discussions, and should
receive greater analysis and other consideration in future IPCC reports.
*
Mr. Alfred Whitehouse (Director, International Programs, U.S. Department of the Interior, Office of
Surface Mining) and Ms. Sarah Evans (Foreign Affairs Officer, U.S. Department of State, Office of Global
Change), phone interview with James Goodwin, March 26, 2008.
16

Contributions from uncontrolled coal fires should be included in future
world and national inventories of greenhouse gas emissions. For China,
for example, the releases from uncontrolled coal fires should be included
in future calculations of the total level of Chinese greenhouse gas
emissions
17
APPENDIX TO CHAPTER 1 – THE CARBON INTENSIVE NATURE OF COAL
The physical character of coal and the manner in which it is formed help to
explain why the burning of coal – whether intentionally in utilities and industrial facilities
or unintentionally in uncontrolled fires – is such a large contributor to world greenhouse
emissions. Coal is formed through a long geological process. If dead organic matter,
especially plant matter, is put into an anaerobic environment, like a bog or still pond, it
will not decompose as it would in the presence of oxygen. The anaerobic environment
prevents the carbon in the organic matter from being released. Under normal aerobic
conditions carbon is released through decomposition, primarily as methane (CH4) or
carbon dioxide (CO2). Organic matter that remains in this anaerobic environment will
become coal after millions of years, a brief period in the geologic scale. When buried
this way, the crushing forces of the overburden (the rocks and soil above the organic
matter) force out most of the oxygen and water from the matter, leaving behind coal.
Through tectonic movements, these layers of coal (also called seams) can be broken and
or moved, sometimes becoming exposed to the surface (Waples 1981).
Chemically, coal is an organic structure consisting mostly of carbon (C) atoms
bound into loose crystal matrices with a number of impurities. In extreme cases, the coal
can become so compressed that it heats up, releases all impurities, and, under the right
conditions, the crystal matrix becomes perfectly organized, creating diamonds.
Impurities are primarily small amounts of hydrogen (H), oxygen (O), and sulfur (S).
The amount of impurities affects the specific gravity (roughly equivalent to density) of
the coal. Coal with fewer impurities has a higher specific gravity. The U.S. Geological
Survey ranks coal into its different categories of quality (Anthracite, Bituminous,
Subbitminous, Lignite, in order of decreasing purity) using the specific gravity
measurement. This gradation scale is given below. Note that a cubic meter of anthracite
might weigh 1.47 metric tons (1,470 kg or 3,240 lbs.).
Table 3- Average Specific Gravity and Average Weight of Unbroken Coal Per Unit of Volume of Different
Ranks
Source: U.S. Dept. of Energy, Energy Information Administration
Combustion
18
Coal fires are ignited when the coal is exposed to the atmosphere and the carbon
is able to react with gases, especially hydrogen and oxygen. The purity of the coal
determines the necessary temperature to combust. Anthracite can burn at temperatures as
low as 50º C (122º F, 323 K), though lignite requires temperatures from 70-80º C (160175º F, 343-353 K). Once these temperatures are reached, the primary exothermic (heat
releasing) reactions detailed below can occur:
I.
C
II. 2C
III. C
IV. 2H2
(Tetzlaff 2004)
+
+
+
+
O2
O2
2H2
O2




CO2
2CO
CH4
2H2O
+
+
+
+
heat
heat
heat
heat
Because these reactions release heat (the “kJ / mol” component), the reaction is able to
replenish the heat it loses through radiation and convection and so a fire can sustain itself.
The production of carbon dioxide in equation II is the most common and most
important reaction, but can only occur if there is an ample supply of oxygen in the
atmosphere. Given the high heat and the hydrogen release from coal, steam can
spontaneously form through reaction IV. This release of steam is also an exothermic
reaction, so it contributes to the further combusting of the coal. In the absence or short
supply of oxygen, reactions II and III may occur, producing carbon monoxide (CO) or
methane (CH4) and more heat (Schloemer 2007).
The occurrence of reactions II and III is significant because of the effects of the
products of the reactions. The IPCC estimates that methane has 25 times the radiative
forcing effect* of carbon dioxide (by unit mass), but has only about 36 percent of the
mass of carbon dioxide per molecule. This means that carbon released from the burning
of coal has about 9 times the effect on global warming if it is combusted into methane
instead of carbon dioxide (Forster et al. 2007).
For carbon monoxide, the IPCC estimates that the radiative forcing per unit mass
could be from 1.0 to 3.0 times that of carbon, with a likely value around 1.9. The effect
of a unit of carbon monoxide emission can be different depending on where (globally) the
emission occurs (Foster et al. 2007). Since carbon monoxide’s mass is 64 percent of
carbon dioxide’s, the effect per carbon atom is likely around 1.2 times higher on average
for carbon monoxide over carbon dioxide. Carbon monoxide is also a toxic molecule for
humans, interfering with the absorption of oxygen into the bloodstream and causing
asphyxiation.
*
Radiative forcing effect describes the cumulative warming effect on the atmosphere of a gas. The effect
is usually given as a multiple of the effect of an equivalent mass of carbon dioxide.
19
References:
Energy Information Administration. 2007. International Energy Annual,
http://www.eia.doe.gov/iea/.
Energy Information Administration. 2008. Coal Reserves,
http://www.eia.doe.gov/neic/infosheets/coalreserves.html.
Forster, Piers M. et al. 2007. Changes in atmospheric constituents and in radiative
forcing. In Climate Change 2007: The Physical Science Basis. Contribution of
Working Group I to the Fourth Assessment Report of the Intergovernmental Panel
on Climate Change, Solomon, Susan et al. eds. Cambridge, U.K.: Cambridge
Univ. Press, 129-234. http://www.ipcc.ch/pdf/assessment-report/ar4/wg1/ar4wg1-chapter2.pdf.
Kim, Ann G. 2007. Greenhouse gases generated in underground coal-mine fires. In
Geology of coal fires: Case studies from around the world (Reviews in
Engineering Geology, vol. XVIII), Stracher, Glenn B., ed. Boulder, CO:
Geological Society of America.
Kuenzer, Claudia, Jianzhong Zhang, Anke Tetzlaff, Paul van Dijk, Stefan Voigt, Harald
Mehl, and Wolfgang Wagner. 2007. Uncontrolled coal fires and their
environmental impacts: Investigating two arid mining regions in north-central
China. Applied Geography 27: 42-62.
Meyer, Mike. 2005. Flaming dragon. Smithsonian 36(2): 58.
Pew Center on Global Climate Change. 2007. Coal and Climate Change Facts,
http://www.pewclimate.org/global-warming-basics/coalfacts.cfm.
Schloemer, Stefan. 2007. Innovative technologies for exploration, extinction, and
monitoring of coal fires in north China: Final report on gas and temperature
measurements at fires zones 3.2 & 8. Hanover, Germany: Federal Institute for
Geosciences and Natural Resources.
http://www.coalfire.org/images/pdf/b_schloemer.pdf.
Stracher, Glenn B. and Tammy P. Taylor. 2004. Coal fires burning out of control around
the world: Thermodynamic recipe for environmental catastrophe. International J.
of Coal Geology 59: 7-17.
Tetzlaff, Anke. 2004. Coal fire quantification using ASTER, ETM, and BIRD satellite
instrument data. PhD diss., Ludwig-Maximillians University (Munich, Germany).
Waples, Douglas. 1981. Organic geochemistry for exploration geologists. Minneapolis,
MN: Burgess Publishing Company.
20
CHAPTER 2 – PUTTING OUT COAL FIRES: METHODS AND COSTS
The feasibility of putting out uncontrolled coal fires depends on the methods
available for this purpose and their costs. In order to sell carbon credits in international
markets, it will be necessary that the cost per ton of greenhouse gas emissions that are
averted by putting out the fire is less than the market selling price of the credits. This
chapter examines the methods available for extinguishing coal fires and their costs.
Coal Fire Dynamics
The basics of coal mine fire control technology focus on the removal of one or
more sides of what is referred to as the fire tetrahedron: oxygen, heat, fuel, and the
chemical reaction. Directly applying water, foam, chemicals, rock dust or sand can
effectively contain the early stages of a coal fire. In a sub-surface mine fire, doing so
within the first thirty minutes of ignition is essential to preventing a costly and dangerous,
often unstoppable, coal fire. However, this method places miners in dangerous proximity
to the fire zone. An indirect method must be used when access to the fire is prohibited
for safety reasons, or there is a limited supply of available firefighting materials, the size
of the fire, or blocked underground access. An indirect approach involves drilling
boreholes through the over burden and then flooding the affected area with water, inert
gases, detergent foam, or gas-enhanced foam to control and extinguish the fire.
No single technique is applicable to all fires due to the variety and complexity of
coal fires. Size, depth, overburden composition, slope, and geological and geographic
characteristics determine what method may work best and what the scope of the
extinguishing project may entail. Even within a given site, the fire may have different
attributes due to a roof having fallen or some other partitioning event, creating chambers
with differing temperatures, slopes, or chemical compositions (Renner 2005). Hotter
burning fires can be more difficult to douse and could move through the coal seam more
quickly. A steeply sloped chamber limits access and creates difficulties for equipment.
Evaluating the subsurface dimensions thoroughly is necessary to evaluate the best
extinguishing method and suppression plan.
Excavation
The most successful proven method for extinguishing coal fires is to excavate the
burning coal and surrounding overburden because of the direct access to the coal and the
ability to evaluate the extent and progress of the fire. Remote operations lack this benefit
and so are attempted less frequently and less successfully. Excavation requires heavy
equipment, and therefore a road, which might not be possible in very remote regions of
historic or abandoned mines or natural outcrops. More recent mining operations would
likely be more accessible. Shallow surface coal seams can often be excavated rather
simply in this manner.
21
Underground fires, however, are usually plowed until they are cut off from
unburned coal and then the encircled fire is allowed to burn out.* This excavated barrier,
like a moat, prevents the fire’s forward movement and ends its supply of fuel. Any
attempt to directly access the burning coal would require further quenching operations
that may not be necessary. Another process involves digging up the coal from the fire
and smothering it with dirt. Excavation and smothering can be performed either “wet”,
when the coal is doused with water as it is excavated, or “dry,” when the coal is doused
with water as it is smothered.†
The excavation process can be very expensive, more so in mines than outcrop
fires. A current underground mine operation in Pennsylvania cost approximately $8 per
yard of material excavated, resulting in a $10 million final cost. This is higher than
typical operations in 2000 where costs averaged $5 per yard and more recently $6 per
yard, due largely to this year’s hike in gasoline prices.‡
Seam outcrops are much less costly to dig up out of the ground. One shallow
operation in Colorado on one-tenth of an acre cost between $25,000 and $30,000. A half
acre fire in Colorado was bid at $65,000, but the fire was on a steep outcrop making it
easier to plow as the over burden would fall itself.§
Chinese Methods
In China, where the cost of labor is low, the methods used for extinguishing coal
fires tend to be relatively basic and labor-intensive. The most common approach for
putting out underground fires involves a two-step process. First, firefighters attempt to
douse the fire with a slurry mixture of water and mud (Discover 1999). In some cases,
this slurry is dumped on the fire through the cracks and trenches created by land
subsidence. When this option is not available, firefighters must drill holes into the
ground in order to access existing shafts and seams through which they can reach the
burning coal (Stracher and Taylor 2004; Wingfield-Hayes 2000). Second, once the
firefighters have directly doused the burning coal with the slurry mixture, they will then
cover the ground over the fire with a thick layer of soil (Stracher and Taylor 2004;
Wingfield-Hayes 2000). This layer of soil helps to ensure that oxygen will not be able to
reach the formerly burning coal, causing it to reignite (Stracher and Taylor 2004).
In some cases, it is simply too expensive or technologically infeasible to extinguish an
underground fire. Often, the more difficult coal fires are left to burn themselves out,
particularly when it is unlikely that they will spread to other coal seams (Prakash 2007;
Stracher and Taylor 2004; Discover 1999).
*
Mr. Dave Philbin (Pennsylvania Office of Surface Mining) phone interview with Colleen Ruddick, April
24, 2008.
†
Mr. Alfred Whitehouse (Director, International Programs, U.S. Department of the Interior, Office of
Surface Mining) interview with authors, March 11, 2008.
‡
Mr. Dave Philbin (Pennsylvania Office of Surface Mining) phone interview with Colleen Ruddick, April
24, 2008.
§
Mr. Steve Renner (Colorado Inactive Mines Program, Office of Surface Mining) phone interview with
Colleen Ruddick, April 17, 2008.
22
For extinguishing uncontrolled surface fires, China typically relies on either of
two common methods. First, firefighters have sought to extinguish these fires by simply
burying them beneath a layer of soil typically one meter thick (Stracher and Taylor 2004;
Discover 1999). In a second more complicated approach, firefighters have used earth
moving equipment to remove the burning coal, and transport it offsite, where it is then
doused with water or sewage (Stracher and Taylor 2004).
Regardless of the type of fire involved, however, firefighting methods are often
limited by local conditions . A lack of roads and other infrastructure in the remotest parts
of China may make it either impossible or unfeasible to bring in earth moving equipment.
Moreover, as mentioned above, many of the regions of China that are affected by
uncontrolled coal fires have dry climates and limited water resources. Consequently, use
of water to fight uncontrolled coal fires must be as efficient has possible, given the
various other competing uses for water in these areas (Kuenzer et al. 2007, 54-55).
Costs in China
Cost is one of the crucial determinants of whether carbon offsets credits can be
used to finance a more comprehensive effort to extinguish China’s uncontrolled coal
fires. Specifically, the cost of extinguishing a particular coal fire would need to be low
relative to the amount of greenhouse gas that would be avoided as a result of
extinguishing the coal fire. This would ensure that the cost per ton of greenhouse gas
emissions averted would be low enough to be competitive with the credits that are
currently available in the carbon offsets markets. For example, currently, carbon offsets
credits in the Chicago Climate Exchange, a voluntary market in the United States,
typically sell in the range of $6. Likewise, the cost of carbon offsets from coal fire
extinction projects would likely be competitive in the in both the European Union
Emissions Trading Scheme (EU-ETS), in which certified emission reduction (CER)
credits are currently priced at $30 to $40 per ton.
A number of factors suggest that extinguishing uncontrolled coal fires in China
would be relatively cheap. First, many of China’s coal fires are located in relatively
shallow coal seams, where they can be easily located and accessed by human laborers or
with relatively simple earth moving equipment. Unlike the United States and India, there
are relatively few deep coal mine fires in China that would require advanced technology
for locating and then extinguishing the fires. Second, the human labor that would be
needed to extinguish many of China’s uncontrolled coal fires is relatively inexpensive.
Third, China has developed a great deal of experience at putting out coal fires through the
relatively simple methods discussed above. During the last fifty years, China has been
able to refine these methods in order to increase the effectiveness and efficiency of its
firefighting efforts.*
To date, there have only been a few efforts to produce a cost analysis of coal fire
extinguishing projects in China. The results of these few cost analyses all seem to agree
that extinguishing uncontrolled coal fires in China would indeed provide an inexpensive
*
Mr. Jianbo Ma, phone interview with James Goodwin, April 12, 2008.
23
source of carbon offset credits – perhaps in the range of $0.50 to $5 per ton of carbonequivalent greenhouse gases.
Techniques and Costs in Indonesia
Indonesia has mainly surface coal fires. One proven method of extinguishing
these surface fires is simply digging out the coal and dousing it with water.* For a fire
burning near a public road and two houses, first, the surrounding land was cleared of
vegetation. Then boreholes were dug to a depth of 30 meters to check the thickness of
the seam, and to look for cracks or fissures that the fire might jump to. Other holes were
drilled around the site to determine the soil temperature around the fire. A backhoe and a
bulldozer were used to literally dig the fire out of the ground. The burning coal was piled
and turned, all the while being doused with water to put the fire out. Fire-fighters dug a
trench between the burning coal and the rest of the seam, and the burning side was left for
a few days to make sure it was not still burning. Then the trench was then filled with a
non-combustible material (Whitehouse and Mulyana 2004, 3-4).
Coal fires burning in remote forests in Indonesia, or by national parks, must be
put out in a different fashion. To dig out a coal seam with a backhoe or a bull dozer,
there must be a road leading directly to the fire. In and around national parks roads are
prohibited. In these cases workers must use hand axes to dig the fire out. In the Sungai
Wain Nature Reserve sixty-eight fires were put out using this method. Workers had to
walk to the fires carrying axes and portable hand pumps for water. The coal was dug out
with the ax, and the seam was doused with water simultaneously; working slowly until
the fire had been extinguished (Whitehouse and Mulyana 2004, 5).
The cost of putting out fires in Indonesia varies by where the fire is located, and
what method is used to put it out. Typically, the budget is comprised of staff salary,
labor, housing and food for workers, transportation, any relocation costs, tools, pumps,
backhoe, bulldozers, and other equipment.† For one fire in Balikpapan that took 40 days
to put out, the total budget was about $18,860 US dollars.‡ The low cost was partly due
to the low price of labor. It took 25 fire-fighters 30 days to put out the fire, and they were
paid about $1.50 US dollars per day. While this wage might seem low, it was higher
than the prevailing wages in the area at the time (Fredriksson 2001, 3).
Methods for Extinguishing Underground Fires
In developing nations such as India where underground coal mine fires are
common, there is little experience in putting out such fires, owing to the high costs and
unpredictability of such efforts. However, if the price of carbon credits rises high
*
Mr. Alfred Whitehouse (Director, International Programs, U.S. Department of the Interior, Office of
Surface Mining) interview with authors, March 11, 2008.
†
Mr. Alfred E. Whitehouse, Director, International Programs Office, Office of Surface Mining Budget
Document.
‡
These figures come from the Office of Surface Mining budget document. These are 2007 dollars. The
exchange rate used at 8500 Rp= $1 US dollar 1998.
24
enough, and as these nations themselves experience rapid growth in national income, it
may become economically feasible in the future for them to put out underground coal
fires as well. There is already considerable experience with such efforts in the United
States to draw upon, including the following methods.
1. Mine Fire Seals -- Methods of sealing off mine fires in order to deprive them of
oxygen are problematic due to their tendency to leak oxygen. This method of applying a
cover of non-combustible earthen material on the overlying ground surface on the
determined extent of the fire was most popular in the United States between the 1950’s
and 1970’s, due to its relatively low cost. However, surface erosion and subsidence of
overburden often caused seals to experience fracturing and failure. Resulting fissures
allowed the inflow of oxygen and negated the smothering effect of the seal. Because of
these dangers, the seal method is most successful at sites with low gradient slopes and
little snow or rainfall that would lead to large-scale subsidence.
The seals must also be extensive enough around the perimeter of the fire, so a
comprehensive fire area determination is necessary. Seals are dependent upon their
continued maintenance and a lack of upkeep is the most common reason why sealed fires
continue to burn (Renner 2005). The Chinese government attempted to put out a longburning mine fire in the Xinjiang province by injecting water and mud through boreholes
then covered over with thousands of tons of soil. The project took approximately four
years and $10 million (U.S.) to complete (Wingfield-Hayes 2000). It is not clear if the
project was ultimately successful, or if the fire has re-ignited.
2. Detergent Foam -- Fire-fighting foams have the consistency of shaving cream and
take up volume with moisture. The soap not only cools the surrounding atmosphere, but
can also coat the coal and low its temperature. A gallon of the soap, such as Pyrocool,
costs approximately $30 and is diluted at a 100 to 1 ratio. The Colorado Office of
Surface Mines bids contracts out to local drilling companies who then use the foam to
extinguish the fire (Renner 2005). These foams work by interfering with the chemical
reactions of fire by absorbing and cooling the high-energy radiant emissions from the
combustion process. They can provide a foam blanket or aqueous barrier that suppresses
volatile organic vapors, eliminating flashback of the fire into areas that have already been
extinguished (Pyrocool Technologies 2008). Due to the temperature lowering effects,
reigniting is rarely a concern.
3. Grout Injection -- An improved new grout-based material was developed at the
NIOSH Lake Lynn Experimental Mine along with a novel material placement technology
(Trevits, Smith, and Brune 2007). The new system creates a mine seal in two stages. The
first stage positions a pipe and a directional elbow at the bottom of the injection borehole
in order to place the grout material into the mine void to fill most of the mine opening.
The second stage uses two strings of pipe in the injection borehole to convey two
components of a specially designed grout material to a spray nozzle.
One of the negatives of grouting systems is that while they can create barriers to
block further passage of these fires, it is these barriers that make later operations of
25
extinguishing more difficult. The walls compartmentalize the area, creating “chimneys”
that can lead to separate isolated and hotter burning fires. * Fires burning with different
properties and/or temperatures are much more difficult to evaluate and then suppress than
a centralized fire.
4. Low Flow Inert Gas Injection -- This method overwhelms a fire with either nitrogen
or carbon dioxide gases in order to replace the oxygen supply. Liquid or gaseous
nitrogen or carbon dioxide is conveyed to the mine by tankers. The liquid is then
converted to a gas at the mine site and injected into the mine through boreholes. The
flow of gas must be precisely controlled, and thus the availability of tankers to transport
the material to the fire site is very important. The cost and feasibility of the project is
also a function of the distance the tankers must travel to the fire site. Delayed shipments
due to transportation issues would disrupt the process and could potentially lead to a
failure to put the fire out. In addition, bulk tankers are typically limited to good road
surfaces and cannot be used in areas of rugged terrain.
5. Gas-Enhanced Foam -- Nitrogen infused foam can both rob the fire of heat and
remove or displace oxygen. As the foam collapses, water is released and the temperature
of the water increases by absorbing heat and eventually turns into steam. Water is
released as bubbles rupture, and because this process takes time, foam can act as a water
reservoir, releasing water at a rate that allows absorption into the fuel of the fire, rather
than running off surfaces. The application and consistency of the mixture can be
precisely regulated and it is this precision of gas, foam, downward pressures and
temperature that creates inert foam capable of putting out a mine fire. The gas-enhanced
foam and nitrogen system can be readily moved from one borehole location to another
and can be deployed quickly by off-road equipment.
Injecting nitrogen gas or nitrogen foam is problematic when there is a large void
in the mine. Too much space means there is a large amount of oxygen to displace, and
more opportunities for oxygen leakage. This process is also expensive and has not been
used by either the Colorado or Pennsylvania Offices of Surface Mining due to its high
cost and low predictability.
6. Engine Exhaust Gases (High-Flow Rate Injection) -- When the location of the fire
can only be generalized, such as in the case of a large underground area that has been
mined by the room-and-pillar method, the use of jet engine exhaust gases from the GAG
3A system may be able to displace the fire’s oxygen supply. The GAG 3A system
consumes aviation fuel with oxygen from the atmosphere and exhausts combustion gases,
primarily carbon dioxide and water, along with nitrogen from the air (Trevits, Smith, and
Brune 2007). Jet engine use can cause complications at monitoring boreholes because the
engine combustion products are similar to that of a mine fire, making the gas monitoring
complicated. Jet engine use might prove to be prohibitively expensive for use in China or
other developing countries, especially in remote regions where access is difficult due to
the size of the engine.
*
Mr. Steve Renner (Colorado Inactive Mines Program, Office of Surface Mining) phone interview with
Colleen Ruddick, April 17, 2008.
26
Monitoring and Maintenance
In order for any of these techniques to be successful, regular monitoring and
maintenance are necessary. Due to the chemical nature of fires, any seepage of oxygen
into the ground can cause a resurgence of fire activity in dormant mines, making
returning to the site to verify suppression with either visual confirmation or gas emission
monitoring equipment necessary. Physical features and mining techniques make some
mines particularly vulnerable to reigniting. For example, “stope mining” creates
chimney-like rooms that extend to the surface and are susceptible to fire propagation, and
hotter fires, due to the high amounts of oxygen. Knowing what mining technique was
used and the extent of the ventilation system are integral in developing an abatement and
monitoring technique (Renner 2005). Access to the mine fire is one of the single greatest
determinants of whether the extinguishing was successful. This is why excavation is a
more widely practiced method than remote foam, gas, or grout injection. Remote
suppression makes knowledge of the extent of the fire extremely difficult and only
through gas emissions monitoring at boreholes can success be assessed.
Costs
Due to the high costs, usually only those coalmine fires near communities are
extinguished. Other fires, especially those in remote regions are left to burn. No two
coal fires are the same, and so in that regard, no two costs for extinguishing are the same.
Factors that contribute the variability of cost include the size and depth of the mine, the
amount of extinguishing material required, and the time involved. Larger projects
increase the costs of both person-hours and equipment. The overburden composition and
geological conditions define what equipment is necessary. For example, drilling
boreholes in stone makes for a much more difficult and time-consuming process. The
accessibility of the location defines whether heavy equipment is even possible. Remote,
roadless regions, or those within protected parklands, require more individuals and less
equipment. Mine conditions and the temperature of the burning coal are also important
factors. The more dangerous the operation, the more costly it will be, and will likely
increase the time because adequate safety measures must be taken. The extinguishing
costs are increasing as the price of gasoline rises due to the required heavy operating
equipment. Price of excavation operations in Pennsylvania has raised $5 per yard since
1986 due largely to the increasing price of oil.*
Recommendations:

In setting priorities for extinguishing coal mine fires, putting out surface coal
fires should command the highest priority. The most cost-effective projects
will typically involve surface coal outcrops, due to the lower cost of
extinguishing them as well as the ability to monitor them with a higher
*
Mr. Dave Philbin (Pennsylvania Office of Surface Mining) phone interview with Colleen Ruddick, April
24, 2008.
27
degree of certainty. Underground fires often require much higher costs for
suppression as well as higher costs of monitoring.

The development of improved technology for controlling and extinguishing
coal fires should be included in the greenhouse gas research and development
programs of the United States and other nations. Compared with other
areas of climate change technological innovation, greater greenhouse gas
benefits might be achieved for less cost by efforts to improve (and
disseminate) the techniques of coal fire extinction.

Extinction costs can be lowered by encouraging bidding by suppression
contractors. As with any construction project, competition among
contractors can bring down the cost to the project coordinator. By accepting
and evaluating proposals based on cost efficiency and proven success rates,
the coordinating entity can ensure that it not only has a high certainty of
total suppression but also it is are getting a competitive price for work
completed.
References:
Discover. 1999. China’s on fire: Underground fires in China burn millions of tons of coal
a year and release carbon dioxide into the atmosphere. October 1.
http://discovermagazine.com/1999/oct/chinasonfire1697.
Fredriksson, Gabriella. 2001. Extinguishing the 1998 forest fires and subsequent coal
fires in the Sungai Wain Protection Forest, East Kalimantan, Indonesia.
Kuenzer, Claudia, Jianzhong Zhang, Anke Tetzlaff, Paul van Dijk, Stefan Voigt, Harald
Mehl, and Wolfgang Wagner. 2007. Uncontrolled coal fires and their
environmental impacts: Investigating two arid mining regions in north-central
China. Applied Geography 27: 42-62.
Pyrocool Technologies. 2008. “Home”, http://pyrocooltech.com/home/.
Prakash, Anupma. 2007. Coal Fire, Geophysical Institute, University of AlaskaFairbanks, http://www.gi.alaska.edu/~prakash/coalfires/coalfires.html.
Renner, Steve. 2005. Report on the status of fires at abandoned underground coal mines
in Colorado. Denver, CO: Division of Minerals and Geology.
http://mining.state.co.us/pdfFiles/fire_report_1cover-intro.pdf.
Stracher, Glenn B. and Tammy P. Taylor. 2004. Coal fires burning out of control around
the world: Thermodynamic recipe for environmental catastrophe. International J.
of Coal Geology 59: 7-17.
28
Trevits, Michael A., Alex C. Smith, and Dr. Jürgen F. Brune. 2007. Remote mine fire
suppression technology. Pittsburgh, PA: National Institute for Occupational
Safety and Health, Pittsburgh Research Laboratory.
http://www.cdc.gov/niosh/mining/pubs/pdfs/rmfst.pdf.
Whitehouse, Alfred E. and Asep A.S. Mulyana. 2004. Coal fires in Indonesia.
Unpublished manuscript, Office of Surface Mining, U.S. Department of Interior.
Wingfield-Hayes, Rupert. 2000. China battles coal fires. BBC News, August 3.
http://news.bbc.co.uk/2/hi/asia-pacific/864588.stm.
29
30
PART II – PAYING TO EXTINGUISH COAL FIRES BY CARBON TRADING
31
32
CHAPTER 3: THE WORKINGS OF NEWLY EMERGING CARBON MARKETS
The sale of carbon credits generated from the extinguishing of coal fires
represents a potentially promising means for obtaining the funds necessary to put many
fires out, particularly in the developing world. According to the World Bank, carbon
trading is expanding rapidly, with the total value of all carbon markets being worth over
$64 billion in 2007, more than double that of 2006 (Capoor and Ambroosi 2008).
Developing a program for putting out coal fires through the use of carbon markets
requires an understanding of how these markets work. This chapter is divided into two
sections: an overview of the workings of the voluntary US market in carbon trading and
an overview of the mandatory carbon market in the EU.
In the US there are, at present, no federal laws or regulations governing emissions
of greenhouse gases (GHGs); instead credits in GHG emissions are traded either on a
voluntary basis or in newly emerging regional markets, in particular the Northeast.
Moreover, the US is not a party to the Kyoto Protocol, which calls for developed
countries to make mandatory reductions in GHG emissions by the reporting period of
2008-2012.
The member countries of the EU, however, are parties to Kyoto, and its Emissions
Trading Scheme (EU-ETS) represents the largest effort to date to use market mechanisms
to reduce GHG emissions; indeed, the vast majority of all carbon credits are traded in the
EU-ETS (Capoor and Ambroosi 2008). Nevertheless, the EU-ETS, and indeed carbon
markets in general, are not without their growing pains. Policies relating to the pricing
and number of allowances issued by individual EU countries have often led to unintended
consequences. The market in carbon offsets, meanwhile, has been plagued by questions
of whether they are leading to actual reductions in GHG emissions.*
The Kyoto Protocol is set to expire in 2012 and it is not clear what sort of postKyoto process will emerge. But even if it is very different from Kyoto, some aspect of
carbon market trading is likely to be included as a significant component of that future
framework. Furthermore, even in the absence of a Kyoto-like international treaty, the EU
will likely continue its efforts with carbon trading; and there is good reason to believe
that the US will follow the lead of several states and adopt some mandatory compliance
approach, of which carbon trading will likely be an essential aspect. Thus, it is reasonable
to assume that carbon emissions trading in its varied forms will grow in scale and scope,
regardless of what happens after Kyoto expires.
The Basics of Carbon Markets
The idea of trading pollutants for the purpose of reducing their amounts, or capand-trade, was first developed in the United States. The idea dates at least back to the
mid-1970s (DePuis 2004). The first major cap-and-trade system stemmed from the
*
These questions, known in the literature as problems of additionality, leakage, and permanence, are
addressed elsewhere in this section of the report (see Wright 2007).
33
Environmental Protection Agency’s Emissions Policy Statement in 1986, and became a
reality when the Clean Air Act of 1990 directed the EPA to set up what became known as
the Acid Rain Program, a national cap-and-trade program for SO2 and NOx, air pollutants
that cause acid rain (Environmental Protection Agency 2008c). Coal-fired power plants in
the United States that had traditionally emitted large quantities of SO2 now operated
under a system that set an overall cap that declined over time, while individual emitters
(companies or their specific plants) could trade in permits (or allowances) to emit,
according to their individual needs. As the number of allowances becomes scarcer, the
price becomes higher, ultimately forcing companies to adopt new technologies or simply
go out of business.
This framework became the model for the European Union in setting up its own
cap-and-trade system . The EPA declared a success of its cap and trade program to reduce
SO2 and the later cap-and-trade program for reducing NOx (Environmental Protection
Agency 2008a).
The US Carbon Market: Voluntary Carbon Offset Trading
A first example of what would become known as a carbon offset project, or
paying for a reduction in GHG emissions to “offset” emissions produced elsewhere,
seems to date to 1988. In that year, Roger Sant, the then-CEO and co-founder of Applied
Energy Services Corp. (AES), became concerned that a new coal-fired power plant his
company was building in Connecticut would emit significant amounts of CO2. Sant paid
$2 million – which was approximately equal to the company’s annual profits – to help
plant 52 million pine and eucalyptus trees in Guatemala the following year in a new 385square mile forest with the idea this would “balance out” the damage from the plant’s
emissions (Shabecoff 1988). This balancing out of the carbon one emits has come to be
known as being “carbon neutral.” The first company purportedly to become “carbon
neutral” in all of its operations was Stonyfield Farm, based in Londonderry, New
Hampshire, in 1997 (Stonyfield Farm n.d.).
Planting forests, often in developing countries, was the first widespread carbon
offsetting activity. The aim was to eliminate one’s “carbon footprint,” which tends to be
quite high per person in rich, energy-intensive countries such as the United States. In the
last few years, planting forests developed a certain Hollywood glamour factor as all sorts
of celebrities had paid to have tracts of forest planted in places as far flung as Bhutan
(Brad Pitt), Mozambique (Jake Gyllenhaal), and the UK’s Isle of Skye (Rolling Stones)
(Bright 2007). Perhaps similar efforts could be directed to reducing the GHG emissions
from uncontrolled coal fires.
Carbon Retail Offset Providers, Green-Power Marketing Firms, RECs, and VERs
Offsetting activities typically requires a middle man, an opportunity that was soon
seized upon by the private sector through what became known as carbon offset providers
and, in the case of dealing with larger institutions who wanted to offset their carbon
footprints, green-power marketing firms that act essentially as brokers who both trade in
34
emissions reductions guarantees that exist in the form of either verified reductions or
certificates, the latter referring to the renewable origin of the power used.
Early on, in the case of the reforestation and/or afforestation projects, quite a few
were done through the British company Forest Futures, founded in 1997 and
subsequently renamed CarbonNeutral in order to reflect the wider nature of offset
activities. Prior to its ratification of the Kyoto Protocol in May 2002, Britain developed
its own voluntary market that included offsetting activities an individual could undertake
through paying a fee to a broker or middle man.
Today there are numerous such retail offset providers in operation in the United
States as well, where the carbon trading market remains all-voluntary. Examples of offset
providers include NativeEnergy, TerraPass, Carbon Fund, and Sustainable International
Traveler. Each of these companies allow an individual to purchase offsets for assorted
activities, such as monthly driving or flying on a commercial jet, with the money going to
fund projects that will “offset” that person’s carbon emissions elsewhere in the world.
The price that these different companies charge to remove one ton of carbon dioxide can
vary widely from $5 to $25 per ton.
In addition to the retail level offset providers, there also developed those who sell
offsets to larger companies, such as utilities, or those involved in issuing and trading
Renewable Energy Certificates (RECs) and Verified Emissions Reductions (VERs) on a
larger scale, such as Sterling Planet, based in Norcross, Georgia. It advertises itself as a
“green-power marketing firm” that won the US Department of Energy’s 2007 Green
Power Leadership Award and was selected to provide the EPA with 135 million kWh of
the 330 million kWh per year to which it committed in what would make it the first
government agency whose power needs are met 100 percent from renewable sources
(Sterling Planet 2007a; 2007b).
While the EPA’s target will in theory offset 460 million pounds of CO2, it is not
an offsetting project like the tree-planting ones described above. Rather, Sterling Power
“guarantees” the power EPA is using through various regional grids serving its regional
offices and headquarters are coming from renewable sources through the purchase of
RECs. The purchase was actually part of a larger 721 million kWh renewable energy
purchase for a one-year period for a broad range of civilian federal agencies and US
military installations.
Many of these activities, especially as it relates to the level of the individual and
the retail broker, occur on what is known as the “over-the-counter” market. The OTC
activities are sometimes described as privately brokered deals; and while it is
acknowledged to possess a high level of flexibility with respect to approving offset
projects, assuring rigorous standards becomes a problem. At issue are the “processes for
certification and verification, or requirements to list credits on established registries. This
lowers transaction costs, but it also makes it a ‘buyer-beware’ market where getting a
handle on the quality of credits being bought can be difficult for consumers” (Hamilton et
al. 2007).
35
Efforts to get a grip on this situation got a boost in December 2006 when A
Consumer’s Guide to Retail Carbon Offset Providers was published on the Web by
Trexler Climate + Energy Services (TC+ES) and made freely downloadable (Trexler
Climate + Energy Services 2008). In addition, the World Wildlife Fund and the
Stockholm Environment Institute published a comprehensive guide that looked at the 10
main offset standards and their associated prices (Kollmuss, Zink, and Polycarp 2008).
The report notes that while offset programs have the potential to be a great force for
reducing GHG emissions, assuring the quality and transparency of the approval process
for carbon offsets is essential to their success.
Chicago Climate Exchange
The Chicago Climate Exchange (CCX) is the largest carbon market in operation
in the U.S., as well as the largest voluntary market in the world. The CCX consists of
over 400 corporations, governments, and other institutions that have made voluntary
commitments to reducing their GHG emissions. Members of the CCX may meet their
targets through either internal reductions of emissions or through the purchase of carbon
credits (known as Carbon Finance Instruments, or CFIs) from fellow members who have
exceeded their reduction requirements. Each CFI contract represents 100 metric tons of
CO2e (so that, loosely speaking, 1 CFI = 100 European Union Allowances, the carbon
credit traded on the EU-ETS).
Like its sister exchange in Europe, the European Climate Exchange (ECX), the
CCX has specified periods for emissions reductions. The specified periods are called
Phase I and Phase II on both the CCX and ECX and both are associated with set targets.
But in the case of the CCX, the target is contractual and not associated with a cap-andtrade system or other government-mandated policy for reducing emissions. The Phase I
target was 1 percent per year reduction below the 1998 – 2001 baseline period, while the
Phase II target extends the reduction through 2010 and includes an extra 2 percent
reduction for Phase I members and a total 6 percent reduction by 2010 for new members
who join during Phase II (Chicago Climate Exchange 2007b).
CCX issues emissions offsets to owners or “aggregators of eligible offset
projects,” but only after verified mitigation has occurred. CCX has standardized rules for
eight different types of projects including agricultural methane; coal mine methane;
landfill methane; agricultural soil carbon; rangeland soil carbon management; forestry;
renewable energy; and ozone depleting substance destruction. It also may include energy
efficiency and CDM-eligible projects. The CCX reported a doubling of trading volume in
2007 over 2006 with 22.94 million metric tons of CO2 equivalent traded in 2007 versus
10.27 million metric tons the year before -- and just 1.46 million metric tons in 2005
(Chicago Climate Exchange 2008a). It further announced that the aggregate greenhouse
gas emissions baseline committed to reduction under the CCX program increased to over
540 million metric tons.
36
The CCX and its Chicago Climate Future Exchange (CCFE) subsidiary continue
to report tremendous growth in its “carbon complex” of cash, futures, and options for the
first quarter of 2008 (Chicago Climate Exchange 2008b). The monetary amount of these
trades, however, is still substantially lower than the EU-ETS. This lower amount reflects
both significantly less trading activity and the fact that the market itself values carbon
significantly less in the US than in the EU system. Consider that the current EUA price is
between 24.50 euros ($38.26) and 27.50 euros ($42.95)* while, depending on the contract
delivery date, the current CCX price is about $6.50 (Chicago Climate Exchange 2007a). .
Other US Markets: RGGI, Lieberman-Warner, and Market Valuation
As stated above, despite the lack of a national policy on GHGs, regions within the
US are moving forward with mandatory emissions reductions agendas, with cap-andtrade at its center. Two such planned systems include the Western Climate Initiative
(WCI) and the Regional Greenhouse Gas Initiative (RGGI). RGGI is the most developed
and it involves a multi-state trading scheme among utility companies in the Northeast and
mid-Atlantic region of the United States. WCI was formed in 2007 after the governors of
California, Arizona, New Mexico, Oregon, and Washington agreed to work on a regional
strategy for addressing climate change.
A federal climate policy is likely to take shape in the next few years. Currently
the leading proposal in Congress is the American Climate Security Act, co-sponsored by
Sens. Joseph Lieberman and John Warner (known as Lieberman-Warner). It would
establish a cap-and-trade system in CO2 emissions, with the aim of reducing emissions by
70 percent below 1990 levels by 2050. Passage of Lieberman-Warner or similar
legislation would vastly increase the scope of the carbon markets in the US. At present,
however, there is still much controversy over what sort of climate change policy the US
should adopt, one that goes to the heart of what can be accomplished by carbon markets.
The issue of market valuation of carbon is a fundamental one in proposed efforts
to curtain greenhouse gas emissions either through a cap-and-trade system or imposition
of a carbon tax. Specifically, the price of carbon must be high enough that it creates large
cumulative effects on demand for traditional fossil fuels and incentivizes behavior into
alternative fuel sources. To date, the price of carbon (as measured per metric ton of
carbon dioxide equivalent) on the voluntary market in place has undoubtedly remained
too low to bring about such changes.
In his testimony before the Senate Finance Committee on April 24, 2008 on a
possible cap-and-trade system, Congressional Budget Office Director Peter R. Orszag
said that “an increase in the price of carbon intensive goods and services … is essential to
the success of a cap and trade system.” Furthermore, he said the size of the price increase
is directly related to the stringency of the cap. Under Lieberman-Warner, the CBO
projects a permit price of roughly $30 a ton in 2015, which would translate to a 25 cent
increase in the price of gasoline, as well as increases in other energy prices (Orszag
*
Based on April 25, 2008 exchange rate of $1.5617 to the euro.
37
2008). Orszag also estimated that the permits under Lieberman-Warner would have a
total value of $145 billion by 2012.
The European Union Emissions Trading System: Mandatory Compliance
The framework for the European Union emissions trading system derives from
the Kyoto Protocol and the subsequent meetings known as the Conferences of the Parties
(COPs) that have been held since the treaty was agreed to in 1997. Kyoto requires
developed countries to reduce their GHG emissions below specified levels between 2008
and 2012 that result in a net 5 percent reduction of global greenhouse gas emissions
below the 1990 base year. The Protocol places the main burden for compliance on
developed nations under the oft-quoted principle of “common but differentiated
responsibility” (Kyoto Protocol 1997).
The Kyoto Protocol has three “flexibility mechanisms” built into it. These include
the market-based emissions trading and two carbon offset programs in which developed
countries can help fund emissions reduction projects in developing (non-Annex I)
countries through the Clean Development Mechanism (CDM) and in other developed
(Annex I) countries through Joint Implementation (JI).
The history of the Kyoto Protocol is beyond the scope of this chapter, except to
note that it was at a meeting in Bonn in July 2001 and a subsequent full-blown COP
meeting in Marrakech. Morocco (COP-7) in November 2001 that the basic mechanics of
what would become the EU-ETS trading system were worked out.
The EU-ETS was approved in 2003 and came into existence on January 1, 2005.
It is described as “the world’s first multi-country emissions trading system and the largest
scheme ever implemented” (European Climate Exchange 2008b). The currency of the
EU-ETS is called the European Union Allowance (EUA). The legal framework under
which the EU-ETS operates is known as the EU-ETS Directive and it grants the holder of
one EUA the right to emit one metric ton of CO2e. The amount of EUAs allocated to each
emitter is based on the National Allocation Plans of each of the EU’s 27 member states.
At present there are approximately 12,000 energy and industrial plants involved in
the EU-ETS in five sectors, including power and heat generation, oil refineries, metals,
pulp and paper, and certain energy-intensive industries. It also involves major financial
institutions who play a crucial role as liquidity providers and intermediates. These
include banks, hedge funds, trading houses, and brokerages.
Another key component of the system is that each EU Member State must
establish and maintain a national registry that links to the other Members’ registries and a
larger Community Independent Transaction Log (CITL). These are collectively called the
Registries System and it forms “the backbone which in turn ensures a secure, compatible
and smooth integration of all systems under one European umbrella” (European Climate
Exchange 2008b). EUAs are issued to any registry created by any person or business for
an affected facility. The global or aggregate emissions reductions to which the EU
38
member states committed under the Kyoto Protocol is 20 percent below 1990 baseline
levels by 2020.
By far the largest actual spot market for the EU ETS is the European Climate
Exchange (ECX), which was launched formally in April 2005. The ECX trades in EUAs
and as of March 13, 2008, according to ECX figures, its spot market has traded 1.3
billion metric tons worth of EUAs totaling 24 billion euros (US$37.7 billion) (European
Climate Exchange 2008a). In addition, approximately 2.2 billion EUAs have been issued
under the EU ETS. The ECX has traded approximately 85 percent of all exchange-traded
EUA (Reuters 2007). The current price for a (December 2008 futures) EUA is 23.47
euros (US$36.85) (Chicago Climate Exchange 2007c).* In addition, the ECX began
trading in Certified Emissions Reductions (CERs), the currency of the CDM as of March
14, 2008. The head of the ECX estimates 4 billion metric tons worth of CER are in the
CDM pipeline (Reuters 2008a).
Phase I Versus Phase II Pricing Issues
As noted with the CCX, the EU-ETS has both Phase I and Phase II trading
periods. Phase I represented the period from 2005 – 2007 and concluded on December
31, 2007. Phase II, representing the period from 2008 – 2012, has now begun.
Significant pricing issues resulted with Phase I EUAs because of the way allowances
were allocated. The price for an allowance or credit has to be set in such a way that it
produces an aggregate reduction under the global cap. As it turns out, actual emissions
data for the EU for 2005 subsequently revealed that the 2005 – 2007 emissions cap “had
not been set at an appropriate level relative to what actual emissions were in that period”
(Capoor and Ambrosi 2007, 3-4). When this was discovered, the price of EUAs crashed
and never recovered, ending Phase I trading at just 0.08 euros. In addition, preliminary
data released by the EU at the time of this writing showed that emissions probably rose
about one percent in 2007, which prompted a rise in EUA price when the data was
reported (Reuters 2008b).
More generally, Phase I of the EU-ETS (dubbed the “learning by doing” phase)
is seen as having had mixed results because of the “excessive allocation” of EUAs under
the various National Allocation Plans and a “reliance on projections and a lack of verified
emissions data,” (a flaw that is being addressed with actual data) so that there is “strong
reason to believe that the overall functioning of the EU-ETS could be improved in a
number of aspects.” (European Commission 2008a)
Significant changes were adopted by the European Commission (the executive
branch of the EU) on Jan. 23, 2008 to coincide with the start of Phase II of the EU-ETS.
The changes include:
 A single EU-wide cap on the number of EUAs instead of 27 national caps. The
annual cap will decrease linearly beyond the third trading period (2013 – 2020).
*
Data as of April 3, 2008; Dollar price based on exchange rate of US$1.57 to the euro.
39
 Auctioning a larger fraction of EUAs instead of free allocation
 Harmonization of rules governing those EUAs that are auctioned freely.
 Adjusting auction allowances between member states based on per capita income to
redistribute more EUAs toward those with lower per capita incomes with the goal
of helping the latter financially invest in “climate friendly technologies.”
 Including more industries such as aluminum and ammonia producers in the EUETS, along with two more gases (nitrous oxide and perfluorocarbons).
 Exclusion of small installations from the EU-ETS provided they are subject to
“equivalent emissions reductions.” (European Commission 2008b)
Total Value of All Carbon Markets Through End of 2007
According to figures from the World Bank, the total value of carbon credit sales
in the CDM market (both primary and secondary projects) reached $US 12.88 billion in
2007 and accounted for 791 million metric tons CO2-equivlent. Including Joint
Implementation projects and other voluntary compliances, the total value of sales for all
project-based transactions reached $13.64 billion in 2007 and totaled 874 million metric
tons CO2-equivalent (Capoor and Ambrosi, 2008). This represents a doubling of the
value over 2006 from US$ 6.5 billion for all project-based transactions and an increase of
about 43 percent in volume of CO2-eq.
Adding in the US$50.39 billion from the various trading schemes and markets for
allowances (i.e. the EU ETS, the CCX, and the New South Wales Exchange), the total
value of the carbon market (both allowances and project-based) reached US$64 billion in
2007.
In terms of offsets, the 2,109 million metric tons of CO2-eq from these trading
markets brought the combined 2007 of CO2-equivalent offsets to 2,983 million metric
tons (Capoor and Ambrosi, 2008).
Conclusions and Recommendations:
As seen by the examples in the US and the EU, carbon markets have the potential
to significantly reduce emissions, and given the high levels of interest in them, there are
likely a number of avenues by which potential projects for putting out coal fires could
find entry into those markets. They still have a long way to go, however, before they are
implemented effectively. As a result, those who choose to undertake a carbon offset
project should be aware of the difficulties confronting such an effort; this includes the
workings of the carbon markets themselves as well as the process by which carbon offset
projects get approved, as discussed in the next chapter.
40
Recommendations:

The CDM, owing to its reach, technical resources, and relative transparency,
would be the best vehicle by which to create and sell carbon credits based on
the putting out of uncontrolled coal fires in developing countries.

The European Union Emissions Trading Market, the Chicago Climate
Exchange and other institutions for carbon credit sales and exchange should
publicly state that the extinguishing of uncontrolled coal fires is in principle –
assuming the requirements of additionality and permanence can be met – a
satisfactory method of generating acceptable carbon credits.

The various carbon credit markets should review their rules and procedures
to ensure that they are compatible with the circumstances of generating
carbon credits through putting out uncontrolled coal fires.

The World Bank, Carbonfund and other public and private brokers in
carbon credits should incorporate the extinguishing of coal fires within their
portfolio of available projects for generating carbon credits.
References:
Bright, Adam M. 2007. Buy now, pay later: Is it too late to buy off our carbon debt?
GOOD Magazine, November 30.
http://www.goodmagazine.com/section/Features/buy_now_pay_later.
Capoor, Karan and Philippe Ambrosi. 2007. State and trends of the carbon market 2007.
Washington, D.C.: The World Bank.
http://carbonfinance.org/docs/Carbon_Trends_2007-_FINAL_-_May_2.pdf.
Capoor, Karan and Philippe Ambrosi. 2008. State and trends of the carbon market 2008.
Washington, D.C.: The World Bank.
http://siteresources.worldbank.org/NEWS/Resources/State&Trendsformatted06M
ay10pm.pdf.
Chicago Climate Exchange. 2007a. Data from Market Overview,
http://www.chicagoclimatex.com/market/data/summary.jsf.
Chicago Climate Exchange. 2007b. Key Features,
http://www.chicagoclimatex.com/content.jsf?id=25.
Chicago Climate Exchange. 2007c. “Home,” http://www.chicagoclimatex.com/ (under
ECX tab).
41
Chicago Climate Exchange. 2008a. Chicago Climate Exchange announces record volume
and membership in 2007, news release, January 9.
http://www.chicagoclimatex.com/news/press/release_20080110_CCFE_endyearre
cord.pdf.
Chicago Climate Exchange. 2008b. Chicago Climate Exchange and Chicago Climate
Futures Exchange announce record 2008 First Quarter volumes, news release,
April 2.
http://www.chicagoclimatex.com/news/press/release_20080403_CCX_Record_Q
108.pdf.
DuPuis, E. Melanie, ed. 2004. Smoke and mirrors: The politics and culture of air
pollution. New York: NYU Press.
Environmental Protection Agency. 2008a. Acid Rain Program,
http://www.epa.gov/airmarkets/progsregs/arp/index.html.
Environmental Protection Agency. 2008b. Latest Findings on National Air Quality:
Status and Trends through 2006,
http://www.epa.gov/oar/airtrends/2007/index.html.
Environmental Protection Agency. 2008c. National Center for Environmental
Economics: Section 3.2.1 Air Emissions Trading,
http://yosemite.epa.gov/ee/epa/incsave.nsf/02139de58cd4f6e18525648c00670434
/eaecb23255e0e5b085256636004f9269!OpenDocument.
European Climate Exchange. 2008a. About ECX,
http://www.europeanclimateexchange.com/default_flash.asp?page=http%3A//ww
w.europeanclimateexchange.com/content.asp%3Fid%3D2%26sid%3D356.
European Climate Exchange. 2008b. What is the EU ETS?,
http://www.europeanclimateexchange.com/default_flash.asp?page=http%3A//ww
w.europeanclimateexchange.com/content.asp%3Fid%3D5%26sid%3D392%26pi
d%3D395.
European Commission. 2008a. Proposal for a Directive of the European Parliament and
of the Council amending Directive 2003/87/EC so as to improve and extend the
greenhouse gas emission allowance trading system of the Community. January
23. Brussels, Belgium.
http://ec.europa.eu/environment/climat/emission/pdf/com_2008_16_en.pdf.
European Commission. 2008b. Questions and answers on the Commission’s proposal to
revise the EU Emissions Trading System, news release, January 23.
http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/35&format=
HTML&aged=0&language=EN&guiLanguage=en.
42
Hamilton, Katherine, Ricardo Bayon, Guy Turner, and Douglas Higgins. 2007. State of
the voluntary carbon markets 2007: Picking up steam. Washington, DC: The
Katoomba Group.
http://ecosystemmarketplace.com/documents/acrobat/ExecSumm_Final.pdf.
Kollmuss, Anja, Helge Zink, and Clifford Polycarp. 2008. Making sense of the voluntary
carbon market: A comparison of carbon offset standards. Berlin: WWF Germany.
http://assets.panda.org/downloads/vcm_report_final.pdf.
Kyoto Protocol to the United Nations Framework Convention on Climate Change,
December 10, 1997, reprinted in 37 I.L.M. 32.
http://unfccc.int/resource/docs/convkp/kpeng.html.
Orszag, Peter R. 2008. Implications of a cap-and-trade program for carbon dioxide
emissions. Prepared statement before U.S. Senate Finance Committee, April 24,
Washington, D.C. http://www.cbo.gov/ftpdocs/91xx/doc9134/04-24Cap_Trade_Testimony.pdf.
Regional Greenhouse Gas Initiative. n.d. About RGGI, http://www.rggi.org/about.htm.
Reuters. 2007. European Climate Exchange trades 1 bln tons CO2. July 11.
http://www.reuters.com/article/environmentNews/idUSL1118113620070711.
Reuters. 2008a. European Climate Exchange CER contract due Mar 14. February 26.
http://www.reuters.com/article/companyNews/idUSL2643932620080226.
Reuters 2008b. EU carbon price boost from 2007 emissions data. April 3.
http://www.reuters.com/article/environmentNews/idUSL0234095320080403.
Shabecoff, Philip. 1988. U.S. utility planting 52 million trees. New York Times, October
12.
http://query.nytimes.com/gst/fullpage.html?res=940DE7D61731F931A25753C1
A96E948260.
Sterling Planet. 2007a. Sterling Planet receives 2007 Green Power Leadership Award.
http://www.sterlingplanet.com/news/newsid14/.
Sterling Planet. 2007b. Sterling Planet selected to supply US Environmental Protection
Agency. http://www.sterlingplanet.com/news/newsid5/.
Stonyfield Farm. n.d. Environmental Practices: Offsets,
http://www.stonyfield.com/EarthActions/Environmental%20Practices/Offset.cfm.
Trexler Climate + Energy Services. 2008. A consumer’s guide to retail carbon offset
providers. Portland, OR. http://www.cleanaircoolplanet.org/ConsumersGuidetoCarbonOffsets.pdf.
43
Wright, David V. 2007. The Clean Development Mechanism: Climate change equity and
the South-North divide. Saarbrücken, Germany: VDM Verlag Dr. Müller.
44
CHAPTER 4 — CERTIFYING A METHODOLOGY FOR PUTTING OUT COAL
FIRES
Uncontrolled coal fire abatement is a very new area of carbon finance -- so new, in
fact, that there have not been any such transactions to date and, indeed, there currently
exist no accepted rules for establishing a carbon offset program that takes coal fire
abatement as its main activity. However, given the significance of uncontrolled coal fires
as a source of greenhouse gas emissions, developing a carbon offset program for their
abatement is desirable. Understanding the process by which carbon offset programs
register and validate potential greenhouse gas reduction projects, then, is crucial to
achieving the actual future financing of coal fire abatement through such programs. This
chapter explains the registration and validation process as conducted by the main issuers
of carbon offsets. This will consist principally of the Clean Development Mechanism, but
also some voluntary programs such as that of the Chicago Climate Exchange and the
Voluntary Carbon Standard. This chapter also discusses how these processes would apply
to coal fire abatement.
Clean Development Mechanism
The basic parameters for implementing the CDM were agreed upon at a meeting of
the Kyoto parties in Marrakech in Morocco in 2001. The first officially approved CDM
project was a landfill-gas-to-energy project in Brazil, which was approved on Nov. 18,
2004. To date over 1,000 project activities have been registered, generating an annual
average of 136 million GHG emissions credits (known as Certified Emissions
Reductions, or CERs). The CDM is by far the largest of all carbon offset programs, and
its tools and procedures have become the standard against which other offset programs
are measured. This section describes how a proposed project activity becomes certified
and generates CERs.
Key Figures in the CDM
Before describing how the process of certifying a typical CDM project operates, it
is necessary to first give a brief outline of some of the key figures in the CDM process
and their relative importance. A visual representation of the participants and their
relationship to one another can be found in the Appendix to this section (for an in depth
description, see United Nations Development Program 2003).
Project Developer
The project developer is any person or organization that designs, owns, and
operates a CDM project activity, and these three roles can be divided among several
participants. The project developer first drafts, by itself or with the assistance of a third
party, a Project Idea Note (PIN), which is a short document describing the project
activity, the estimated amount of GHGs that it would reduce, and its proposed sources of
funding, both from the issuance of CERs and from other sources. This document serves
as the basis for completing the Project Design Document (PDD), which is the CDM’s
45
official form for proposing new project activities. The PDD goes into further detail than
the PIN, and in particular demonstrates, according to CDM-approved criteria, that the
project is additional; i.e., the project activity reduces GHG emissions that would not been
accomplished otherwise (about which more in Chapter 6). Once the project activity is
approved, the project developer is responsible for maintaining data that will help verify
that the project has in fact reduced emissions.
Project Funder
Funding for a CDM project activity can be provided by individuals, corporations,
non-profits, public agencies, or other organizations. Perhaps the largest funding source of
CDM projects is the World Bank, whose Carbon Finance Unit acts as a broker between
developed countries looking to buy CERs and developing countries looking to sell them.
In addition, the Bank provides technical assistance for project developers navigating the
process of getting their project activity approved; this includes developing new
methodologies for demonstrating the project’s additionality.
CDM Executive Board
This ten-member body, representing both developed and developing countries,
meets usually in Bonn, Germany. The Executive Board is in charge of developing and
amending the rules for CDM projects, accrediting Designated Operational Entities (see
below), registering projects, approving new or revised methodologies, and actually
issuing CERs. The Executive Board has several subsidiary bodies that report to it,
including the Methodology Panel, which reviews proposed new or revised
methodologies; the Accreditation Panel, which reviews prospective DOEs; the Small
Scale Working Group, which reviews methodologies for small-scale project activities;
the Afforestation/Reforestation (A/R) Working Group, which reviews methodologies for
A/R project activities; and the Registration and Issuance Team, which review proposals
for registering new project activities and issuing CERs. In turn, the Executive Board
reports to the Conference of Parties/Meeting of Parties for Kyoto (COP/MOP) and
recommends to it ways of improving the CDM process.
Designated National Authorities
Under Kyoto, each country participating in the CDM must choose a DNA,
typically a government agency, that will be in charge of approving CDM projects and, in
the case of the host country, ensuring that the project meets the country’s standards for
sustainable development.
Designated Operational Entities
DOEs are independent organizations authorized by the CDM Executive Board to
both validate that the proposed project activity meets the CDM’s standards for
additionality and other criteria, as well as verify that the project activity has in fact
reduced GHG emissions. CDM rules prohibit the same DOE from doing both the
46
validation and verification of a project activity, as such an act could create a conflict of
interest. DOEs are generally private profit making entities. There are currently 29
accredited DOEs, none of which are in the United States. As an example of a DOE, the
British Standards Institution (BSI) is a leading business standards organization that
provides testing and certification of management systems and products in sectors ranging
from agriculture to health care.
Stakeholders
The CDM process requires that project developers invite parties affected by the
project activity, including local communities, businesses, and governments, to review and
comment on the proposed project activity before and after receiving approval from the
CDM executive board. Project developers must show, in addition to reduced GHG
emissions, that the proposed project activity does not have any adverse effects, whether
environmental or social, on the surrounding communities.
Example of a CDM Project: Coal Mine Methane Recovery and Utilization
One of the more common CDM project activities is the practice known as coal
mine methane recovery and utilization. Methane can be found in large quantities in coal
mines. Besides posing a significant safety hazard to miners, it is also a large source of
GHG emissions, particularly so since methane has a GWP more than 20 times greater
than that of carbon dioxide. To mitigate these effects, methane recovery and utilization
projects aim to capture the methane released from the mine and use it to produce
electricity for industrial purposes, local communities, or both. Because of the obvious
similarities between this type of project and abatement of coal fires, examining how
recovery and utilization projects go through the process of getting CDM approval can
yield substantial insights into how one might design a CDM project — or any offset
project, for that matter — for coal fire abatement. This section describes how one
currently registered project for coal mine methane recovery and utilization in China was
developed (for more about this project, see Clean Development Mechanism Executive
Board 2006).
Design
The particular project activity to be discussed here is located in Anhui Province,
near the town of Panji. The Pansan mine is part of a rich area of coal mining for the
Chinese, and consequently is a large source of methane emissions. The project, begun in
2004 as a collaboration of the Chinese Huainan Coal Mining Group (HCMG) and the
Swiss energy firm Vitol SA, intends to capture this methane in order to establish an
electricity generation scheme powered by coal mine methane that will enable
approximately 4,000 households currently using coal to switch to a cleaner energy
source.
The methodology upon which the Pansan project activity is based is a consolidated
methodology for coal mine methane recovery and utilization, drawing on previous
47
methodologies developed by other firms that had done similar projects in the past.
In the first section of the PDD, the project developers first describe their proposed
activity in brief, including its location, the technologies to be used, and a brief
explanation of why CDM funding is necessary for the project activity to go forward. In
the second section, the heart of the PDD, the project developers demonstrate that the
recovery and utilization scheme they have devised is additional when compared to a
baseline scenario. To establish this, the project developers rely on an existing CDMapproved methodology for determining the additionality of methane recovery and
utilization from coal mines.
The methodology requires first, that the project boundaries be defined; i.e., that all
known sources of GHG emissions are identified. Second, the baseline scenario must be
defined; this is done through a 5-step process:
Step 1. A variety of alternative methods of draining methane from the coal mines
must be identified, as well as alternative methods for generating electricity; these include
draining the methane and flaring it prior to mining in the former case, and continuing to
rely on coal-fired electricity in the latter case.
Step 2. The project developers must remove from consideration any options that do
not meet legal or regulatory requirements; in this case, certain ways of draining the
methane are eliminated due to their failure to meet safe mining requirements in China.
Note that if the only legal scenario found by the project developers is the proposed
project activity, then the project is not additional; the project activity would not be a true
reduction of GHG emissions, but a function of local laws.
Step 3. The project developers draw up various baseline scenario alternatives, based
on a combination of the remaining options listed in Step 1. Among the scenarios listed
are: the business as usual case, in which methane is vented prior to mining, and no
change is made to electricity production patterns; flaring the methane; using the methane
for gas supply; using it for electricity; or a combination of the three.
Step 4. Once the alternative scenarios are identified, the project developers must
then identify any prohibitive barriers to development. For example, flaring the methane
would be costly to mine operators and have no compensating revenue stream; likewise,
using the methane for gas supply would require a more developed pipeline infrastructure
than currently exists. Indeed, construction of new pipeline projects are anticipating future
CDM revenues, and thus are waiting for the Pansan mine project to be approved.
Step 5. Though this is an optional step, the project developers provide an
investment analysis of the alternative scenarios to determine which is the most
economically attractive. The analysis compares the internal rate of return (IRR) of the
scenarios, as well as tests each scenario with a sensitivity analysis. In the end, the
analysis finds that the alternative scenarios are not economically feasible without CDM
funding.
48
The proposed project activity and the baseline scenario are then assessed for their
GHG emissions. The project activity’s annual emissions are the sum of the emissions
generated through the conversion of methane into electricity (including emissions from
the electricity consumed during the methane recovery process) and the emissions from
uncombusted methane. The baseline scenario’s annual emissions are the sum of the
methane emissions released from the mine and from the electricity consumed from coalfired power plants that the project activity would replace. The project developer must also
calculate any potential leakage from the project, or the releasing of emissions outside the
project boundary. In this case, there is no expected leakage, as the methane recovery does
not affect coal mining operations or (for now) coal prices, nor does it cause methane to be
unintentionally released elsewhere. The estimated annual emissions reductions are
determined by subtracting the annual project emissions and any leakage from the annual
baseline emissions.
Additionality must now be determined (for more about the tool for demonstrating
additionality, see Clean Development Mechanism Executive Board 2007).* The project
developers first show that they are justified in submitting the project for CDM
registration despite the fact that it has already commenced; they note that HCMG has
been designated as an potentially important figure in employing the use of coal mine
methane recovery and utilization in China, and that reducing GHG emissions is one of
the benefits stated in feasibility studies of methane recovery and utilization projects.
Next, the project developers demonstrate that in the absence of CDM funding, the project
activity would not be financially viable. Last, the project developers must show that
methane recovery and utilization is not a widely-used practice in China, and that the
growth of the industry depends in large part on CDM funding.
The next major section details the monitoring methodology that the DOE will use
to verify the emissions reductions from the project activity once it is implemented. This
includes the same parameters used in determining the baseline scenario and estimated
project activity emissions, as well how the parameters will be used to measure actual
emissions reductions. Last, the PDD must state any non-climate environmental impacts
by the project, which the project developers determined to be minimal, and any
stakeholders’ comments, which in this case were mostly supportive.
Approval
Once the PDD is submitted, a DOE will examine it and validate that it has met
CDM registration criteria. In order to validate the PDD, the DOE will typically review
the document itself; make on-site visits with project stakeholders; and hold a 30-day
period for public comment. If the DOE determines that the PDD meets the CDM’s
standards for demonstrating additionality, as well as baseline and monitoring scenarios,
then the DOE will issue a final validation report, which will be submitted, along with the
PDD, to the project host country for approval. In the case of the Pansan mine project, the
*
A flow chart showing the process of determining additionality can be found in the Appendix to this
section.
49
British company Det Norske Veritas Ltd., an accredited DOE, reviewed the Pansan
project developer’s PDD and conducted on-site interviews with project stakeholders. In
the end, Det Norske Veritas recommended to the CDM Executive Board for registration.
The Executive Board concurred, and the project was registered March 31, 2007. The
crediting period began Oct 1, 2007, and will last for a renewable 7-year period.
Implementation and Monitoring
After the CDM Executive Board has registered the project, the project developer
may begin to implement the project activity. (Although in this case, as mentioned above,
implementation may begin before registration, but then the project developer must show
in the PDD that CDM revenues were considered when designing the project, or else the
project will be rejected as not being additional.) Once in operation, the project developer
must maintain records for a set period of time on the GHGs emitted by the project,
consistent with the monitoring methodologies used in the PDD. The project developer
may choose to have several short monitoring periods or one long period, depending on
whether it wants a continuous stream of CER revenue or low administrative costs. These
monitoring periods can range from a few weeks to several years, depending on the life
span of the project.
A DOE, different from the first so as to avoid conflicts of interest, then evaluates
the data collected by the project developer and determines if the project activity has been
implemented in accordance with the original PDD. The DOE will then issue a draft report
that tallies the emissions reductions made thus far and notes any potential problems with
the project activity. The DOE will ask that the project developer resolve those problems
before issuing a final report.
Thus far, the Pansan project has had three monitoring reports issued in nine-month
intervals, conducted by HCMG with the support of Carbon Resource Management, Ltd.,
a British carbon offset firm. Only one so far has been verified, however; the DOE TÜV
SÜD has verified the emissions reductions made from July 1, 2006 to March 31, 2007.
Certification and Issuing of CERs
The final stage in the CDM project cycle is the actual issuance of CERs. Upon
receiving the DOE’s verification report, the CDM Executive Board will then certify that
the project has made emissions reductions and issue CERs equal in number to those
reductions to the project developer. The CERs will be entered into the CDM Registry.
The project developer may then sell the CERs either directly to a country that needs to
meet its emissions reduction requirements, or to an intermediary, such as one of the
several carbon funds managed by the World Bank. Depending on how many monitoring
periods there are, the project developer will repeat the verification and certification
process several times; most CDM projects come in either a seven-year period with one
renewal period or a nonrenewable ten-year period.
50
As mentioned above, only one monitoring period for the Pansan project has been
verified and consequently resulted in the issuing of about 76,000 CERs. This represents
an approximate 88 percent reduction in GHG emissions compared to the baseline
scenario for that period.
Voluntary Offset Programs
As mentioned above, the CDM is the predominant carbon offset program in
operation in the world, and also functions as the benchmark for judging the performance
of other offset programs. However, the process for generating credits under the CDM has
a number of critics; these range from complaints about the time-consuming nature of the
process to, on the other end of the spectrum, concerns that the CDM’s standards are not
stringent enough. This section will describe some of the most prominent voluntary offset
programs, as well as how they resemble or differ from the CDM.
Chicago Climate Exchange
As mentioned in Chapter 3, members of the CCX may meet their targets through
either internal reductions of emissions or through the purchase of CFIs from fellow
members who have exceeded their reduction requirements. Members may also meet their
requirements through the funding of offset projects. The CCX has issued, to date, nearly
27 million offset credits since beginning operations in 2003.
The offset program for the CCX is run by the Committee on Offsets, a 12-member
board that reviews and approves potential offset projects. Again, as mentioned in Chapter
3, offset projects range from energy efficiency to rangeland soil carbon (i.e., paying
ranchers to employ more sustainable grazing practices). Most offset projects are in the
United States.
The most notable feature of the CCX’s offsets program is the lack of a specific test
for additionality. Instead, the CCX says that offset projects must be “beyond regulations,”
new, and best in class, if applicable (Kollmuss, Zink, and Polycarp 2008, 68). Specific
eligibility criteria have been developed for the various types of offset activity the CCX
recognizes, but nothing as elaborate as the CDM’s additionality test. In addition, CCX
offset activities are validated only once, not twice as in the CDM, by independent third
parties.
Voluntary Carbon Standard
The Voluntary Carbon Standard (VCS) was developed by the Climate Group, the
International Emissions Trading Association, and the World Economic Forum Global
Greenhouse Register. The VCS Association’s main offices are located in Geneva,
Switzerland.
Started in 2006, the VCS aims to “standardize and provide transparency and
credibility to the voluntary carbon market” (VCS Secretariat 2007). Run by the VCS
51
Board, the VCS issues Voluntary Carbon Units (VCUs) to any project that is an approved
GHG program or is supported by a VCS methodology. These methodologies may be
approved either by the VCS Board or by another offset program; to date, however, no
VCS-specific methodologies have been approved. The VCS advises project developers to
use ISO 14064-2, which provides internationally recognized standards for reducing
GHGs, as a benchmark for new methodologies. Validation of projects is conducted by
two independent third parties, one appointed by the project developer and one by the
VCS Secretariat. Both must validate the project in order for it to be approved. Unlike the
CDM, VCS projects may be validated and verified by the same entity.
Its additionality test closely resembles that of the CDM: Step 1 ensures that the
project is not required by the laws of the country in which it will be implemented; Step 2
is a barrier analysis; and Step 3 is a common practice analysis. For additionality tests, the
VCS advises project developers to use the GHG Project Protocol developed by the World
Resources Institute and the World Business Council for Sustainable Development.
The VCS has the potential to be an important means for ensuring the reliability of
emissions on the voluntary market without high costs of compliance. However, it remains
to be seen whether it will be widely adopted. If the VCS is perceived to be not only lowcost, but also low-quality, then it will fail to distinguish itself in the broader market for
carbon offsets.
VER+
The VER+ Standard was created by the German company TÜV SÜD, which
specializes in testing and assessment services. TÜV SÜD is also a DOE under the CDM.
Much of the VER+ architecture is, in fact, borrowed from the CDM; the main differences
are that eligibility criteria are the same as that of the Joint Implementation (JI)
framework, and that co-benefits of project activities (sustainable development and the
like) are not a motivating factor. The VER+ program is small — only 25 programs have
thus far been validated — but growing rapidly.
Gold Standard
The Gold Standard Foundation, based in Basel, Switzerland, is a project of a
number of environmental NGOs, most prominently the WWF. Its goal is to introduce
rigorous standards into both the Kyoto offset market and the voluntary offset market. The
Gold Standard has a narrow focus as well, giving its approval only to renewable energy
and energy efficiency projects. For the voluntary market, the Gold Standard offers
Voluntary Emissions Reductions (VERs), the certification process for which is explicitly
modeled on that of the CDM, albeit with some slight streamlining and a much stronger
emphasis on demonstrating environmental and social co-benefits.
52
Application to Coal Fires
What does the preceding survey of carbon offset programs tell us about designing a
project activity for reducing coal fires? We may begin by trying to compare abatement of
coal fires to existing carbon offset project activities. Eligibility requirements vary for the
different offset programs, but there seem to be an established set of project activities for
most offset programs: 1) Renewable energy, including small-scale hydroelectric projects;
2) End-use energy efficiency; 3) Land-use, land-use change, and forestry (LULUCF) a
catchall term for everything from reforestation to no-till agriculture; 4) Capture of
industrial gases, including HFC destruction and prevention of natural gas flaring; and 5)
Methane capture.
Coal fire abatement does not appear to fit into any of these project types. To be
sure, there are some resemblances: As evidenced above, methane capture from coal
mines is a close analogue in some respects; likewise, verifying that the fires have been
permanently extinguished bears some similarity to the problems encountered in
afforestation and reforestation projects, and in particular avoided deforestation, as we will
discuss in Chapter 6. But in the former case, the methane is captured and ends up either
flared or used for electric power or heating, whereas coal fire abatement results solely in
avoided emissions from coal fires; and in the latter case, the manifest dissimilarity is
compounded by the fact that coal seams might be mined, all else being equal, regardless
of fires, and so the question of whether GHG emissions are truly reduced by abating fires
becomes even more complex than that concerning LULUCF.* Developing a project
activity for coal fire abatement will undoubtedly require new methodologies and other
design criteria in order to be accepted as a worthy offset project.
With respect to determining additionality, defining this for coal fire abatement
projects will be tricky; much will depend on the size of the fires to be put out. To begin
with, defining alternative scenarios means that we should have a good idea of how long
the fires will burn without a program of abatement, something that can be hard to figure
out. Another factor to consider is the type of technology that will be used to put out the
fires: The less exotic the technique used, the greater the possibility that the project may
fail to count as additional. These and other considerations will be addressed in Chapter 6.
One further consideration is which carbon offset standard would be best suited for
coal fire abatement. We must ask ourselves: Given the novelty of this type of project, is it
better take a proposal to an established body like the CDM in order to get its stamp of
approval, and thus make it a “mainstream” project activity? Or is it better to go to offset
programs with more flexible standards, such as the CCX, and try to build up the
reputation of coal fire abatement projects that way? The trade-off lies in the
accountability of CDM projects vis-à-vis voluntary projects: With the exception of the
Gold Standard, which only accepts renewable energy and end-use energy efficiency, the
offset standards described above allow validation and verification to be done by the same
*
On the other hand, one additional potential benefit of putting out coal fires is the improved health and
safety of the miners and any neighboring communities. However, the extent of this benefit will vary
depending on the particular situation of each coal fire abatement project.
53
entity, which could engender a conflict of interest (as both project developers and
auditors have an interest in overestimating reduced emissions). In addition, many
voluntary offset programs do not fully differentiate between validation (confirming that
the project is additional) and verification (confirming that the proposed emissions
reductions have been achieved).
At the same time, the process of certifying a CDM project activity can take two to
three years, and requires a considerable amount of labor to complete, compared with
voluntary programs. Nor is the CDM free from controversy with respect to
accountability: Several proposed CDM projects have been criticized for allowing
excessive payments for emissions reductions projects (Wara 2007). At present though,
the trend in the carbon offset market is toward ensuring accountability, i.e., making sure
the offset activities are a reliable source of GHG emissions reductions. This pushes us
toward the CDM and CDM-like programs, which are comparatively more transparent
about their methods than other standards. Coal fire abatement, then, may be a more
appealing business proposition if the CDM is the vehicle by which it is carried out.
Conclusions and Recommendations:
Since carbon offsets projects to extinguish coal fires offer a lot of economic promise,
a methodology for these projects should be developed and accredited either through the
CDM or the accreditation standards used for the voluntary carbon markets. The process
of developing and accrediting a methodology requires access to a great deal of technical
expertise and is very expensive, laborious, and time consuming. Thus, the World Bank
would be an ideal candidate for fulfilling this recommendation, since it has both
experience with and the resources for developing and accrediting methodologies.
Achieving accreditation for this methodology will require particular attention to the
requirements of additionality and permanence. Further studies of existing coal fires may
be necessary for determining how best to satisfy these requirements.
Recommendations:

The United States government should support the development and
accreditation of a methodology for carbon credit projects to extinguish
uncontrolled coal fires.

The World Bank is also well positioned to undertake the development and
approval of a methodology for accrediting coal fire extinction as an accepted
form of carbon market credit.

If the CDM accredits a methodology for uncontrolled coal fires, the other
markets for carbon credits should adopt this methodology as at least one of
the acceptable ways of defining and establishing saleable carbon credits.
54
References
Chicago Climate Exchange. 2004. Offsets and Exchange Early Action Credits. In
Chicago Climate Exchange Rulebook. Chicago, IL.
http://www.chicagoclimatex.com/docs/offsets/CCX_Rulebook_Chapter09_Offset
sAndEarlyActionCredits.pdf.
Clean Development Mechanism Executive Board. 2006. Project Design Document for
Pansan coal mine methane utilization and destruction project.
http://cdm.unfccc.int/UserManagement/FileStorage/B94EMJ2MMF80644R88QZ
8GKMY4UAI0.
Clean Development Mechanism Executive Board. 2007. Tool for the demonstration and
assessment of additionality (Version 4).
http://cdm.unfccc.int/methodologies/PAmethodologies/AdditionalityTools/Additi
onality_tool.pdf.
Gold Standard Foundation. 2006. The Gold Standard Voluntary Emissions Reductions
(VERs) manual for project developers. Basel, Switzerland.
http://cdmgoldstandard.org/uploads/file/GSVER_Proj_Dev_manual_final%20.pdf.
Kollmuss, Anja, Helge Zink, and Clifford Polycarp. 2008. Making sense of the voluntary
carbon market: A comparison of carbon offset standards. Berlin: WWF Germany.
http://assets.panda.org/downloads/vcm_report_final.pdf.
TÜV SÜD. VER+: A robust standard for Verified Emissions Reductions. Munich.
http://www.tuevsued.de/uploads/images/1179142340972697520616/Standard_VER_e.pdf.
United Nations Development Program. 2003. The Clean Development Mechanism: A
user’s guide. New York: UNDP/BDP Energy and Environment Group.
http://www.undp.org/energy/docs/cdmchapter1.pdf.
VCS Secretariat. 2007. Voluntary carbon standard program guidelines. Geneva,
Switzerland. http://v-c-s.org/docs/Program%20Guidelines%202007.pdf.
Wara, Michael. 2007. Is the global carbon market working? Nature, 445: 595-596.
55
56
CHAPTER 5 — ESTABLISHING A BASELINE SCENARIO FOR COAL FIRES
For a methodology to be approved for generating carbon credits under any of the
various accreditation systems, there must be a clear way to determine the avoided
emissions generated by the act of extinguishing a coal fire. This chapter will focus on the
technical feasibility and potential for estimating the avoided greenhouse gas (GHD)
emissions by extinguishing coal mine fires. The general concept presented is that for
each coal seam the total tonnage of coal can be estimated, and the estimate of tonnage
can be combined with a model of greenhouse emissions to create a total estimate for
avoided emissions from would have been released, if the fire had not been put out and the
coal seam had instead burned. Various possible methods will be presented for each step,
and those methods will be evaluated for their ability to meet the technical requirements of
a certifiable methodology.
Identifying Coal Fires
The first step in establishing a coal fire baseline is to identify a set of currently
burning coal fires. If these fires will be used to generate carbon credits, these fires should
be burning out of control with little prospect that any future efforts will be made to
extinguish the fires. In order to establish carbon credits by future year, a projection of the
path and rate of burn of the fire will also be needed. Then, as described below, such a
projection can be combined with an estimate of the total volume of coal presently
exposed to the fire in order to develop an overall estimate of GHG emissions averted.
Currently, Dr. Claudia Kuenzer of Germany is researching methods for
identifying coal fires remotely. Her method relies on the thermal difference of the fires
relative to their surroundings. Her experiments using controlled, buried fires have proven
the feasibility of remotely detecting uncontrolled coal fires. She is currently working for
the Sino-German Coal Fire Research Initiative to create an inventory and analyze
uncontrolled coal fires in northern China (Zhang and Kuenzer 2007).
Estimating the Volume of a Coal Seam
For the extinguishing of a coal fire to be considered a reduction in total
greenhouse gas emissions, it is necessary to show the emissions that would have been
created by the burning of that coal. The first step in this process is to estimate the
quantity of coal present in the seam. Fortunately, the coal industry has invested in the
development of measurement techniques for the volume of coal in the ground.*
Geologic Prediction
The oldest method for the estimation of coal seam volume is the observation of
surrounding geologic features to predict the location and thickness of the coal seam. This
prediction can be made more precise by measuring outcroppings or exposed portions of
*
In general, the technical aspects of these methods have been adapted from Milsom 2003; Kearey, Brooks,
and Hill 2002; and Waples 1982.
57
the seam. This method is, however, the least precise method of prediction.
Core Sampling
The second oldest method of coal seam estimation is the analysis of core samples.
(Kearey, Brooks and Hill 2002, 236-249). This system requires the use of heavy
machinery that was, serendipitously, made possible by the coal-powered steam engines of
the 19th century. The basic process is the identification of the likely location of a coal
seam, drilling to an adequate depth with a specialized drill that removes a cylinder profile
of the soil it drills through, and the analysis of that core.
Once a coal seam has been found, a grid of drilling samples is laid out. The U.S.
Geological Service (USGS) has a published manual on methods for laying out this grid.
Once the grid is laid out, surveyors mark the locations and measure their altitude. Today,
however, the increasing use of global position systems (GPS) allows the automation of
the surveying process.
Once the new drilling locations are identified, cores are taken and analyzed. If
there are positive results, a new grid with closer drilling locations is laid out and the
process is repeated an arbitrary number of times. This method can produce a fairly
precise prediction of coal volumes, and the precision is a function of the number of cores
taken. Unfortunately, cost is also a function of the number of cores taken, so that
certainty comes at an increasing cost. If a high level of precision is required for
certification of avoided emissions, the cost of this drilling could be significant. These
costs would be manifested in equipment rent or depreciation and a large number of low to
moderately trained workers. On the other hand, the identification of a fire (i.e., a point
along the coal seam) allows the grid to begin at a high level of precision, so that there is a
lower overall cost than achieving the same level of precision unguided.
Still, borehole logging should not be ruled out as a means of estimating coal
seams. An article in an industry magazine in 2000 proclaimed that a “virtual revolution”
has been occurring to bring borehole logging back to the forefront of technology due to
reduced labor intensity through technological development (Upadhyay 2000).
Core drilling has several other drawbacks. Complex, heavy machinery must
reach all of the drilling locations. Because core samples can range from 10 to 1,000
meters in depth, the machinery is substantial and the amount of displaced soil is also
significant. This factor is somewhat minimized by this report’s focus on surface fires
where the drilling should be shallow, though it is possible that a coal seam that is burning
at the surface could go quite deep. In terms of promoting investment, however, it should
be feasible to predict which seams go deep based on the structure of the exposed portion.
In terms of environmental damage, however, it would be necessary to accept possibly
substantial damage to the local ecosystem in order to quantify the avoided emissions.
58
Gravimetric and Magnetic Surveys
During the middle of the 20th century, several new methods of surveying were
developed based on the characteristics of coal relative to their surrounding soils (Kearey,
Brooks, and Hill 2002, 125-181, Milsom 2003, 29-70). The most effective for the
prediction of coal volume was gravimetric surveying. Gravimetric surveying relies on
the relative density of coal that distinguishes it from surrounding soils. Gravitational pull
is a function of mass, not volume, so the coal generates more or less gravity than the
surrounding soils. By developing high-precision gravity measurement devices, it became
possible to measure the change in gravity generated by coal. On average, the earth’s
gravity is measured as 9.8 meters per second per second (m/s/s). A variation of 0.0001
m/s/s is referred to as one gravity unit (gu). As of 2002, scientific gravity measurements
could measure with a precision of 0.01 gu, though imperfect conditions usually reduce
that precision to 0.1 gu. In practice, coal seams usually cause variations of 25-250 gu, so
that the current instrument capabilities can produce fairly precise estimates of the seam’s
thickness.
One of the prime advantages of gravimetric surveying is that it reduces the need
for secondary calculation of density and volume by immediately measuring the mass of
the seam. Since mass is a direct measurement of the number of carbon molecules in the
coal, gravimetric surveying provides a very clear idea of how much carbon dioxide or
methane could be produced by the burning of the seam. It also requires little disruption
of the local ecosystem and does not require digging or drilling.
Unfortunately, this method has several serious problems. The first is that the
collection of data requires frequent reading of instruments over a long period of time
(potentially months) to average out interference in the measurement. Because it takes
several months to sample any point, the establishment of a grid to measure a whole seam
would likely require many instruments to be monitored simultaneously, increasing both
instrument and labor costs. Also, the length of the measurement time implies that it
cannot be used for projects requiring quick return on investment. Another downside of
gravimetric surveying is that it requires the other components of the geologic structure to
be known. If the density of the surrounding stone is unknown, it is impossible to
determine the gravity differential caused by the coal. This means that a traditional
geological survey must also be completed, again expanding the cost, scale, and scope of
the project.
Magnetic methods produce very similar results to gravimetric mapping, but
instead of the force of gravitational pull, it relies on the force of magnetic pull. Just as
the specific gravity of geologic components differ, so does the magnetic pull. There are
two primary advantages to magnetic surveying: it can be done for much less money, and
it can be done much more quickly. Magnetic sampling can even be performed from aerial
vehicles, and in 2006 it was used to map the extent of subsurface coal seam fires
(Schaumann et al. 2006). It does not, however, achieve a substantially more precise map
of the area. It is primarily used today for prospecting of potential coal fields, followed by
seismic analysis for more precise measurement of identified fields.
59
Seismic Measurement
Since the late 1970s, the petroleum industry has been developing seismic
measurement. (Kearey, Brooks, and Hill 2002, 21-124, Milsom 2003, 179-222) Initially,
this was used to measure underground pools of liquid and gaseous petroleum products,
but it was later adapted to work for solid structures, including coal.
Seismic measurement works much like echolocation or a sonogram. A
mechanical pulse is generated at a point, and a shockwave radiates outward through the
ground. When this wave hits the border between two materials of different density, part
of the wave is transferred onward and part of it reflects off of the surface and radiates
outward. Sensors on the surface detect the direction, time, and strength of these returning
waves. Relying on the speed and precision of modern computers, the system performs
millions of advanced matrix calculations to generate a high precision map of the
underground formations. Since the 1990s, a system using the same model but with more
sensors and more complex mathematics has been developed that can create threedimensional images.
Seismic measurement has many advantages over other means of measuring coal
seams. First, it offers a spatial precision that no other method can produce. It can
measure the actual shapes and locations of objects remotely. Although it has lower
precision than the gravimetric survey, it can also estimate the densities of the layers it
encounters. Like the gravimetric survey, it does not require disturbance of the local
ecosystem, and has in fact been applied to especially sensitive ecosystems for that reason.
Unlike the gravimetric survey, however, seismic measurement does not require long-term
monitoring, reducing the relative labor costs.
It is important to differentiate modern seismic analysis from its outdated forms in
the 1970s and 1980s. Growth in instrument precision, mathematical theory, and
computer processing power has resulted in a tremendous increase in the capabilities and
precision of seismic measurement. It is no longer restricted to a minimum depth, nor is it
restricted to two-dimensional analysis, though two-dimensional analysis is still less
costly. Today, it can be used for near-surface analysis, down to even a couple meters,
and can measure the distance of layers to within several millimeters, making volume
calculations far more precise (Eaton 1997).
There are still several important limitations to seismic measurement. The most
immediate concern is cost. The equipment is expensive, many sensors are required to be
used simultaneously, and it requires highly trained operators. All of these factors increase
the capital cost of measurement dramatically, though the labor costs for any individual
project remain low (Gochioco 1990). In addition, the size of the seismic generator is a
function of the area covered, and significant seismic pulses have been shown to cause
ecosystem disruption. This disruption can be minimized by using a smaller spacing
between generators so that each generator needs to emit a smaller wave.
60
Analysis of Methods of Estimating Coal Seam Quantity
As potentially applied in a future CDM or other methodology for verifiably
extinguishing coal mine fires and establishing the magnitudes of CDM emission credits,
the actual action on the ground would be the identification of coal seam fires, the
measurement of the quantity of coal at risk of being combusted, and the extinguishing of
that fire. These fires could be in large working pit mines that have caught fire or in
smaller seams that may never have been explored commercially. Presumably, an
entrepreneurial corporation, public-private partnership, or government entity would
complete this process. These projects would often need to be done in developing
countries with substantial coal mine fire problems such as China, Indonesia, or India.
Given these conditions, seismic analysis appears the most promising method.
Geologic prediction, as stated before, carries with it too much imprecision to be useful for
verifying avoided emissions. Core sampling requires the disruption of the local
ecosystem and can only provide moderate precision, which must be bought at a high cost
using large quantities of capital and labor. Gravimetric sampling is perhaps the second
best method, since it can provide direct measurements of the carbon sequestered in the
coal vein, but it requires substantial labor costs.
The primary advantages of seismic analysis in our application are its high
precision and low variable costs. The high precision and the rapidity of data production
are significant because the accreditation of credits will require verifiability. The lower
the precision, the fewer avoided emissions that can be promised, and the less money that
is provided to finance the project, if any project is still viable at all.
The coal industry as a whole has made the same determination that higher
precision in seismic surveying is worth the cost since the revenue generated from the
seam is so important. The second advantage, low variable cost, is significant because
fixed costs become negligible as the number of projects completed by an entity rises.
The machinery is also mobile, so one entity completing multiple projects would only
need to invest in the machinery once
Given that these projects would require substantial up front investment and
dealings with both international diplomatic and market systems, it seems likely that a few
firms would perform most of the project work, primarily large firms, since they would
enjoy economies of scale. Those firms would be able to maintain large capital stocks
over time, so that the variable cost would be the larger primary determinant for any
individual project. Since seismic analysis has low variable costs, it would be more
economically efficient, especially since its cost scales directly with size of the seam and
therefore the benefits of extinguishing the seam’s fire. Seismic analysis seems to be the
best recommendation for the purposes of this methodology.
61
Estimating emissions
Once the quantity of coal has been estimated, the amount of emissions generated
by the burning of that quantity of coal must be determined. These values can be derived
through several methods, focusing either on the actual rate of emission or the qualities of
the emissions.
Chemical Reaction Analysis
As stated earlier, only a few gaseous components are typically generated in large
quantities by the combustion of coal, although this can vary depending on the
surrounding materials and the level access to atmosphere at the site of combustion. If,
however, we restrict the consideration to organic products (carbon dioxide and the other
molecules that might substitute for it), we come down to a small group, primarily carbon
dioxide (CO2), carbon monoxide (CO), and methane (CH4). Also, one must note that
each ton of carbon could produce 3.7 tons of carbon dioxide, 1.3 tons of methane, or 2.3
tons of carbon monoxide (Tetzlaff 2004; Waples 1981).
In an absolute simplification, one could sample the coal in the seam to determine
its carbon density and then multiply that by 3.7, assuming that all the coal was converted
to carbon dioxide, and therefore yielded the least radiative forcing effect on the
atmosphere. This would create a clear lower bound estimate of emissions credits
generated per ton of coal prevented from burning. Multiplying this by the estimated
tonnage of coal produced from the above surveying would produce a total minimum
assessment.
The primary benefit of this method is its simplicity. Its results are indisputable as
a minimum amount of carbon emissions from burning the whole seam. This may be all
that is required. Suppose, for instance, that a seam is found that is quite small. The
extinguishing entity could retrieve a sample of the coal, extinguish the fire, and perform a
low-cost survey of the seam. This would minimize total cost, making the extinguishing
of small fires more profitable.
There are, of course, several drawbacks to this method, the most obvious being a
lack of precision and a strong downward bias. Significant emissions of methane might in
fact be averted by putting out a coal fire, and these would not be counted for their full
GHG impact. By relying on a minimum estimate, the entity foregoes the potential
funding that could be earned, thus reducing the additional incentive of the credits.
The second major weakness is that it ignores all other products of the burning.
Because the fires may also combust the surrounding matter (like soil and rocks) and the
impurities in the coal, other gaseous products may also be produced. Many of them will
have much greater global warming potential and could in theory generate a substantial
number of credits. Trace molecules like volatile organic compounds have a GWP of 1.76.8 by mass relative to carbon dioxide, and hydrogen 5.8. The inclusion of other
molecules and the relative effect of all particles would undoubtedly raise the expected the
62
credits earned.
Atmospheric Composition Sampling
The actual outputs of the coal combustion can be observed to create an emissions
profile for a specific coal mine fire. Dr. Glenn Stracher of East Georgia College has done
extensive research on the deposition of combustion products near coal mine fires,
including taking atmospheric samples around the fires and even within the fissures.
These samples were then sent to a laboratory for spectrographic analysis to determine the
constituent gases.* Similar work has been done by the former U.S. Bureau of Mines (Kim
2007).
Although the sampling of gases around coal mine fires is in its infancy, the
processes of atmospheric sampling and spectrographic analysis are well established. In
theory, one could compare the samples close to the fire and at some distance (preferably
upwind) to determine the amounts and ratios of the combustion products. After taking
these samples across several time periods and averaging them, one would have a decent
estimate of the products of combustion that would be released in the future. By also
taking a sample of the carbon density of coal, one could determine the output of each
product per ton of coal burned and develop an estimate of the total amount the seam
could generate of each product, and therefore the total radiative forcing effect.
Although this method offers a much more detailed analysis, it has significant
problems as well. The first problem is that it would require taking samples across several
time periods and waiting for them to be analyzed. This introduces a time delay in the
project cycle that would decrease any profitability in extinguishing the fires, working
against the overall purpose of the policy since a lower profitability reduces the economic
incentive to extinguish the fires and therefore a lower incentive to reduce the greenhouse
gas emissions. Second, atmospheric sampling may return widely varied results
depending on the conditions and burn rates at the time of sampling, not to mention
heterogeneity of the mixing of gases. This method may overall have a very low
precision.
Temperature Analysis
Another method for estimating the emissions would be to monitor the temperature
of the gases escaping. When the fire has access to more oxygen, it burns more rapidly
and produces more oxygen-rich molecules like carbon dioxide. By watching the
temperature of the gases escaping over several days and through various climactic
conditions, one could estimate both the rate at which the fire would burn over time and
the products that would be created based on the temperature (Kim 2007; Kuenzer 2007).
One of the greatest advantages of this process over others is that the rate of burn
*
Taken from video posted to Dr. Stracher’s school website (Stracher 2008).
63
allows for forecasting not only of the total credits to be generated, but would also provide
a basis for distributing them over time. Since carbon credits are issued for the time at
which the emissions are prevented, it is important the time of the potential emissions be
estimated.
This method has a glaring weakness, however. It relies heavily on theoretical
relationships between temperature, rate of combustion, and chemical production. Those
relationships inherently contain large uncertainty and may not be applicable to all of the
mines considered.
Remote Sensing
There is much interest now in the use of remote sensing technology to estimate
the greenhouse gas emissions of coal mine fires (Gangopadhyay 2008; Zhang and
Kuenzer 2007; van der Meer et al. 2004). In theory, this method uses the relative spectral
profile of carbon dioxide and other greenhouse gases to measure their concentrations in
the local atmosphere. By comparing the local profile against the surrounding average
atmospheric concentrations, the relative emissions of the site can be estimated. This
estimate might be refined by also considering the relative heat generation of the area and
thereby the intensity of the fire.
This method is currently in development but has not yet reached maturity.
Several scientists have proposed it and are reportedly working on it at this time, but no
scholarly work has yet been presented that gives an application or a scientific evaluation
of the method. Still, it is considered to be feasible by the community, and is mentioned
here for prospective purposes.
Comparing Emissions Estimation Methods
For the purposes of this study, baseline chemical theory is the recommended
option, though only for the immediate time period. This method has important abilities to
create a scientifically certain minimum and very low costs. For the completion of a
project, it essentially reduces the process of estimation to simple paperwork.
This method is recommended only for the short term for several reasons. First,
knowledge of coal mine fires is rapidly advancing, as is knowledge of methods for
estimating emissions. Better methods can be reasonably expected in the coming years.
Investment in the extinguishing of coal mine fires under this method should also offer
financial incentive for more rapid research into the technology, especially in increasing
the precision and reducing the cost. Second, this method should be reevaluated in the
future because it provides only for a minimum assessment of importance of extinguishing
these fires. More precise measurements in the future will probably show that the effects
of these fires are greater than estimated. Finding a better method for estimating
emissions will increase the value of both this policy.
64
Conclusions and Recommendations:
While the study of coal seam fires is just emerging, the science necessary to
analyze the issue has been developing for many years, driven both by the market and
scientific discovery. While there is more to be done to apply the larger concepts to this
problem, current research suggests that there should be low cost, scalable, effective
scientific solutions to the problems presented in implementing the policy. At the very
least, there is agreement among researchers that there is no obvious technical reason that
the emissions of coal seam fires can not be reasonably accurately and precisely predicted.
Recommendations:

Use seismic methods to determine the volume of a coal seam on fire.

Use chemical analysis methods to determine the amounts of GHGs the
fires are producing, and the future timelines, at least until new techniques
are developed.

The climate research and development programs of the United States and
other nations should commit greater funds to modeling and other study
of uncontrolled coal fires, including the development of more refined
methods of estimating the future path and timeline of coal fires and the
magnitudes of the future GHG emissions that could be averted by putting
out these fires.
References
Eaton, David William. 1997. 3-D seismic exploration for mineral deposits. Keynote
address, Exploration ‘97: Fourth Decennial International Conference on Mineral
Exploration, Toronto, Canada, September 14-18.
Gangopadhyay, Prasun K. 2007. Application of remote sensing in coal-fire studies and
coal-fire–related emissions. In Stracher 2007, 239-248.
Gochioco, Lawrence M. 1990. Seismic surveys for coal exploration and mine planning.
Geophysics. The Leading Edge, 9(4): 25-28.
Kearey, Philip, Michael Brooks, and Ian Hill. 2002. An introduction to geophysical
exploration. London: Blackwell Science Ltd.
Kim, Ann G. 2007. Greenhouse gases generated in underground coal-mine fires. In
Stracher 2007, 1-14.
65
van der Meer, Freek, Paul van Dijk, Prasun K Gangopadhyay, and Chris Hecker. 2004.
Remote-sensing GIS based investigations of coal fires in northern China; global
monitoring to support the estimation of CO2 emissions from spontaneous
combustion of coal. Paper presented at the 1st Asian Space Conference (ASC),
Chiang Mai, Thailand, November 22-25.
Milsom, John. 2003. Field geophysics. West Sussex, England: John Wiley & Sons Ltd.
Schaumann, Gerlinde, et al. 2006. Geophysical investigations over a coal mining Area in
China for risk assessment of the expansion of local coal seam fires. Paper
presented at the European Geosciences Union General Assembly, Vienna,
Austria, April 2-7.
Stracher, Glenn B., ed. 2007. Geology of coal fires: Case studies from around the world
(Reviews in Engineering Geology, vol. XVIII). Boulder, CO: Geological Society
of America.
Stracher, Glenn B. 2008. “Home,” http://www.ega.edu/facweb/stracher/stracher.html.
Tetzlaff, Anke. 2004. Coal fire quantification using ASTER, ETM, and BIRD satellite
instrument data. PhD diss., Ludwig-Maximillians University (Munich, Germany).
Upadhyay, Raja. 2000. Developments in coal exploration. Pincock Perspectives, 3: 1-3.
Waples, Douglas. 1981. Organic geochemistry for exploration geologists. Minneapolis,
Minnesota: Burgess Publishing Company.
Zhang, Juanzhong and Claudia Kuenzer. 2007. Thermal surface characteristics of coal
fires 1: Results of in-situ measurements. J. of Applied Geophysics 63: 117-134.
66
CHAPTER 6 – ADDITIONALITY, PERMANENCE, AND OTHER
METHODOLOGICAL ISSUES
In order for the extinguishing of a coal fire to be sold as a GHG emissions credit,
a proposed project activity must describe the proposed actions to put out a coal fire; give
an accurate estimate of the carbon dioxide or other GHG emissions that would have
resulted in the absence of these actions; and provide a verifiable procedure for certifying
that the actions have been taken, the coal fire has in fact been put out, and that it has not
reignited. There must also be a method for demonstrating that the coal fire would not
have been put out in the absence of the financing provided by the sale of carbon credits –
i.e., that the project activity meets the criterion of additionality.
Moreover, there must be a demonstration that other coal fires will not be ignited
or left to burn because of the specific actions to put out the coal fire at hand – i.e., that the
project activity meets the criterion of permanence. In the case of a coal fire that is put out,
a special issue that arises is whether the extinguishing of the coal fire will then allow the
coal to be mined and subsequently burned in a power plant or for some other industrial or
commercial use. If that is the case, the extinguishing of the coal fire may or may not
meet the criterion of permanence.
At present, there is no approved methodology (see Chapter 4) for the sale of GHG
emissions credits based on the putting out of a coal fire. Chapter 5 described the methods
that are available for estimating coal volumes in currently burning coal fires and then the
GHG emissions averted by putting out the fire. This chapter will address the necessary
steps to demonstrate that the extinguishing of the coal fire will in fact meet the criteria of
additionality and permanence. Once a methodology for making such a demonstration
has been worked out it detail, it would have to be submitted for the review of the CDM
Executive Board or of other bodies responsible for verification of the acceptability of
actions to create GHG emissions credits.
Additionality
Additionality is a central concept for carbon offset programs: It would be a waste
of money to purchase offsets that fund reductions in GHG emissions that would have
occurred anyway. Indeed, in the case of the CDM, where offsets count toward emissions
reductions targets for developed countries, allowing non-additional projects to generate
credits would lead to a net increase in emissions (Kollmuss, Zink, and Polycarp 2008).
Determining whether a project activity is additional, however, can be a difficult
task, as it may require making a judgment call about what would happen without funding
from sales of carbon offsets. A project developer, for example, could argue that her return
on investment on a project activity is too low, and that outside funding is needed;
however, such a requirement can vary in amount from developer to developer, and raises
questions of what is an acceptable rate of return for carbon offset activities. Would the
sale of emissions credits promote more low-carbon investment, or would it merely enrich
project developers — indeed, might it not even discourage such investment, if there is
67
more money to be made from carbon offsets revenue? These and other questions
concerning additionality do not admit of any precise answers. Nevertheless, it is possible
to highlight the most salient issues surrounding the additionality of any given project
activity, which we shall do now for extinguishing coal fires.
A first question is to estimate how long, in the absence of actions to put it out, a
coal fire could be expected to burn. Some underground coal fires have burned for
decades and it may reasonably be assumed that they will continue to burn into the
indefinite future. For these fires, specific public or private actions will normally be
required to put them out in an expedient manner. For surface fires, many have been
burning for years but their typical duration is shorter. It can be assumed that, in the
absence of actions to put out the fire, they will continue to burn for some number of years
but eventually all the coal will be used up and a surface coal fire will die out of its own
accord. Routine natural events such as heavy rainfall are not normally sufficient to
extinguish a surface coal fire.
For estimating the date of extinction of a coal fire, two factors will be critical – an
estimate of the volume of coal available to the fire and an estimate of the path and rate of
burn of the coal fire (see Chapter 5). Given these two items, one might project that, for
example, 1,000 tons of coal are burning at a rate of 100 tons a year and the fire can be
expected to burn itself out in ten years. Assuming other requirements of the
methodology are met, the emissions credits generated would then be the GHG emissions
associated with burning 100 tons of coal (approximately 330 tons of CO2, if all the
emissions took that form) for each of the next ten years.
Barriers to Private Action
No carbon credits would be available if it appeared likely that actions would be
taken to put out a coal fire even in the absence of the financing made available by the sale
of carbon credits. The main reason a private party would act to put out a coal fire would
be to save the coal for future mining. When a coal fire breaks out in an active coal mine,
it is in fact common for the mining company to take actions to put out the coal fire. This
normally happens soon after the fire breaks out and it is likely to be rapidly extinguished.
No GHG emissions credits would be available in such circumstances since the putting out
of the fire would fail to be additional.
Even where a coal fire breaks out in an existing mine, however, it might still be
possible to generate carbon credits, if it can be demonstrated that the private economic
incentives are not sufficient to put out the coal fire. This might be demonstrated in one of
several ways:
Abandonment of the Mine-- It might be shown that, since the fire broke out, the coal
company has ceased operation of the mine and is making no further efforts to put out the
coal fire.
No Further Effort -- It may be possible to segregate the coal fire from other parts of the
68
mine and thus to continue operations, even while the coal fire continues to burn.
Application of this criterion might require that a minimum time period be specified in
which the coal company has made no effort to put out the fire (say a minimum of one
year).
Uneconomic to Put Out the Fire -- Application of this criterion would require the
development of an estimate of the cost of putting out the coal mine fire. One of various
firms that are in the business of putting out coal fires might provide such an estimate (see
Chapters 2 and 9). An estimate of the volume of coal being burned would also be
needed. Combining these two estimates, the cost per ton of coal saved from burning
through extinguishing the fire could be estimated. This cost per ton could then be
compared with market prices per ton in the market for buying and selling coal reserves.
If the cost per ton of saving the coal from burning is less than the normal market value of
buying and selling coal reserves, it could be assumed that it would be worth the cost for
any normal private party to pay to put out the coal fire.
Barriers to Public Action
It is still possible that there might be public incentives that would be sufficient for
a government at some level to take action to put out the coal fire, even in the absence of
the sale of any carbon credits. Coal fires can have various adverse environmental
consequences including air pollution and subsidence, and these might be sufficient to
motivate a government agency to put out the fire – considerations of greenhouse
emissions aside. If it appeared that this would be likely, again, the putting out of the coal
fire would fail to be additional. On the other hand, additionality would be considered to
have been demonstrated if one of the following could be shown:
No Government Program at any Level to Put Out Coal Fires -- It might be shown that no
government that has jurisdiction in the area of the coal fire has any program or makes any
expenditures for the purpose of putting out coal fires.
Not a High Enough Priority for Government Action -- Some governments might be
taking actions to put out coal fires but these efforts are limited to a subset of coal fires
that command a higher priority for government attention. This higher priority might
reflect the degree of environmental damage associated with the coal fire, the total
availability of government funding for putting out coal mine fires, and the cost of
putting out any specific fire. The higher the degree of damage, the more funds
available, and the lower the costs, it can be assumed that the likelihood of active
government efforts to extinguish the fire will increase. Even in a nation with the large
resources of the United States, however, many coal fires are not a high enough priority
that any level of government has taken action to put them out (see Chapter 9). In most
developing countries, efforts to extinguish coal mine fires are limited to a small minority
of the coal fires currently burning.
No Past Effort -- If a coal mine fire has burned for a certain period of time, and no
government has thus far made any efforts to put it out, it might be presumptively
69
assumed that the fire will be allowed to burn without any short term government actions
to extinguish it. In some cases, there might be a good reason to project that a
government might eventually take action some number of years in the future (say five
years from now). If that were the case, any carbon credits would be only for the
duration of that period, and further carbon credits would require a reexamination of the
issue and a new demonstration at that point in the future.
Permanence
Issues of additionality arise with respect to the methodologies for many forms of
GHG emissions credits. Putting out a coal mine fire presents an unusual feature in that it
raises the possibility that the extinguishing of the fire may allow the future mining of the
coal and thus the release of GHGs from the coal combustion in a power plant or other
industrial or commercial facility. One could argue, even, that unlike many other carbon
offset activities, the additionality of a coal fire abatement project is easier to prove than
its permanence. For if it appears that the putting out of the coal fire would not achieve
any permanent reduction of GHG emissions, no carbon credits would be allowed.
Alternatively, it might be possible to demonstrate that a reduction of GHG
emissions would be achieved but that it would be temporary and thus any carbon credits
recognized should be strictly time limited (say for three years of coal burning). Such time
limits would be in accordance with most carbon offset projects, which reduce only a
specified amount of GHG emissions over a specified time horizon. To an extent, then, the
problem of determining permanence in coal fire abatement projects is one of carbon
offset programs in general: The value of the reduced emissions is cumulative, and only
sustained efforts to reduce emissions over time will justify the investment in any one
carbon offset activity.
With respect to coal fires, there are several ways in which one might meet the
criterion of permanence, provided specific time horizons are stated:
No Mining Activity -- If there is no coal mining activity in the surrounding area of the
uncontrolled coal fire (usually a surface fire in such cases), it would be reasonable to
assume that the coal will not be mined in the future, if the coal fire is put out.
No Mining of Similar Coal Deposits -- Even if there is active mining going on in the
region of the coal fire, it may not involve coal deposits with similar economic, geologic,
and other characteristics to the fire that is burning. The coal that is burning may simply
not be economic to mine. To illustrate this, let us note that nations such as the United
States, China, and India possess very large reserves of coal; however, at any given time,
given the economics of coal mining, only the particularly most attractive coal deposits (in
terms of transportation requirements, coal quality, mining costs, labor needs, etc.) will be
mined. Even if a particular coal deposit might eventually be mined, this might be
decades, if not centuries from now, if it is not cost-effective to mine relative to existing
coal supplies. For the purposes of generating carbon credits, this could be demonstrated
by showing that similar types of (non-burning) coal deposits are not presently being
70
mined.
Substitutability of Many Other Similar Coal Deposits -- Even where a coal fire involves
high quality and otherwise economic coal that makes it suitable for mining, it may be
possible to establish that a genuine permanent reduction in GHGs would be achieved by
putting out the fire. If a region is rich in high quality coal deposits, it may be somewhat
arbitrary which specific deposits are being currently being mined at any given time and
which are being conserved for the future. Thus, if a coal mine fire is put out, and this
coal is then soon being mined, it will result in other coal deposits in the same region not
being mined. On the other hand, if the coal fire had not been not put out, these other coal
deposits would then have substituted for its coal and would have been mined. In short,
even if the coal burning in a fire is soon put back into production, putting the fire out may
result in a net reduction in GHGs equal to the potential emissions from the mine fire.
In formal economic terms, the matter at issue here is the character of the regional
supply curve for coal. If the supply curve is flat (completely “inelastic”), reflecting very
large amounts of coal that could be mined for similar costs, then the total amount of coal
mined at any given time will depend largely on the character of the demand curve for the
region’s coal. The total amount of coal mined, and then burned intentionally in
commercial facilities somewhere, will be independent of the circumstances of any one
coal deposit. That is to say, if a currently burning coal fire is put out, and then it turns out
to be mined, this will result in a reduced level of mining at some other coal deposits (and
the coal from those deposits will then not be burned). Considering the totality of all the
coal in the region, there will be a net reduction in GHG emissions from the region.
Contractual Pledges -- In some cases estimating the regional demand curve for coal may
be difficult with the precision required to make a clear showing of permanence in this
manner. There would be yet another way in which the condition of permanence might be
met. If necessary, as part of the establishing of a legitimate carbon credit, the owner of
the coal that is currently burning might sign a binding agreement that the coal will not be
mined in the future, if the fire is put out. Alternatively, the coal mine owner might agree
to only sell coal to power plants or other facilities that use cogeneration or carbon capture
and storage (CCS), activities that would reduce the GHGs emitted from burning coal
through enhanced efficiency or through burying the carbon emitted in the ground,
respectively.
Both types of agreements would require special efforts to secure, given worldwide
demand for coal; the coal mine owner would need to be compensated for the value of the
coal not being mined, in the first case, or the opportunity cost of not being able to sell
coal to any and all buyers, in the second case. Consequently, a contractual pledge with
the coal mine owner would be feasible only where the price of carbon offsets was
sufficient to cover the value of the coal left in the ground. .
71
Verifying the Accidental Character of Coal Fires
Another methodological issue that arises with respect to coal mine fires is the
method of demonstrating that the fire was in fact accidental. Given the substantial
revenues that might be earned in carbon markets from putting out uncontrolled coal fires,
there would be an economic incentive to start a coal fire with the intention of selling the
credits for putting it out. However unlawful, it cannot be assumed that such actions
would never occur. If the legitimizing of the sale of carbon credits for putting out coal
fires actually resulted in an increase in GHG emissions, this would of course be a
perversion of the original intent. A demonstration of “accidental character” might be
accomplished in the following ways.
The Fire Began Burning Prior to the Date of Approval of the Coal Fire Methodology or
the First Recorded Sale of a Carbon Credit Based on the Putting Out of a Coal Fire -- It
can be assumed that it would be unlikely that any party at present would start coal fires in
the anticipation that it would be possible at some point in the future to sell carbon credits
for putting them out. If a coal fire methodology is approved, it might be desirable to
conduct a comprehensive inventory in each nation of all known existing coal fires. It
would also be appropriate to establish methods by which the historical starting point of a
coal fire could otherwise be verified.
The Known Circumstances of a Coal Fire -- Besides the historic date at which a coal fire
began, there may be other ways of verifying that a coal fire is accidental, even in the case
of fires that have only started recently. There may be reliable eyewitnesses, for example,
who can testify from first hand experience as to the circumstances that resulting in the
coal beginning to burn.
Coal Fire “Detective” Work -- There may also be other ways to verify that a coal fire
was accidental and not intentionally set. This issue arises in other settings where the
question is whether the burning of a house of other building is a case of arson. It may be
possible also to make a good estimate from an examination of a specific coal fire whether
it was deliberately set.
Conclusions and Recommendations:
Selling carbon credits generated from the extinguishing of coal fires raises a
number of methodological issues, some unique among carbon offset activities. As
mentioned in Chapter 4, there is some resemblance to the problems encountered in
avoided deforestation projects — a project type not allowed under the CDM in part
because establishing additionality and permanence for such projects appeared to be so
difficult. One similarity worth remarking upon here is that, like avoided deforestation,
coal fire abatement will likely require a type of resource management scheme, one that is
less focused on a specific project than on looking after the coal in a given project
boundary.
In many cases, it will not be difficult to establish that the extinguishing of a
72
particular coal fire represents a true reduction in total GHG emissions. In other cases, the
factors may require more detailed and potentially complicated calculations with respect
to a particular fire. Overall, however, it seems that the establishing of legitimate
emissions reductions for many coal mine fires is practical and feasible. Indeed,
compared with the methodological issues raised by other forms of carbon credits (e.g.,
deforestation credits), the difficulties and burdens associated with applying a coal fire
methodology may be less imposing.
Recommendations:

While the issuance of carbon credits for putting out uncontrolled coal
fires raises challenges with regard to meeting the approval
requirements of additionality and permanence, these requirements
can likely be satisfied for many coal fire projects. Compared with
some other methods of generating carbon credits, it may be easier to
demonstrate additionality and permanence for coal fire projects.

The World Bank, the World Resources Institute, private brokers in
carbon market credits, and other involved parties should seek out a
sample set of currently burning coal fires that could be used as
demonstration projects to establish and improve methodologies for
showing coal fire additionality and permanence.

Where issues of permanence arise, credits generated from putting out
coal fires should have shorter lifespans; they might be lengthened if
the mine owner can be persuaded to agree contractually not to mine
the coal or to only use it for low-carbon activities when the fire is put
out.
Reference
Kollmuss, Anja, Helge Zink, and Clifford Polycarp. 2008. Making sense of the voluntary
carbon market: A comparison of carbon offset standards. Berlin: WWF Germany.
http://assets.panda.org/downloads/vcm_report_final.pdf.
73
74
PART III – THREE CASE STUDIES: CHINA, INDONESIA, AND THE UNITED
STATES
75
76
CHAPTER 7 – CHINA AND COAL FIRES
Introduction
Uncontrolled coal fires in China are nothing new. Some coal fires in China have
been burning for decades, and even in some cases for centuries (Stracher and Taylor
2004). In his journals recounting his travels to the Far East in the late 13th Century,
Marco Polo mentioned what we now know were probably uncontrolled coal fires in
China when he described seeing “burning mountains along the Silk Road” (Hilsum 2007;
Keunzer et al. 2007, 43).
The coal fires in China include both coalfield and coal mine fires. Coalfield fires
are the uncontrolled coal fires that burn on or near the surface, often having started on
exposed coal seams or in open-pit or shallow coal mines. By contrast, coal mine fires are
those uncontrolled coal fires that occur either in government or privately-owned mines,
and can be situated deep underground or along the surface.. Coalfield fires and in some
cases surface mine fires can be relatively easy to extinguish.. The underground coal mine
fires are often much more difficult, or indeed impossible, to extinguish since such fires
cannot be easily located nor are reached by firefighting equipment or flame retardants
(Stracher and Taylor 2004).
As in other countries, the great majority of China’s uncontrolled coal fires are
anthropogenic in origin. In particular, they are often attributable to mining-related
activities. In some cases, mining activities are directly related to the ignition of the fire,
such as when explosives or electronic equipment used for mining causes naturally
occurring mine gases like methane and hydrogen to ignite (Stracher and Taylor 2004;
Wingfield-Hayes 2000; Discover 1999). In other cases, mining activities serve as an
indirect cause of uncontrolled coal fires. One common scenario involves an abandoned
small-scale or artisanal mine that was not closed off or reclaimed properly, thereby
leaving the coal seam exposed (Hilsum 2007; Kuenzer et al. 2007, 48). This exposed
coal seam in turn is ignited either through a process of spontaneous combustion or by
lightning or forest or brush fires (Kuenzer et al. 2007, 43, 48; Stracher and Taylor 2004;
Discover 1999). Many of the uncontrolled coal fires in the Wuda coalfield, for example,
are believed to have started in this fashion (Hilsum 2007; Kuenzer et al. 2007, 47). A
second common scenario involves the ignition of the waste or leftover coal piles from
artisanal mines. Like exposed coal seams, these piles are also susceptible to ignition
through spontaneous combustion (Kuenzer et al. 2007, 48).
Coal Mines and Coal Use in China – An Overview
According to some observers, a dramatic increase in the number of uncontrolled
coal fires in China in recent decades is due to ownership and operational changes in
China’s coal mining sector. One particularly important change was the shift in patterns
of ownership away from mines owned by the central government towards privatelyowned artisanal mines that occurred during the 1980s and early1990s (Hilsum 2007).
While the Chinese government has succeeded in shutting many of these mines down in
77
the past decade or so, an estimated 21,000 to 23,000 still remain in operation (Ball et al.
2003, 25). As discussed below, these mines tend to have lower safety standards,
especially when it comes to preventing gas explosions or other direct causes of
uncontrolled coal fires (see also Hilsum 2007). While the Chinese central government
has passed laws to regulate the mining practices in and safety conditions of artisanal coal
mines (Gunson and Jian 2002, 17), these laws are not rigorously enforced by the central
government due to a lack of resources. Such laws are also rarely, rigorously enforced by
local government officials owing to conflicts of interest because they are often partowners of such mines (Hilsum 2007). As a result, the remaining artisanal mines continue
to pose the biggest threat of future uncontrolled coal fires (see Kuenzer et al. 2007, 48).
China – A Nation Dependent on Coal
China has among the largest national reserves of coal in the world. According to
some estimates, proven recoverable coal reserves in China are about 11.6 percent of the
world’s total at around 114.5 billion tons (Ball et al. 2003, 24). These reserves could
theoretically supply China’s coal production needs for around the next 100 years (Ball et
al. 2003, 24).
These reserves are largely concentrated within China’s “coal belt” that stretches
across the northern part of the country. This coal belt is about 750 km wide (north-south)
and about 5,000 km long (east-west) (Prakash 2007). The largest reserves are located in
Ningxia Hui and Xinjiang Uygur (Stracher and Taylor 2004). Figure 1 shows coal
sources by region in China. Much of these reserves are in thick coal beds located at
shallow depths, rendering coal relatively easy to recover (Cao et al. 2007, 24).
Most of China’s proven reserves consist of relatively low quality coal.* Some
notable exceptions include areas Ningxia Hui and Xinjiang Uygur, where exist
significant reserves of higher quality anthracite coal (Stracher and Taylor 2004).
Chinese Production and Consumption
China is the largest producer of coal in the world (Keunzer et al. 2007, 43; Ball et
al 2003, 10), by some estimates accounting for nearly one-third of global production
(Stracher and Taylor 2004). China’s coal mining industry has grown rapidly in
conjunction with the expanding economy. According to the International Energy Agency
(IEA), annual coal production reached 1,402 million tons in 1996 after starting the
decade at 1,051 million tons (Ball et al. 2003, 24). The rate of production actually fell for
the rest of the decade and by 2000, the rate of coal production was down to 1,231 tons,
having declined at an average of rate of 3.2% per year (Ball et al. 2003, 24) before once
again increasing in recent years. This decline in the late 1990s seems largely attributable
to the implementation of government policies designed to restructure the domestic coal
mining industry (Ball et al. 2003, 11).
*
Mr. Alfred Whitehouse (Director, International Programs, U.S. Department of the Interior, Office of
Surface Mining) and Ms. Sarah Evans (Foreign Affairs Officer, U.S. Department of State, Office of Global
Change), phone interview with James Goodwin, March 26, 2008.
78
Figure 1: Chinese Coal Sources by Region
Source: Ball et al. 2003, 23
The objectives of China’s policies to restructure its coal mining industry were
twofold. First, the policies sought to eliminate virtually all small, privately-owned
artisanal mines. In general, these mines are relatively primitive operations, characterized
by inefficiency, minimal occupational safety standards, and low capital investment (Ball
et al. 2003, 11). Second, these restructuring policies also sought to eliminate the most
inefficient of the large state-owned mines, either by combining them with other stateowned mines or by closing them outright (Ball et al. 2003, 11). Recent statistics show
that coal production in China has increased markedly beginning in 2001 when it rose to
1,294 million tons in 2001 (Ball et al. 2003, 24), and reaching over 1,900 million tons in
2004 (Kuenzer et al. 2007, 43).
In addition to being the largest producer of coal in the world, China is also the
largest consumer of coal of any country as well (Kuenzer et al. 2007, 43; Ball et al 2003,
10). Coal comprises by far the largest share of China’s energy mix, with the country
deriving both two-thirds of its primary energy and three-quarters of its electricity
generation from it. In the last few decades, trends in China’s coal consumption have
roughly corresponded with trends in domestic coal production (Ball et al. 2003, 10-15).
79
Figure 2: Total Chinese Coal Output by Mine Type
Note: These are official estimates of total production
and are therefore lower than IEA estimates.
Source: Ball et al. 2003, 26
Coal Mines in China
Broadly speaking, China’s coal mines fall into one of two categories, each of
which can be classified according to form of ownership.
State-Owned Mines
The first category of mines—those that are state-owned—are larger in size, more
efficient, safer, and more technologically advanced. There are over 2,000 such stateowned mines in China. Of these, fewer than 100 are “key state mines,” or mines that
were formerly operated by the central government, but are now run by the provinciallevel government in which they are located. Key state mines are often the largest and
most technologically advanced of all of China’s mines. Until the early 1980s, key state
mines were the dominant coal producers in China, accounting for approximately fifty-six
percent of all domestic coal output. By 1996, the share of domestic coal output produced
by key state mines had declined to only thirty-nine percent . Between 1996 and 2000,
coal production by key state mines remained fairly constant before slightly increasing in
2001. Almost all of the coal that key state mines currently produce is directed towards
state-run utilities and industries (Ball et al. 2003, 25-26).
The remaining smaller state-owned mines are known as “local state mines.” .
These mines are usually operated by the provincial, prefecture or county government in
which they are located. Compared with key state mines, the local state mines tend to be
smaller and more technologically primitive (Ball et al. 2003, 25).
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Figure 3: Chinese Coal Production By Mine Type
Note: The production statistics used in this figure are official Chinese
statistics.
These
are
lower
than
the
IEA
estimates.
Source: Ball et al. 2003, 3.
Artisanal Mines
The second broad category of coal mines in China consists of the artisanal mines.
Broadly speaking, artisanal mines include all small-scale, privately-owned mines in
which labor-intensive and primitive methods are used for coal recovery (Gunson and Jian
2002, 16). Artisanal mines represent the vast majority of the China’s coal mining
operations, with relatively conservative estimates placing the total number somewhere
between 21,000 and 23,000 (Ball et al. 2003, 25).* In China, these mines are often
virtually indistinguishable from what are referred to as township and village enterprise
(TVE) mines (Gunson and Jian 2002, 3), or mines operated by local township or village
governments (Ball et al. 2003, 25; Gunson and Jian 2002, 17). This is because the
artisanal mines are often only nominally private enterprises. Instead, in most cases,
artisanal mines are operated by partnerships that include both private businessmen and
local government officials. Moreover, both types of mines share a number of
characteristics. In contrast to state-owned mines, artisanal and TVE mines tend to have
low productivity, minimal safety standards, and little capital investment.
In 1980, artisanal mines produced only eighteen percent of China’s total domestic
coal supply. Between 1983 and 1997, however, the central government encouraged the
As discussed above, China’s central government has been making a concerted effort to close down all of
the artisanal mines as part of its efforts in the late 1990s to restructure the domestic mining industry.
Consequently, this number of artisanal mines seems quite large. Assuming that China’s efforts at shutting
down artisanal mines has been somewhat successful (as indicated by the large reduction in output from
these mines in the late 1990s), the large number of remaining artisanal mines might suggest that there was
well over 23,000 artisanal mines prior to the implementation of the restructuring efforts. Moreover, given
that artisanal mines are often quite small operations that are located in the most remote areas of the country,
these large numbers might suggest that the Chinese government lacks the enforcement capacity to shut
down all of the artisanal mines located within its borders.
*
81
rapid expansion of artisanal mines in order to provide a source of revenue for rural
economies and a steady source of energy supply. By 1996, artisanal mines were
responsible for forty-five percent of China’s coal production (Ball et al. 2003, 26).
The output from artisanal mines has since declined dramatically because of efforts
by the Chinese government to close them down, with production falling from a peak of
615 million tons of coal in 1996 to 197 million tons in 2001. As discussed above, this
reduction in output is largely attributable to China’s economic reforms in the late 1990s
that, among other things, sought to close down many of the artisanal mines. In particular,
three objectives motivated the closure of artisanal mines: the promotion of safety and
efficiency in China’s coal mining industry; the production of higher quality coal; and the
conservation of China’s coal reserves. Various government laws remain in place to
regulate those artisanal mines that have not been shut down. However, due to lack of
political will on the part of local government officials, who often have a significant
financial stake in the continued operations of such mines, and due to lack of enforcement
resources by China’s central government, many of these laws are largely unenforced (see
Hilsum 2007).
Artisanal mines are both a source of benefits and hardships for the communities in
which they are located. On the one hand, most of the coal output from artisanal mines
generally goes to meet community energy needs. Moreover, in many rural areas, these
mines also serve as a primary source of income for local residents (Gunson and Jian
2002, 9). On the other hand, the operation of these mines often produces negative
environmental and public health consequences. With lax safety standards, artisanal
mines have very high levels of fatal work-related accidents. According to official
statistics, more than 6,000 such fatalities occur every year (Kuenzer et al. 2007, 4). The
negative environmental consequences include soil erosion, sound pollution, and dust
clouds—all of which are detrimental for local agricultural activities and public health.
China, the CDM, and Global Climate Change Policy
If coal fires are to be extinguished as part of a greenhouse gas reduction strategy,
this will involve consideration of China’s relationship with the United Nations
Framework Convention on Climate Change, the Kyoto Protocol, and the Clean
Development Mechanism (CDM) of that treaty. Any effort to combat coal fires using a
CDM or CDM-like method must meet the legal and administrative requirements in place
in China as relates to the issue of greenhouse gas emissions.
China is party to both the United Nations Framework Convention on Climate
Change (UNFCCC) and its Kyoto Protocol (Office of National Coordination Committee
on Climate Change 2005). According to the Chinese government, China intends to
cooperate with the international community in the implementation of these agreements
“while maintaining economic and social development” (National Development and
Reform Commission 2007, 3).
82
China has been relatively active in the Clean Development Mechanism (CDM)
program established under the Kyoto Protocol. According to United Nations statistics,
China is host to 196 registered CDM projects, or 19.18 percent of the 1,022 projects that
have been registered so far (United Nations Clean Development Mechanism. 2008b). The
only country hosting more registered project is India, with 331 projects, or 32.39% of all
registered projects (United Nations Clean Development Mechanism. 2008b). The CDM
projects hosted by China involve a wide variety of project types, including methane
capture, hydropower development, wind power generation, and hydrofluorocarbon
abatement (United Nations Clean Development Mechanism 2008a). Moreover, China is
currently ranked second behind only India in the CDM investment climate index for Asia
(Bandelow, Gielisch, and Schulz 2006, 58). In theory, this high level of interest suggests
that China may offer a relatively favorable environment for the development of CDM (or
CDM-like) projects for coal fire abatement.
China and the CDM Process
CDM Project Approval and Implementation
The main coordinating agency for climate change policy, the National
Coordination Committee on Climate Change, (NCCCC) has established a rigorous
process for approving and implementing CDM projects within China (see generally
Office of NCCCC 2005). A formal climate change bureaucracy that includes the
Committee, the National CDM Board (“Board”) and the CDM Project Management
Institute (“Institute”) has been established to ensure the proper functioning of this process
(Office of National Coordination Committee on Climate Change 2005). The Board
consists of members from a number of key agencies within the Chinese government,
including the National Development and Reform Commission (NDRC), the Ministry of
Science and Technology (MOST), the Ministry of Foreign Affairs (MFA), the State
Environmental Protection Agency (SEPA), the China Meteorological Administration, the
Ministry of Finance, and the Ministry of Agriculture (Office of National Coordination
Committee on Climate Change 2005). The Board’s primary responsibility is to review
the implementation of proposed CDM projects for such considerations as baseline
methodology and monitoring plans as well as to monitor and report on the
implementation of existing CDM projects (Office of National Coordination Committee
on Climate Change 2005).
As required by the Kyoto Protocol, the NDRC also serves as China’s Designated
National Authority for CDM. Accordingly, it has the responsibility of accepting CDM
project applications, issuing final approval of accepted CDM project proposals, and
providing formal supervision over the implementation of CDM projects within China
(Office of National Coordination Committee on Climate Change 2005).
The application procedure for implementing a CDM project in China begins when
a project owner—either alone or in conjunction with a foreign partner—submits the
project application to the NDRC. The NDRC then circulates the application to “relevant
organizations for expert review” (Office of National Coordination Committee on Climate
83
Change 2005). * Once the expert review has been completed, the NDRC then submits the
application to each of the Board members for their consideration (Office of National
Coordination Committee on Climate Change 2005). The Board is required to evaluate
each project proposal according to a number of predetermined criteria, including baseline
methodology and emissions reductions, monitoring plan, and price of CER credits
(Office of National Coordination Committee on Climate Change 2005). If the Board
members conclude that the project should be approved, then NDRC, in conjunction with
MOST and MFA, formally approves the project.
The NDRC is required to make a decision regarding the application within twenty
days of its receipt—not including time for expert review—with a one-time optional
extension of an additional thirty days available in cases in which a decision could not be
made within the required twenty-day period. The NDRC is also required to provide a
project applicant with notice of all decisions as well as the reasoning for those decisions
(Office of National Coordination Committee on Climate Change 2005). After a project
has been approved by the NDRC, the project owner must then obtain validation of the
project for registration from a designated operational entity (DOE), as required under the
Kyoto Protocol. Finally, if the project has been approved by the CDM Executive Board,
then the project owner must notify the NDRC of this approval within ten days of its
receipt (Office of National Coordination Committee on Climate Change 2005).
The Chinese government has also established a number of implementation
guidelines that apply once the proposed project has received all the necessary approvals
(Office of National Coordination Committee on Climate Change 2005). According to
NCCCC rules, first, the project owner must provide the NDRC and the DOE with
frequent updates concerning the implementation and monitoring of the project. Second,
the guidelines authorize the NDRC to supervise the implementation of the CDM project.
Third, as provided for under the Kyoto Protocol, the DOE is responsible for verifying any
emissions reductions achieved by the project and submitting the required certification
report to the CDM Executive Board.
Criticisms of CDM Project Implementation in China
Despite the relatively large number of CDM projects being implemented in China,
and despite China’s relatively high investment climate rating for CDM project
development, the implementation of such projects in China has been the subject of some
criticism. Some have criticized the CER credits price floor requirement that has been
established by the Board as a criterion for approval (Xianli and Jiahua 2006, 8). In
essence, this criterion ensures that proposed CDM projects that produce CER credits that
are too low in price will not be approved by the Board. All of the projects approved in
August of 2005 had a CER credit price of around $5 per ton of carbon dioxide equivalent
(CO2-eq) avoided, suggesting that the price floor was around that level. Critics are
*
A project owner is a Chinese funded corporation that must be involved in the implementation of all CDM
projects in China (Office of National Coordination Committee on Climate Change 2005). Entities that are
not based in China can enter into partnerships with Chinese funded corporations in order to implement a
CDM project.
84
concerned that this price floor will eventually leave China unable to compete against a
number of the other active CDM project host countries, thus preventing it from
undertaking potentially important CDM projects (Xianli and Jiahua 2006, 8).
A second criticism relates to the regulatory and legal uncertainty that surrounds
the approval process for proposed CDM projects. The mechanism described above is
only an interim measure; no final mechanism has been formally adopted under the laws
and regulations of China (Xianli and Jiahua 2006, 21). Given this failure to establish a
mechanism for approval of proposed CDM projects through formal legal or regulatory
means, some foreign investors have been reluctant to undertake CDM projects in China.
A third criticism has been directed towards the requirement that only Chinese
funded corporations are eligible to function as a project owner for CDM projects pursued
in China. This restriction on project owner eligibility limits the degree to which foreign
investors can initiate CDM projects in China, and thus limits the amount of projects that
might be potentially pursued there (Xianli and Jiahua 2006, 21).
A fourth criticism concerns the relative stringency of the approval process for
proposed CDM projects. This stringency increases both the amount of time and the
transaction costs required to obtain approval for a project. As such, these stringent
barriers, while theoretically promoting the integrity of CDM projects in China, might also
serve to discourage foreign investors from undertaking these projects in the first place
(Xianli and Jiahua 2006, 21-22).
A fifth criticism highlights the lack of financial institutions available in China.
On the one hand, this makes its difficult for Chinese investors to assemble the capital
necessary to establish corporations that can serve as project owners for CDM projects
undertaken in China. On the other hand, this also discourages foreign investors from
undertaking projects in China, since there are no institutions to guarantee their loans in
the event that a project fails (Xianli and Jiahua 2006, 21-22).
The rapid increase in CDM projects undertaken in China suggests that their
profitability somewhat outweighs the burdens involved in the approval process that
foreign investors must undertake through the Chinese government. Nevertheless, if the
Chinese government does not adequately respond to the burdens that form the bases of
the criticisms discussed above, these burdens might continue to discourage some foreign
investors from pursuing potentially valuable CDM projects in China.
Putting aside bureaucratic hurdles, numerous logistical and technical problems
remain before any CDM or CDM-like project could be undertaken in China for the
purposes of coal fire abatement. These are discussed in the next section. An
understanding of the full scope and magnitude and scope of the issues involved is
necessary before any proposed linkage between the CDM and coal fire abatement is
possible.
85
More on China’s Coal Fire Problem: Scope and Magnitude
The two major obstacles to combating coal fires in China in terms of devising a
comprehensive solution are establishing the scope and establishing the magnitude of the
problem.
The first obstacle is establishing the scope of the problem. Simply getting a
handle on the geographic scope (extent) of the problem can be quite difficult because in
some instances, the locations of the fires are not even known by officials who would be
able to set in motion efforts to combat them. This is because some new fires may be
unreported by local inhabitants, and in other cases, the fires may even go wholly
unnoticed, especially those that occur in particularly remote parts of China.
The next major obstacle is establishing how much coal is being burned, since any
CDM project requires accurate information on emissions and emissions reductions. The
issue of “how much coal?” involves the number of fires burning, the amount of coal
involved, and the volume of greenhouse gases being emitted. This section looks at these
issues.
Scope of the Problem: Knowing the Geographic Distribution of Uncontrolled Coal
Fires
The first issue to consider is the scope or extent of the problem, specifically,
knowing the geographic distribution of these fires. China’s uncontrolled coal fires are
primarily located in the vast coal belt that runs along the northern portion of the country.
As noted earlier, this coal belt extends about 750 km north to south and fully 5,000 km
east to west across the whole of China.. Uncontrolled coal fires are found in all of the
provinces and autonomous regions along China’s coal mining belt, which stretches from
Heilongjiang in the east to Qinghai in the west (Stracher 2007). In most cases, however,
the uncontrolled coal fires tend to be located in the remotest and difficult to reach areas of
the coal belt (Telegraph.co.uk 2002).
Estimating the Number of Uncontrolled Coal Fires in China
There are widely varying estimates of the number of active uncontrolled coal fires
in China. On the low end, some estimate the number of fires to be as low as fifty six
(Meyer 2005). In the intermediate range, several sources estimate the number of fires to
be around 200 or more (Strangeland and Hauge 2007; Revkin 2002; Discover 1999). At
the high end, some researchers such as Stefan Voigt, a geographer with the Sino-German
Coal Fire Initiative* estimate the number of fires in the thousands (Krajick 2005).
Similarly, there are also widely varying estimates of the number of uncontrolled
coal fires affecting individual provinces and autonomous regions in China. The
*
The Sino-German Coal Fire initiative is a collaborative project involving German and Chinese scientists
studying various aspects of China’s uncontrolled coal fires, including issues relating to geology, miningengineering, climatology, socioeconomic effects, and remote sensing technology (Kuenzer et al. 2007, 43).
86
International Institute for Geo-Information Science and Earth Observation (ITC) in the
Netherlands estimates that there are approximately ten fires in Ningxia Hui Autonomous
Region, nine fires in Inner Mongolia Autonomous Region, and thirty to forty fires in
Xinjiang Uygur Autonomous Region (Telegraph.co.uk 2002). Other reports suggest that
these estimates are on the low end. For example, according to one report, there are
sixteen individual uncontrolled coal fires affecting the Wuda coalfield, which itself is just
one of many coalfields and coal mines located in Inner Mongolia (Autonomous Region)
(Meyer 2005).
Similarly, another source reports that twenty-four of the coal production zones in
Xinjiang Uygur (Autonomous Region) contain uncontrolled coal fires (Meyer 2005).
Depending on how many fires are affecting each coal production zone, this report
suggests that the ITC’s estimate of thirty to forty fires in that region is too low. Lastly,
according to the Sino-German Coal Fire Initiative, the Rujigou-Gulaben coalfields in
Ningxia Hui (Autonomous Region) have experienced at least twenty-five coal fires in the
last few years (including twenty in the Rujigou coalfield and five in the Gulaben
coalfield) (Kuenzer et al. 2007, 48). Again, this suggests that ITC’s estimate of ten fires
in Ningxia Hui is too low.
The Ningxia Hui Coal Fires
Figure 4 shows an administrative map of China with its provinces labeled and
Figure 5 shows the geographic distribution of coal mine and coal field fires across China
(Prakash 2007). As indicated in Figure 5, the largest and most concentrated number of
coal fires are located within the coal mining belt in Ningxia Hui, Inner Mongolia (also
called Nei Mongol), and Xinjiang Uygur (Prakash 2007).
These regions are
characterized by their sparse population, high levels of poverty, and arid and semi-arid
climates (Gielisch 2007, 200 and Stracher 2007).*
The most important area of uncontrolled coal fires in Ningxia Hui is the RujigouGulaben coalfields (Kuenzer et al. 2007, 44-46).† The Rujigou and Gulaben are two
adjacent large coalfields that contain some of China’s largest coal reserves. The Rujigou
coalfield in turn contains three major mining areas: the Rujigou coal mine; the Dafeng
open coal mine; and the Baijigou coal mine. Together, the Rujigou and Gulaben
coalfields contain reserve prospects of almost one billion tons. The quality of this coal
ranges from above-average bituminous coal to relatively high-grade anthracite. ITC is
currently studying uncontrolled coal fires at the three mining areas in the Rujigou
coalfield (International Institute for Geo-Information Science and Earth Observation
n.d.), while the Sino-German Coal Fire Initiative is studying uncontrolled fires in both the
Rujigou and Gulaben coalfields (Sino-German Coal Fire Project n.d.). There are at least
seven state-owned in the Rujigou-Gulaben coalfields and at least forty-five artisanal
mines (Kuenzer et al. 2007, 48).
*
Mr. Jianbo Ma, phone interview with James Goodwin, April 12, 2008
To be more precise, the Rujigou-Gulaben coalfields actually straddle the border between Ningxia Hui
Autonomous Region and Inner Mongolia (Nei Mongol) Autonomous Region, but most of the coalfields
area lies within Ningxia Hui Autonomous Region (Kuenzer et al. 2007, 44).
†
87
Figure 4: Administrative Map, China
Source: Mapsoftheworld.com 2006
88
Figure 5: Distribution of Coal Fires, China
Source: Prakash 2007
Almost 5.4 square kilometers of the Rujigou-Gulaben coalfields are currently
being affected by uncontrolled coal fires (Kuenzer et al. 2007, 48). While most of the
uncontrolled coal fires in the Rujigou-Gulaben coalfields are of recent origin, some have
been burning for centuries. For example, one of the uncontrolled coal fires at the
Baijigou coal mine has been burning since the mid 1880s (Telegraph.co.uk 2002). The
Chinese government has also had some success in putting out coal fires in Ningxia Hui.
As already noted, a reportedly 180-year old coal fire at the Rujigou coal mining area was
extinguished in 2007 (United Press International 2007). Because of the area’s higher
quality coal, the most likely cause of most of these fires is probably direct ignition
through careless coal mining practices rather than spontaneous combustion.
The Xinjiang Uygur Coal Fires
As indicated above, Xinjiang Uygur is perhaps the hardest hit area in China’s coal
mining belt. According to one estimate, twenty-four of the region’s eighty-eight coal
production zones (twenty-seven percent) contain at least one uncontrolled coal fire
(Meyer 2005). The Sino-German Coal Fire Initiative is currently studying two
uncontrolled coal fires in Xinjiang Uygur: one at the Ke-er Jian coalfield and one at the
Tielieke coalfield (Sino-German Coal Fire Initiative, Study Area). Many of the largest
uncontrolled coal fires in Xinjiang Uygur are located around the capital city of Urumqi.
Among the most notable uncontrolled coal fires in this area are those located in the Liu
Huangou coalfield (Wingfield-Hayes 2000). Some of the underground fires there have
been burning for decades (Stracher and Taylor 2004). Officials estimate that
89
extinguishing these fires could take as long as four years and cost at least $10 million.
Another notable uncontrolled coal fire near Urumqi was reported to be over a century old
when it was put out in 2003 (Meyer 2005).
The Inner Mongolia Coal Fires
Perhaps the most well known of the uncontrolled coal fires in Inner Mongolia are
those in the Wuda coalfield. The Wuda coalfield has a number of uncontrolled coal fires,
some of which are at least four decades old (Kuenzer et al. 2007, 44; Meyer 2005). The
Wuda coalfield actually comprises three adjacent coalfields: the Wukushan in the South;
the Huangbaici in the East; and the Suhai-Tu in the Northwest. Overall these fields are
estimated to be thirty-five square kilometers in area and contain 630 million tons of coal,
of which only 27 million tons are able to be mined (Kuenzer et al. 2007, 45, 46). This
mineable coal is divided between twenty-four different seams, each ranging from one to
six meters thick (Kuenzer et al. 2007, 45, 46). As mentioned above, the first fires were
started through spontaneous combustion of coal seams exposed by careless mining
activities.
Estimating the Magnitude of the Problem: Coal Burned, Greenhouse Gases
Released, Costs To Society Incurred
The second issue involves the magnitude of the problems being created by
uncontrolled coal fires. This includes the amounts of coal being burned, the amounts of
greenhouse gases being released, and the costs (both economic and non-economic) to
society
Amount of Coal Burned
There have been attempts to estimate the amount of coal that is lost at smaller
scales, such as in the case of the coal fires in Ningxia Hui. According to one estimate,
Ningxia Hui loses around 300,000 tons of coal per year through uncontrolled fires (Fields
2002, A234). This estimate seems low, however, if one considers the estimates that have
been made for the amount of coal that has been consumed by individual uncontrolled coal
fires in that region. According to the Sino-German Coal Fire Initiative, the Gulaben
coalfield alone has lost over 600,000 tons of coal (Kuenzer et al. 2007, 48). Similarly,
some reports estimate that one of the fires in the Rujigou coalfield was consuming about
1 million tons of coal by itself each year when it was extinguished in 2007 (United Press
International 2007).
If these numbers are correct, they would correspond to greenhouse emissions as
much as 1.98 million tons for the Gulaben coalfield and 3.3 million tons for the one
Rujigou coalfield fire. Similar estimates have been made for uncontrolled coal fires in
Xinjiang Uygur and Inner Mongolia. The uncontrolled coal fire located in the Liu
Huangou coalfield in Xinjiang Uygur is estimated to have burned millions of tons of coal
over the course of its twenty- to forty-year lifetime (Wingfield-Hayes 2000). Similarly,
the Sino-German Coal Fire Initiative estimates that the uncontrolled coal fires in the
90
Wuda coalfield in Inner Mongolia burn approximately 200,000 tons of coal each year, a
rate that has been accelerating in recent years (Kuenzer et al. 2007, 47). Over all, the
Wuda coalfield fires are estimated to have burned approximately 2 million tons of coal
over the course of four decades, releasing about 6.6 million tons of greenhouse gases.
Dangers associated with the coal fires and resulting subsidence have rendered an even
larger amount of coal inaccessible to mining operations (Kuenzer et al. 2007, 47-48).
Estimating Greenhouse Gas Emissions from Uncontrolled Coal Fires in China
As noted above, the 2 million tons burned at Wuda over four decades has
translated into 6.6 million tons of greenhouse gases (carbon dioxide equivalent) being
released into the atmosphere. Uncontrolled coal fires generally release two kinds of
greenhouse gases: carbon dioxide and methane (Kuenzer et al. 2007, 44). By
concentration, carbon dioxide is the most prevalent gas released from uncontrolled coal
fires (Stracher and Taylor 2004). The amount of carbon dioxide released from an
uncontrolled coal fire is not constant over the course of the fire’s lifetime7, and the
amount and concentrations of carbon dioxide emitted can vary considerably from one
coal fire to the next due to a number of anthropogenic and geological factors (Kuenzer et
al. 2007, 55; Stracher and Taylor 2004).
The release of carbon dioxide and methane from uncontrolled coal fires presents a
major environmental problem since these are greenhouse gases. By increasing
atmospheric concentrations of greenhouse gases, uncontrolled coal fires are a significant
contributor to anthropogenic global climate change. Given their scope and magnitude,
China’s uncontrolled coal fires are especially significant in this regard. According to one
commonly cited estimate, China’s uncontrolled coal fires account for between two and
three percent of the world’s carbon dioxide emissions (Stracher and Taylor 2004). If,
however, one assumes the amount of coal being burned in China’s uncontrolled coal fires
is towards the lower range of available estimates (i.e. 10-20 million tons of coal per year),
then carbon dioxide emissions from China’s uncontrolled coal fires would only amount to
around 0.1 percent of the total global carbon dioxide emissions (Kuenzer et al. 2007, 52).
Whatever the case, the carbon dioxide emissions from China’s uncontrolled coal
fires are not included in the estimates for China’s annual emissions of greenhouse gases
(Stracher and Taylor 2004), which are probably now the largest of any nation on earth
(Hilsum 2007). New data from the Chinese government and from the IEA indicates that
China either already surpassed the United States in 2007 or will surpass it some time in
2008 for total greenhouse gas emissions (Collier 2007). Scientists attribute the dramatic
increase in China’s annual greenhouse gas emissions over the past couple of decades to
its rapid economic growth and its large population. Owing to China’s economic and
demographic factors and its reliance on dirtier burning coal for so much of its energy
needs, some researchers see a real opportunity with coal fire abatement to realize some
reductions in greenhouse gas emissions. According to Prof. Li Jing, a Chinese scientist
7
Mr. Alfred Whitehouse (Director, International Programs, U.S. Department of the Interior, Office of
Surface Mining) and Ms. Sarah Evans (Foreign Affairs Officer, U.S. Department of State, Office of Global
Change), phone interview with James Goodwin, March 26, 2008.
91
who participated in the Sino-German project, extinguishing coal fires offers an ideal
opportunity for reducing China’s greenhouse gas emissions, particularly compared to
other policy options like increased energy efficiency (Hilsum 2007).
Estimating Economic and Non-Economic Impacts of China’s Coal Fires
China’s uncontrolled coal fire problem produces obvious adverse economic
effects in addition to the public health and environmental ones. According to some
estimates, the burning of coal costs China between $125 and $200 million in direct
economic losses per year (Prakash 2007; Stracher and Taylor 2004). Much of the
economic costs from uncontrolled coal fires are the direct losses that result from the
destruction of coal, a valuable resource that China relies on for energy and economic
growth (see Kuenzer et al. 2007, 43-44).
Many of the economic costs associated with uncontrolled coal fires arise more
indirectly. One major indirect source of economic losses is the phenomenon of acid rain.
As with carbon dioxide, uncontrolled coal fires are among China’s largest emitters of
sulfur dioxide and various nitrogen oxide gases. As such, these coal fires may be a major
contributor to acid rain, which has become a large problem throughout China (Stracher
and Taylor 2004). Among other negative impacts, acid rain has been associated with the
deterioration of building exteriors in China’s vast urban centers as well as with lowered
agricultural productivity, arising from acid-related damage to soil and plants (Nelson and
Chen 2007, 32).
There are also significant non-economic negative effects, particularly as relates to
public health and environmental pollution. As discussed below, the air pollution
generated by China’s uncontrolled coal fires has detrimental consequences for the health
of China’s citizens. These health impacts result in lowered productivity rates and higher
levels of employee absenteeism, which in turn produces more adverse economic
consequences (Stracher and Taylor 2004).
Chinese Government Policy Toward Extinguishing Uncontrolled Coal Fires
The Chinese government has been engaged with the issue of uncontrolled coal
fires for at least the last fifty years, albeit it in a disjointed way lacking a comprehensive
focus. Beginning in 1954, then-Chinese Premier Zhou Enlai directed state organizations
to extinguish coal fires throughout the country (Gielisch 2007, 200). Overall, however,
the Chinese government never adopted a consistent or comprehensive policy for
addressing uncontrolled coal fires during much of this period. According to the ITC,
fewer than 10 percent of China’s active uncontrolled coal fires are currently being fought
(Meyer 2005). Recently though, there are indications that the Chinese government has
come to recognize the various negative environmental and non-environmental (including
economic) consequences of allowing its uncontrolled coal fires to continue to burn. As a
result, the Chinese government has made some concerted efforts to extinguish these
fires, as discussed below.
92
In some cases, these efforts are part of China’s strategy to protect its valuable coal
resources upon which it relies as an important energy source (Kuenzer et al. 2007, 43-44,
54). In other cases, Chinese efforts to extinguish uncontrolled coal fires are directly
attributable to growing pressure from the international community for China to reduce its
greenhouse gas emissions (see Hilsum 2007).
China does seem to be making progress in extinguishing some of its coal fires.
Chinese newspapers report that that the Chinese national government has undertaken a
major initiative with the regional government to extinguish uncontrolled coal fires in
Xinjiang Uygur. Through this joint effort, the national government has agreed to put out
eight major fires in the region by 2012, while the regional government would finance the
extinguishing of twenty-seven smaller fires by 2014.*
Similarly, the Chinese government is starting to pursue a policy of extinguishing
some of the uncontrolled coal fires in Ningxia Hui. According to the Sino-German Coal
Fire Initiative, the Rujigou coalfield in that region has experienced at least twenty
uncontrolled coal fires in the last few decades, fifteen of which were extinguished in the
last five years (Kuenzer et al. 2007, 48), although in fact China has been actively fighting
fires in this region since 1978 (Kuenzer et al. 2007, 54). Undoubtedly, though, much of
the motivation to extinguish these fires is that the coal being consumed is the highly
valuable anthracite coal, rather than any concern for public health or environmental
problems (Kuenzer et al. 2007, 54) or worries over climate-altering greenhouse gas
emissions. On balance, China’s efforts to put out uncontrolled coal fires in the Rujigou
coalfield have been largely successful. Most of the fires in this coalfield have either been
extinguished or are being brought under control (Kuenzer et al. 2007, 54).
Lastly, Chinese newspaper reports indicate that China’s national government is
also undertaking extensive efforts to address the uncontrolled coal fires in the Wuda
coalfields in Inner Mongolia. Specifically, the national government has pledged to spend
around 20 million yuan, or approximately $2.86 million to fight coal fires in the region.†
Despite all the money that the national government and regional governments are
spending on these efforts, many are concerned that the funding is still insufficient to
eliminate all of China’s uncontrolled coal fires. In an interview with a Chinese
newspaper, the Director of the Firefighting Division of Wuda Mineral Company, a stateowned mining company in Inner Mongolia, said that budgetary limitations remain the
biggest impediment to fighting China’s uncontrolled coal fires.‡
Furthermore, with poor regulation of mining practices and inadequate safety
conditions in China’s thousands of remaining artisanal mines, it seems unlikely that
China will have much success in preventing the outbreak of future uncontrolled coal
fires.
*
Mr. Jianbo Ma, phone interview with James Goodwin, April 12, 2008
Mr. Jianbo Ma, phone interview with James Goodwin, April 12, 2008.
‡
Mr. Jianbo Ma, phone interview with James Goodwin, April 12, 2008.
†
93
These artisanal mines often employ poor mining and reclamation practices, which
can lead to the ignition of new coal fires (Hilsum 2007; Kuenzer et al. 2007, 48).
Similarly, even when China is successful in extinguishing an uncontrolled coal fire, the
illegal and unregulated activities at an artisanal mine that can easily cause the still
smoldering fire to reignite (see Hilsum 2007). This undermines those rare instances of
success, of which there have been some. One notable success occurred, in 2007 when
Chinese officials reported extinguishing a 180-year-old coal in Rujigou coalfield in
Ningxia Hui (United Press International 2007). So far, this fire has remained out.
Unfortunately, however, the reverse also occurs— re-ignition of an uncontrolled fire that
had been extinguished (or was believed to be extinguished). One common scenario for
ignition is when illegal mining operations begin at a small rudimentary artisanal mine
where a coal fire had been extinguished. This occurred at the site of a coal fire that had
been extinguished in 2004 in the Liu Huangou coalfield in Xinjiang Uygur, where
firefighters had spent four years putting out a fire that had burned an estimated 1.8
million tons of coal each year. Local officials believe that a small artisanal mine began
operating on the site after the fire was extinguished and then accidentally reignited
through careless mining practices (Hilsum 2007).
The lack of regulatory oversight in areas in which uncontrolled coal fires have
been extinguished or are in the process of being extinguished has already been discussed
above. To illustrate this lack of oversight, a number of Chinese newspapers have
reported that local peasant farmers are beginning to disguise themselves as firefighters in
order to obtain access to firefighting sites so that they can steal exposed coal.* These
extreme examples demonstrate how easy it is for unregulated miners to access these sites,
thereby increasing the chances that they might accidentally reignite the recently
extinguished uncontrolled coal fire.
CDM Coal Fire Abatement Projects in China: Could It Work?
As the above discussion indicates, it appears that the Chinese central government
is beginning to take the issue of fighting uncontrolled coal fires more seriously, as
evidenced by the collaborative efforts it is undertaking with the relevant regional and
local governments to fight such fires in those three regions where they are especially
pervasive and deleterious. Furthermore, the Chinese government is actively involved in a
number of CDM projects.
The question to which this chapter has been building is whether it is possible to
unite these two approaches in the form of a CDM (or post-Kyoto Protocol CDM-like)
coal fire abatement project in China to offset carbon emissions. Given the emissions and
credits that would be involved, such a project has the potential to be quite lucrative.
Additionality and Permanence Issues
However, the very fact that the government is taking such an initiative to
extinguish more of these fires, ironically, creates an additionality problem. That is, given
*
Mr. Jianbo Ma, phone interview with James Goodwin, April 12, 2008.
94
these efforts, it is possible that carbon offsets projects designed to put out uncontrolled
coal fires in China might not meet the requirement of additionality, since one could argue
that many of these fires would be put out even in the absence of these carbon offsets
projects. However, the argument that these carbon offsets projects would not meet the
requirement of additionality seems weak when one considers all of the available
evidence. On the one hand, the sheer number of uncontrolled coal fires in China, the
economic loss, the public health and environmental effects, and the massive amounts of
greenhouse gases they emit are all serious issues that go beyond an abstract argument of
additionality. On the other hand, the high costs and logistical difficulty involved in
extinguishing them suggest that China will not be able to address all of the fires within its
borders, thereby allowing many of these fires to continue burning for many years or even
decades until they extinguish themselves.
Moreover, the evidence is not clear that China’s efforts are even part of a
comprehensive effort to extinguish all of the coal fires. Rather, the efforts might simply
reflect an effort by China to preserve its most valuable kinds of coal resources. This
would actually leave many of the uncontrolled coal fires to burn unabated. As such,
carbon offsets projects designed to extinguish many of China’s coal fires would likely
meet the additionality requirement in most cases, since it seems that many of these fires
would not be extinguished but for the implementation of the project.
The question of whether these carbon offsets projects would meet the requirement
of permanence is a little more problematic, however. China’s policies towards
uncontrolled coal fires seems limited to putting out a few of these fires, but there appear
to be no policies in place to prevent these fires from being reignited by illegal or smallscale mining operations. As such, there is little guarantee that a carbon offsets project
designed to extinguish an uncontrolled coal fire would result in permanent or long-lasting
emissions reductions, since the extinguished fire might be reignited soon after the
project’s completion. Indeed, this permanence question raises the same monitoring
concerns that are being addressed for projects designed to achieve emissions reductions
through avoided reforestation in places like Brazil and Indonesia. Without a better
system of monitoring in place to ensure that extinguished coal fires remain extinguished,
there may be sufficient concerns regarding permanence to jeopardize any attempts at
having projects designed to extinguish these coal fires approved as a carbon offsets
mechanism, either for the CDM or for the voluntary markets in the United States.
A Coal Fire Abatement Project Case Study: Determining CDM Viability
One notable effort was conducted by the Deutsche Montan Technologie GmbH
(DMT) using as a case study an uncontrolled coal fire in Xinjiang Uygur in order to
determine the viability of using the Kyoto Protocol’s CDM program to finance coal fire
extinguishing projects in China (Bandelow, Gielisch, and Schulz 2006, 56). In its case
study, the DMT estimated that the uncontrolled coal fire it was investigating emitted
approximately 420,000 tons of carbon dioxide each year. Furthermore, the DMT
estimated that this uncontrolled coal fire would continue to burn with the same intensity
for ten years, yielding a lifetime emission of approximately 4 million tons of carbon
95
dioxide for that coal fire. Finally, the DMT estimated that extinguishing the fire would
cost about the equivalent of 4 million euros. Thus, the DMT concluded that the project
could produce carbon offsets that cost approximately 0.95 euros per ton of carbon dioxide
avoided, not including the additional upfront costs required to have the project accredited
for the CDM program.
At the time that the DMT had conducted this analysis, CDM credits cost
approximately seven or eight euros in the European Union Emissions Trading Scheme.
Consequently, the DMT concluded that CDM projects involving the extinguishing of
uncontrolled coal fires in China had the potential to be quite profitable (Bandelow,
Gielisch, and Schulz 2006, 57). In particular, the DMT observed that there was a
sufficient gap in the costs to allow for significant cost variations across coal fire projects
that might result of changed economic and geologic conditions.
Other cost analyses have produced conclusions similar to that of the DMT
analysis. For example, one Chinese newspaper article from 2004 cited a report that
indicated that CDM credits generated through the extinguishing of uncontrolled coal fires
in China would cost between $0.70 and $2 per ton of avoided carbon dioxide.*
Conclusions and Recommendations:
There is certainly no shortage of potential coal fires in China that foreign
investment could play a role in extinguishing. By one estimate, fewer than 10 percent of
China’s active uncontrolled coal fires are currently being fought (Meyer 2005). Limited
information about specific uncontrolled coal fires in China makes it exceedingly difficult
to identify mines that are particularly well suited for such foreign investment, however.
In addition, there is the problem of knowing how much coal is being burned and hence
how much greenhouse gases are being emitted. Then there are the technical and logistical
difficulties of fighting sometimes remote coal fires. Finally, there is the bureaucratic
labyrinth that envelops the whole CDM process, both with the CDM Executive Board
and the Chinese government. Nevertheless, a number of factors do suggest that China’s
uncontrolled coal fires offer an excellent opportunity for investments in carbon offsets
projects.
As discussed above, China seems to offer a favorable investment environment for
the development of carbon offsets projects. China has been relatively active in the CDM
program established under the Kyoto Protocol. Moreover, China is currently ranked
second behind only India in the CDM investment climate index for Asia (Bandelow,
Gielisch, and Schulz 2006, 58). To be sure, there are a number of burdens that foreign
investors must overcome in order to obtain approval of a proposed CDM project by the
Chinese government. As described above, these burdens have been substantial enough to
discourage foreign investors from pursuing such projects in China. Nevertheless, the
rapid increase in CDM projects initiated in China in the last few years suggests that these
burdens are not insurmountable.
*
Mr. Jianbo Ma, phone interview with James Goodwin, April 12, 2008.
96
In light of the two factors described above—cost effectiveness and the
favorability of China for developing CDM projects—it would seem that extinguishing
coal fires in China offers potential as a project for developing carbon dioxide offsets. To
confirm this potential, however, further inquiry is necessary. In particular, it will be
necessary to identify a few active uncontrolled coal fires in China. These fires need to be
studied in order to determine the amount of coal they each now burn, the amount of coal
they will burn over their lifetime, and the probable cost of putting the fire out. Making
these determinations with the requisite accuracy may be beyond the capacity of current
scientific knowledge and methods. Accordingly, it seems that this knowledge and these
methods will also need to be further refined before a project to generate carbon offsets
through the extinguishing of uncontrolled coal fires in China can be successfully
undertaken. It seems that pilot projects would provide ideal vehicles for undertaking
such studies.
These considerations of practicality are not the only relevant factors, however. In
addition, to be potentially feasible, a proposed carbon offsets project must also meet the
relevant requirements in order to be approved as a recognized mechanism under either
the CDM or the voluntary offsets market in the United States. As discussed above,
despite China’s policies to extinguish uncontrolled coal fires within its borders, the
evidence suggests that carbon offsets projects to address these fires would likely meet the
requirement of additionality. Specifically, both the large number of these fires and the
apparently limited nature of China’s policies towards these fires suggest that many of
them will continue to burn unabated for years or even decades in the absence of a carbon
offsets project.
The requirement of permanence might be more difficult to meet, since China has
not proven itself adept at preventing extinguished fires from being reignited by the
careless mining practices of the illegal or small-scale mining operations within its
borders. As with the proposed afforestation methodologies, China will need to
demonstrate that it is capable of monitoring the sites of extinguished uncontrolled coal
fires to ensure that the fires are not reignited. If this concerned is adequately addressed,
and if the results of the studies described above prove favorable, then the extinction of
uncontrolled coal fires in China, and elsewhere, might emerge as a valuable carbon offset
project for both the CDM and the U.S. voluntary market.
Recommendations:

The existence of many uncontrolled coal fires in China and the urgency of
extinguishing them should be included by United States and other
international negotiators as important topics in future discussions of Chinese
actions to address world problems of greenhouse gas emissions and climate
change.

The Chinese government should be encouraged to establish transparent and
workable procedures by which CDM credits for extinguishing uncontrolled
coal fires can be established and certified within China.
97

The Chinese government should be encouraged to allow easier and greater
participation of foreign private companies and other foreign organizations in
projects to put out coal mine fires in China and to sell the resulting carbon
credits.

Steps should be taken to compile a complete inventory of the current
uncontrolled coal fires in China. This may help to address any potential
permanence and additionality concerns for future carbon credit projects
designed to extinguish coal fires in China.

Additional research and other studies should be undertaken to further refine
cost estimates for extinguishing coal fires in China.

One or more uncontrolled coal fires in China should be chosen as
demonstration projects to evaluate the feasibility of using the extinguishing
of such coal fires to generate cost-effective carbon offset credits.
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CHAPTER 8 – INDONESIA AND COAL FIRES
Coal fires in Indonesia are closely linked to a chronic problem of forest fires in
the past quarter century as increasing human pressures on the land have lead to rapid
deforestation through the use of fires to clear jungle cover. Small scale forest fires have
had a history of getting out of control under severe drought conditions. Coal fires are both
a subset of this wider set of fires and are intimately bound up with them. In order to
understand why and how the coal fire issue is related to the larger forest fire issue, it is
helpful to consider a set of issues relating to population, geography, land use pressures,
and climate in Indonesia.
Geography, Population, and Land Use Pressures Contribute to the Forest Fire
Problem
Despite its vast size as a sprawling archipelago containing approximately 1.92
million square kilometers and consisting of 17,508 islands (approximately 6,000 of which
are inhabited), land use is at a premium in Indonesia. This is because Indonesia currently
has a population of 237.5 million, making it the fourth most populous nation in the world,
as well as the largest Muslim country on the planet. The five main islands are Sumatra,
Java, Borneo, Sulawesi, and Papua. The islands of Borneo and Papua are shared with
other nations; Malaysia and Brunei on Borneo, and Papua New Guinea on Papua.
Indonesians refer to the island of Borneo as Kalimantan, which is the name of the
Indonesian state on the island (Whitehouse and Mulyana 2004, 2).
As of 2007, only eleven percent of the land was arable, and another seven percent
was dedicated to permanent crops such as rubber trees and palm oil trees. While the
agricultural sector accounts for a mere 12.4 % of GDP in a year, it employs 43.3 % of the
population. Indonesians need land to grow crops for personal consumption, and there is a
large incentive to grow plantation crops such as pulpwood, rubber and palm oil because
of the ease of obtaining new land (Whitehouse 2000, 1). On islands where the majority
of the land is covered by tropical rain forest, the only way to obtain farm land is to get rid
of the forest.
Land clearing by burning is the most popular method of removing forest cover in
Indonesia (Villarosa and Witteman 2001, 5). Fire reduces plant cover quickly, at a very
low personal cost to the fire setter, and the burnt matter left behind can fertilize poor soil
(Whitehouse 2000, 1). It has been estimated by the United States State Department that
clear burning the forest costs two to four times less than the next best alternative, not
taking into account the costs of externalities (Villarosa and Witteman 2001, 5). The
difficulty is that forest fires started by untrained professionals can quickly get out of
control.
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Natural forest fires
Natural forest fires are rare in Indonesia. For a natural forest fire to occur there
needs to be ample vegetation for fuel, the proper wind and weather conditions, and an
ignition source. It is believed that less than one percent of the forest fires in Indonesia are
natural, because the forest ecosystem rarely piles up enough vegetation to burn, and there
are few natural ignition sources. The evidence indicates that almost every forest fire in
Indonesia has been deliberately set by an individual citizen (Villarosa and Witteman
2001, 2). While it is illegal to set some types of fires, there is little to no government
enforcement of these laws (Villarosa and Witteman 2001, 7). Of 263 coal fires
inventoried in Indonesia, all of them could be traced back to human-made fires
(Whitehouse and Mulyana 2004, 3).
ENSO Climate Variations and Fire
There have also been climate variations in the past twenty-five years involving the
El Nino – Southern Oscillation (ENSO) phenomenon that have resulted in periods of
prolonged drought that have greatly exacerbated fires. The worst fire years have been
1982/83, 1987, 1991, 1994, and 1997/98; twenty-six of the last twenty-eight drought
periods since 1877 have been associated with warm ENSO events (Whitehouse 2000, 1).
A warm ENSO (El Nino Southern Oscillation) event refers to a particular alteration to
Pacific Ocean water temperatures and to interlinked atmospheric pressure pattern changes
that tend to bring drought to Indonesia.
With all of these factors in mind, the issue of coal mining, coal usage, and coal
fires can be explored since, as noted above, coal fires are closely linked to the larger issue
of forest fires. The next section provides an overview of coal production, consumption,
and export statistics for Indonesia.
Coal Statistics for Indonesia: An Overview
With 4,968 million metric tons (MMT) of proven reserves, Indonesia ranks a
distant fourth behind China (114,500 MMT), India (92,400 MMT), and Australia (78,500
MMT) in terms of coal reserves in the Asia-Pacific region (Energy Information
Administration 2007; World Coal Institute n.d.). About ninety percent of Indonesia’s
coal reserves are concentrated on the islands of Borneo and Sumatra, where the coal lies
beneath tropical forest (Whitehouse 2000, 2).
In 2005 it is estimated that 152.2 MMT were extracted, making Indonesia the
seventh ranked coal producing nation in the world. Although its reserves are relatively
modest compared to some of its Asia-Pacific regional neighbors, Indonesia is a big
exporter of coal, exporting 107.3 MMT in 2005, or nearly three quarters of the coal it
extracted that year and 21 percent of global coal exports. Of this 107.3 MMT, about 89
MMT was steam coal and 18MMT was coking coal, ranking Indonesia second among
steam coal exporting nations and fourth among coking coal exporting nation in the world
(World Coal Institute n.d.).
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In terms of domestic consumption, coal is not the dominant source of energy.
Based on 2004 primary energy consumption statistics, coal ranked fourth at 13 percent
behind natural gas (19 percent), combustibles/renewable/waste (27 percent), and crude oil
(31 percent). Overall in 2005, only 27 percent (41.3 MMT) of the coal extracted was
consumed domestically, with 75 percent (31 MMT) going toward electricity production
and 25 percent (10.3 MMT) used by industry. The industry portion was divided roughly
evenly between non-metallic minerals (5.6 MMT) and paper, pulp, and print activities
(4.3 MMT), and the rest (0.2 MMT) for iron and steel.
Coal Mining and Coal Mines in Indonesia
The Indonesian government owns the mineral rights to coal and gives out
concessions to coal companies to mine it. Companies can buy Coal Contract to Work
(CCOWs) permits that allow them to explore for coal and mine in a particular geographic
area. There is one state-run coal mining company, and six other CCOWs produce the
bulk of the rest, followed by an assortment of smaller CCOWs. The remaining
companies are wholly private firms or cooperatives.
The main government-owned coal mining company is known as PT Tambang
Batubara Bukit Asam Tbk (PTBA) and in 2004, the last year for which statistics were
available on the Web site of the U.S. Embassy in Jakarta, Indonesia, it produced 8.7
MMT or about 6.6 percent of the total coal produced in Indonesia that year. This actually
represented a drop from 10.0 MMT or 8.8 percent of the total produced the prior year in
2003 (U.S. Embassy, Jakarta, Indonesia, 2004). In 1999, PTBA produced 11.2 MMT or
15.2 percent of the country’s total coal production for that year (U.S. Embassy, Jakarta,
Indonesia, 2001).
The six main CCOWs are Adaro Indonesia, Kaltim Prima Coal, Kideco Jaya
Agung, Arutmin Indonesia, PT Berau Coal, and Indominco Mandiri. In 2004, they
produced a combined total of 93.1 MMT or just over 70 percent of the 132.4 MMT
produced that year with Adaro and Kaltim producing 24.3 MMT and 21.3 MMT,
respectively (U.S. Embassy, Jakarta, Indonesia, 2004). The share produced by these six
companies of the country’s total has inched up each year from 67 percent in 1999 while
PTBA’s share has gone down. The remaining coal production is from an array of smaller
CCOWs and from local cooperatives.
Of the seven main coal mining companies (PTBA and the six main CCOWs),
three operate mines exclusively in East Kalimantan (World Coal Institute n.d.). Many of
the mining operations take place in the East Kalimantan province. Kaltim Prima Coal
Company operates mines around Sangatta, the capital city of the East Kutai Regency.
Some of their mining operations are contracted out to other, smaller firms (Kaltim Prima
Coal 2008). The P.T. Berau Coal Company is a joint venture between P.T. Armadian
Tritunggal, an Indonesian company, Dan Rognar Holding B., a Dutch company, and
Sojitz Corp., a Japanese company. In 1983 the venture was awarded the exclusive rights
to mine in East Kalimantan, specifically in Lati, Binungan and Samburatan.
103
Mining companies also provide an important source of infrastructure investment,
because the companies build roads, schools, and hospitals in the remote areas in which
they operate. This is especially true in the state of Kalimantan.
Coal companies such as PTBA and the various CCOWs do not attempt to
extinguish fires on their concessions because the costs do not outweigh the benefits. This
issue of who would put out coal fires will play into the additionality problem for any
proposed carbon credit sales related to coal fire abatement through a Clean Development
Mechanism (CDM) or CMD-like project in Indonesia. It would probably require the
involvement of outside parties to put out coal fires in Indonesia.
Coal Fires and Forest Fires in Indonesia
A Vicious Cycle
In the tropical jungles of Indonesia there is a vicious cycle of fire involving
humans, the forest, and exposed coal seams. Though the cycle is initiated by humans,
once started, the cycle can be self-sustaining between forest and coal seams even without
human intervention. The cycle is initiated when humans set forest fires either to clear
land for agricultural or other purposes or when trash heaps are ignited. Such fires can
quickly spread beyond what was intended to clear a plot of land or as a result of a burning
trash heap, setting a much larger area of forest ablaze.
Such forest fires can then ignite exposed outcrops of coal. Once initiated, these
coal outcrops can burn for decades if they are part of larger coal seams. They can burn
until all the coal is burned up, the fire runs out of oxygen, or it is put out through human
intervention (Whitehouse 2000 1). While monsoon rains can put out forest fires, they
cannot extinguish coal fires (Whitehouse and Mulyana 2004, 2). The cycle goes full
circle when fire moves through the coal seam, re-igniting forest fires, starting the cycle
over again even in the absence of any subsequent human intervention beyond setting the
original forest or trash heap fire.
Because of their origins, coal fires in Indonesia are generally in the form of
burning coal seams on the surface, not underground mine fires such as those often found
in India, China, and parts of the United States. Instead, in Indonesia they are exposed
outcroppings of coal seams that can ignite during a forest fire.
Estimating the Number of Coal Fires in Indonesia
In one sense, coal fires are not a new problem for Indonesia; some of the fires
have been burning at least since 1982. (Whitehouse 2000, 1) However, many of the fires
are burning underneath the tropical forest, which makes it difficult to assess how many
fires in total are actually burning. When the fires are deep in the jungle, they are often
not seen by humans. Since most of the forest is uninhabited and only fires that threaten
roads, homes, or public buildings are usually noticed, those fires burning away from
104
towns are not catalogued. (Whitehouse and Mulyana 2004, 3) There are remote sensing
techniques, but until recently, the thick canopy made aerial and satellite mapping
difficult.
There have been 263 coal fires investigated in Indonesia since the 1980s. East
Kalimantan is a province on the island of Borneo where tropical forest covers most of the
land, and there are rich coal seams. In East Kalimantan alone, 164 fires have been
inventoried. Officials at the United States Office of Surface Mining in the U.S.
Department of the Interior have used these known fires to build an estimated range of the
number of fires burning in East Kalimantan. It is believed there could be anywhere from
760 fires if most fires are known, and 3000 possible fires, if only very few fires have
been identified. (Whitehouse 2000, 3) While this is a large range, it is important to keep
in mind the cycle of fire. Even one coal fire can re-ignite a forest fire, which has the
possibility of starting even more coal fires.
There is difficulty in reliably estimating how many fires are burning in Indonesia.
First of all, the jungles are deep, and there are not many roads through them, making
detection difficult unless the fire is near a town or a road. Second, the jungle canopy
makes aerial detection next to impossible.* Thirdly, if the forest is already on fire, smoke
from a coal seam fire would be indiscernible from smoke due to the forest fire. As
discussed in the technology section of this report, there is work being done in Germany
on remote sensing techniques. However, it is not clear how the jungle canopy would
interfere in any sort of heat sensing technique.
Environmental, Public Health, and Economic Harm from Indonesian Forest Fires
The remaining tropical forests of Indonesia are home to endangered species such
as orangutans and sun bears. (Whitehouse and Mulyana 2004, 2) There are estimated to
be 20,000 orangutans in the wild, and 15,000 are believed to live on Kalimantan.
(Whitehouse and Mulyana 2004, 5) Coal fires are often associated in a “vicious circle”
with at least some of the larger set of forest fires that regularly and effectively
irreversibly destroy significant swaths of Indonesia’s tropical forest. Whatever the cause,
these forest fires threaten these species’ already decimated habitats in the province of
East Kalimantan, and coal fires only exacerbate the problem.
Coal fires are burning near Kutai National Park and Sungai Wain Nature Reserve,
both important ecological reserves in East Kalimantan. Sungai Wain contains the last
unburned primary forest in the Balikpapan–Samarinda region of East Kalimantan, the
area most affected by forest and coal fires. However, the fires of 1997/98 burned almost
50 percent of the reserve and the forest fire ignited 76 new coal fires. These coal fires
represent a great risk for re-igniting forest fires, because the primary forest becomes more
susceptible to fire after each major burn. (Whitehouse 2000, 1-2)
*
Mr. Alfred Whitehouse (Director, International Programs, U.S. Department of the Interior, Office of
Surface Mining) interview with authors, March 11, 2008.
105
The loss of forest resources and the haze from the smoke has hurt Indonesia’s
economy – and the smoke has sometimes reached other nations as well. (Villarosa and
Witteman 2001, 4) Some of the coal fires threaten infrastructure such as roads and
schools. (Whitehouse 2000, 1) Damage to the infrastructure not only costs money to
rebuild, but there are social costs as well. The U.S. State Department has estimated that
the cost of burning land to make room for agriculture has cost the Indonesian economy,
and the surrounding countries, billions of dollars each year, including loses due to the
extreme haze. Yet these costs only take into account economic losses, they do not
include the loss of biodiversity, degraded ecosystem functions, or the increase in health
costs in the long term due to exposure to chemicals from the fires. (Villarosa and
Witteman 2000, 4)
Forest fires have a large impact on the health of Indonesians. The cycle of fire
shows that problems associated with forest fires are also associated with coal fires. The
soot from forest fires contains ash and particulate matter that is harmful to human health.
Coal fire fumes contain toxic substances such as CO, CH4, and H2S (Villarosa and
Witteman 2001, 3), which when breathed in can cause health issues. Coal fires eat
through the coal seam, causing land subsidence above. This land can then be extremely
weakened, and can collapse (Whitehouse 2000, 1); there is a potential for people to be
hurt if walking above the back end of a coal fire.
Government Involvement in Coal Fires
Indonesian Government
Indonesia is a fairly young country, with a new democracy. Indonesia was
originally a Dutch colony, but won its independence after World War II. Indonesia had
an authoritarian government for its first four decades. Indonesia has been slowly moving
towards a democracy, with a popularly elected president and vice president, a legislature
and a judicial system. However, the political structure has difficulties with wide
corruption. Indonesia is also having difficulties managing the military and the police
force; there have been accusations of human rights violations, and there is often little
enforcement of the laws on the books (Villarosa and Witteman 2001, 4).
There has been an unwillingness of any government agency to assume jurisdiction
over coal seam fires. It was a widely held belief that the fires would be difficult and
costly to put out, and no agency wanted to be associated with failure (Whitehouse and
Mulyana 2004, 3). The government is still highly centralized, and decisions are made in
Jakarta, not out in the jungles where the fires are. The government is facing many other
pressing issues, and coal fires are low on the priority list (Villarosa and Witteman 2001,
5-7). When coal fires were discovered that threatened homes or public buildings, the
government chose to relocate people, rather than put the coal fires out (Whitehouse and
Mulyana 2004, 3).
The Indonesian government is committed to reducing greenhouse gases on a
world-wide basis. President Dr. H. Susilo Bambang Yudhoyono committed Indonesia to
106
an interdependent approach to emissions reductions at the United Nations “Global Voice
for Climate Change” event in New York in 2007. The President asserted that greenhouse
gas emissions know no boundaries, and that he believed only a collective world-wide
effort would be effective against climate change (Yudhoyono 2007). Indonesia was the
host of the United Nations Climate Change Conference in Bali in 2007, further showing
its commitment to climate change issues (United Nations Framework Convention on
Climate Change 2008b).
Role of the United States Government
After the terrible forest fire season of 1997/98, the United States Government
created an inter-agency working group to aid Indonesia in the aftermath of the fires. The
Office of Surface Mining (OSM), in the Department of Interior, is responsible for dealing
with coal mine fires in the United States, and now has a supporting role in Indonesia as
well. On August 18, 1998, OSM began its “Coal Fire Project” in Indonesia. The OSM
was instrumental in showing the Indonesian government that these fires were and are
manageable. The OSM initiative was funded by a $1.5 million dollar grant from the
United States State Department (Whitehouse 2000, 2).
The first hurdle the OSM had to overcome was that no agency in the Indonesian
government wanted to take responsibility for coal fires. Eventually OSM convinced the
Department of Energy and Mining Resources (DEMR) that their agency was the natural
place for dealing with coal fires. The goal of OSM was to provide the DEMR with the
capability to take action against coal fires in a quick and effective manner (Whitehouse
and Mulyana 2004, 3). The United States provided the funding and transfer of necessary
skills to put out coal fires (Whitehouse and Mulyana 2004, 4).
The project has been successful in fighting coal seam fires. Early success was
vital to show the Indonesian government that coal fires were a solvable problem. The
first fire the DEMR and OSM worked on together was in the East Kalimantan Province.
The project was selected because the fire was highly visible to the public, and if
successfully put out the project would save two homes, and the only road connecting
Balikpapan, itself a major city, to Samarinda, the capital of the Province (Whitehouse and
Mulyana 2004, 3). The coal fire began due to a brush fire. The project began on October
12, 1998 and was completed by November 7 of the same year (Whitehouse and Mulyana
2004, 4). In the end the Coal Fire Project helped extinguish 52 fires, 32 of which were in
the Sungai Wain Reserve (Whitehouse 2000, 3).
Benefits From Putting Out Coal Fires in Indonesia
Indonesia is a prime example of the other adverse effects from these fires, and the
co-benefits from putting them out. It is possible to calculate the potential emissions from
coal fires in Indonesia. The Indonesian government in conjunction with the United States
Office of Surface Mining has begun to inventory coal fires. This inventory has
incomplete information, but attempts to include the size of the coal seam, the location of
107
the fire, when it started burning, and if the fire is out or not. The Office of Surface
Mining made this data available to the authors of this report.
The following calculations assume that the coal seams burn in entirety, and do not
extinguish naturally due to lack of oxygen. According to the methodology suggested in
Chapter 4 of this report, we are also assuming a conservative estimate of 3.30 tons of
CO2 equivalent per ton of coal. It is also assumed that the coal is bituminous.
One possible way to look at the data is to examine the total amount of greenhouse
gases that would be released, if all the fires were left to burn. In this calculation we took
the total volume of coal that had been burning, and is currently burning, and estimated
the greenhouse gas equivalent emissions. Then, since the inventory is incomplete, we
assumed that the known fires are a representative sample of all the inventoried fires.
There is information for 38% of fires that have been extinguished and 37% of the
fires still burning. If, hypothetically, all the fires had have been left to burn, then about
5.0 million tons of CO2 equivalents would have been released. This calculation provides
a sort of upper emissions ceiling, because it assumes that the fires that have already been
put out might have been left to burn, and that the fires left burning would not be
extinguished.
The actual number of fires now burning is largely unknown. If the inventory of
known fires perhaps represents 70 percent of fires, say, then it is possible that the current
emissions ceiling could be about 7.2 million tons of CO2 equivalent. However, if the
inventory only represents 1 percent of fires, which is possible, then the ceiling could be
as high as 500 million tons of CO2 equivalent. Obviously, there are very large
uncertainties about the extent of uncontrolled coal fires and resulting greenhouse gas
emissions in the Indonesian content.
In reality, one would also need to know the burn rate of the fire to estimate
emissions with any precision over given future years. In the calculations done for this
report we assumed the fires burn consistently, and completely. We did not take into
account the variations in emissions that arise from hotter and faster burning, or from
different chemical make ups of coal seams. These numbers do provide a brief view of
the potential carbon savings from a scheme to put out coal seam fires in Indonesia.
Conclusions and Recommendations:
A number of factors suggest that Indonesia would be a good candidate for a pilot
program for obtaining carbon credits generated by putting out coal fires. First, the
Indonesian government has already accepted jurisdiction over coal seam fires. This is
important, because for a program to succeed it will need the host country’s cooperation.
Having one specific government agency to work with reduces the amount of red-tape, as
well as centralizes information.
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Second, Indonesia has already successfully demonstrated that there are feasible
methods available for putting out coal seam fires. With the United States OSM’s help,
Indonesia put out 52 fires in the past. While the Department of Energy and Mineral
Resources still needs to build up its fire-fighting capabilities, the ground work has been
laid. While the Coal Fire Project has been completed, the OSM still has a mission to
assist Indonesia when asked, so there is an extra support system in place.
Third, although not anywhere near complete, Indonesia has inventoried fires in
East Kalimantan. With improvements in detection techniques it should be possible to
obtain a more complete inventory. Having an inventory of existing fires might be an
important tool against future fraud. If a coal fire was started intentionally to obtain
money from selling the credits, the project would not meet validation requirements set up
by the CDM. Knowing what fires existed prior to the inception of the project would help
to prevent such potential abuses.
The issue of additionality was raised in Chapter 6. Although the OSM has trained
the Indonesian government on how to put out coal fires, once OSM left, the project lost
most of its funding. Unless the coal seam fire is in immediate danger of destroying
infrastructure, the Indonesian government now lets it burn. Many fires in the forest are
left to burn as well. The costs are too high, so it is likely that the Indonesian government
will need outside funding to put out most current coal fires.* Hence, it should not be
difficult in most cases to demonstrate additionality.
Fourth, there are biodiversity co-benefits from putting out Indonesian coal fires.
The majority of the fires are in the tropical rain forest. The coal fires can spark forest
fires, which can create further risks for threatened or endangered species. Scientists
believe that the tropical forests hold many thousands more species than we know about
(U.S. Department of State, Bureau of International Information Programs n.d.). Some
known Indonesian coal fires have been alarmingly close to orangutan preserves.
Fifth, Indonesia has signed the Kyoto Protocol, and has been involved in 14 CDM
projects through 2008 (United Nations Framework Convention on Climate Change
2008a). There could also be a new set of CDM projects to put out coal fires. English is
also widely spoken in Indonesia, which would assist any US agency or company
interested in doing a coal fire mitigation project.
Cons
There are also concerns about a CDM coal fire program in Indonesia. There is a
corruption problem in some Indonesia government agencies which could complicate the
successful implementation of CDM projects. Indonesia has been called “law heavy,
enforcement poor” (Villarosa and Witteman 2001, 4). In 2001, the United States State
Department had difficulties in working with the central government of Indonesia to
address the problem of forest fires. Hosting CDM projects requires that the host country
*
Mr. Alfred Whitehouse (Director, International Programs Office, Office of Surface Mining), e-mail
message to Elizabeth McNicol April 29, 2008.
109
work closely with NGO’s and other organizations. A CDM methodology requires
outside monitoring to ensure that the carbon emissions reductions are really being
achieved. If the Indonesian government did not cooperate, a whole project could unwind.
Another concern is that of permanence, and whether the Indonesian government
has the capabilities to enforce the forest fire laws. If a coal fire is successfully put out,
and CDM credits are created, but then a private citizen sets an illegal land clearing fire
that gets out of control and reignites a coal seam, who would pay to put the fire out
again? Would the credits previously purchase be voided by such an act?
There is also some concern that the fires might be too deep in the forest to be
accessible to fire-fighters. In some ways Indonesia represents low hanging fruit in terms
of putting out coal fires. The fires are usually close to the surface, and labor costs are
low, so the costs at the site to put out coal fires is typically low. However, if the fires are
in remote locations, they might involve large transportation costs that would result in
high overall costs of coal fire extinction.
Recommendations:

The Indonesian government should be encourage to establish transparent
and workable procedures by which CDM credits for extinguishing
uncontrolled coal fires can be established and certified within Indonesia.

Steps should be taken to compile a full inventory of the current uncontrolled
coal fires in Indonesia. This may help to address any potential permanence
and additionality concerns for future carbon credit projects designed to
extinguish coal fires in Indonesia.

Additional research and other studies should be undertaken to further refine
cost estimates for extinguishing coal fires in Indonesia.

One or more uncontrolled coal fires in Indonesia should be chosen as
demonstration projects to evaluate the feasibility of using the extinguishing
of coal fires to generate cost-effective carbon offset credits.

The United States government should offer financial assistance to the
government of Indonesia for the purpose of developing and implementing a
program of creating carbon credits based on extinguishing uncontrolled coal
fires.
References
AsianInfo.org. 2000. Indonesia’s Geography,
http://www.asianinfo.org/asianinfo/indonesia/pro-geography.htm.
110
Central Intelligence Agency. 2008. The World Factbook: Indonesia,
https://www.cia.gov/library/publications/the-world-factbook/geos/id.html.
Energy Information Administration. 2007. International Coal Reserves,
http://www.eia.doe.gov/pub/international/iea2005/table82.xls.
Indonesia Mining Sector. n.d. NRM-Draft Report prepared by Universitas Trisakti,
Jakarta, Indonesia (on file with authors).
Kaltim Prima Coal. 2008. “Home,” http://www.kaltimprimacoal.co.id/.
P.T. Berau Coal. 2007. “Home,” http://www.beraucoal.co.id/.
United Convention on Biological Diversity. 2007. Sustaining Life on Earth,
http://www.cbd.int/convention/guide.shtml.
United Nations Framework Convention on Climate Change. 2008a. CDM Statistics:
Registration,
http://cdm.unfccc.int/Statistics/Registration/NumOfRegisteredProjByHostPartiesP
ieChart.html.
United Nations Framework Convention on Climate Change. 2008b. The United Nations
Climate Change Conference in Bali,
http://unfccc.int/meetings/cop_13/items/4049.php.
U.S. Department of State, Bureau of International Information Programs. n.d. Forests:
Our Planet’s Endangered Edens.
http://usinfo.state.gov/products/pubs/biodiv/forest.htm.
U.S. Embassy, Jakarta, Indonesia. 2001. Indonesia Coal Report 2001,
http://jakarta.usembassy.gov/econ/coal-2001.html.
U.S. Embassy, Jakarta, Indonesia. 2004. Indonesia Coal Report 2004,
http://jakarta.usembassy.gov/econ/coal/coal-2004.html.
Villarosa, S. and W.J. Witteman. 2001. Haze policy or hazy policy. Cable from U.S.
Embassy in Jakarta to U.S. State Department, August 11 (on file with authors).
Whitehouse, Alfred E. 2000. Coal fire management in Indonesia. Unpublished
manuscript, Office of Surface Mining/Ministry of Energy and Mineral Resources
Coal Fire Project Ministry of Mines and Energy, Jakarta, Indonesia.
Whitehouse, Alfred E. and Asep A.S. Mulyana. 2004. Coal Fires in Indonesia.
Unpublished manuscript, Office of Surface Mining, U.S. Department of Interior.
111
World Coal Institute. n.d. Coal Info, Coal Statistics, Country Profiles: Indonesia,
http://www.worldcoal.org/pages/content/index.asp?PageID=458.
Yudhoyono, H.E. Dr. Susilo Bambang. Remarks. 2007. Speech given at the General
Debate Session of the 62nd UN General Assembly. http://www.indonesiamissionny.org/NewStatements/2c092407d.htm.
112
CHAPTER 9: COAL FIRES IN THE UNITED STATES
There are currently hundreds of actively burning coal mine fires in the United
States covering thousands of acres, posing risks to both public health and safety as well
as generating significant volumes of greenhouse gases. In the United States, the mine
company’s insurance, or the Abandoned Mine Land Fund is sometimes available to pay
for mine fire extinguishing. The Abandoned Mine Land Fund is authorized by the
Surface Mining Control and Reclamation Act of 1977 (SMCRA) for the purpose of the
restoration of mined lands that were abandoned or left inadequately restored before its
enactment. The law is funded by production fees of 35 cents per ton of surface mined
coal, 15 cents per ton of coal mined underground, and 10 cents per ton of lignite collected
from coal producers. As of the end of fiscal 2005, the fund had received $7.4 billion in
total since 1978, and a total of $5.7 billion had been distributed to the states (U.S. Office
of Surface Mining 2006).
The 2006 Amendments to SMCRA extended the Interior Department’s authority
to collect Abandoned Mine Land (AML) fees through 2021. It also made the majority of
the funding automatically available to States and Tribes, designating almost 83 percent of
AML fee collections for mandatory distribution without the past need for specific
Congressional appropriation. The Office of Surface Mining (OSM) holds the remaining
portion to manage emergency programs and provide health benefits to its workers (U.S.
Office of Surface Mining 2007).
Yet, despite this significant funding source, the financial resources available to
states are not adequate to insure the successful permanent suppression of all coal fires –
expecially given the continuing high costs of monitoring and upkeep. Moreover, instead
of thoroughly committing to the complete extinction of a smaller number of fires, OSM
often undertakes lesser mitigating efforts on a broader basis. This leads to a number of
dormant fires reigniting. As the western United States begins to mine methane as an
alternative fuel, this gas is increasingly seeping through the ground and more coal fires
are likely to occur in the region.*
Hence, one can not assume that, because it is a developed nation, the United
States has its coal fires all under control. While the extinguishing of some coal fires is
paid for by the AML Fund, the program has inventoried many other coal fires that have
been left to burn (Abandoned Mine Land Program n.d.). Putting out such fires thus could
meet the test of additionality.
Some U.S. coal mines also have private insurance against fires. In such case,
additionality might be difficult to establish. Nevertheless, despite potential AML and
private insurance sources of funds, there is a large number of remaining coal fires, both
underground and on the surface, that are not likely to receive funding and could therefore
potentially create carbon credits.
*
Mr. Gary Colaizzi (President, Goodson & Associates, Inc.) phone interviews with Colleen Ruddick, April
15, 2008, and April 17, 2008.
113
Moreover, as shown in Table 9-1, there are substantial acreages in many U.S.
states where funds are not available at present to extinguish coal fires. If the necessary
funds were made available, and given the estimated costs of extinguishing the fires, the
resulting carbon credits could typically be generated at a cost of around $2 per ton of
carbon dioxide for underground coal fires. For surface fires, the costs would be
considerably less, typically less than $1 per ton. Both figures are well below the current
selling price of around $6 per ton of carbon credits in U.S. voluntary markets. (Coal fire
extinctions in the United States are not now eligible as CDM projects.) If a future GHG
cap and trade system is established in the United States, the market price of carbon
credits will probably be much higher. Hence, generating carbon credits in the United
States by extinguishing coal fires appears to be economically viable and indeed quite
promising.
Regional Markets
Some of the states with uncontrolled coal fires have joined regional carbon
markets that are planned to begin in 2008 and 2009. However, only Utah and Illinois
have signed on as full partners to the Western Climate Initiative and the Midwestern
Regional Greenhouse Gas Reduction Accord, respectively. Colorado, Pennsylvania,
Wyoming, Alaska, and Ohio have joined their regions’ initiatives as observers of the
process, with intention to participate as the markets evolve and stabilize.
Extinguishing historic coal fires could provide an avenue for states or municipalities as
entities under their agreements to offset their emissions in terms of their agreed upon cap.
The Midwestern Regional Greenhouse Gas Reduction Accord has a long-term target of
reducing carbon emissions 60 to 80 percent below current levels while the Western
Climate Initiative has a target of reducing emissions 15 percent below 2005 levels by
2020. Regional initiatives have yet to allocate specific caps to state entities, but as they
do so, the U.S. price per carbon credit will likely increase due to the increased demand
for offset projects.
In order to facilitate demonstrations of additionality, when creating coal fire
extinguishing projects, it would help to have a full state level inventory of fires. States
could then count the fires as part of their emissions baseline when joining regional carbon
trading markets, and could reduce their emissions by extinguishing them. After the
delineated baseline, no new fires should be allowed to count in the inventory of available
carbon credits in order to avoid the problem of moral hazard. Mining companies might
be tempted not to purchase fire insurance if the costs for extinguishing coal fires would
be covered by carbon credits.
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Table 9-1 – United States Costs of Carbon Credits, Extinguishing
Underground and Surface Coal Fires, by State
Unfunded Underground Coal Mines
State
Acres
Colorado
176.50
Suppression
Cost ($)
10,750,000
Kentucky
122.90
8,847,810
1,278.10
595,539,499
326.00
20,365,071
$1.75
50.00
4,037,500
$2.27
1,937.50
213,415,315
$3.09
296.00
1,400,000
$0.13
Pennsylvania
Utah
Virginia
West Virginia
Wyoming
Calculated Suppression Cost
per Ton of CO2*
$1.72
$2.00
$13.20†
Unfunded Surface Coal Fires
State
Acres
Suppression
Cost ($)
Calculated Suppression Cost per
Ton of CO21
Alaska
19.00
3,000,000
$4.50
Alabama
62.50
445,125
$0.20
7.00
99,000
$0.40
121.70
4,232,805
$0.98
Ohio
76.00
730,095
$0.27
Pennsylvania
54.50
5,166,202
$2.68
Utah
8.00
170,000
$0.60
Virginia
9.00
180,000
$0.56
79.20
3,687,536
$1.30
8.00
220,000
$0.78
Illinois
Kentucky
West Virginia
Wyoming
Source: Abandoned Mine Land Program, n.d., and report author’s calculations.
*
Calculation: (short tons per acre ft * 6ft * # acres * 3.3 tons CO2) / Total Cost
Assumptions:
The average coal seam is 6 ft thick
3.3 tons of CO2 per ton of coal
Types of coal per state, U.S. Department of Energy, Energy Information Administration
†
Higher relative cost is likely due to the massively expensive uncontrolled Centralia, PA coal fire
115
Conclusions and Recommendations:
The Abandoned Mine Land program of OSM estimates that there are more than
4,600 acres in the United States with currently burning coal fires and no immediate plans
to put them out. Provision of additional funds to pay for extinguishing these fires thus
might well meet the additionality requirements for new carbon credits. The costs per ton
of carbon dioxide emissions averted would be less than the current and likely future
prices of carbon credits in U.S. markets.
Recommendations:

The U.S. Office of Surface Mining should support the development of a
methodology for creating carbon credits by extinguishing uncontrolled
underground and surface coal fires in the United States. These credits could
be sold at present in U.S. voluntary carbon markets and potentially in the
future in U.S. markets created by the possible enactment of federal cap and
trade legislation.

OSM should support efforts to have a methodology for coal fire extinction
projects recognized and validated by the various carbon credit accreditation
services in the United States voluntary markets.

State surface mining offices should designate specific coal fires in their states
for which actions to extinguish the fires would meet the requirement of
additionality and permanence in carbon trading markets.

OSM -- working with the states -- should establish a full inventory of existing
coal fires in the United States for the purpose of facilitating future
demonstrations of additionality and of enlisting private sector interest in
putting out these fires in order to sell carbon credits.
116
APPENDIX TO CHAPTER 9 -- U.S. COAL FIRE EXTINGUISHING
COMPANIES
State surface mining agencies or private mining companies commission drilling,
heavy equipment, and firefighting contractors to aid in the suppression operations for
coal fires. There is a small community of coal fire extinguishing contractors in the
United States who assist mining companies when their initial suppression efforts have
proven unsuccessful and specialized engineering attention is required. These companies
provide onsite consulting as well as chemical materials they contend can suppress coal
fires efficiently and cost-effectively. Three of these companies are Goodson &
Associates Incorporated, USF Technologies and Services, and CAFSCO. These three
have well-documented successes and have collaborated with the United States Office of
Surface Mining or the National Institute of Occupational Safety and Health. Their past
experiences in extinguishing coal fires provide a valuable base of knowledge for
considering the potential for future generation of carbon credits through coal fire
extinction.
Goodson & Associates, Inc.
Goodson & Associates, Inc. (GAI) is a consulting firm based in Wheat Ridge,
Colorado that specializes in geotechnical, geologic, and environmental engineering, and
mined land reclamation services. The company has been involved in coalmine fire
extinguishing, ground stabilization, backfilling, mine reclamation, and other construction
related problems since its inception in 1978. Their ThermoCell product is a foam
injected grout compound used in the extinguishing of coal fires (Goodson & Associates,
Inc. n.d.).
ThermoCell is a high-heat resistant solid compound comprised of selectively
proportioned quantities of cement, ash, water and foam mixtures. The cellular
cementicious material formed is environmentally safe and non-polluting. Goodson and
Associates, Inc. also boast that ThermoCell is the most cost-effective fire retardant
compound due to its incorporation of fly ash waste products to form a unique, thermally
efficient, inert insulation material. ThermoCell is a flowable foam injected through
boreholes, fractures, or vents that sets and hardens to smother or provide a fire resistant
wall. The GoodCell foam generator used to disperse the ThermoCell can produce foam
at up to 40 cubic feet per minute at 12 or 110 volts. It can be self-contained when
installed on a truck, making for easy transport to remote regions (Goodson & Associates,
Inc. n.d.).
The president of the company, Gary Colaizzi, reported that GAI is currently in
discussion with the governments of India and China to evaluate extinguishing mine fires
as a profit-making venture through the carbon credit market. This progress is
117
confidential, but they are examining the environmental and health benefits as well as the
availability of increasing access to coal resources.*
Example of a GAI Project
The US Bureau of Mines in cooperation with the Colorado Division of Minerals
and Geology contracted Goodson and Associates, Inc to test the effectiveness of
ThermoCell in 1995 and again in 1999 at the IHI Mine site in Haas Canyon where an
abandoned mine fire had been burning for 80 years. The area has both steep terrain and a
large, underground mine void, the combination of which provided a potential for surface
subsidence over the active mine fire. The coal in the Grand Hogback is highly volatile
bituminous B, susceptible to spontaneous combustion. Ignited by spontaneous
combustion in 1916, conventional firefighting methods had not been successful in
extinguishing the 900 to 1700 degree fire. The road to the canyon changes from gravel to
rutted dirt, and narrows to become rocky and steep, making accessibility difficult.
Normal grout would have exploded under the temperature conditions, but the
heat-resistant Thermocell compound was able to flow through steel-cased boreholes,
drilled by Agapito Drilling Company. The compound was able to encapsulate the
burning coal. Due to the foam’s ability to double the grout compound, only 5,200 cubic
yards were needed and were pumped through 49 boreholes and two vents. The cost of
the 1999 application came to $445,125. The mine was monitored for two years, and the
suppression efforts were proved successful (Feiler, Colaizzi, and Carder 2000).
* Note: While after two years the monitoring showed a successful operation, a 2005
Colorado survey of mines where suppression efforts have been made deemed the IHI
mine active. The conditions of the mine make it highly susceptible to fire.
USF Equipment and Services
USF Equipment and Services, based in Longview, Texas, specializes in coalmine
fire safety education and consulting and mine fire research and development. USF
Equipment and Services’ fire extinguishing system is The Hellfighter, a nitrogen gas
injected fire fighting foam. The system uses a combination of gas, foam, down shaft
pressures and temperature to smother coal fires. The Hellfighter Dispensing Unit includes
a foam proportioner, Mine Foam Concentrate, a nitrogen generator, an optional power
generator and an optional water pump. The system can produce up to 94,000 square
cubit feet per hour of 95 percent nitrogen enriched foam (USF Equipment and Services
2005).
USF Equipment and Services was a member of the Coal and Mining Expo in
Beijing, China in October 2005. The China International Technology Exchange &
Equipment Exhibition on Coal and Mining has been held every other year for the past
twenty-two years and has become the largest coal and mining event in Asia, attracting
international attention. Eighteen countries displayed their advances in the technology and
equipment of coal mining and processing industries (China Coal and Mining Expo 2005).
*
Mr. Gary Colaizzi (President, Goodson & Associates, Inc.) phone interviews with Colleen Ruddick, April
15, 2008, and April 17, 2008.
118
USF Equipment and Services has a partnership with both the Mining Safety and
Health Administration and the National Institute for Occupational Safety and Health.
USF completed a test of its products with NIOSH that was documented in detail.
Example of a USF Project
On December 25, 2004 a fire of unknown origin was discovered near the bottom
of a compartment slope in Excel No. 3 Mine owned by MC Mining, LLC, a room-andpillar mining operation. Immediate steps were taken to control the fire while
simultaneously the authorities were called. Emergency response teams deemed the fire
too hazardous to continue operations after attempting to extinguish it for the larger part of
the evening. Temporary seals were installed to limit the inflow of oxygen to the fire
zone. Several boreholes were drilled to monitor the mine atmosphere and to inject
nitrogen gas and nitrogen gas-enhanced foam.
On December 28, the injection of liquid nitrogen was initiated and analysis of the
gas monitoring data indicated that the sealing of the mine and the replacement of oxygen
had controlled the spread of the fire. On January 2, nitrogen gas-enhanced foam was
injected by USF Technologies and Services through two holes near the fire area. The
water system of the mine failed periodically throughout the procedure, causing an
intermittent flow. To compensate for when the flow was not working, nitrogen gas from
the membrane plant was injected directly. On January 4, operations were halted to
evaluate the conditions and conduct a video survey of the mine void. The nitrogen foam
application resumed on the 6th, and the next day the mine fire was evaluated and deemed
successfully extinguished. The mine was reentered on January 8 and permanent seals
were installed underground to isolate the area affected by the fire. Mining operations
resumed February 21 (Trevits et al. 2005).
CAFSCO
Mark Cummins and Lisa LaFosse’s company CAFSCO is a Compressed Air
Foam (CAF) consulting and engineering corporation that focuses on the extinguishing of
coalmine fires. Cummins has 30 years of CAF experience and the claims to have the
original patent on a Nitrogen foam injection method, although this claim as recently been
contested by USF’s Alden Ozment in a patent infringement lawsuit.*
CAFSCO puts their cost estimates at between 10 and 15 million dollars,
accounting for the mobilization, drilling, and nitrogen foam setup for the first acre of
burning coal in a deep mine (LaFosse 2007). Average costs are difficult to establish with
Nitrogen Foam Injection because both the drilling company and the Nitrogen generator
providers are contracted and their expenses vary, especially as the overhaul is variable.
LaFosse has stated that they are in the process of establishing their own coalmine fire
response team that would include drilling capabilities and continuous nitrogen supply as
well as surface remediation capabilities (Smith 2007). Having their own teams would
*
U.S. Foam, Inc. v. Cummins Indus., Inc., No. 2:2007cv00491 (E.D. Tex. filed Nov. 8, 2007).
119
greatly reduce the costs and avoid contracting companies. Like USF, they have also
completed a successful mine fire extinguishing in partnership with NIOSH, the Pinnacle
Mine fire (CAFSCO 2007).
Example of a CAFSCO Project:
A series of explosions occurred in the Pinnacle Mine between August 31 and
September 7, 2003. After the location of the ignition was identified by the monitoring
data, a jet engine from Phoenix First Response was used to lower oxygen concentrations
in the mine. The GAG jet engine is based on a Soviet designed agricultural jet engine
and consumes oxygen and aviation fuel then after combustion emits primarily carbon
dioxide and water. The engine was initiated on October 1, and not until October 6 were
inert gases from the GAG engine observant to approaching the area by the active fire.
The engine ran until October 19 to attempt to maintain inert gases, after which ventilation
was re-established and monitoring of fire gases continued into January 2004.
The presence of carbon monoxide suggested that the fire was still burning
underground in a panel of the mine. This panel was localized and a remotely installed
seal was placed in the entry. On January 30 a borehole was completed to the coal seam
and injected the nitrogen-enhanced foam through a borehole by the seal. Then seals were
remotely-installed by injecting a mixture of 50 pct cement and 50 pct fly ash by volume
to a density of 15.3 lb/gal. The mixture was injected by an accelerator of epoxy-resin and
sprayed into the mine chamber, where it was assumed the mound of slurry would close
the gap between floor and ceiling. Approximately 128 yd3 of material was pumped into
the void. Injection pressure readings indicated that it was not a full seal (Smith et al.
2005).
On January 29, 2004 Cummins Industries, Mark Cummins’ company affiliated
with CAFSO, injected nitrogen-enhanced high expansion foam into a borehole. This
foam was intended to not only act as a suppression agent, but also as a gas barrier to
control ventilation and confine efforts toward the active gob of material. The foam was a
batch of 1 or 2 pct in four 21,000-gallon tanks and was pumped using a 750 cubic feet per
minute nitrogen membrane separation plant. Approximately 18 million gallons of foam
were pumped into the mine at an average rate of about 1,500 gallons per minutes for nine
days. Gas monitoring showed a significant decrease in oxygen and an increase in
nitrogen. Another section of monitoring showed that both oxygen and nitrogen
concentrations dropped to very low levels, and filled almost entirely with methane,
indicating that this location has become isolated from mine air. The system was able to
control ventilation and suppress the suspected ignition source by isolating it from oxygen.
On February 7, recovery teams entered the mine began erecting temporary seals along the
wall that was near the source of ignition. On May 19, 2004 mining operations proceeded.
120
References
Abandoned Mine Land Program. n.d. Inventory of Coal Mining Related Abandoned
Mine Land Problems, http://192.243.130.34/scripts/stsweb.dll.
CAFSCO. 2007. “Home,” http://www.cafsco.com/.
China Coal and Mining Expo. 2005. Proshow Report,
http://www.chinaminingcoal.com/2007/download/China_Coal_Mining_Expo_20
05_Proshow_Report-1.pdf.
Feiler, Joseph J., Gary J. Colaizzi, and Carol Carder. 2000. Foamed grout controls
underground coal-mine fire. Mining Engineering 52(9): 58-62.
Goodson & Associates, Inc. n.d. About Goodson &Associates, Inc,
http://goodsonassociates.com/pages/about.html.
LaFosse, Lisa. 2007. Coal mine fire extinguishment. Mine Disasters and Coal New,
September 6. http://minedisasters.blogspot.com/2007/09/coal-mine-fireextinguishment.html.
Smith, Alex C., Thomas P. Mucho, Michael A. Trevits, and Mark Cummins. 2005. The
use of nitrogen-enhanced foam at the Pinnacle Mine fire. Pittsburgh, PA:
National Institute for Occupational Safety and Health, Pittsburgh Research
Laboratory. http://www.cdc.gov/niosh/mining/pubs/pdfs/tuone.pdf.
Smith, David A. 2007. CAFS pioneer Mark Cummins followed father’s path. Fire
Apparatus and Emergency Equipment Magazine, April.
http://fireapparatusmagazine.com/columns/2007/April07/Cummings_04_07.htm.
Trevits, Michael A., Alex .C. Smith, Alden Ozment, John B. Walsh, and Mike R. Thibou.
2005. Application of gas-enhanced foam at the Excel No. 3 Mine fire. Pittsburgh,
PA: National Institute for Occupational Safety and Health, Pittsburgh Research
Laboratory. http://www.cdc.gov/niosh/mining/pubs/pdfs/apgef.pdf.
USF Equipment and Services. 2005. About Us, http://www.hellfighter.us/index2.php#.
U.S. Office of Surface Mining. 2006. Abandoned Mine Land Fund: Status,
http://www.osmre.gov/fundstat.htm.
U.S. Office of Surface Mining. 2007. Press Release, OSM announces decisions needed to
distribute funds under the 2006 AML legislation, December 6.
http://www.osmre.gov/news/120607.pdf.
121
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CONCLUSION
Uncontrolled coal fires have been around as long as coal has been on the earth.
There was often little incentive to do anything about these fires. Given the abundance of
coal reserves and the correspondingly low unit price of coal as a source of energy, the
cost of putting out the fires would have been greater than the market value of the coal
resource. Attempts to put out the fires thus tended to occur only in situations where they
threatened other values – such as when a coal fire burned beneath a populated area,
emitting unpleasant and unhealthy gases and raising the possibility of subsidence that
could damage existing structures.
In recent years, however, the growing concern for the warming climate of the
earth has brought a new factor into the picture. Uncontrolled coal fires are a significant
source of carbon dioxide and other greenhouse gas emissions. Hence, there may be a
strong new reason to put out the fires, sufficient to justify action where it would
otherwise have been unnecessarfy..
Curbing the emissions of greenhouse gases, however, raises difficult collective
action problems for the world. For most nations, their emissions will not be large enough
in themselves to have much effect on the earth's climate. Their narrow incentive is to be
a free rider. Even major emitters of greenhouse gases such as the United States and
China do not have it within their capacity to resolve the climate change problem by their
own actions.
The world has thus attempted to address the climate change problem through
international negotiations such as those that produced the Kyoto Protocol. Under Kyoto,
a principle was adopted that one nation could substitute reductions of greenhouse
emissions in another nation, if such reductions would be less expensive. The workings of
the Clean Development Mechanism represent the leading example of such a strategy beig
put into practice. Businesses and governmental actors in developed nations such as
Japan and the members of the European Union are paying for reductions of greenhouse
emissions in developing nations such as China and India. These efforts are part of a
wider spread of markets for carbon credits that are emerging in the United States as well
on a voluntary basis.
Putting out a coal fire thus has acquired a large potential new monetary value -the selling price for the carbon credit that could be earned by putting out the fire, and thus
avoiding the greenhouse emissions that would otherwise have occurred. This report
finds that in many cases the cost of extinguishing coal fires yields reductions of
greenhouse gases at a cost well below the existing price of carbon credits. In other
words, sufficient funds could be earned by selling carbon credits to put out many of the
uncontrolled coal fires now burning across the world and that are contributing
significantly to total accumulations of greenhouse gases.
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There remain, however, a variety of practical problems that must be resolved
before such sales of carbon credits for putting out coal fires can begin to occur. First, the
International Panel on Climate Change (IPCC) and other international bodies involved in
climate change negotiations must become more aware of the significant greenhouse
impacts of uncontrolled coal fires. To date, there may have been less recognition of the
worldwide importance of coal fires than any other significant source of greenhouse gas
releases to the atmosphere. As a beginning step, coal fire emissions should be included
in national and world inventories of greenhouse gas sources, and nations should be asked
to take responsibility for the greenhouse emissions from coal fires within their borders.
Selling credits for putting out coal fires requires the approval of a methodology
for calculating the amount of the credits available in the case of any individual coal fire.
Such a methodology must be able to show that actions to extinguish a coal fire will in
fact add to the net reductions worldwide of greenhouse gases over the long run -- that the
conditions of "additionality" and "permanence" can be satisfied. Gaining international
approval for such a methodology can be a time consuming and expensive process. At
present, no private, national or international organization has been willing to assume the
necessary responsibility. The United States government, the European Union, or the
World Bank would be among the leading candidates for developing and taking the steps
necessary to get international approval for a coal fire methodology.
Given the limited incentives to put out coal fires in the past, the funds invested in
research and development of new technologies for coal fire extinction have not been
large in comparison to other areas of greenhouse concern. National and international
organizations could contribute by supporting such research and development and
assisting in the assembly of national inventories of currently burning coal fires. These
organizations could also support demonstration projects in individual nations that could
provide further information on the costs of extinguishing coal fires and examples of the
generation of carbon credits.
Given the longstanding status of uncontrolled coal fires as a "neglected
greenhouse source," the putting out of coal fires may represent a "low hanging fruit"
among the potential strategies for reducing world greenhouse gas emissions. This is
particularly the case with respect to surface coal fires which can often be extinguished at
low cost and then monitored easily in future years. Since many nations are doing little at
present to put out such fires, it should also not be difficult to demonstrating that resulting
carbon credits would meet the requirement of additionality.
Given all these elements, uncontrolled coal fires should be put on the active
agenda of international climate change negotiations and the appropriate steps, as outlined
above, should be vigorously pursued to put many of them out.
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