Methodology for the economic assessment of enhanced coal mine methane drainage (ECMM) as a fugitive emissions reduction strategy

A methodology for the assessment of the economic feasibility of strategies for reducing fugitive emissions from open cut mining is presented. This approach involves integrating reservoir simulation of gas drainage for various operational and reservoir conditions with economic analysis involving a range of financial parameters. The feasibility of conventional and enhanced coal mine methane drainage (CMM and ECMM) is evaluated relative to the business-as-usual scenario, where the methane is allowed to become fugitive. The methodology is demonstrated through a case study evaluating the economic merit of ECMM and CMM at open cut mines representative of the Hunter Coalfields, NSW, Australia. The results of the case study indicate that a positive business case exists for ECMM above a CO2 penalty of A$20/tCO(2) (electricity price A$60/MWh) (US$17/tCO(2) and US$51/MWh using a long term exchange rate of A$1 = US$ 0.85). CMM did not appear economic under the considered conditions (CO2 penalty: A$10-$70/tCO(2), electricity price: A$35-85/MWh) due to slow recovery rates and high residual gas content. Less favourable reservoir properties such as lower reservoir permeability and gas content can be compensated by higher CO2 penalties and/or electricity prices. Crown Copyright (C) 2012 Published by Elsevier B.V. All rights reserved.