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Under avoided fugitive methane rule: NSW NGACs for waste coal mine gas, but not for coal seam gas, but special case made for waste coal mine gas project

Posted by gmarkets on 18 September, 2007

The NSW Greenhouse Scheme Administrator has recently accredited a power station project that will be supplied via a common fuel network. The network transports waste coal mine gas (WCMG) and coal seam gas (CSG)). The applicant assumed in its calculations that the power station would use 100per cent WCMG on the basis of contractual arrangements for the supply (via the common fuel network) of sufficient WCMG to meet the power station’s requirements, reported GGAS Newsletter, Issue 5, September 2007. It said the decision was made under:

• (Clause 10.1.1 of the Generation Rule requires that an applicant calculate the “Total Greenhouse Gas Emissions … for each Fossil Fuel Used”);

• For this project, the Scheme Administrator determined that it was appropriate to interpret the “fuel used” by the power station as 100pc WCMG on the basis of the contractual arrangements outlined, and the accepted gas industry practice of assigning the use of fuels supplied via common fuel networks to different end users.

Fugitive or not? WCMG and CSG have the same physical nature, but are distinguished by whether the coal seam that is the source of the gas is being or will be mined. Where the coal seam is being (or has been) mined, the gas is classified as WCMG, while CSG is gas sourced from unmined coal seams. The WCMG produced from mining operations would otherwise be vented to the atmosphere or flared, while CSG remains “trapped” underground.”

No precedent set, says IPART: Hence, under the Generation Rule, an applicant is able to create certificates for avoided fugitive methane emissions for the use of WCMG, but not for the use of CSG. As outlined, this project involves the commingling of gases of the same physical nature. The Scheme Administrator advises that this determination does not necessarily set a precedent for cases where gases of a different physical nature are commingled in a pipeline.

Reference: GGAS Newsletter, Issue 5, September 2007, http://www.greenhousegas.nsw.gov.au/documents/Newsletter_Issue5_September07.pdf

Erisk Net, 10/9/2007

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