Assessing methane emissions through the lens of carbon dioxide stock vs. flow

Evaluating the impact of methane emissions through the lens of CO2 stock vs. flow is something new l learned recently. I heard about it on the premier episode of Shift Key podcast  by Dr. Jesse Jenkins and Robinson Meyer.

“Methane has the ability to immediately shape global temperatures, while carbon dioxide impacts global temperatures over the long term. So you can almost think of methane as a flow problem and CO2 as a stock problem.”

Jesse goes on to say: "so if you care a lot about short term impacts, over the next ... 20 years, and you might care a lot about that if you think we're close to certain irreversible tipping points in the climate system, then you care a lot more about methane than you do about carbon dioxide."

This way of thinking about methane resonated with me given my work with cities and counties who operate wastewater and sanitation treatment plants. The conclusion is that the most practical approach to mitigating methane is to burn it.

In this post I cover three ways we can combust methane, how it can power our world, and why we can feel good about it.

Let’s zoom out for some perspective. Where does methane come from?

Nearly 40% of Methane Production Comes from Wetlands

Methane production and leakage comes from various sources, including both natural and anthropogenic. In fact, about 40% of methane production comes from natural forming sources i.e., wetlands.

Methane has increasingly captured global attention. Detecting and tracking methane has become a priority.

Methane Tracking and Detection from Space

Recently, the Department of Energy and Environmental Protection Agency announced a $1bn fund for monitoring, reporting, and verification (MRV) infrastructure and Google is partnering with the Environment Defense Fund to monitor methane from space.

According to this announcement by Google, the Environmental Defense Fund has launched MethaneSAT to measure and track methane with unprecedented precision. The launch happened in early March 2024. Data will soon be available and actionable by all: “To help researchers and organizations, these insights will be available later this year on MethaneSAT’s website and accessible through Google Earth Engine, our planetary-scale environmental monitoring platform.”

Methane from Human Waste

Methane from human waste is the 3rd largest contributor among the anthropogenic sources after agriculture and oil and gas.  This is primarily from landfills, waste and sanitation facilities. This source of methane is actually rather interesting; because while it is clearly a problem from a climate impact perspective, interesting opportunities are becoming available to treat this source of methane as a fuel source.

Let’s break this down into methane from landfills and wastewater treatment plants.

Methane Powered Microgrids – Sanitation & Wastewater Agencies Supporting the Grid

These wastewater treatment agencies collect and treat human waste; they produce a lot of methane. The process these agencies use to treat waste in many plants involves using anaerobic digesters. Digestors are (nearly) airtight vessels containing anaerobic microbes that break down waste which in turn produces methane-rich biogas as a bi-product.

To be clear, this treatment process is needed so humanity can flourish. Without wastewater and sanitation agencies, we could not build cities. These public agencies are among the heroes of civilization.

So, what happens with all the methane that gets produced as part of the treatment process? We have to get rid of it somehow. In many places, the methane/bio-gas is flared, as in simply burned, producing large amounts of carbon dioxide. This might seem bad. But it is actually a net good if you take on the temporal lens of curbing near term global temperature rise.

Methane’s ability to trap heat in the atmosphere is even stronger than that of carbon dioxide. On a molecule-by-molecule comparison, methane is about 84x more effective than carbon dioxide in causing temperature rise.

But is burning methane the best we can do? You could argue we should just store the methane and not burn it to avoid additional CO2 emissions. That is unfortunately, not practical.

Methane is difficult to store in tanks because of the challenges and expense of liquifying the gas. This is why liquified natural gas (LNG) projects are so expensive. Natural gas is about 97% methane. You could in principle store methane in a tank in the gas state, but space will quickly become an issue.

A more practical solution would be to use the methane to produce electricity using combined heat and power (CHP) generators. That power can be used to off-set the electric usage of the wastewater plant, which in turn avoids grid electricity emissions and saves on the electric bill for the plant.

Historically, many agencies deployed on site combined heat and power plants (CHPs) to offset their electricity usage, fueled with utility supplied natural (i.e., methane) gas . In the event they produced excess generation, they exported the power to the grid.

This used to be fine, except now grid exports are becoming problematic. Also, with the introduction of time-of-use electricity pricing, it does not always make economic sense to export surplus power to the grid. Plus, balancing the power produced from CHP generators is becoming more challenging. The reliability issues of the aging power grid are forcing utilities to increasingly block export of power to the grid during many hours of the day and/or times of the year. Adjusting CHP output is not a recommended practice. CHP generators needs to run on a steady output to prevent wet stacking.

This is where batteries co-located with CHP generators can help. Batteries can absorb surplus power from a CHP generator and even enable a microgrid when there are grid outages.

The upfront costs of battery and CHPs plus microgrid equipment can be steep. Fortunately, with the 30% (minimum) tax credits from the Inflation Reduction Act (the "IRA") as well as an additional 10% bonus tax credit for facilities located in “energy communities”, and, recent ramping of the supply chain leading to reductions in battery costs, these solutions are becoming more and more affordable.

A Day in the Life of a CHP, Solar, and Battery Microgrid

The image below shows a day in the life of a methane powered microgrid which is co-located with solar and battery energy storage systems. The CHP system is set to run constantly, while solar power is generated during the day, and the battery is utilized to charge and discharge as needed to balance load vs. generation.

Beyond using methane to power a microgrid, there are other interesting and viable options including putting methane into pipelines and powering remote data centers.

Methane to Renewable Natural Gas - Offsetting Hydrocarbon Extraction

There is another option to capture and utilize methane which is to process it for use as renewable natural gas. The process also requires treatment or purification of methane from anaerobic digestion. The added step is to interconnect the gas to a pipeline.

Biomethane or renewable natural gas can be used to off-set fossil based natural gas for heating and other use cases. For this option, proximity to a utility owned natural gas pipeline is key. For more on renewable natural gas read this page by the California Public Utilities Commission.

Methane Powered Data Centers – Landfills as Off-grid Power Plants

Landfills are also getting attention in the methane mitigation fight. Mainspring and Vespene Energy recently announced their project development collaboration to deploy multiple generators at landfills, utilizing the electricity to charge electric vehicles. According to Utility Dive. Through the capture and utilization of methane, the main component of biogas, the project will generate 80 MW of dispatchable baseload renewable electricity for use in elective vehicle charging.”

How Do You Monetize Methane? The Answer Lies in Geography

Much like real estate, the value from monetization of methane is primarily dependent on location, location, and location. Proximity to the electric power grid and natural gas pipeline determine the available paths to utilize methane from your facilities.

If your facility is remote, like a landfill, then the cost to build an electric or gas interconnection line to either sell your excess power from a CHP to the utility or just injecting treated methane into a natural gas line may be uneconomical. The option for these facilities is to assess co-location with a data center operator. The assessment needs to be compared to the otherwise available option of building and operating a flare stack.

If your facility is grid connected, like most wastewater and sanitation plants, then a CHP microgrid paired with a battery would we worth assessing. And, if you have surplus land, parking lot, or rooftop space to install solar, then supplementing your electricity needs by integrating solar into the microgrid could provide another cost reduction opportunity compared to buying electricity from the grid.

If your facility also happens to be close to a natural gas pipeline, then the additional assessment of injecting your treated methane into the pipeline to sell as renewable natural gas would be worth understanding and comparing against the benefits of a microgrid.

What is the Roadmap? Activities and Outcomes

The high level road map to managing methane from your facility is to:

1 - Conduct a desktop study of the option your geographic location provides you. The outcome of this step is to narrow your options to viable paths.

2 - Commission a feasibility study to understand the cost/benefit of potential projects against the cost of doing nothing. The outcome of this step is to create an engineering feasibility report and a financial pro forma for the economic useful life of the installations.

3 - Run a procurement process using design-build or progressive design-build to find a development partner. The outcome of this step is to receive competitive proposals from qualified providers that can deliver on the scope and costs outlined in the engineering feasibility study and financial pro forma. Read more on our 10 learnings from running over 260 procurement processes for public agencies.

3 Key Activities to Keep in Mind

As you finish reading this post, remember to

1- Engage your stakeholders, including your board and community early and often throughout the entire process.

2 - Stay in the know on federal and state regulations and rules impacting your existing operations, microgrid, and power generation installations.

3 - Implement an asset management plan to maintain oversight of your microgrid and power generation installation after commissioning to ensure you receive the benefits projected in the financial pro forma.