In 2012, I found myself in a meeting in Somerset, Colorado with
representatives from Oxbow Mining’s Elk Creek
Mine, owned by Bill Koch (of Koch brothers fame). We were interested in
capturing the polluting methane from the mine and turning it into usable
electricity.
Methane is a huge problem when it comes to global warming, which is an
existential threat to the ski industry (COVID-19 resulted in massive revenue
loss
when it forced us to shut down our spring season a month early, a preview of
what we could be facing with rising temperatures in years to come.).
We had been building micro-hydro plants, solar arrays and other sources of
renewable energy for years; but these projects never scaled enough to offset our
intensive energy usage. But the potential with the Elk Creek Mine was different.
Early on, we found that talking about climate change wasn’t resonating with the
Koch team. But when we talked about capturing and monetizing wasted resources,
their ears perked up. We built on the momentum generated by energy entrepreneur
Tom Vessels and
environmentalist Randy
Udall, who understood
that methane had a warming potential 86 times that of carbon dioxide — and that
it was leaking from coal mines all over the West. The two approached Holy
Cross Energy — our local utility company, which had a goal of transitioning to
20 percent renewable energy by 2015 — which agreed to the project (The company
has since announced a goal of 100 percent renewable energy by
2030,
but that’s another story that we also played a part in.).
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The missing pieces were a mine operator willing to take on this risky venture,
and a financial investor to make it come to life — which is how the meeting with
Oxbow and Aspen Skiing Company (ASC) came
about.
After overcoming many legislative and bureaucratic hurdles, and creating a
complicated agreement that included a color-coded glossary of terms, Oxbow
agreed — and we invested $5.34 million (out of the $6 million needed) to make
this first-of-a-kind project a reality.
L-R: Mike Kaplan, CEO of Aspen Skiing Company; and the late environmentalist Randy Udall (speaking) launch the project on November 9, 2012. | Image credit: Jeremy Swanson
Now that the Biden administration has put climate at the top of the national
agenda by re-signing the Paris
Accord
and requiring methane pollution limits for oil and gas operations, we decided to
take a closer look at how our project has been performing for nearly a decade.
This week, we released a
report documenting
exactly how much energy has been produced, how much harmful methane has been
destroyed, and the financial return.
We are proud to say that the Elk Creek Mine produces 3 megawatts of baseload
power, which delivers 24 million kWh annually. In English, this means it
produces approximately as much energy as we use each year at all four of our ski
mountains, including hotels and restaurants — or enough to power about 1,800 US
homes annually. The electricity generated and carbon offsets flow into the
utility grid, not to ASC directly. Therefore, our resort does not claim that it
is 100 percent carbon neutral. Instead, the project did something more
important: it helped ‘green’ the entire regional grid, knocking almost 10
percent off the utility’s carbon footprint.
Simultaneously, since this project started in 2012, it has prevented the
emission of 250 billion cubic feet of methane annually into the atmosphere. This
is equivalent to three times all the carbon pollution created by the resort
annually — electricity, gasoline, diesel fuel and natural gas, combined — which
is the same as removing 517,000 passenger vehicles from the road for a year.
And here’s the kicker: This project produces between $100,000 and $150,000 in
revenue per month from electricity and carbon credit sales to Holy Cross Energy.
After nine years, ASC has only about $750,000 remaining to pay off our
investment. So, we help to address climate change, and make money — two of my
favorite things! But, of course, we need to do more.
First, we need to deal with regulation. The US currently lacks nationwide
regulations or incentives to capture
methane,
but fortunately that is beginning to change. California’s groundbreaking
cap and trade
program
purchases carbon offsets from coal methane projects across the country and can
turbocharge economic returns from projects like these. It also makes possible
other, less expensive methane-destruction projects — such as
flaring.
Second, we need to recognize that whether through energy generation or flaring,
methane destruction is critical to the climate fix — not only because of the
gas’s warming potential, but because there is so much of it being released into
the atmosphere. In fact, methane is leaking from oil and gas
operations,
coal mines, fracked gas wells, and natural seeps at such high rates in the
southwestern US that it’s visible from
space.
Collectively, we need to get aggressive in our efforts to capture and destroy
this extremely harmful substance. The last seven years have been the hottest in
the global temperature record; and as planetary warming accelerates, there is
little time left to develop and implement solutions to prevent us from reaching
irreversible tipping points.
Finally, businesses must work toward phasing out our reliance on fossil fuels
and dramatically reducing greenhouse gas emissions — in addition to holding
elected officials accountable for national emissions-reductions strategies — to
have a realistic chance of meeting our Paris Accord goals and doing our part to
stop global warming.
The primary challenge in all of this: the cost. But that’s the point here — we
did this project to show that large-scale climate projects can also be
lucrative, knowing that harnessing the power of capitalism is one of the best
ways to drive change forward at the speed and scale needed. We’ve been
transparent with the economics of this project so that others may imitate it —
which, in addition to being flattering, would give us all a chance to help avert climate disaster.
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Matt Jones is Chief Operating Officer, Mountain Division, and Chief Financial Officer for Aspen Skiing Company. He joined the company in 2003 after having spent most of his previous career in the entertainment industry. In addition to being a sustainability advocate, he is an outdoor enthusiast and a performing musician.
Published Mar 5, 2021 1pm EST / 10am PST / 6pm GMT / 7pm CET