The Economics of Mitigating Geological Methane Release Through Carbon Market Revenue

Methane, a potent greenhouse gas, seeps from concentrated geological sources documented in large quantities across the terrestrial, marine, and permafrost environments. Of particular concern is arctic permafrost thaw and glacier retreat that may expose parts of the arctic methane reserves to the atmosphere. These reserves are estimated to be at least two orders of magnitude larger than current atmospheric levels.

We seek to understand the distribution of methane emissions and investigate a cost-effective means of mitigation. Significant geological methane release into the atmosphere has been widely documented from reservoirs that are too small or distributed to be of interest to commercial resource extraction ventures. Therefore, we investigate the viability of mitigation through carbon-market-based revenue. We analyze voluntary and compliance carbon market mechanisms to understand the verification burden and revenue potential. We then prototype and deploy a device in a thermokarst lake exhibiting geological methane release to validate cost, longevity and deployment assumptions.

Voluntary carbon markets fund methane mitigation largely through the flaring of landfill methane at approximately $10 Million per year. Compliance markets offer an order of magnitude larger funding avenues, though are limited to specific regions. All carbon markets value methane mitigation at 25 times higher than CO2 due to its potency as a greenhouse gas; therefore, flaring captures 96% of the carbon market value while posing smaller logistical and infrastructure challenges compared to sequestration.

For terrestrial and shallow water sources, we performed a sensitivity analysis to determine the site characteristics, mitigation device specifications, and carbon market prices which characterize an envelope of an economically self-sustaining deployment. Our analysis reveals high sensitivity to deployment cost and device longevity / maintenance needs.

We propose a design for a deployable methane-flaring system that is self-funding for point sources with flux rate above 10,000 cu ft/day in voluntary carbon markets and above 2,000 cu ft/day for compliance markets such as 2018 California-Quebec.