As summarized in the TerraPass website: "Waste Management Inc. runs a landfill near Tontitown, Arkansas that provides some of the carbon credits in TerraPass' portfolio. The carbon credits are generated by a methane flaring project. Essentially, methane from decomposing garbage is captured and burned, preventing it from reaching the atmosphere. Such projects are generally considered to be very good sources of carbon offsets, because there is no financial incentive to burn landfill methane other than to generate carbon offsets...However, a BusinessWeek article raised questions about whether the methane flaring project would have taken place even in the absence of offsets." Because carbon offsetting is novel, abstract, and engages up to seven distinct stakeholders...project employees, project neighbors, regulatory authorities (State of Arkansas in this case), corporate project owner (Waste Management in this case), the broker (CCX in this case), the commercial buyer (TerraPass in this case), and the offset purchasers (TerraPass customers in this case), each of which has limited understanding of the other's respective circumstances and interests...we thought it might be helpful for our readers to look at an actual carbon emissions project up close, to meet one of the most distant stakeholders, a carbon credit seller. Wes Muir, a representative of Waste Management, Inc., owner and operator of the Tontitown, Arkansas facility, kindly agreed to answer some TreeHugger questions. Note that links are provided to the TerraPass website where Tontitown project regulatory information is conveniently summarized.TH:- The gas collection and control system at the Tontitown, Arkansas landfill uses approximately 75 gas extraction wells (as pictured) to collect landfill gases generated by decomposing waste. Thermal destruction of collected gases occurs at a central, high-temperature flare. Why was this necessary?
WM:-In 2001, we began addressing issues related to methane gas seeping into and impacting the groundwater in areas around the Tontitown landfill. We voluntarily installed this system because it was the most effective option, one that went beyond standard Federal and State regulatory requirements. Further, we worked with the Arkansas Department of Environmental Quality to ensure the landfill gas system was installed faster than would have been required by standard administrative procedures. (See detailed discussion of this matter here.) In fact, the majority of the gas collected from the landfill comes from areas that are not related to the remediation of the groundwater problem. These areas, which are above and beyond regulatory requirements, are what have generated the carbon offsets that have been certified, independently audited, registered on the Chicago Climate Exchange (CCX), and sold to Terrapass.
WM: There are two ways to buy and sell credits through CCX.
CCX members can use the CCX trading platform to buy and sell credits. These trades are anonymous as they are not tied to specific projects.
Members can also conduct bi-lateral trades with each other. The bi-lateral trade is a separate contract between two member parties to deliver credits and take payment. These transactions may designate from which projects credits are being traded. The transaction is registered through CCX but is not conducted on the CCX trading platform. The Tontitown credits were traded through a bi-lateral agreement between Waste Management and TerraPass. CCX collects an administrative fee on bi-lateral transactions.
TH:- Because TerraPass came along after the site was configured in it's present form, it seems that neither CCX nor TerraPass had any role in shaping design or operating scope for the methane collection system per se. Is that correct?
WM:- That's correct. The landfill gas collection system was installed prior to the founding of the CCX and establishment of protocols for trading carbon offsets. This project was not about possible future revenues but in fact a long-term commitment to protecting the environment in and around the site.
TH:- Did the purchase of credits by TerraPass directly increase the environmental performance of Waste Management operations at Tontitown?
WM: The revenue derived from credits sold from Tontitown was not directly routed back to the facility. It was used by Waste Management to invest in additional environmental projects at other facilities, so that these facilities could also improve their performance over and above regulatory requirements. These voluntary improvements would not have occurred without the funding provided from offset sales. In this way, the credits helped to perpetuate these types of environmental investments. Separate from these payments, Tontitown has continued to make improvements to its own systems by installing new wells and upgrading the recording system so that we have more accurate readings on gas flow and increased gas collection efficiency and methane reductions over and above regulatory requirements.
TH:- As a greenhouse gas, methane is 20 times more potent than C02, but CO2 also has a climate forcing impact. Can WM manage methane gas more efficiently than just burning it?
WM:- Many landfills collect the gas and burn it through a flare system to destroy it. Instead of simply flaring the gas, the methane gas can be used to create clean, renewable energy for electricity and alternative gas uses. We have developed 103-landfill gas to energy projects over the past 20 years, which generate nearly 500 megawatts of power - the equivalent of providing energy for over 400,000 homes or replacing nearly seven million barrels of oil each year. (TH note: see photo at end of post showing landfill methane filters and compressors used at a different Waste Management site to prepare the methane gas for piping, under pressure, to electricity generating turbines.)
TH:- Do you think carbon trading in general genuinely encourages companies to take added steps to reduce their greenhouse gas emissions? I mean beyond what the regulations require.
WM:- Absolutely. The BusinessWeek article in effect highlights a "grey area" in the issue of what constitutes a carbon credit that policymakers are grappling with. Both of WM's actions — installing the landfill gas collection systems and selling the carbon offsets to TerraPass — benefited the environment beyond just the Tontitown locale.
Image credits: Waste Managment; See also: TerraPass interview on TreeHugger
Closing remark by TreeHugger:- With so many stakeholders it's easy to see why a management system is needed to clarify roles, responsibilities, and performance metrics for carbon offsetting projects. Third party verification may well be needed to make offset regimes sustainable - consider that the design life of a solid waste facility like the one discussed here is measured in centuries instead of years - and to establish and maintain public trust that spans generations! A voluntary standard is currently under development for this objective; and TreeHugger will keep you posted on the progress. We also hope to post an interview with a representative of CCX in the near future.