SOMERSET, Colo. — The ski company hipsters sat on one side of the table, the flinty oil and gas veterans on the other.
The meeting wasn’t going well. The oil and gas men were skeptical. They worked for a mine owned by one of the Koch brothers, the conservative billionaires who had long fought environmental regulations. One of the men wore a hat that said “Fire Obama.” Another said he didn’t believe climate change was real.
Matt Jones, the chief financial officer for Aspen Skiing Co., said he and the other representatives of the resort firm quickly realized they had to stop basing their pitch on the environmental merits and go straight to the economics — arguing that methane was a potentially valuable resource that could be sold.
“It felt like it was going sideways fast,” Jones recalled. “We read the tea leaves and said, ‘Let’s focus on making money. It’s a win-win.’ ”
The mine operator eventually gave the green light to the project, and eight years into its operations, the Elk Creek Mine plant — which sits in a mining town in the North Fork Valley of Colorado — is a qualified success.
The power plant churns out 24 million kilowatt hours a year, about as much electricity for the grid as the ski company uses to run its four resorts and hotels. So far, it has also prevented 250 billion cubic feet of methane a year from entering the atmosphere, according to a recent progress report from the company. That’s the equivalent of taking half a million cars off the road a year.
News of its success comes as the international climate community continues to debate how best to stop the warming of the planet, with a new emphasis on methane reduction. And the Biden administration has announced an ambitious goal of lowering the country’s greenhouse gas emissions by 50 percent by 2030.
Methane — about 10 percent of U.S. emissions — is the second-most-prevalent greenhouse gas after carbon dioxide, but it is 25 times as powerful in trapping heat in the atmosphere. It is emitted during the production and transport of coal, natural gas and oil, and also by livestock and other agricultural sources.
A landmark United Nations report released May 6 argues that drastically cutting methane emissions is necessary to avoid the worst impacts of climate change and could reduce the rate of global warming by 45 percent by 2030.
Yet Elk Creek Mine’s success comes with an asterisk. It has yet to make a profit for its investors, and complicated regulatory issues and the low prices of other energy sources in the current market may make it difficult to replicate — without new legislation or government incentives.
The project passes two tests of “meaningful climate action” because it works on a large scale and could be a model for others, the progress report argues. “While it is not a comprehensive market or policy solution," the report adds, "it illuminates a path in that direction.”
An hour west of the manicured ski runs and tony enclaves of Aspen, through a landscape of sage and scrub pine, sits tiny Somerset, a once-thriving coal town hit hard by industry losses. Miners at Elk Creek — where the power plant now operates — used to haul out $1 million in coal a day, before the mine was closed in 2012 after a costly fire.
Environmentalists and energy entrepreneurs had long kicked around the idea of a project to reuse the methane that is produced naturally from coal production and that continues to leak even from shuttered mines. Leading the way was now-deceased environmentalist Randy Udall, who was from the famous family of pro-conservation politicians and used to describe methane’s potency as “Co2 on steroids.” Eventually, Udall joined forces with the ski company and an oil and gas entrepreneur named Tom Vessels on the project.
Fugitive methane emissions continue to contribute substantially to Colorado’s greenhouse gas emissions, Vessels says. There are 1,700 coal-mining permits in the state, but most mines are abandoned and continue to leak methane.
The ski industry is also battling the effects of climate change. Aspen’s winter ski season is a month shorter than it was in 1980, and average temperatures in Colorado have increased by 2 degrees Fahrenheit in the past 30 years. Low-snow years cost the industry on average $1 billion in lost revenue per season, according to one industry estimate.
Aspen Skiing Co. had already built a small solar array on one ski hill and a hydroelectric plant powered by spring snowmelt — but it wanted to do more.
“We had always said, ‘Look, if we legitimately care about our own impact, we need to figure out a way to do clean energy in some fashion that isn’t token,’ ” said Auden Schendler, the company’s senior vice president of sustainability.
Eventually, the company struck a deal to build the plant at the Elk Creek Mine, which is owned by a firm founded by William Koch, the “other brother” of the conservative industrialist Koch family. William parted ways acrimoniously with his more famous brothers Charles and David in 1983, but founded his own company, Oxbow Carbon, which deals in oil and natural gas byproducts.
Koch, now 81, is worth more than $1.6 billion, according to Forbes, and has campaigned against renewable-energy projects and emissions regulations.
Koch, who did not respond to an interview request, made it clear at the time that his company got involved in the project not out of altruism but because “we viewed this as a challenge.”
“Our company has a history of taking waste product and turning it into energy,” he told the Aspen Times in 2013. “We were aware of the potential benefits of capturing and using the waste methane. The potential greenhouse gas benefits were not a driver in our decision to proceed with the project. But we did consider them.”
Eight years later, the working power plant pulls methane from the mine and filters the gas before converting it into electricity. The electric current then moves onto the regional power grid, where it is used by Holy Cross Energy, a nonprofit rural electric cooperative.
The power plant generates $100,000 to $150,000 in revenue per month from electricity and carbon-credit sales, the progress report said, and Aspen Skiing Co. has recouped all but $750,000 of its initial $5.34 million investment. A portion of the carbon credits has been sold to California’s controversial offset market.
The electric cooperative was willing to pay a slightly higher price for the electricity because it fulfills its clean-energy goals, according to its chief executive, Bryan Hannegan.
“We think this project is environmentally beneficial enough that we’re willing to pay above-market prices for the electricity,” Hannegan said.
Environmentalists have largely praised the project as a good model for what can be done as the climate community focuses on reducing methane emissions, according to Morgan Bazilian, the director of the Payne Institute for Public Policy and a professor at the Colorado School of Mines in Golden.
“It’s a nice project that has an elegant narrative: using something that’s just being wasted that causes climate change and producing something that’s useful — electricity — from it,” Bazilian said.
But, he notes, while Aspen Skiing Co. receives praise for its sustainability activities, “the wider context for the ski industry is that their business is partly fueled by wealthy people coming to have fun on private jets, staying in 20,000-square-foot houses with heated driveways and heated streets.”
The technology that turns excess methane from coal mines into electric power has been around for decades, said Raymond C. Pilcher, a Grand Junction, Colo., consultant and the chairman of the United Nations Group of Experts on Coal Mine Methane. Mine methane is being used to power electric plants in Europe and China, with the latter providing hefty government support.
Pilcher sees potential for more projects throughout the United States. There are about 679 active coal mines, according to the U.S. Energy Information Administration, but thousands more have been shuttered or abandoned by their owners and are still leaking methane.
In the United States, there are about three dozen efforts to repurpose methane for beneficial use but just two that have been turned into working power plants, according to a study by the Global Methane Initiative, an international public-private partnership focused on methane as a clean-energy source. The Environmental Protection Agency is a member of the group.
Dealmakers often face hurdles such as acquiring rights to the gas and accessing electricity markets — and, in the West, navigating complex leasing practices on federal lands. Efforts by the Obama administration to simplify these practices were reversed by the Trump administration, Pilcher said.
“The sad part about reducing emissions at coal mines is that it’s not about technology. It’s about changing the way people think and removing these impediments in the United States, such as complicated regulations and market access," Pilcher said.
The question remains whether other environmentally friendly companies could use the Elk Creek Mine as a model.
Sen. Michael F. Bennet (D) and other lawmakers from Colorado are pushing for Senate approval of the Colorado Outdoor Recreation and Economy Act, a sprawling public lands and recreation bill that has passed the House and would make it easier for companies to lease methane from abandoned mines in the North Fork Valley.
Bennet said in a statement that the legislation has been in the works for more than a decade, and that its pilot program would build on the success at the Elk Creek Mine and pave the way for other projects that could “boost the local economy, and help tackle climate change.”
Hannegan said Holy Cross, the electric cooperative, is actively searching for other coal mines that would be suitable for power projects, although the cost is likely to be higher than for other renewables such as solar.
“You have to balance affordability with the environmental benefits,” Hannegan said. “This is a local, clean and resilient power source that prevents methane from going into the atmosphere. There are a lot of different considerations; it’s not just about pure profit.”
This story has been updated to make clear that power plants fired by methane emissions from coal mines are a rarity in the United States.