Plugging leaky gas pipes in Eastern Europe could reduce greenhouse gas

Nov 11, 2007 01:00 AM

Plugging leaky natural gas pipelines in Eastern Europe could be the next big business opportunity in reducing climate-changing emissions, the freshly selected chair of a global greenhouse gas business group has said.
"They have a lot of leaky valves," Jack Cogen, the president and CEO of greenhouse gas asset manager Natsource, said about Eastern Europe's natural gas distribution system. The Geneva-based International Emissions Trading Association this month selected Cogen to chair the business group. "It will take a lot of manual labour. You've got to go to each valve, check them and fix them. It's time consuming," he said.

Natural gas, or methane, has more than 20 times the greenhouse potential of carbon dioxide, the heat-trapping gas widely blamed for causing global warming. Cogen said leaks afflict larger pipelines going from gas producers to power plants as well as smaller ones going to homes for heating. Fixing them could be the next big source of carbon credits.
In greenhouse gas markets, coal-fired power plants and other big polluters can meet emissions limits by buying credits that represent emissions reductions. Projects such as burning biomass for energy in Thailand, or putting waste heat from iron plants to work in India, generate many of the credits. Investors pay for the projects and bank the credits hoping they will rise in value.

The first low-hanging fruit in the greenhouse business had been destroying freak industrial gases, such as refrigerant HFC23, a gas with 11,700 times the heat trapping potential of carbon dioxide. Projects typically occurred in China, through the UN's Clean Development Mechanism (CDM), which allows parties in rich countries to invest in projects in developing countries.
Last year, two entities of Natsource participated in an HFC23 deal put together by the World Bank in which companies paid two chemical companies more than $ 1 bn (EUR 680 mm) to reduce output of the gas. But that source of credits has mostly dried up, leaving companies like Natsource to seek other options.

Cogen said fixing natural gas pipes could be handled through the CDM as well as through the UN's Joint Implementation (JI) program, in which a rich country can invest in projects in another developed country, principally ones in Eastern Europe. After plugging leaks, the next big greenhouse gas prize should be large-scale energy efficiency projects, Cogen said.
Such projects could go beyond the UN carbon trade mechanisms. Companies in rich countries could help poor countries develop public transportation systems, for instance.

"It's less perfect in its measurement capability (of greenhouse gas reductions) but nobody argues the environmental integrity," Cogen said. "Everyone wins but it doesn't fit the rules currently," he added.
Lobbying for big energy efficiency projects is one of the things IETA will be doing at the UN meeting in Bali in December, when the world will start negotiations for a way to curb greenhouse gases after the current accord, the UN's Kyoto Protocol, expires in 2012, he said.

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