A voluntary effort to cut climate-changing greenhouse-gas emissions took center stage in Richmond yesterday.

Representatives of a Pittsburgh company that produces coal-bed methane in Virginia were accompanied by Gov. Timothy M. Kaine to announce that it joined the Chicago Climate Exchange.

The exchange offers a market-based approach for combating climate change by providing financial incentives to companies that reduce greenhouse-gas emissions.

Credits, or offsets, for emissions are bought and sold on the exchange. Companies that surpass goals to reduce emissions can sell excess credits to companies that need them. The aim is to reduce the overall release into the atmosphere of climate-changing gases such as methane and carbon dioxide. Companies in this program that exceed their permitted emissions must buy credits.

CNX Gas Corp. captures the gas in Southwest Virginia on active and idled coal-mining properties owned by Consolidation Coal Co. It sells the gas to those that burn it, cutting its environmental impact.

Previously, explosive coal-bed methane, which presents a safety hazard to miners, was vented into the atmosphere, where it has 20 times the climate-changing impact of carbon dioxide.

CNX produces enough natural gas to fill the needs of three-quarters of the Virginia homes that use natural gas for heating, cooking and water heating, according to Stephen Walz, the governor's top energy adviser. In 2006, CNX produced 59 percent of the 102 billion cubic feet of natural gas produced in Virginia, according to a state report.

Company President and CEO Nicholas J. DeIullis praised Kaine and Virginia for taking a balanced approach to energy production and environmental protection in the state's energy plan.

"There's a man who wants to have his cake and eat it, too," he said of Kaine.

Methane capture, such as CNX is doing in Buchanan County, will help Virginia meet its goal of cutting greenhouse-gas emissions 30 percent by 2025, DeIullis said.

Publicly traded CNX was created in a spin-off three years ago from Consolidation Coal, which operates Virginia's largest coal mine, Buchanan No. 1. It hopes to work with coal companies other than Consolidation to produce coal-bed methane, DeIullis said.

The company said yesterday that it has registered 8.4 million metric tons of carbon-dioxide equivalent offsets from its coal-bed methane operations in Virginia and elsewhere with the climate exchange. That is equivalent to taking 1.6 million cars off the road permanently, DeIullis said.

Richard Sandor, chairman and CEO of the climate exchange, said companies representing 16 percent of U.S. greenhouse-gas emissions are exchange members. Those companies include American Electric Power and Allegheny Power, two electric utilities serving Virginia customers.

Kaine said the work of climate exchange is a complicated but urgent matter. The nation does not have an energy policy but that is not slowing down Virginia or other states, he said.
Contact Greg Edwards at (804) 649-6390 or gedwards@timesdispatch.com.