California's Cap-and-Trade program has issued over 23.6 million carbon credits to companies that capture and destroy methane from American coal mines. At recent market prices of approximately $28-30 per credit, that represents over $680 million in value. The program has been running since 2014 under California Air Resources Board's Mine Methane Capture Compliance Offset Protocol.
Whether or not you believe carbon dioxide is warming the planet, here's what isn't debatable: the process of chasing those credits is putting toxic substances into water that people drink. Iron, sulfuric acid, arsenic, heavy metals — pouring out of abandoned mines and into the creeks where communities fish and draw their water. That's not a climate question. That's a poisoning question.
In the hollows of West Virginia — the state that has generated more mine methane credits than any other — residents are watching their creeks turn orange, their wildlife die, and their well water go muddy. The operations generating those credits appear to be poisoning their water. And the protocol that governs the program? It never once requires anyone to test what's happening downstream.
The Numbers
According to CARB's official offset credit issuance data, West Virginia leads all states in Mine Methane Capture credits issued:
- West Virginia: 6,681,575 credits (~$187-200 million at $28-30/credit)
- Illinois: 4,650,922 credits (~$130-140 million)
- Wyoming: 4,213,758 credits (~$118-126 million)
- Pennsylvania: 3,984,965 credits (~$112-120 million)
- Colorado: 1,881,872 credits (~$53-56 million)
- Virginia: 869,946 credits (~$24-26 million)
Each credit represents one metric ton of CO2-equivalent emissions avoided. California's large emitters — refineries, power plants, cement manufacturers — purchase these credits to meet a portion of their compliance obligations under the state's emission cap (up to 4% through 2025, rising to 6% for 2026-2030). The mechanism is straightforward: instead of reducing their own emissions, they pay someone in Appalachia to destroy methane that would otherwise vent to the atmosphere.
How It Works
The Mine Methane Capture protocol covers four categories of activity: ventilation air methane from active underground mines, methane drainage from active mines, surface mine drainage, and — critically — abandoned underground mine methane recovery.
It's the abandoned mine category that concerns residents most. West Virginia has thousands of abandoned coal mines, many dating back over a century. When mines are abandoned, pumps are turned off and the workings gradually flood with groundwater. Methane trapped in coal seams is released as water levels fluctuate.
Operators drill into these abandoned mines, extract the methane through wells or collection systems, and destroy it — typically through enclosed flares or thermal oxidizers. Third-party verification bodies certified by CARB audit the destruction quantities. CARB issues the credits. The credits are sold. Everyone profits.
Everyone except the people who live downstream.
Who's Getting Paid
Two companies dominate West Virginia's mine methane credit market: McElroy Green Marketing, LLC (13 projects, 3.69 million credits) and Keyrock Environment/Energy, LLC (8 projects combined, representing 38.8% of ALL mine methane credits issued nationally). Between them, they've generated over $250 million in carbon credit value from West Virginia's abandoned mines alone.
The biggest single project — Federal 2 Abandoned Mine Methane Recovery in Monongalia County — generates approximately 337,000 credits per year, worth roughly $9.4 million at current market prices. That's one abandoned mine. One hole in the ground. Nearly ten million dollars a year in paper value, sold to California refineries so they can keep emitting.
What Residents Are Seeing
In April 2026, Pigeon Creek at Ragland in Mingo County turned red — classic acid mine drainage. The event was documented by local activist Tara Sexton and reported by Bruce Justice of the Mingo Messenger. Iron-rich, acidic water pouring from abandoned mine openings on hillsides and flowing into waterways that feed drinking water sources for downstream communities.
Residents describe a pattern they've been seeing across multiple counties — Mingo, Wyoming, Boone, and McDowell — since at least 2023. Their theory: operators are manipulating water levels in abandoned mines to maintain methane flow toward collection points. The pressurized water, laden with dissolved metals and acid from decades of contact with exposed coal seams and pyrite, eventually finds escape routes through fractured rock — emerging as catastrophic discharges.
In Mingo County, the local Redevelopment Authority rejected Keyrock Energy's attempts to drill into abandoned mines at their Twin Branch site — twice, in September 2023 and March 2024. The locals said no. But the financial incentive hasn't gone away.
What the Protocol Actually Says
CARB's Mine Methane Capture protocol, adopted April 25, 2014 and never amended since, is a technically rigorous document when it comes to measuring gas. It specifies methane measurement methodologies, destruction efficiency requirements, monitoring frequencies, and quantification formulas.
What it does not include is any requirement to monitor water quality.
The protocol requires projects to maintain "regulatory compliance" — meaning operators must hold applicable permits and follow environmental laws. But CARB doesn't verify that themselves. They trust state regulatory agencies to handle it. In West Virginia, that means the Department of Environmental Protection — the same agency that residents accuse of deflecting blame.
The Structural Loophole
Here's the critical design flaw: the protocol explicitly prohibits injecting fluids into mines to push methane toward collection points. But it is completely silent on removing water to keep methane pathways open. Operators can pump water out of abandoned mines all day long — the methane keeps flowing, the credits keep generating — and the protocol doesn't require anyone to ask where that water goes.
The baseline methodology assumes methane would "naturally" vent at declining rates based on historical MSHA data from when mines were actively managed. But without pumping, many abandoned mines would simply flood and stop venting entirely. The methane would stay trapped. No emissions. No credits needed.
This creates a perverse dynamic: operators may be manufacturing the very emissions they're being paid to destroy. The baseline isn't "methane that would have vented anyway." It's potentially "methane we made available by manipulating water levels."
The Verification Blind Spot
The third-party verifiers who audit these projects — firms like SES, Inc. (which has verified 6.3 million credits, 26.6% of all mine methane credits) and the Ruby Canyon/TÜV SÜD partnership — have a narrow mandate. They verify math and equipment calibration.
They do not assess whether the operation is contaminating groundwater. Whether nearby wells have been affected. Whether aquatic ecosystems downstream are impaired. Whether the operator's activities are causing or exacerbating acid mine drainage. It's not negligence — it's simply not in their scope. The protocol doesn't ask them to look.
Least Protective of All Major Standards
Compared to other carbon offset protocols globally, CARB's Mine Methane Capture protocol is the least protective. The UN's Clean Development Mechanism requires environmental impact assessments. Verra's VCS standard requires stakeholder consultation and environmental safeguard reviews. The American Carbon Registry requires consideration of environmental co-impacts. CARB's MMC protocol requires none of these.
Zero water quality monitoring. Zero groundwater assessment. Zero community notification. Zero health impact assessment. A program that counts every molecule of gas destroyed but ignores every creek turned orange isn't protecting the environment. It's protecting a ledger.
The Fundamental Question
Set aside the climate debate. Ask a simpler question — a first-principles question:
Is it acceptable to pump toxic water into people's creeks so that someone else can sell a piece of paper in California?
A man-made system created a financial incentive to manipulate abandoned mines. The manipulation is putting real, measurable toxins — iron, sulfuric acid, dissolved heavy metals — into water that real people drink. The people profiting don't live anywhere near the damage. The people suffering have no say in the system and no mechanism to stop it.
At EPR Foundation, we don't take positions on climate policy. We take positions on poisoning people. And right now, a system designed around climate abstractions is creating real, tangible environmental destruction in communities that never had a voice in its design. That's not environmental protection — no matter what you call it.