Digital Assets: Oil Drillers And Bitcoin Miners Hold Hush-Hush Confab In Texas
The agenda: How to convert flared gas into bitcoin wealth.
Nearly 200 people from the oil and gas and bitcoin mining industries met in Houston, Texas, last week to join forces on the long-standing problem of natural gas flaring. Excess and wasted gas from drilling sites in Texas has to be flared if the site is not within reach of a gas pipeline – this is so-called ‘stranded gas.’ The process of flaring is a waste of energy and has climate activists in arms for the harm it does to the environment. Instead, capturing the gas and using it to mine bitcoin is climate friendlier, curbs energy waste, and earns dollars for both driller and miner. (CNBC)
The meeting was held in a warehouse used for keeping valuable vintage cars and located on a residential back street in Houston.
Over beer, bitcoin miners and oil drillers enthused over the now-real possibility of running their gas through a bitcoin mining setup instead of venting or flaring it. Bitcoin miners the world over look for cheap energy, and running their mining rigs onsite on the hitherto flared or vented gas kills many birds with one stone.
“This is the best gift the oil and gas industry could’ve gotten,” said Adam Ortolf, who heads up business development in the U.S. for Upstream Data, a company that manufactures and supplies portable mining solutions for oil and gas facilities. “They were leaving a lot of hydrocarbons on the table, but now, they’re no longer limited by geography to sell energy.”
Texas, bitcoin mining and “Chexit”
Texas is fast on course to become the bitcoin capital of the world. It boasts of a deregulated power grid, is politically crypto-friendly, and offers many sources of inexpensive power.
Crypto miners booted out by China (“Chexit”) are looking for alternative locations for their operations. It is crucial for them to source energy cheaply and Texas is now a magnet.
Meanwhile, Upstream is doing roaring business. Founded by lead engineer Steve Barbour, the company already counts 140 bitcoin mines across North America among its customers.
It claims that its bitcoin datacenters do not need costly utilities such as pipelines or power lines. All that is required to start is a natural gas source and a low cost internet connection such as cellular or satellite.
Barbour’s first product was Combo datacenter shown below. It consisted of a natural gas genset and bitcoin mining datacenter all housed in a modified 20′ shipping container.
“Since bitcoin miners are paid through the internet and awarded bitcoin the value of electricity is now directly correlated with the value of bitcoin,” wrote Barbour in a 2019 blog. “This means that stranded, useless energy located even on a remote oil well has the same baseline value as useful grid-connected energy flowing from a hydroelectric dam!”
Moreover, this is also environment-friendly. When natural gas (primarily methane) is used in a generator, all of the gas is combusted and none of it is released into the atmoshere.
At the meeting, the possibilities charged up the participants and the enthusiasm got to the point that you had to shout to be heard.
“This is Texas, boys. We got what you need, so come on down,” said Hayden Griffin Haby III, an oilman turned bitcoiner, at the meeting. “We are sitting on the energy capital of the world.”
Image Credit: Flickr
Latest Alternative Investment News
Hundreds of thousands of bats from about 40 species routinely nest under US bridges, and many of them are endangered or threatened. Transportation departments must mandatorily check for them before…
Amazon (NASDAQ: AMZN) installed AI-powered cameras in its delivery fleet in February as an investment in safety technology across its operations. The company said at the time the system would…
Wise (LON: WISE), the UK payments fintech previously known as TransferWise, has taken its first steps into investing solutions. Its Assets product allows users to invest in stocks but also…
ETF Managers Group, which created the highly successful Breakwave Dry Bulk Shipping ETF (NYSE: BDRY), has launched a sister ETF – the ETFMG Breakwave Sea Decarbonization Tech ETF (BSEA). The…