Afterhours inside an unexpected location, a car depot in Houston Texas, several secretive invite-only meetings have recently taken place. To be invited you had to be from one of two industries – the Texas oil industry, or cryptocurrency mining.
The exact details of these clandestine meetings are still not open to the public, the deals made within protected by nondisclosure agreements.
But we managed to get some early details.
What’s becoming obvious is that Texas wasn’t kidding when they said they want to become the crypto mining capitol – China banning miners set that plan into overdrive…
Texas is the home to a massive portion of the US oil industry, not just the black stuff, but natural gas too. Because oil is so valuable, natural gas goes to waste – only released because it escapes the earth when drilling for oil.
Currently, they just burn this natural gas away – as explained in the NYTimes article ‘Despite Their Promises, Giant Energy Companies Burn Away Vast Amounts of Natural Gas’ which explains:
“When an energy company strikes oil and begins to pump, less-valuable natural gas comes up alongside the oil. That gas could be gathered into pipelines and sold. ‘It’s just much cheaper for companies to get rid of it’ said Artem Abramov, an industry analyst at Rystad Energy.”
The article also claims that several oil companies have a policy of burning off 100% of the natural gas they encounter while drilling for oil.
With massive amounts of energy literally going up in smoke, the crypto mining industry spotted the obvious opportunity…
Natural gas is much less valuable than oil, so if companies can choose which one to fill their tanks with – it’s going to be oil.
So if they won’t bother capturing the natural gas escaping from their oil drilling sites, the only way it would be put to use is if an industry wanted to use it right there, on location.
“I couldn’t take my eyes off this when I saw that so much money could be made on gas thanks to a Bitcoin miner who takes advantage of the gas that is usually released into the atmosphere to burn” says Adam Ortolf, who runs a company named Upstream Data, which makes the equipment needed to run Bitcoin miners off excess natural gas.
So the plan is to have crypto mining can take advantage of the current situation, install mining operations in the vicinity of each well, then use that to power everything.
Our guess on how it’ll all work would be to use trailers fitted to serve as portable crypto mining operations, which would relocate from one oil well onto the next, following the oil company doing the drilling.
A rare situation where everybody wins…
Oil companies currently making nothing off the natural gas their oil wells expel will now receive a small cut of the crypto mining profits, and the crypto miners get energy at a cost lower than ever before.
There’s environmental benefits as well – now these crypto miners can unplug from the grid, reducing crypto mining’s dependence traditional power plants.
Lowering demand on the grid means these power plants can then produce less energy – the end result is less carbon emissions, and an overall smaller carbon footprint for crypto.