Using Excess Natural Gas Energy from Canadian Oil Drilling to Mine Bitcoin

Using Excess Natural Gas Energy from Canadian Oil Drilling to Mine Bitcoin

TL;DR: greenSpice is a column exploring how cryptocurrency and the environment interact. Bitcoin mining has been always a weak spot when talking about sustainability in the cryptocurrency sphere. However, there are some interesting projects seeking to take advantage of renewable and more green energy alternatives to minimize the impact this power-intensive activity has over the environment. Canadian companies are planning to leverage the natural gas oil wells are releasing to the air, taking a by-product of oil extraction and putting it to work.

Bitcoin Mining Takes Advantage of Natural Gas

Canadian Oil companies are starting to get into the cryptocurrency mining business in an unorthodox way. One of the first roadblocks mining startups have in first world countries is the cost of the energy needed to operate. This is why the biggest mining operations are in places like China, a country featuring cheap power tariffs. However, there might be a potentially less expensive way, and oil companies leveraging their available gas resources.

Using Excess Natural Gas Energy from Canadian Oil Drilling to Mine Bitcoin

Natural gas is a by-product of oil drilling traditionally not very valuable to these companies. It is a proven energy source used regularly in some parts of the world, but due to the problems and logistics involved to pipe it, and the costly transportation methods to move it from one place to another, it is mostly ignored and released to the atmosphere, burning it.

But now, these companies are using that excess energy on site to power small cryptocurrency mining farms. They’re lured by the idea of repurposing so-called “free energy” that would otherwise be wasted, providing what is essentially a free source of power for mining, according to Miner Update.

Profitability and Greenness of the Idea

The idea of taking advantage of this commonly overlooked resource came from oil consultant Stephen Barbour, who built portable self-contained mining farms that can be taken everywhere an internet connection is available. The setups contain the generator needed to transform the natural gas into power for the dozens of bitcoin mining rigs powering the farm. However, the upfront costs can be quite high: according to BREAKER, these setups can cost up to $130,000 even before the mining gear is installed, a steep price for experimenting with mining.

Using Excess Natural Gas Energy from Canadian Oil Drilling to Mine Bitcoin

But the idea behind this is unless the mining rigs need updating or maintenance, the whole setup would essentially pay for itself upfront because the energy to operate it would be “free” to oil companies. This also would help oil companies to get rid of the natural gas deemed impractical and unprofitable to sell locally.

These setups are being used in Canada but due to the similarity of the conditions in Texas and other oil fields, it is very possible that if the idea picks up steam, we could see portable mining rigs scattered across the US, mining bitcoin.

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