From 2010 to 2020, the volume of wasted natural gas has grown by more than 300%. This unused raw energy presents an opportunity for those who can harness it, and Bitcoin miners are taking advantage of the excess energy while turning it into economic activity.
Although more complicated than using electricity directly from the power grid, natural gas offers some advantages to the Bitcoin mining sector that grid-based mining does not. Natural gas-powered Bitcoin mining takes advantage of nearly free, wasted and stranded energy, and converts it directly into jobs and GDP.
The last ten years
Since 2010, the top gainers for vented and flared natural gas production were Texas, North Dakota and Wyoming, according to the U.S. Energy Information Administration (EIA). Of course, each is already a major adopter of Bitcoin mining in its own right.
Sovereign oil production in the U.S. has caused an explosion in natural gas. Most of the natural gas production is secondary to oil production, considering it is a byproduct of the process. Building the infrastructure to capture and sell it is too costly for individuals to bear, which presents both an issue and an opportunity that miners can take advantage of.
Today, states are putting regulations around vented gas, forcing well sites to flare the gas as opposed to dumping it into the atmosphere. Indeed, studies show flaring is less harmful to the environment, and capturing wasted energy for economic growth would stand to benefit almost every party involved.
Stranded energy and Bitcoin mining
Small companies across the U.S. have already started taking advantage of stranded energy, helping oil companies monetize wasted natural gas through Bitcoin mining.
- Companies like Jai Energy and Giga Energy are generating power remotely through natural gas engines and powering ASICs.
- Containerized, mobile units of ASICs dropped on location to monetize wasted energy in return for Bitcoin.
- Energy that was once wasted is now supplementing stranded oil wells.
- Gas that was burned into the air prior to monetization is now undercutting the competition by lower operational expenditures
Capturing stranded energy is not the only problem Bitcoin is solving. Through making these energy hotspots, Bitcoin miners are able to create a localized grid, lighting up locations that were previously disconnected from the larger grid.
Hidden potential energy
Texas, North Dakota and Wyoming aren't the only locales with excess wasted energy, but they do contain the majority. In 2020, Texas had more than 62% of the total vented and flared gas throughout the United states – literal megawatts worth of energy. Imagine if this vented and flared gas was put to work, hashing on the world’s largest supercomputer network at a fraction of the electricity rate. Not only would it solve the wasted energy problem, but it could bring more economic value and jobs to those communities.
Flared-gas Bitcoin mining is a relatively new industry with new companies popping up each year. It is still in its infancy, but it has the potential to bring higher profit margins to stranded oil and gas producers around the U.S. by monetizing what was once waste.