A Bitcoin Mine at a Natural Gas Well in Texas

https://www.vice.com/en/article/m7v49n/inside-a-bitcoin-mine-at-a-natural-gas-well-in-texas

by elorant • 4 years ago

45 79 4 years ago

vice.com

wffurr2• 4 years ago

The real problem is Texas and the federal government allowing flaring in the first place.

With better regulations, many better things could be done with that gas rather than mining Bitcoin.

CodeShmode3• 4 years ago

The amount of gas to too small to be economical to transport away from the well.

nharada• 4 years ago

Maybe that's a problem with economic incentives and it shouldn't be free to just burn the gas to get rid of it.

chockchocschoir2• 4 years ago

With better regulations, many better things could be done with that gas rather than mining Bitcoin.

With better regulations we could also maybe outlaw desktop gaming computers as there are a lot of powerful (and power hungry) desktop computers just being used to play video games when they could be doing many better things, like contributing to Folding@home or other efforts.

Ourgon3• 4 years ago

Regulations, because we know better. More specific, you know better what people should do with both their time as well as their money. They should not play those games nor should they buy those computers for playing games, instead they should buy those computers and the power needed to run them to run $Thing_You_Deem_To_Be_Proper_Today. Since those gamers are just to stupid to realise this they need to be forced to your will because you are right and they are stupid and wrong.

It is that attitude which was part of the reason why the USA got its previous president. Assuming that you did not like the previous president of the USA you'd do well to tone it down a bit since people don't like to be patronised.

127• 4 years ago

With that logic we should ban cars and vacation flights, and only use ships, public transport and electric taxi service. Which I'm not entirely opposed to but some other people might be.

lovingCranberry• 4 years ago

Got any ideas for what you could do with that gas "rather than mining Bitcoin"? Believe me, if there was a way to make "better things" with it instead of flaring, they would do it. (Because doing "better things" usually implies that money can be made!)

You will always have to burn waste and unwanted gas at such facilities, because you need to stabilize pressure and flow from the well and you just cannot just capture and process all gas that comes out of it.

The majority of the burnt gas is methane anyway, and I prefer this to be burnt rather than released into the atmosphere.

wffurr2• 4 years ago

No but with the correct economic incentives I am sure someone will figure it out. After all, Bitcoin incentivized someone to do something with it.

If those oil wells are uneconomical to operate in a way that doesn't entail leaking the natural gas, maybe it's best for them not to operate at all.

Something1234• 4 years ago

I've been wondering why they don't use the flare gas in a local power plant to power the site and drill.

maerF0x0• 4 years ago

It seems pretty likely that 1) they do and 2) the gas far too much energy to consume onsite. Adding electrified vehicles might help a little.

What I'm surprised is that they cant find a way to add that electricity to the grid, am i right that you must have an internet connection to mine? If so maybe wireless power is the innovation to unlock these distributed sources?

Scoundreller2• 4 years ago

Or to power some other kind of task. Nobody is posting ads: “hey, need cheap electricity for your industrial thingamajig? See what we can do for you!”

toomim• 4 years ago

Often because there is no way to get the gas to a power plant. There might not be a local power plant that uses natural gas, or there might not be pipelines, or the local plant might not need the gas.

Methane pops up in many places, and in order to use it for the power grid, you need it to pop up in a convenient place for the power grid.

The only other options left are to flare it, or vent it into the atmosphere. Methane is 40x worse for the environment in its uncombusted form than after burning it, so it's better to burn (flare) it. But sometimes the extractors don't bother. Bitcoin mining provides an incentive for entrepreneurs to seek out methane that isn't being burned, and burn it.

kitkat_new• 4 years ago

Often because there is no way to get the gas to a power plant.

build one

majinuub2• 4 years ago

From the article:

“This gas is unable to be sold to a pipeline, so otherwise they’re either venting or flaring the gas. If you are venting the gas you’re just literally venting the methane into the atmosphere,”...

There's probably too much distance between the nearest town or pipeline for the gas to be sold. If not, there's likely some other reason why its not economical for the gas to be used. Otherwise these companies wouldn't be burning away free money. So Bitcoin miners act as a buyer of last resort.

As for it being wasted. What's valuable is purely subjective. That's what makes markets work. Its also why planning economies from the top down doesn't work. What seems like wasted energy or capital to you is very useful to another person. Many people (myself included) believe that a decentralized, digital, hard money that is tied to the real world through energy is extremely important. So to those people its not a waste of energy, far from it.

Eddy_Viscosity2• 4 years ago

Using flare gas for a useful purpose is a good thing.

Does 'mine crypto' qualify as a useful purpose? To some, maybe, but to me energy used for crypto is still wasted energy.

I'd really like to see innovators step up and disrupt the gas industry by coming up with new ways of using/capturing/exploiting the energy that otherwise would be wasted in flares. Mining crypto falls far short of that, imho.

herendin2• 4 years ago

How about a data center onsite?

tedivm• 4 years ago

It's been done with methane reclamation at landfills, and is still being experimented with.

https://www.datacenterdynamics.com/en/news/microsoft-opens-p...

asciimike9• 4 years ago

Hi! I'm the product lead for [Crusoe Energy's](https://crusoeenergy.com/) cloud product, which is building a climate aligned data center powered by stranded energy (e.g. flared natural gas). Can confirm it's definitely possible, though definitely a non-trivial problem :)

If you're interested in using our cloud or joining the team to help scale our data center deployments or software, feel free to reach out (mike at crusoecloud dot com).

landemva4• 4 years ago

Typical data center workloads need great communications (bandwidth, latency, redundancy) and very high power uptime, which is challenging to achieve at remote sites. Some IT workloads with less stringent communication needs are better for remote data centers.

caymanjim• 4 years ago

I disagree that it's a good thing. It's still being burned, so the environment damage is still there. Except now it's being whitewashed. Instead of the obvious, visible waste and damage of a flare, the companies get to sweep it under the rug and pretend things have improved. Once again a fossil energy company is externalizing their pollution damage. If they were able to pump electricity into the grid it would be slightly better, but not much. Using it for crypto is turning one bad thing into another bad thing, and sweeping the true cost under the rug.

asciimike9• 4 years ago

I disagree that it's a good thing. It's still being burned, so the environment damage is still there.

I won't try and argue against "if we never had fossil fuels, the environment would be better" (I agree, but we also probably wouldn't be communicating right now, were that not the case), but by mitigating flares, you can significantly reduce methane emissions (98+%), CO2 (~70%)/CO (95%), VOCs, etc. It's not "good" for the environment, but it's a hell of a lot better than what's currently being done.

Lots of folks ITT have discussed a carbon tax on emissions; think of flare mitigation via crypto as an economic incentive for companies to voluntarily reduce their emissions much faster than a state/federal government can move to enact legislation. It achieves the same end result, just one is aligned with the current dominant economic system in the country, and one would likely end up in political gridlock.

landemva4• 4 years ago

We can likely agree that venting is not good. Flaring is better, though the combustion can be incomplete (windy days). Combustion in a generator is much more complete, so this is a significant pollution reduction. It is moving in the right direction.

zozbot2342• 4 years ago

Does 'mine crypto' qualify as a useful purpose?

It's using free or nearly-free power to displace an equal amount of compute that would otherwise occur elsewhere, likely using grid power. That unused power can now go to a better use. So yes, in a roundabout way it is useful.

ip264• 4 years ago

It wouldn't occur elsewhere. The way the incentives are built, anywhere energy is cheaper than the expected return of mining, all excess energy will be consumed mining. Thus, new sources of inexpensive energy translate to more mining than before.

vmception• 4 years ago

Its useful that crypto mining caused you to notice this issue in the first place.

Like, where were you (all) before crypto mining filled in the void? Decades of looking for a use case that reduces emissions, this does that while producing a valuable digital byproduct sellable on the open market. It doesnt really matter what that byproduct could theoretically be used for. A bitcoin has more use than a tradeable carbon credit, which also just has a theoretical application of reducing emissions in the future.

Capira3• 4 years ago

Bitcoin is crucial to build more sustainable societies.

bilekas• 4 years ago

This is the first time I've heard this argument. Can you point out what you mean exactly?

adh636• 4 years ago

https://squareup.com/us/en/press/bcei-white-paper

Capira3• 4 years ago

Bitcoin makes renewable energy sources more profitable [1], and it targets the hidden cost of the petrodollar [2].

[1] https://www.coindesk.com/policy/2021/10/11/bitcoin-mining-is... [2] https://bitcoinmagazine.com/culture/the-hidden-costs-of-the-...

vdnkh• 4 years ago

Bitcoin is not crucial to build more sustainable societies.

sokoloff• 4 years ago

Not Bitcoin is crucial to build more sustainable societies?

woodruffw4• 4 years ago

There is nothing sustainable about restarting shuttered coal plants to crack hashes[1].

[1] https://www.theguardian.com/technology/2022/feb/18/bitcoin-m...

Scoundreller2• 4 years ago

One of these got set up at an “orphan gas” well in Alberta.

I found it strange that a few mw was only economical this way and not economical enough to send to the grid:

https://www.cbc.ca/news/canada/calgary/link-global-auc-penal...

ChoGGi• 4 years ago

It's not the only one, I think these guys got shut down too.

https://m.youtube.com/shorts/V-uOOPug4Jg

ip264• 4 years ago

Yeah, it does seem odd. Perhaps it's about the path of least resistance. Laying power lines, contracting with the grid, and so forth is a bunch of up front investment.

Maybe Tesla could drop down a battery pack & install superchargers? There's a synergy between "place too remote to ship out power for selling" and "place too remote to ship in power for electric cars"

asciimike9• 4 years ago

In the hierarchy of moving things around, from difficult to easy:

- natural gas (building a pipeline)

- electricity (generation, transformers, high voltage lines, etc.)

- bits (copper, fiber, microwave, cellular, satellite all are viable for low bandwidth operation)

It's orders of magnitude in terms of cost difference.

The issue with superchargers is mostly that these places are in the middle of nowhere--nobody is going to be driving their Tesla across the Permian.

occz• 4 years ago

That's one of the more dystopian things I've read this week.

Ourgon3• 4 years ago

That's because you have not looked around very much and did not understand what would have been done with this gas had it not been used in a generator to power that $hitcoin-mine. As to not looking around I'd say the malversations around all those (soon-to-be) warring nations far eclipse whatever can be achieved by a single funny-money-mine in the backwoods of the Republic of Texas. As to not understanding what would have happened had they not hooked up that generator to the gas line there it should be enough to have a look around an oil extraction area at night where the darkness is often shattered by bursts of reddish light coming from flares. Flares which burn natural gas (and whatever else happens to come up in gas form). Reddish light due to the incomplete combustion inherent in the technology and the gas mixture. Here that gas is burned in a generator which both provides for a more complete combustion as well as produces power to run that mining rig. The net result is less air pollution due to better combustion of spill gas, less light pollution due to the absence of flares plus whatever money that mining operation brings in. There's plenty of flares to go around for mining operations, including those at refineries - have at it. Any $shitcoin mined this way is not mined using power which would otherwise have gone to more useful applications.

Angostura• 4 years ago

And the energy from these flares can't be used for actually useful applications, because?

darksaints• 4 years ago

I'm disappointed there aren't more technical details. Small scale gas-to-electric conversion isn't something you really find off the shelf. Diesel generators can be converted to use natural gas, but the conversion isnt something really available off the shelf. The smallest commercial gas turbines are 30kw, which seems a bit too high for what I assume to be the Bitcoin mining equipment in the utility box on the pole in the picture. Some solid oxide fuel cells can convert methane, but the ones you can find commercially can't handle the dirty sulfur-rich natural gas that you'd find in an oil well. So there is something novel happening here to convert the gas to electricity, but it is completely overshadowed by the bitcoin story.

asciimike9• 4 years ago

I'm pretty sure that stock photo at the top of the article isn't actually a bitcoin miner, it's probably just power/control equipment for the site.

aresant2• 4 years ago

I think https://www.crusoeenergy.com/ is by far the largest participant in this space with a view on using crypto mining as entry point but layering in distributed compute data centers as scale play

It’s an interesting idea to bring the utility directly to the energy and think about the infrastructure required (uplink / maintenance / etc) required to fulfill the vision

asciimike9• 4 years ago

I'm the product lead for Crusoe's Cloud; thanks for mentioning us!

Our data centers are currently in alpha with a number of A100's and A40's currently running on flared natural gas. We're able to offer a product that's carbon negative (each GPU running for a month offsets ~400kg CO2e) and also ~40% cheaper than hyperscale cloud providers.

If you're interested in giving our cloud a shot, feel free to email me @ mike at crusoecloud dot com.

And of course, we're always hiring: https://www.crusoeenergy.com/careers

paulgb• 4 years ago

Interesting, what use cases are you targeting? Is it mostly batch ML training, or do you have customers using you for real-time rendering applications? Or just lots of ETH mining?

aresant2• 4 years ago

That’s amazing do you anticipate maintaining that pricing advantage?

Maursault• 4 years ago

Comments seem to be focused on whether this is good or bad. The argument for good sounds suspiciously like the (all invalid) arguments for hunting, that hunting is somehow conservation, because if game not hunted, it would reproduce beyond the point the environmental resources could support their numbers, and they will all suffer greatly by starving. So, if these generous and selfless bitcoin mining individuals were not using residual methane from old wells to mine bitcoin for their own self-interests, then the methane would be released into the atmosphere, and everyone on Earth would be worse off. When you hear these individuals speak in support of themselves, all you will hear, over and over again, droning out your ability to discern if what they're saying makes sense, is, "it's win-win. It's really a win-win. So it's a win-win," and the only message you need take with you is that it is a win-win.

I don't know if there are lesser evils here, but the smell of bullshit is overwhelming.

BXLE_1-1-BitIs1• 4 years ago

One Alberta wellhead bitcoin miner got socket with a fine big enough to confiscate his profits because he failed to obtain a power production license (required in Alberta).

The noise could be heard for miles around. Be a good neighbor - or else.

kthejoker2• 4 years ago

A simpler solution: charge an indefinitely scheduled Bitcoin tax for any gas flared.

As in, you agree that in exchange for flaring some amount of gas today we can come collect anytime in the future some amount of a wildly speculative and volatile asset from you, even if it involves more liability than your entire organization can sustain.

Oh wait, we already have this, it's called climate change, we just pay it as an entire planet.

This way lies madness.

A Bitcoin Mine at a Natural Gas Well in Texas

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