Big Dog Energy LLC, Pennsylvania, has installed 30 gas-fired generators on one of the gas well pads in Beccaria Township. By mining a cryptocurrency called Bitcoin, these generators use electricity that is unique, profitable and can have a negative impact on the environment.
The Pennsylvania Environmental Protection Agency sent a breach notice to the company alleging that the company installed and operated the generator without permission after discovering the mining work during a field visit in January. According to a letter to owner Matthew Anderson, these operations violate a section of state environmental law that prohibits the construction or modification of air pollution sources without permission.
Big Dog Energy has also begun mining Bitcoin on the Woodward Township site and has submitted notices of its intention to develop gas wells in the Townships of Covington and Grich. report By local journalist Mikaila Heiss. It is not yet known if the Covington and Grich wells will also be used to mine Bitcoin.
Bitcoin is a digital cryptocurrency in which all transactions are recorded in a distributed digital ledger and each block of transaction is added to a long chain or blockchain of transactions. So-called miners are rewarded with cryptocurrencies in exchange for verifying blocks that include races to solve complex crypto puzzles.
The value of cryptocurrencies to society is fiercely contested. Proponents say it gives owners privacy and freedom from government and bank control, giving them the opportunity to make great profits as the value of private currencies rises. Opponents say cryptocurrencies are being used to hide illegal wealth and activity and are at the heart of a huge Ponzi scheme that results in essentially worthless price increases as long as new customers buy it. Insist.Recent Cryptocurrency market volatility I just emphasized the controversy.
Beyond the conceptual question about cryptocurrencies, the process of creating new Bitcoin (figurative mining despite being entirely composed of computer transactions) consumes a lot of energy and has an environmental impact. Encourage questions about. The more computer power a miner can spend on mining, the more bitcoin he or she can mint. The cheaper the electricity bill, the bigger the profit. And when electricity is generated through fossil fuels, those benefits contribute to climate change as emissions of carbon dioxide and other greenhouse gases increase.
Over the past few years, Bitcoin miners have discovered new ways to get cheap electricity. Buy your own power plant.. Other miners are flared off in oil wells in places like Texas and North Dakota to power on-site generators and use that power to mine Bitcoin in server farms installed in shipping containers. I started to buy gas. At least in such cases, the gas was burned no matter what, so there are no additional greenhouse gas emissions.
The same is not true for Big Dog Energy operations or other off-grid mining operations in stranded gas fields. Well owners have no way to market gas because these are wells that have been opened and crushed but not connected to the pipeline. Anyone who sets up a Bitcoin mining operation on one of these left-behind sites is burning fossil fuels that would have stayed on the ground without Bitcoin.
Rob Altenburg, director of the energy center at Citizens for Pennsylvania’s Future, a state-wide environmental advocacy group, said that miners who own gas wells use gas to mine Bitcoin and sell it to the wholesale market 2 He said he could make more than double the money. Altenburg is concerned about what this means for Pennsylvania’s air pollution and greenhouse gas emissions. Especially if more gas companies follow the initiative of BigDog. Also, these operations are relatively mobile, making them difficult to monitor and regulate.
“They put the generator on a trailer, connect it to a gas well, and run the generator to mine Bitcoin,” Altenberg said. “And these problems were that they were on the wheels and didn’t apply for a permit. One day they just appeared with a trailer and plugged it in.”
Altenburg points out that Big Dog Energy owns other wells in states that could have started mining unnoticed. “I think that’s a fair question. Have you ever been to see someone else’s well?” Altenberg said. “And have you seen anyone else?”
The Pennsylvania Environmental Protection Agency did not answer email questions about BigDog Energy’s Bitcoin mining operations. Owner Matt Anderson told a local newspaper that the notice of the breach “is unlikely to be applicable to my business.”
“They seem to be trying to claim that they don’t need permission at least,” Altenberg said. “They seem to claim to be part of the existing permit for the gas well. This is something I don’t believe, and the people who spoke at DEP don’t believe it. As you know, the court hasn’t considered this yet. It’s brand new, or it’s exempted for some reason, whether the nature of these sources is too small or mobile. Claims. “
Another energy company in Pennsylvania Sell electricity Produced at the Ridgeway Township gas well pad, it powers Bitcoin mining operations.In a statement provided to local journalist Brian Stockman, the company Said, “Pin Oak Energy evaluates what is called a” digital pipeline. ” In essence, this process converts on-site natural gas production into on-site electricity for use in a variety of applications. “
According to the FracTracker Alliance, Pennsylvania has more than 1000 unconventional (ie, hydraulic fracturing) wells that have been excavated but have not been reported to produce gas, condensate or oil until 2021. It’s not hard to imagine the owners of those stranded assets who bring in generators and Bitcoin miners to make a profit, especially if it is considered legal.
This isn’t just happening in Pennsylvania. In 2020, a Bitcoin mining company called Link Global will launch four 1.25 MW gas generators. Dormant natural gas well in Alberta, Canada, Bitcoin mining has started. The generator has been in operation for almost a year (364 days) without permission. Another unauthorized Bitcoin mining operation by the same company has been performed for over 400 days.
In South Dakota, a Bitcoin mining company called Highwire Energy Purchased mining rights for seven natural gas wells that were scheduled to be closed..
Avi Asher-Schapiro, a reporter for the Thomson Reuters Foundation, interview A person passing by “Hodl Tarantula” mining Bitcoin in an abandoned gas well in southeastern Kentucky. Tarantula told Asher-Shapiro that only one site brings $ 20,000 worth of Bitcoin a month.tarantula explanation Details of his operation in last year’s Funwith Bitcoin podcast. Tarantula said he would install a 1/2 MW or 1 MW generator to power the miners, depending on the amount of gas available at each site.
The amount of electricity generated at individual sites may be low, but depending on the size of the tarantula and other off-the-grid miners, the amount of electricity generated can increase quickly. “Now that Bitcoin mining is taking place, there is no limit to the amount of capital that can be extracted from the energy left behind,” Tarantula told Usher Shapiro.
In a podcast, Tarantula argued that mining in the stranded gas field was environmentally friendly. “We are reducing the transient emissions of leaking natural gas. We actually pass it through a controlled environment, burn it into CO2 that trees can use, convert it to oxygen and breathe. “He said. .. “Leaking methane or CH4 causes 30% damage to the atmosphere and ozone, but nothing translates it into something that humanity can use in a beneficial way.”
Properly blocking gas wells will reduce methane emissions without increasing carbon dioxide emissions. This causes global warming and climate change.
Tarantula is also part of the cottage industry that was born to supply people with stranded gas resources with turnkey Bitcoin mining solutions.By him Twitter biographyHe is currently the mining director of a Wyoming-based company. Sovereign mining, We sell pre-manufactured Bitcoin mining facilities with an enthusiastic tagline called “Mine Bitcoin Anywhere!”. “We are working to power the Bitcoin network with energy that is left behind and underutilized,” the company said.
Tarantula is affiliated with (or at least was) a Kentucky-based gas company. Middle classIn addition to Bitcoin mining, we sell turnkey solutions to future miners. According to the company’s website, “Instead of selling gas, we use it as fuel for generators, which power cryptocurrency mining machines. With this strategy, 10 from natural gas. You can double the value. “This is a good selling point for what the company calls a” big rig. ” This is a 300 kW mining array designed for “natural gas producers who want to step into their own gas-powered mining.”
Midstream Chief Operating Officer Marshall Holbrook Chief Executive Officer of Puissant Industries Inc“Natural Gas Development and Cryptocurrency Mining” Company Owns 39 wells Eastern Kentucky.
In Kentucky, at least off-the-grid mining seems to be perfectly legal. “We are aware of at least some work in previously unused gas wells, but oil and gas that prevent or manage this activity beyond normal well maintenance, safety, and reporting requirements. There is no statute, “the Kentucky Energy and Environment Cabinet wrote in an email. “We are still confirming the permit requirements for generators used in this way,” Mura added.
As Altenberg observed, these operations are relatively small and mobile, making it difficult to assess the scale with which Bitcoin mining brings stranded gas fields online. Like Alberta and Ridgway, Pennsylvania, they may become apparent as residents are complaining about noise. Even if people know about them, local and state government officials may not be able to tell the miners to stop.
“It’s really difficult for state environmental regulators to deny permits,” Altenberg said. “I worked for DEP for 22 years, and I told many people that if the company met the permit criteria and DEP refused the permit, DEP would say,” I’m not going to allow this. I think it’s bad. So I refuse permission. ” idea. ‘They have to say, “Are you meeting these criteria?” And in a world where Bitcoin mining was being considered, no standards were written. “
