Texan Bitcoiners Start Mining In Argentina Using Flared Excess Gas 75
Two Texas-based bitcoin miners have turned to the foothills of the Andes mountains in Argentina to mine bitcoin using flared natural gas. CNBC reports: Brent Whitehead and Matt Lohstroh, both graduates of Texas A&M University, have been mining bitcoin on the oil fields of East Texas since 2019. That's when they founded Giga Energy with the goal of taking flared natural gas and turning it into electricity to run bitcoin mines, which are notoriously power-thirsty. On Tuesday, Giga announced its first foray into Argentina, following expansion across the U.S. and into Shanghai. The company is partnering with Phoenix Global Resources, an oil and gas company with operations in Mendoza, and with IT services company Exa Tech to launch a two megawatt bitcoin mine on top of Vaca Muerta.
Giga's system involves placing a shipping container full of thousands of bitcoin miners on an oil well, then diverting the natural gas into generators, which convert the gas into electricity that's used to power the miners. The process reduces CO2-equivalent emissions by about 63% compared to continued flaring -- or burning -- of unused gas, according to research from Denver-based Crusoe Energy Systems. It also turns wasted energy into a valuable asset for oil producers.
On the small pilot site in Argentina, Exa Tech is handling operations on the ground, Phoenix Global is providing the gas and Giga is supplying the equipment. [...] Lohstroh told CNBC that Giga has generated over $10 million in revenue so far this quarter. It's not the only miner that sees opportunity in Argentina, which ranks 12th on the list of the top global emitters of methane, according to World Bank data. Giga's mine is intentionally small to start and isn't intended to be profitable yet. The company first wants to make sure it can successfully import all the necessary equipment before scaling the operation. The mine has been running a test since December, and Lohstroh estimates the site has mined in the range of $200,000 to $250,000 worth of bitcoin. Giga projects the mine is set to reduce CO2 emissions by approximately 30,000 tons per year at the upstream facility. The site is also designed to sell any excess power to the Argentina grid as a way to both generate revenue and curb operational redundancies.
Giga's system involves placing a shipping container full of thousands of bitcoin miners on an oil well, then diverting the natural gas into generators, which convert the gas into electricity that's used to power the miners. The process reduces CO2-equivalent emissions by about 63% compared to continued flaring -- or burning -- of unused gas, according to research from Denver-based Crusoe Energy Systems. It also turns wasted energy into a valuable asset for oil producers.
On the small pilot site in Argentina, Exa Tech is handling operations on the ground, Phoenix Global is providing the gas and Giga is supplying the equipment. [...] Lohstroh told CNBC that Giga has generated over $10 million in revenue so far this quarter. It's not the only miner that sees opportunity in Argentina, which ranks 12th on the list of the top global emitters of methane, according to World Bank data. Giga's mine is intentionally small to start and isn't intended to be profitable yet. The company first wants to make sure it can successfully import all the necessary equipment before scaling the operation. The mine has been running a test since December, and Lohstroh estimates the site has mined in the range of $200,000 to $250,000 worth of bitcoin. Giga projects the mine is set to reduce CO2 emissions by approximately 30,000 tons per year at the upstream facility. The site is also designed to sell any excess power to the Argentina grid as a way to both generate revenue and curb operational redundancies.
This has always bugged me (Score:5, Interesting)
If it's ok enough to flare, it's ok enough to use as fuel for electricity. I've never had the option to ask why they flare, (probably a storage thing, or just easier to burn to prevent back pressure) but surely , capturing it is worthwhile?
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The issue is that if it makes gas more profitable, there will be more gas consumption. Low carbon sources must be the cheapest and everything else is going to have to be phased out for all be a limited number of exceptions where there really is no alternative.
A specious argument with no supporting evidence. Can you do better than that?
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Low carbon sources must be the cheapest
Must be? According to who? Why?
going to have to be phased out
What happens to folks who refuse to phase out their carbon-heavy energy sources and who will perpetrate this action ?
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The bottom line is that people who insist on continuing to contribute to global warming are going to have to be stopped by legal means. They are obviously not going to like it.
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The vast majority of people will always prioritize making things cheaper, which renewables do.
Second priority is convenience. Fortunately we can help there too. Charge your car at home, have a whole house battery for when the power goes out. Less pollution where you live.
It seems like we are winning. The counter-argument has gone from "it's not happening", to "it's happening but it's not because of us", to "we did it but it's not that bad", to having an actual conversation about how we do this.
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When it comes to things like pollution, though, I have a bit different view. As a mostly-libertarian I'm not okay with pollution. You cannot dump benzene in the river, then say you aren't responsible for the people downstream getting cancer. In my
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I'm not keen on pollution either, but at the same time it has to be affordable for people. That's why we can't rely on nuclear, or one of many reasons.
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However, with something like tailpipe emissions it's pretty complicated and
They die. (Score:2)
>> What happens to folks who refuse to phase out their carbon-heavy energy ... at some point...
They die.
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old entitled farts. (Score:2)
and the death of those old entitled farts solves that problem.
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If it's ok enough to flare, it's ok enough to use as fuel for electricity.
Flaring is done at remote sites with no connection to the grid or gas pipelines.
Oil can be trucked out, but gas and electricity can not.
surely , capturing it is worthwhile?
Surely not. If it was worthwhile to capture it, some greedy capitalist would already be doing it.
Re:This has always bugged me (Score:4, Informative)
When there is a strong enough legal requirement it can be re-injected into the reservoir.
Re-injection costs money but hey, we're talking about our climate.
Climate is one of the other problems with these fake currencies, their 'mining' consumes huge amounts of power, mostly (hydro)carbon based.
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If it's ok enough to flare, it's ok enough to use as fuel for electricity.
Flaring is done at remote sites with no connection to the grid or gas pipelines.
Oil can be trucked out, but gas and electricity can not.
On the other hand, those sites surely need electricity to operate so they could burn the flared gas to generate electricity, like the bitcoin miners are doing, to directly offset their electricity usage and/or charge a power bank for later use, etc... Also, obviously with more local infrastructure, can't that gas be compressed into liquid and then trucked out if there's no outbound pipeline?
Re:This has always bugged me (Score:5, Informative)
On the other hand, those sites surely need electricity to operate
They do, and they often burn gas to do so.
But there is way more gas than the local need for electricity, so the extra gas is flared.
can't that gas be compressed into liquid and then trucked out if there's no outbound pipeline?
Methane can't be compressed into a liquid at ambient temperature. The gas can be compressed, but then you need an expensive pressure tank. The compressed gas has low energy density and doesn't sell for much. Trucking it out is not profitable, and Argentina doesn't have the money to subsidize it.
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Thanks for the info and explanation.
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Methane can't be compressed into a liquid at ambient temperature.
Correct. This is similar to the reason why we don't have cheap electrolysis rigs producing HHO from water and electricity. HHO is a clean burning carbon neutral energy source. However, it's also explosive as hell and likes to spontaneously blow up when compressed or sometimes just because. Gasses like these aren't financially viable to store or transport and when produced as industrial by-product, are flared.
I've always hoped someone could find a better method of electrolysis that would produce a more st
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No but they could lay an electrical line, burn the gas to generate power and stop polluting.
Re:This has always bugged me (Score:5, Informative)
I've never had the option to ask why they flare, (probably a storage thing, or just easier to burn to prevent back pressure) but surely , capturing it is worthwhile?
They flare off the gas, because unburnt gas is an explosion risk. A benefit in modern terms is that the burnt gas is less environmentally impactful than unburnt gas.
No. Capturing the gas is not economically viable. It costs more to capture, contain, purify, and transport than it is worth to sell.
That is why it can be bought and used cheaply by ventures like the one in the article -they are taking it at the site where it comes out of the ground, supplying their own infrastructure to move/use it.
Re:This has always bugged me (Score:5, Informative)
It's because it's traditionally been too expensive to capture and pipe it out.
Flare gas is basically natural gas - as you pump oil out, you get natural gas that comes out. You need to deal with it, and the easiest way is to burn it. This does two things - first it transforms a potent greenhouse gas into a less potent one (methane to CO2), and second it prevents the buildup of explosive gases near the well. because you've burned it.
But traditionally speaking, as these wells are generally far from civilization and oil pipelines are not able to carry natural gas, it's been cheaper to just burn it up than to capture it and package it for shipment (usually as LNG, which requires energy to compress and liquefy).
That's the reason why natural gas prices plummeted in North America - the use of fracking has made it much easier to get and extract the natural gas and as it's a valuable commodity, to transport it alongside the oil to a nearby town or city.
But in a lot of other places, it's still not worthwhile to do it so flaring exists.
Of course, burning fossil fuels isn't great, but at least you're extracting useful work out of it which is far better than just burning it land letting it go to waste.
cryptomining is not "useful work" (Score:2, Funny)
>> at least you're extracting useful work
The claim that cryptomining is "useful work" is highly debatable
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In the UK flaring in the North Sea has been banned for quite a while now. I would at this juncture note that they always use some of the gas to power the oil rigs and it is only the excess that is flared. For years now it has been piped back ashore and brunt to generate electricity. Not burning it for power generation is a pathetic excuse because they are not paying for the cost of the pollution from flaring it.
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Wellllll, never "banned". It has always been a "permitted operation" - meaning you need a permit to do it, and outside emergency events you need to ask for permission, not forgiveness. Play that card too often, and your applications of other permitted operations suddenly start receiving a lot more scrutiny. I forget the Petroleum Operations Notification you had to submit when planning an operation involving flaring, before starting tha
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I started my career in 1987, when one of those pipeline systems was being built. It was completed in about 1995, which triggered a burst of new drilling on old platforms to extract the gas that had been separated at surface and re-injected into the wells to provide pressure support to keep the oil wells flowing. Which is an option you didn't mention. Then, when the oil:water ratio of the oil wells dro
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In consequence, most oil wells will produce large amounts of methane ("natural gas") along with the compounds that are liquid at surface temperatures and pressures. If you put this raw product into tanks to store, you end up with a very
Alternate use (Score:1, Insightful)
This seems like a pretty good use of otherwise wasted power....
However I wonder if any some point, it would actually be more profitable to use that energy to power compute for other things - possibly AI farms.
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"AI farms"
What does AI taste like? Is it a fruit or a vegetable? Is it cheaper than growing asparagus?
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power compute for other things - possibly AI farms.
AI needs interconnections.
Mining does not. Each ASIC can be handed a block of addresses and churn away without further communication.
If you have flared oil rigs scattered across Patagonia, mining can be profitable, while AI is not.
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AI needs interconnections.
Starlink exists, for locations that cannot be tied back to the primary internet connections of the area.
Also this is more about future profitability than current, assuming projected power needs for AI are correct. At some point it could easily be profitable.
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Starlink exists, for locations that cannot be tied back to the primary internet connections of the area.
If you're running a 100-billion parameter LLM, you need microsecond communication between TPUs. Starlink is too slow by a factor of a million.
Also this is more about future profitability than current
Argentina is an economic basket case.
They are focused on the extreme short run. Inflation was over 200% last year. They just whipsawed from Peronism (similar to Trumpism but even stupider) and anarcho-libertarianism. They're more worried about paying the bills next week than the far future (say, six months from now).
Re:Alternate use (Score:4)
AI needs interconnections.
Mining does not.
You're wrong, if you mine offline you'll end up with a forked blockchain which the network will reject if and when you finally do get online. So if you're mining in some oil field out in BFE you'll still need some sort of reasonably reliable internet connection.
Re: Alternate use (Score:2)
True. But you only require a cellular modem to handle the level of traffic used for Bitcoin.
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This is much better for the environment than just flaring the gas but it's about the least useful thing that could be done with that energy. Training/running AIs would be somewhat better. Some even better uses I could think of:
- Putting the energy into grid storage (maybe even just local grid for the oil rig equipment)
- Running an atmospheric CCS plant, or even CCS on the exhaust of some of the nearby oil rig equipment
- Running a traditional data center (even better usefulness per watt/hour than AIs)
- Runni
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- Running an atmospheric CCS plant, or even CCS on the exhaust of some of the nearby oil rig equipment
You want to burn waste fossil fuel to power equipment that captures CO2 from the atmosphere? I'm guessing you might not have heard the phrase "In this house we obey the laws of thermodynamics."
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It doesn't take more energy than the fossil fuel produced to capture all of its CO2 output and more, so it's not a violation of thermodynamics any more than a catalytic converter on a car is.
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So after you've captured all the CO2 from whatever you're burning, and then some from the air, you still have to actually get rid of the resulting CO2 in a manner which prevents it from just ending up right back in the atmosphere. Keep in mind we're talking about some location where it's already not economically viable to just clean and compress the unwanted natural gas and sell it. Setting up carbon capture in such a location is probably pretty close to being a wasted effort if every step along the proce
Re: Alternate use (Score:2)
Thermodynamics says nothing about sequestration. No energy change when the carbon simply moves.
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This is much better for the environment than just flaring the gas ....
Is it, though? They say they reduce CO2-equivalent emissions by 63%, compared to what? How does burning the gas to make electricity produce less pollution than just burning the gas to get rid of it? Are they burning a larger fraction of it? Or are they reducing emissions by using the waste gas for power rather than using some other fossil fuel? I couldn't find an answer on their Web site.
Re:Alternate use (Score:4)
First we have to compare two types of flaring, just releasing the gas unburned where the methane goes directly into the atmosphere and acts as a powerful greenhouse gas (rarely done these days...intentionally, anyway), and flaring and burning it where the methane is ignited into an open flame that mostly converts it to CO2, a longer-lasting but much less powerful greenhouse gas. Previously the energy wasn't used at all, just wasted, but that was an energy waste issue rather than an emissions issue.
Burning the gas in a turbine converts it to CO2 more efficiently than an open flame, so the environmental improvement over the first scenario is obvious, compared to the second the improvement isn't as huge but still significant. I'd guess the 63% CO2-equivalent emissions is the difference between the total effective GHG output of running the gas through a turbine vs. burning it in an open flame, since some of the methane can still escape that way.
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No the point is that traditional flaring produces no useful work. If you instead put it into a gas turbine and generate some electricity you are doing something useful (excepting mining crypto is not really useful) which would have otherwise been generated elsewhere. Thus you have lowered your carbon footprint.
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Of course they're from Texas. (Score:1, Flamebait)
Texas rocks and is full of nice people. (Score:3, Informative)
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True story: I have relatives from another Southern state who moved to Texas thinking it was the Next Big Thing. They fled back to the other Southern state because Texas was too racist and too stupid for them.
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Stay in Texas or Russia. Not that anyone would notice the difference.
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Greenhouse gas reduction (Score:2)
The process reduces CO2-equivalent emissions by about 63% compared to continued flaring -- or burning -- of unused gas
Before: you flare methane.
After, you flare methane, and use the energy to power a bitcoin mine.
How can this reduce emissions?
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I assume the flaring is kind of shitty so a some methane gets out unburned. When you run it through a turbine it gets more thoroughly burned. Since "CO2 equivalent" usually means multiplying the methane by something between 20 and 80, a little better burning can go a long way. It could also be that the flare produces some nitrous oxide or similar. Nitrous has a multiplier of something like 300.
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It has been illegal to flare in the North Sea (except in an emergency) for years now. It all gets piped ashore and burn to generate electrical power. At least that way the CO2 produced from burning it is not for nothing.
I knew we'd heard of these guys before (Score:2)
Also: "bitcoin mines, which are notoriously power-thirsty." I always thought they were power-hungry. Are they both?
Texas? Oh, home to AMD, TI, National Instruments (Score:1, Informative)
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