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Oil Producer in Utah is using wasted natural gas to mine bitcoin

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Indrani bose Follow

INDIA

Jul, 29 2021

Jul, 29 2021

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Wesco Operating Company, an oil field operator near Moab, Utah found a high-tech way of using the by-product natural gas in burning electrical generator which in turn power two mobile data centre that processes Bitcoin transactions.

For several years, this oil producer is pumping crude oil out of 18 north of Moab, which was producing a lot of natural gas as by-products. Due to the problem in the pipeline that connects wells to the Blue Hills gas-processing plant, these by-product gas couldn’t be transported out of the plant to the market. Hence a big part of this gas was being wasted and burned. According to Steve Degenfelder, Wesco representative, that instead of eliminating this natural gas by burning it off, the company started using it to run electrical generators which is giving power to bitcoin mining rigs.

For this process, the company connected with EZ Blockchain, a Chicago-based firm and got the two Bitcoin “miners” which came in 30-foot-long boxes called a Smartgrid Flaring Mitigation System. Three generators were installed by Wesco at the Blue Hills site to convert the gas into electricity which is used for mining Bitcoin. EZ Blockchain's CEO, Sergii Gerasymovych said “Mining Bitcoin means running power-hungry computer equipment that validates transactions for Bitcoin network.” The system went fully operational from February after getting tested for four months. According to Steve Degenfelder, to achieve the target of almost no gas flaring since February, the company used a significant amount of capital investment. A cut of each transaction the miner's process is provided to the Wyoming-based Kirkwood Companies, Wesco’s parent company.

As Degenfelder said the company is paying 12.5% royalty on the gas it burns in the generators. Utah Board of Oil, Gas, and Mining, praised Wesco for taking this step. In recent years, Wesco joined hands with other oil producers who are also seeking ways to capitalize their “stranded” natural hydrocarbon gas energy which would otherwise is getting wasted for lack of financial incentives to capture it.

 


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Indrani bose

CBW - External Analyst

INDIA

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