Canadian oil and gas miner Bengal Energy has commenced a trial to assess the profitability of mining bitcoin from its stranded gas assets in the Australian Outback.
According to a report in The Australian, Bengal Energy has commenced its program to install approximately 70 Bitcoin mining rigs within a “donga”, a term that left some confused from the outset:
‘Stranded Energy’ Problem
The initial project entailed assembling a series of previously out-of-operation gas wells in South Australia’s Cooper Basin, all of which were purchased from Santos Energy and Bridgeport Energy.
Bengel Energy’s chief operating officer, Kai Eberspacher, commented that the newly acquired wells however posed a significant problem given that they were “stranded” – able to produce power but unable to be distributed as current pipelines are out of reach.
While a pipeline is under construction, efforts have been delayed due to Covid-19 induced supply chain bottlenecks. In Eberspacher’s words:
We were basically looking at six months of having wells ready but without an outlet. We were dealing with stranded assets.
Kai Eberspaecher, chief operating officer, Bengal Energy
Bitcoin Mining Plugs Gap
After having outlaid the initial capital without a return on investment, Bengal Energy turned to portable Bitcoin mining rigs in dongas. A trial donga is being fitted with 66 mining rigs, able to generate approximately 0.005 BTC, or A$315, per day.
If the trial is successful, the company has indicated that it intends increasing its mining efforts by a factor of 10 to 20.
Energy Companies and Bitcoin – Match Made in Heaven
Despite recent efforts by some to discredit bitcoin mining, we’re seeing growing evidence of energy companies leveraging stranded assets and flared gas to power bitcoin mining operations.
While this has been happening in West Texas for some time, last week US energy giant ExxonMobil joined ConocoPhillips in disclosing that it was mining bitcoin with flared gas and looking to expand.
A recent report found that bitcoin mining consumed as little as 0.05 percent of global energy with emissions at “inconsequential levels”. It’s also been suggested that up to 58 percent of Bitcoin’s energy composition is renewable, making it one of the greenest industries in the world.
Irrespective, those who believe bitcoin has no value will necessarily also believe that its appropriate energy use is zero:
“Imaginary money”… #NGMI.
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