A video showing a bitcoin mining operation hooked up to an oil well in Texas has gone viral, sparking outrage and debate over the environmental impact of cryptocurrency mining. The clip, posted by Matt Lohstroh, co-founder of Giga Energy Solutions, shows a gas pipe running from the well to a generator powering mining rigs inside a shipping container.
Giga Energy uses flare natural gas, a by-product of oil extraction that is usually burned off, to power its bitcoin mining. Lohstroh argues that this reduces carbon emissions by capturing gas that would otherwise be wasted. 'Economically it's a waste product,' he said. 'We're able to reduce carbon emissions by getting 90 per cent combustion rate in our engines.'
The company pays almost nothing for the gas, and oil producers benefit by improving their environmental, social, and governance (ESG) credentials. Lohstroh noted that publicly-traded companies have approached them, saying they don't care if they lose money on the deal, as it helps improve public opinion and reduce flaring emissions.
However, critics point out that bitcoin mining consumes enormous amounts of energy. The University of Cambridge estimates the network uses over 121 terawatt-hours annually, comparable to the electricity consumption of the Netherlands. The practice has drawn criticism for its contribution to climate change, despite claims of using 'waste' energy.
The East Texas rig began operating in January and has yet to gather data on emission reductions. Lohstroh maintains that his company has a net benefit on emissions, as the energy used is non-renewable but would otherwise be wasted. The debate highlights the complex relationship between cryptocurrency and fossil fuel industries.
