From the article: [...] [...] [...] I wonder what a "bitcoin pumper" is? It doesn't seem to be a standard term. (There's the obvious joke about pump-and-dump, but is it a promoter or something else?)
From the article:
Whereas oil can easily be trucked out to a remote destination, gas delivery requires a pipeline. If a drilling site is right next door to a pipeline, they chuck the gas in and take whatever cash the buyer on the other end is willing to pay that day. But if it’s 20 miles from a pipeline, drillers often burn it off, or flare it. That is why you will typically see flames rising from oil fields.
[...]
More often than not, if a gas well isn’t already stationed near a pipeline, it won’t be big enough to warrant the time and expense of building an entirely new line. And if a driller can’t immediately find a way to sell the stash of natural gas, most dispose of it on site.
One method is to vent it, which releases methane directly into the air – a poor choice for the environment, as its greenhouse effects are shown to be much stronger than carbon dioxide. A more environmentally friendly option is to flare it, which means actually lighting the gas on fire.
But flares are only 75 to 90% efficient, explained Adam Ortolf, who heads up business development in the U.S. for Upstream Data. “Even with a flare, some of the methane is being vented without being combusted,” he said.
This is when on-site bitcoin mining can prove to be especially impactful.
When the methane is run into an engine or generator, 100% of the methane is combusted and none of it leaks or vents into the air, according to Ortolf.
“But nobody will run it through a generator unless they can make money, because generators cost money to acquire and maintain,” he said. “So unless it’s economically sustainable, producers won’t internally combust the gas.”
[...]
The team got creative by tracking down smaller customers in north and east Texas who were either “breaking the rules” or couldn’t get permits and were just wasting the gas. As Whitehead describes it, these smaller companies were often the ones that neglected regulatory compliance.
“We were able to come in and say, ‘Hey, you’re flaring, and you shouldn’t be. You’re doing stuff that’s illegal, and you have opportunity here, because you have a shut-in well. We can take all this gas,’” recounted Whitehead.
But the real turning point for the company came in Dec. 2020, when the price of bitcoin broached the $20,000 threshold. That’s when some of the bigger players in the oil and gas industry started to take note, and leaders from publicly-traded companies began to approach them about getting into business.
[...]
Giga tells CNBC that its revenue was more than $4 million in 2021, and it’s on track to earn more than $20 million by the end of 2022.
Whitehead says that some of their mining sites have helped to revitalize the local economy by creating jobs, such as field technicians and bitcoin pumpers, who go out to check the sites. In the small communities where they’ve set up a bitcoin mine, they are sometimes the largest source of revenue.
I wonder what a "bitcoin pumper" is? It doesn't seem to be a standard term. (There's the obvious joke about pump-and-dump, but is it a promoter or something else?)
Regardless of how green the power source is, crypto mining still produces a lot of e-waste. But I suppose it's better than them using coal or some other similarly dirty power source AND producing...
Regardless of how green the power source is, crypto mining still produces a lot of e-waste. But I suppose it's better than them using coal or some other similarly dirty power source AND producing similar amounts of e-waste.
The issue is these wells aren't going to be there forever and, a common issue in Texas and other places I'm sure, is when the price of oil/natural gas drops, the pumps close up shop. The generator...
The issue is these wells aren't going to be there forever and, a common issue in Texas and other places I'm sure, is when the price of oil/natural gas drops, the pumps close up shop. The generator and the mining container are portable, so they can pick up and take it to another spot. The question is once that's no longer a viable option, are they going to close up shop and say "We had a good run, I guess we'll stop mining now..."? My guess is the answer will be no.
The economic incentives here seem rather perverse. On the one hand, it is good to do something with all that otherwise wasted gas that would get vented. On the other, if this really catches on...
The economic incentives here seem rather perverse. On the one hand, it is good to do something with all that otherwise wasted gas that would get vented. On the other, if this really catches on (which it very well might if bitcoin keeps rising) it could incentivize oil+gas extraction to continue longer than it would have otherwise when competing with solar/wind. And at the end of the day that's whats really important, is to stop burning hydrocarbons as much as possible. Not finding new uses for them.
It is a bit weird but nonetheless true that burning methane isn't the worst thing that can happen to it. Meanwhile, solar and wind are doing very well. I think they're going to win that...
It is a bit weird but nonetheless true that burning methane isn't the worst thing that can happen to it.
Meanwhile, solar and wind are doing very well. I think they're going to win that competition. A carbon tax would help, of course.
The generator can presumably be used for some other purpose. If it's sold someone will buy it. The lifetime of the electronics is going to be limited because it's only useful for Bitcoin mining...
The generator can presumably be used for some other purpose. If it's sold someone will buy it.
The lifetime of the electronics is going to be limited because it's only useful for Bitcoin mining and faster chips come out that make the old ones no longer profitable to use.
It would make sense to diversify by finding some other uses for wellhead-generated electricity. Coming up with a viable plan might be hard, though.
Maybe you're thinking more about who will mine Bitcoin, though?
The environmental benefit isn't in using green power. Green power is neutral. The benefit is in helping those drilling companies dispose of their methane waste properly. Industrial methane venting...
The environmental benefit isn't in using green power. Green power is neutral. The benefit is in helping those drilling companies dispose of their methane waste properly. Industrial methane venting is one of the few big low-hanging fruit in climate action.
I'm not sure how the benefit of less methane waste vs more e-waste weighs up, so I can't say whether it's a net benefit.
Also, not to mention that these companies are supposed to take care of their waste properly, certainly morally, sometimes even legally. The article mentions that venting is illegal, not sure whether flaring (which still emits methane) is sufficient legally.
I wonder if there's a reasonable alternative in using the excess methane for energy storage. Why? Here's the deal: One model for a future renewables-based grid would use, well, renewables for...
I wonder if there's a reasonable alternative in using the excess methane for energy storage. Why?
Here's the deal: One model for a future renewables-based grid would use, well, renewables for generation, batteries for short term storage and long-term reserves of methane for long-term storage. You can synthesize methane from excess power, so that's how you make that one green. Of course you'll need gas power plants. In any case all the infrastructure is there already for the methane part: Pipelines, gas plants, etc. Just gotta hook your power-to-gas equipment up with all that.
Now... methane is hard to store. We use properly industrial storage for it: Geological deposits usually. Basically, take an oil or gas well and pump gas back in when you have too much. Germany has 3 months of gas stored away this way. The problem is then: Can we get the gas into these storage systems without the usual infrastructure? Can we for example burn part of it in a generator to run a refrigeration cycle to cool the rest down to cryogenic temperature, then cart it off to the nearest pipeline?
That's a lot of effort of course, but I think we should be treating natural gas more like the resource it is: It is, realistically, the last of the fossil fuels to go, and its infrastructure is useful even in a decarbonized world. We should get used to that and not just burn it like household trash.
Building a pipeline is expensive. But is it also not financially viable to build power cables and feed the generated electricity into the grid? I doubt it's 100%, but I did some quick ducking and...
Whereas oil can easily be trucked out to a remote destination, gas delivery requires a pipeline. If a drilling site is right next door to a pipeline, they chuck the gas in and take whatever cash the buyer on the other end is willing to pay that day. But if it’s 20 miles from a pipeline, drillers often burn it off, or flare it.
Building a pipeline is expensive. But is it also not financially viable to build power cables and feed the generated electricity into the grid?
When the methane is run into an engine or generator, 100% of the methane is combusted and none of it leaks or vents into the air, according to Ortolf.
I doubt it's 100%, but I did some quick ducking and failed to find a more accurate number. Does anyone here know the combustion efficiency of a methane-powered electric generator?
I wonder what a "bitcoin pumper" is? It doesn't seem to be a standard term. (There's the obvious joke about pump-and-dump, but is it a promoter or something else?)
Feels like a play on words to me. Someone working at an oil rig is an oil pumper. If there's a bitcoin miner at an oil rig, that makes the people maintaining it bitcoin pumpers.
The issue here isn't the conversion efficiency into power. The issue is the conversion efficiency away from methane. It's very plausible that burning methane in a controlled environment causes...
I doubt it's 100%, but I did some quick ducking and failed to find a more accurate number. Does anyone here know the combustion efficiency of a methane-powered electric generator?
The issue here isn't the conversion efficiency into power. The issue is the conversion efficiency away from methane. It's very plausible that burning methane in a controlled environment causes basically the entire methane to combust, say 99%. Maybe a few extra 9s. A flare stack... well, you get a gust of wind that off go a good few percent of your methane, plaguing the atmosphere for decades to come. 70-80%, according to the article. Just venting it, 0%. Methane is an incredibly powerful greenhouse gas, considering the amounts of it we fuck around with. And by burning it, we basically reduce its impact by a factor of ~10.
What you might be looking for is the efficiency of conversion of chemical energy into electrical power. That's of course 0% for the flare stack and, honestly it doesn't matter for this use case what the efficiency of the generator is; the gas is basically free. I'd say 80% at the max, but probably closer to 50%. The inefficiency here often does not result from incomplete combustion, but from incomplete conversion of heat into electricity: Much of the power is lost to the atmosphere as e.g. hot exhaust gas.
Which is to say, the problem they're solving ecologically is the venting of excess methane; we don't care about thermal efficiency as much. We want the methane to burn. Once it's burned, ecologically, you already did the world a favor. (Of course better still is leaving it in the ground or making other beneficial use of it, but hey, apparently as a species we're incapable of not shitting the bed we lie in.)
Ahh I see. I misread that then. I just found this paper - notable bits: Basically, these plants are 99.8 to 99.96% efficient in terms of eliminating methane. In some cases... ...the exhaust is...
Ahh I see. I misread that then. I just found this paper - notable bits:
Measured CH4 emission rates (ER) ranged from 8 (±5) to 135 (±27) kg CH4/h (±1σ), with the fractional CH4 throughput lost (loss rate) ranging from −0.039% (±0.076%) to 0.204% (±0.054%).
Basically, these plants are 99.8 to 99.96% efficient in terms of eliminating methane. In some cases...
We attribute negative values to partial combustion of ambient CH4 in the power plant.
...the exhaust is even "cleaner" than the intake air, in terms of methane.
Another part with slightly different methodology:
The median corresponds to an unburned CH4 fraction of 0.01% in Figure 3 compared to 0.024% in Figure 2. These highlight the high combustion efficiency of these plants, high enough that in some cases there is less CH4 in the exhaust than in the intake air.
I'm not sure I can pry apart the differences in methodology of these two calculations, but I'm left with the impression that gas plants are pretty darn efficient, somewhere around 99.9%.
Though to be fair, small scale generators might be worse than big commercial power plants.
It seems like power lines could be expensive too, depending on what kind they are and how far off the grid the oil well is? They also need to be maintained. In California, PG&E went bankrupt due...
It seems like power lines could be expensive too, depending on what kind they are and how far off the grid the oil well is?
They also need to be maintained. In California, PG&E went bankrupt due to fires started by improperly maintained power lines.
This is the sort of comparison that has to be done with numbers.
I had the same thought, but then also, don't each of these sites already need some kind of electrical hookup to function in the first place? Yea the bitcoin rigs draw their power from the gas...
I had the same thought, but then also, don't each of these sites already need some kind of electrical hookup to function in the first place? Yea the bitcoin rigs draw their power from the gas generator, but at the very least the equipment that was already there needed some kind of connection to the grid? I'll research later this evening if I remember...
A good question! I don't know anything but I'd guess it varies. It seems that many oil wells do require power? Here's an article about using natural gas to lift the oil. The article gets pretty...
A good question! I don't know anything but I'd guess it varies. It seems that many oil wells do require power?
Even ignoring the grid connection costs, the rising electricity rates in some oil producing regions such as Wyoming and North Dakota constitute a significant operating burden for legacy oil fields with increasing water production, and declining oil cuts. The combination of increasing power costs and lower oil prices can result in many oil wells being shut-in which would otherwise continue operating.
Most gas-lift fields around the world use gas-fired compressors to operate their gas-lift systems. These fields typically have vertical wells and produce a constant stream of fluid and gas. When there is a steady stream of gas, the compressors run with no issues.
Unconventional horizontal wells produce slugs of fluid and gas. When a well produces slugs of fluid and gas, the well does not deliver a steady stream of fuel gas to the compressor. Without a steady stream of gas, the compressors will not run continuously.
I think I saw a headline about this earlier this year (or maybe late last year), that a cryptomining company had bought a decommissioned coal power plant and fired it up again to get electricity...
But Lohstroh tells CNBC the next stage is for the energy producers themselves to become the bitcoin miners.
“I think that’s the next large transition, whether that’d be power producers, natural gas producers, upstream, midstream, downstream. I think at all sectors within the industry space, they’re going to be affected by bitcoin mining, because bitcoin mining is innately tied to power, and the point of energy is to create power. And so I think you’re gonna see a lot of semantics and how they’re interrelated,” he said.
I think I saw a headline about this earlier this year (or maybe late last year), that a cryptomining company had bought a decommissioned coal power plant and fired it up again to get electricity for their mining rigs.
Yes, something like that happened for a natural gas power plant in upstate New York too. It's certainly clear that many cryptocurrency miners don't care about the environmental impact, even if...
From the article:
[...]
[...]
[...]
I wonder what a "bitcoin pumper" is? It doesn't seem to be a standard term. (There's the obvious joke about pump-and-dump, but is it a promoter or something else?)
Bitcoin finally doing something good for the environment?
Regardless of how green the power source is, crypto mining still produces a lot of e-waste. But I suppose it's better than them using coal or some other similarly dirty power source AND producing similar amounts of e-waste.
The issue is these wells aren't going to be there forever and, a common issue in Texas and other places I'm sure, is when the price of oil/natural gas drops, the pumps close up shop. The generator and the mining container are portable, so they can pick up and take it to another spot. The question is once that's no longer a viable option, are they going to close up shop and say "We had a good run, I guess we'll stop mining now..."? My guess is the answer will be no.
The economic incentives here seem rather perverse. On the one hand, it is good to do something with all that otherwise wasted gas that would get vented. On the other, if this really catches on (which it very well might if bitcoin keeps rising) it could incentivize oil+gas extraction to continue longer than it would have otherwise when competing with solar/wind. And at the end of the day that's whats really important, is to stop burning hydrocarbons as much as possible. Not finding new uses for them.
It is a bit weird but nonetheless true that burning methane isn't the worst thing that can happen to it.
Meanwhile, solar and wind are doing very well. I think they're going to win that competition. A carbon tax would help, of course.
The generator can presumably be used for some other purpose. If it's sold someone will buy it.
The lifetime of the electronics is going to be limited because it's only useful for Bitcoin mining and faster chips come out that make the old ones no longer profitable to use.
It would make sense to diversify by finding some other uses for wellhead-generated electricity. Coming up with a viable plan might be hard, though.
Maybe you're thinking more about who will mine Bitcoin, though?
The environmental benefit isn't in using green power. Green power is neutral. The benefit is in helping those drilling companies dispose of their methane waste properly. Industrial methane venting is one of the few big low-hanging fruit in climate action.
I'm not sure how the benefit of less methane waste vs more e-waste weighs up, so I can't say whether it's a net benefit.
Also, not to mention that these companies are supposed to take care of their waste properly, certainly morally, sometimes even legally. The article mentions that venting is illegal, not sure whether flaring (which still emits methane) is sufficient legally.
I wonder if there's a reasonable alternative in using the excess methane for energy storage. Why?
Here's the deal: One model for a future renewables-based grid would use, well, renewables for generation, batteries for short term storage and long-term reserves of methane for long-term storage. You can synthesize methane from excess power, so that's how you make that one green. Of course you'll need gas power plants. In any case all the infrastructure is there already for the methane part: Pipelines, gas plants, etc. Just gotta hook your power-to-gas equipment up with all that.
Now... methane is hard to store. We use properly industrial storage for it: Geological deposits usually. Basically, take an oil or gas well and pump gas back in when you have too much. Germany has 3 months of gas stored away this way. The problem is then: Can we get the gas into these storage systems without the usual infrastructure? Can we for example burn part of it in a generator to run a refrigeration cycle to cool the rest down to cryogenic temperature, then cart it off to the nearest pipeline?
That's a lot of effort of course, but I think we should be treating natural gas more like the resource it is: It is, realistically, the last of the fossil fuels to go, and its infrastructure is useful even in a decarbonized world. We should get used to that and not just burn it like household trash.
Building a pipeline is expensive. But is it also not financially viable to build power cables and feed the generated electricity into the grid?
I doubt it's 100%, but I did some quick ducking and failed to find a more accurate number. Does anyone here know the combustion efficiency of a methane-powered electric generator?
Feels like a play on words to me. Someone working at an oil rig is an oil pumper. If there's a bitcoin miner at an oil rig, that makes the people maintaining it bitcoin pumpers.
The issue here isn't the conversion efficiency into power. The issue is the conversion efficiency away from methane. It's very plausible that burning methane in a controlled environment causes basically the entire methane to combust, say 99%. Maybe a few extra 9s. A flare stack... well, you get a gust of wind that off go a good few percent of your methane, plaguing the atmosphere for decades to come. 70-80%, according to the article. Just venting it, 0%. Methane is an incredibly powerful greenhouse gas, considering the amounts of it we fuck around with. And by burning it, we basically reduce its impact by a factor of ~10.
What you might be looking for is the efficiency of conversion of chemical energy into electrical power. That's of course 0% for the flare stack and, honestly it doesn't matter for this use case what the efficiency of the generator is; the gas is basically free. I'd say 80% at the max, but probably closer to 50%. The inefficiency here often does not result from incomplete combustion, but from incomplete conversion of heat into electricity: Much of the power is lost to the atmosphere as e.g. hot exhaust gas.
Which is to say, the problem they're solving ecologically is the venting of excess methane; we don't care about thermal efficiency as much. We want the methane to burn. Once it's burned, ecologically, you already did the world a favor. (Of course better still is leaving it in the ground or making other beneficial use of it, but hey, apparently as a species we're incapable of not shitting the bed we lie in.)
I was thinking of conversion efficiency away from methane, but thanks for both perspectives!
Ahh I see. I misread that then. I just found this paper - notable bits:
Basically, these plants are 99.8 to 99.96% efficient in terms of eliminating methane. In some cases...
...the exhaust is even "cleaner" than the intake air, in terms of methane.
Another part with slightly different methodology:
I'm not sure I can pry apart the differences in methodology of these two calculations, but I'm left with the impression that gas plants are pretty darn efficient, somewhere around 99.9%.
Though to be fair, small scale generators might be worse than big commercial power plants.
It seems like power lines could be expensive too, depending on what kind they are and how far off the grid the oil well is?
They also need to be maintained. In California, PG&E went bankrupt due to fires started by improperly maintained power lines.
This is the sort of comparison that has to be done with numbers.
I had the same thought, but then also, don't each of these sites already need some kind of electrical hookup to function in the first place? Yea the bitcoin rigs draw their power from the gas generator, but at the very least the equipment that was already there needed some kind of connection to the grid? I'll research later this evening if I remember...
A good question! I don't know anything but I'd guess it varies. It seems that many oil wells do require power?
Here's an article about using natural gas to lift the oil.
The article gets pretty technical.
I think I saw a headline about this earlier this year (or maybe late last year), that a cryptomining company had bought a decommissioned coal power plant and fired it up again to get electricity for their mining rigs.
Yes, something like that happened for a natural gas power plant in upstate New York too.
It's certainly clear that many cryptocurrency miners don't care about the environmental impact, even if there are a few that do.