June 18th, 2021

Bitcoin miner Hut 8 seeks to cash in on U.S. flare gas, reaffirms Canadian operation

By COLLIN GALLANT on March 4, 2021.

NEWS FILE PHOTO COLLIN GALLANT - Jeff Mason, a Hut 8 director, shows off a portion of the facility's control room at the Medicine Hat facility on Sept. 21, 2018.


Canadian Bitcoin miners are launching plans to profit from methane reduction efforts in the United States, but one with southeast Alberta operations is reiterating dedication to its Canadian base of operations.

In late February Hut 8 Data-processing announced a partnership with Validus Power to deploy mobile power generators that would burn waste gas from natural gas processing facilities.

The resulting electricity would power mobile data centres and the extra capacity could boost production at improved margins, according to Hut 8, and create “a work around” to acquiring access to traditional electricity.

“The generation of low-cost electricity converted from alternative fuel sources such as those from the oil and gas industry, marks a significant milestone for innovation improving the relationship between energy and bitcoin mining industries,” states an investors’ Q&A posted by Hut 8.

At the same time, company officials told the News there should be no effect on its base operations in Drumheller or in Medicine Hat, where its substantial power draw provides large profits for the municipal energy company.

“Alberta is our home base and we work closely with our energy providers there,” states the document. “As a growing company we are always evaluating where the best economics are. We focus on scale and size of market, and with (environmental sustainability) as a strategic priority, we also believe the bigger the impact, the better.”

South of the border, a glut of shale natural gas production in Texas and in North Dakota has overloaded pipeline transportation systems and much of the excess was flared of vented.

Restrictions on such activity were loosened over the past four years, but the new U.S. Federal administration has signalled it will revisit the standards.

Reducing methane is considered a key climate strategy as the gas is 20 to 25 times more potent as a greenhouse gas compared to the carbon dioxide produced when it is burned efficiently.

There is also a suggestion that the generators could provide readily accessible peaking stations to provide energy during outages, such as what happened across Texas in cold weather last month.

On Wednesday, DMG Blockchain, which operates a facility in southeast British Columbia, says it will target the Permian Basin in Texas through a new partnership with Wyoming-based company Ecopwrs (sic).

An initial 25-megawatt project – enough power to supply a substantial chemical plant – could be operational in three months, stated a release, and the agreement foresees 125 megawatts in total.

It would “generate electricity for the Bitcoin mining operations at a very low cost,” said Ecopwrs’ CEO John Heffernan. “It’s important to note that electricity is the largest factor determining profitability in Bitcoin mining.”

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