Here’s what you can do with that extra gas: bitcoin mining
In an innovative solution for what to do with stranded natural gas pulled from the ground during oil production, entrepreneur Stephen Barbour is using it to mine bitcoin.
If you don’t know what that means, you’re not alone. Barbour, a mechanical engineer working in oil and gas, often finds himself explaining not only his groundbreaking technology, but also the concept of bitcoin itself to oil and gas companies he has worked with for a decade.
Barbour’s business, Upstream Data Inc., builds portable bitcoin mining skids that can be placed on-site at oil production facilities. The stranded gas is plumbed into natural gas-aspirated engines to create round-the-clock power. That runs computers connected to the internet to create new units of virtual currency.
“The producer can purchase the skid from me, or I can put my skid on-site and earn my own bitcoin while saving companies from having to pay to flare it or get rid of it,” Barbour told American Gas.
His own skid is currently humming away near an oil well owned by Black Pearl Resources Inc. in Alberta, Canada. Besides this skid, he has built and sold two others. He just built his fourth skid for his first American customer—a team in Texas that was drilling for oil but found only natural gas instead, he said.
“The problem is that associated natural gas from oil production has no market,” he said. Rather than flaring or venting it—and in the absence of pipelines, especially in rural areas—using it as fuel to mine bitcoin is a viable alternative, he said.
Though promising, the venture is challenging, Barbour said.
“Many oil and gas producers don’t know a lot about bitcoin, and it takes a lot of time to present it and to convince them that it’s a good investment since there is no precedent for it,” he said. “Bitcoin is another opportunity for any energy producer to monetize energy. If you’re not happy with the prices you are getting for your gas, bitcoin is a new option, and it doesn’t require a lot of infrastructure.”