Cryptocurrency companies are seeking sustainable and cost-effective ways to power their mining operations, as governments around the world increase regulations on energy-intensive crypto activities. One solution is to use waste gas from fossil fuel production, which has been successfully implemented in the U.S. However, as more governments push for eco-friendly practices, this option is becoming more challenging.
To combat this issue, many crypto companies are now turning to Argentina, where they can set up similar operations and also support the country’s struggling currency. This trend is part of a larger effort by oil and gas companies to decarbonize and prevent CO2 emissions by incorporating carbon capture and storage (CCS) technology. Some companies have also started working with crypto companies, using waste energy from gas-flaring activities to power digital currency mining. This allows them to reduce emissions and find a valuable use for their waste gas.
One of the pioneers in this field is Giga Energy Solutions, which began using waste energy from oil and gas producers in East Texas in 2019. They place shipping containers filled with Bitcoin miners on oil wells, using the diverted natural gas to power generators that produce electricity for the miners. This reduces emissions by about 63% compared to traditional gas flaring methods.
Now, Giga is expanding its operations into new markets, including the Mendoza province in Argentina. This region is home to the world’s second-largest shale gas reserve, providing a significant source of waste energy for crypto mining. In March, Giga announced plans to partner with oil and gas company Phoenix Global Resources and IT services company Exa Tech to develop a 2 MW project on Vaca Muerta, the shale gas reserve. This move not only supports the country’s currency but also helps the oil and gas producers reduce emissions and turn waste into something valuable.
Argentina has been experiencing economic turmoil, with inflation rates reaching an all-time high. The government has been trying to combat this by embracing digital currencies, and the country’s libertarian President Javier Milei is seen as crypto-friendly. This has attracted the attention of Grayscale Investments, who stated that Milei sees Bitcoin as a crucial tool for countering inefficiencies and corruption in centralized financial systems. This pro-crypto stance could encourage other countries in the region to follow suit.
Giga has already achieved over $10 million in revenue this quarter and plans to expand its operations in Argentina. This includes reducing carbon emissions by 30,000 tonnes per year and selling excess power to the Argentinian grid. Other crypto companies are also looking to enter the Argentinian market, as there is a significant opportunity for crypto mining operations in a country with high methane emissions. This trend provides a win-win situation for both the crypto and fossil fuel industries.
By Felicity Bradstock for Oilprice.com
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