By nature, Bitcoin mining is energy-intensive and relies on cheap energy to turn a profit. Bitcoin miners have started to flock to Texas because of the current “goldilocks” situation for cryptocurrency mining for three main reasons:
- The State’s energy infrastructure allows for access to cheap power from its deregulated power market;
- Its growing energy source mix from renewables, particularly wind energy; and
- Its supportive policy and backing by policymakers.
Bitcoin Mining: Leaning On Texas’s Energy Infrastructure
While Bitcoin mining has been criticized for being energy-intensive, Texas Governor Greg Abbott, among others, views Bitcoin mining as a solution to other related issues, such as taking advantage of untapped energy, including natural gas (such as surplus gas or associated gas) that would otherwise be flared or vented because of limited infrastructure to transport it to a destination.
It’s no secret that for years oil and gas companies have struggled to solve the problem of flaring, not only in Texas but across the U.S. Unlike oil, which can be transported by truck or rail, natural gas requires pipeline infrastructure to deliver it to market. If a driller has no means of transporting its gas, either economically or because there isn’t available pipeline infrastructure to do so they flare (or burn) it, and the environmental implications of doing so are substantial.
Instead, cryptocurrency miners can tap into this surplus gas, whether it’s flared gas or bad netbacks, and divert it to generators, which then can convert the gas into electricity and then use it to power their sophisticated supercomputers and servers. According to Argus Media, “Companies see a double benefit – reducing the negative impacts of gas flaring and cutting their carbon footprint.” According to research from Crusoe Energy Systems, one of the largest Bitcoin miners in the U.S., the process reduces the CO2 equivalent emissions by about 63% compared…
