US Senator Ted Cruz has called for Texas, the so-called energy capital of the world, to use excess natural gas to mine bitcoin.
Speaking at the October 8 Texas Blockchain Summit, Cruz said that mining bitcoin can be used to add monetary value to usually wasted natural gas whilst “helping the environment enormously… by putting it to productive use.”
Cruz argued that natural gas is currently “wasted because there is no transmission equipment to get that natural gas where it could be used the way natural gas would ordinarily be employed.”
This energy-efficient technique could help relieve some of the environmental scrutiny bitcoin has been subject to this year – due to its high power consumption.
Managing energy needs
Cruz said bitcoin mining would be a good use for what is a large amount of the world’s unused energy, and energy for bitcoin should be managed depending on the local energy needs, so that mining could take place in times when demand was not critical.
He added: “The beauty of bitcoin mining is that if you can connect to the internet, you can use that energy and derive value from those renewables in a way that would be impossible otherwise.”
This follows on from China’s strict crackdown on industrial mining firms in May which saw many of the firms relocate to Texas, which is now the number-one wind energy producer in the US.
It seems Cruz is not alone with this idea.
Hayden Griffin Haby III, an oilman turned bitcoiner from Texas, told CNBC: “When I heard that you could make this much money per MCF (a metric used to measure the quantity of natural gas), instead of just burning it up into the atmosphere, thanks to the whole ‘bitcoin mining thing’, I couldn’t look away.”
El Salvador also recently announced its intention to create a state-backed bitcoin mining project powered by renewables.
How it would work
Gas flaring is a practice in the oil and gas industry which sees excess gas – that can’t be easily or economically transported to end users – burned at the well site.
Often such gas is a by-product of an oil-producing operation or represents an oversupply to the local gas market.
The idea would be that small-scale gas-fired electricity generation could be used to power bitcoin mining operations in a way that, framed as a recycling exercise, is more palatable to energy-efficiency focussed stakeholders.
At the same time, certain so-called ‘alt-coin’ cryptos take a different approach to ‘mining’ which has a lower drain on computer power.