Black Mountain Energy, a US-owned resource company headquartered in Australia, has received a “non-binding” letter of intent from Highwire Energy Partners regarding collaboration for potential entry into the bitcoin mining industry.
The proposed location for the crypto mining project is a fracking site in the Kimberly region of northwest Western Australia; however, despite BME’s charter of “responsibly developed and environmentally conscious natural gas supply”, environmentalists claim the project will not benefit from emission reductions.
Flared Methane to be Diverted to Crypto Servers
Highwire Energy Partners will likely work with BME to divert flared methane gas from well-testing to power mobile cryptocurrency servers. This well-testing, and eventual project roll-out, is taking place at BME’s Valhalla Project fracking site in the Kimberley’s Canning Basin.
Rhett Bennett, BME’s chief executive officer, has stated that the process would likely aid in a reduction in emissions by avoiding flaring off the excess gas, allegedly reducing CO2-equivalent emissions by around 63 percent.
Flaring natural gas certainly is not [Environment, Social and Governance]-friendly … so the ability to utilise that gas for power and ultimately create a product, in this form, is a much better solution.
Rhett Bennett, CEO, Black Mountain Energy
BME’s current negotiations involve the use of 5 terajoules of gas per day, which can supply up to 25 megawatts of power for the crypto servers. This translates into approximately A$100,000 worth of Bitcoin daily, providing BME uses the best available mining equipment.
However, anti-fracking organisations are retaliating against the plan, suggesting that bitcoin miners should have to use a renewable energy source rather than environmentally damaging fracked gas. As noted by Dr David Glance, director of the University of Western Australia’s Centre for Software Practice, mining operation computers established in hot and remote areas require more energy to cool.
From an environmental perspective, it makes absolutely no difference whatsoever if they burn the gas or they use it to mine cryptocurrency … It will still produce carbon dioxide.
Dr David Glance, UWA Centre for Software Practice
As it stands, the Valhalla project is yet to receive approval from the Environmental Protection Agency (EPA), which does not expect to have a report finalised until early 2023.
Other Energy Giants Mining Crypto
Black Mountain Energy is not the first company to utilise natural resources for crypto mining. In March, ExxonMobil diverted some of its unused natural gas to power mining operations in North Dakota, US. This was managed via a partnership with solutions specialist Crusoe Energy Systems, which converted the gas into mobile generators that then powered the mining operations.
Meanwhile, back in Australia, Canadian oil and gas miner Bengal Energy has commenced an assessment of the profitability of mining bitcoin from stranded gas assets in the Australian outback. The project has already led to the reassembly of previously out-of-operation gas wells in South Australia’s Cooper Basin.
