To the untrained eye, the nondescript boxes and containers scattered around some oil and gas wells in Colorado look a lot like the equipment typically found at a well pad — boxy, utilitarian and industrial.
But inside these particular containers, a kind of otherwordly magic is happening.
Dozens of high-powered computers quietly crunch complex math problems in an act of cryptocurrency “mining,” whereby virtual currencies like bitcoin are created and added to a kind of worldwide cryptocurrency ledger. A bitcoin miner is essentially in a race with others to solve these math problems — and the winner gets bitcoins as a prize for their efforts.
The mobile data center on wheels is powered by a generator that whips up electricity using natural gas pulled up from the ground — gas that often has nowhere else to go but into the atmosphere.
In Adams County, this novel mashup of old-school legacy fossil-fuel extraction and futuristic digital-currency creation is a bit too new — at least for now.
County officials in May issued a cease-and-desist order, saying the arrangement — “a trailer full of computers powered directly by a producing well” — is unlike any land use Adams County has seen before.
The county followed up last week with a lawsuit against an oil and gas producer that it claims has not complied with its order to shut down crypto mining operations in the oil patch. Adams County, according to community and economic development director Jenni Hall, first needs to create rules around the practice before allowing it to resume.
“These are remote areas with a lot of dry grassland around them,” Hall said. “We also know they are running generators, which have emissions and make noise.”
Adams County, she said, simply doesn’t have language in its land use code that speaks to cryptocurrency mining at the wellhead. 9News was the first to report on the situation.
“We were all just surprised,” Hall said, referring to the moment this spring when an oil and gas inspector discovered crypto operations in full swing at four well sites in the county.
Proponents of the practice say it’s a win-win for both the environment and the crypto industry. Bitcoin mining typically occurs at a well where natural gas is an unwanted byproduct of oil extraction — known in the industry as “stranded gas” — and in remote locations where there is no pipeline to bring the gas to market.
Hyoung Chang, The Denver PostRenegade …read more
Source:: The Denver Post – News