Bitcoin-Mining Power Plant Secretly Launched in Alberta

Bitcoin-Mining Power Plant Secretly Launched in Alberta, Tapping Dormant Gas Well
from the power-plays dept.
"When residents of an affluent estate community in Alberta started hearing noise from a nearby power plant, they didn't expect their complaints of sleepless nights would lead to a months-long investigation that would find a bitcoin mining operation had set up shop without approval," reports the CBC:
Now, Link Global, the company behind the site, is being ordered by the province's utility commission to shut down two plants until it can prove it's allowed to operate — a move the company says will cost jobs and cause the oil and gas infrastructure in which it operates to sit dormant....

Vancouver-based Link Global had set up four 1.25 MW gas generators at the site, pulling power from a dormant natural gas well owned by Calgary-based company MAGA Energy. The natural gas powers thousands of computer servers that run programs to "mine" digital currency... Work on the plant began in August 2020, and by fall — when neighbours started to get annoyed — it was operating at full capacity. There was just one problem: The company hadn't notified neighbours of its plans. Or the county. Or the provincial utilities commission — which allows power plants to be set up without approval if they meet several conditions, including only generating power for the company's own use and proving the plant has no adverse effects on people or the environment...

Alberta is littered with nearly 200,000 dormant or abandoned oil and gas wells, often because they're no longer economically viable. It has raised the spectre that landowners and taxpayers could be on the hook for the cleanup costs, which the province estimates could be up to $30 billion, as well as prompted a push to find other uses for the facilities, such as powering cryptocurrency operations. Stephen Jenkins, Link Global's CEO, said some of that abandoned energy infrastructure, is at risk of leaking methane — a greenhouse gas more potent than carbon dioxide. "We look at, OK, what can we do to use this in a beneficial way ... I don't want to say we're in the business of methane destruction, but we're in the business of beneficial use of that potential methane-generating source. You combust it properly. You don't flare it, and you control those emissions," Jenkins said...

And though the facility employs only four people, Jenkins said it's important to him to employ locally and give former oil and gas workers a path into other careers. The Sturgeon County plant's supervisor is a former pipefitter; he's now a bitcoin pro and an expert at keeping the plant online, Jenkins said. "It's a perfect use of people's skills," he said.

Of course, it's not all altruism. The company has said for every 10 MW of power, it can generate about 1.2 bitcoins per day.

Last Friday the Alberta Utilities Commission (AUC) ruled that the plant had indeed been violating their regulatory requirements, and would now also have to suffer a financial penalty which the CBC reported as "a $50,000 to $75,000 fine, reduced by up to 50% because Link Global admitted to breaking the rules..."

"More penalties could be on the way. The AUC will now review whether specific sanctions should be imposed against Link Global for operating without approval — a decision on that is expected this fall."

The CBC adds that another Link Global plant was also found to be "set up without the AUC's prior approval."

the staggering cost of cryptomining isn't just an expensive graphics card

Analysis: the staggering cost of cryptomining isn't just an expensive graphics card

In addition to the outrageous prices being charged online for graphics cards like the RTX 3080 and RTX 3090 – even among legitimate retailers – there is a much greater cost to the cryptomining craze of the past few years. 

Despite what cryptocurrency advocates claim, actual scientists who study the effects of cryptomining on the environment are pretty much in agreement that it's an ecological disaster. 

Cryptomining, globally, requires 110,000,000,000 kilowatt-hours of electricity each year, while all of the solar panels in the United States produced only 90,000,000,000 kilowatt-hours in 2020.

You can say that this energy diversion is well spent if you believe cryptocurrencies have utility beyond holding critical national infrastructure hostage for ransom, buying drugs online, or money laundering, but it is energy diversion. 

It might not be as explicit as in this case in Malaysia where miners literally tapped into a power line and diverted electricity from legitimate use, but a single watt of electricity used to process blockchain transactions and generate bitcoin anywhere is one less watt available for everything else. 

We don't stop powering our homes for some discrete amount of time in order to mine bitcoin. We power our world and we mine bitcoin. This isn't going to change, so no matter how much crypto advocates try to green up crypto, it is still an increasingly heavy anchor on our efforts to combat climate change. 

All one needs to do is look out the window of a New York City office this week and see the hazy smoke from west coast wildfires to know that this is untenable if we want a reasonably livable planet in the years to come. Against that reality, crushing 1,069 mining rigs beneath a steamroller is woefully insufficient, but it's a start.