How Bitcoin Could Turbocharge Solar and Wind Energy
Bitcoin is considered an energy-intensive network. This has led to negative attention from politicians, regulators, institutions and individuals who claimed that the digital resource contributes to global warming.
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However, many are trying to leverage the Bitcoin network to create sustainable systems and mechanisms using renewable energy. The Cathie Wood-led Ark Invest has been at the forefront of this effort.
Ark Invest researcher Sam Korus recently shared a way that Bitcoin mining can be exploited to “harvest natural gas emissions”. In the oil and gas industry, billions of cubic meters of natural gas are released into the atmosphere.
These resources can be used to power the Bitcoin network, incentivize network participants to secure the asset, and transform what would otherwise be wasted energy into a useful resource. As shown below, 265 billion cubic meters of natural gas is wasted each year.
Around half of this wasted natural gas comes from methane emissions, while the other half originates from gas flaring. As Korus noted, the Bitcoin network only needs 25 billion cubic meters of natural gas to operate.
Natural gas flaring is an important part of the processes that support the oil and gas industry. Companies use this mechanism to get rid of unwanted components and run maintenance, testing and safety processes in oil wells.
Thus, Korus believes Bitcoin miners should use methane emissions and convert them into electricity. This will represent a significant improvement for the sector in terms of electricity costs and incentivize more operators to adopt this mechanism, which will help reduce carbon emissions. Korus wrote:
Our research suggests that installing natural gas generators at well sites and using methane that would otherwise be vented can generate electricity at a cost much lower than public bitcoin mining companies pay today.
Bitcoin The best choice to support renewable energy models?
Unlike other solutions to get rid of methane gas, Bitcoin mining is scalable, transportable and flexible. In fact, many companies in the oil industry have started teaming up with BTC miners to transform waste material into electricity and a worldwide accepted asset.
This implementation is more practical than building entire infrastructures to transport the gas or moving entire populations near oil wells. Mark Le Dain, vice president of strategy at the oil company Validere, said the following about the potential for Bitcoin to contribute to the reduction of carbon emissions:
It helps to cut emissions at (an oil) producer level, but also globally by reducing mining in parts of the world where coal is likely to be the power source (…).
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Korus believes regulators should encourage this model by introducing “carbon reduction pricing plans” and encouraging more BTC miners to work with the oil industry. At the time of writing, BTC’s price is trading at $21,600 with a profit of 4% in the last 24 hours.
