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Felicity Bradstock

Felicity Bradstock

Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK.

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Argentina Taps Waste Gas To Mine Bitcoin

  • Giga Energy Solutions, known for repurposing waste gas for crypto mining, is expanding into Argentina's Vaca Muerta shale gas reserve, aiming to leverage its immense waste energy for digital currency operations.
  • Argentina's economic crisis and President Milei's pro-crypto stance have created an environment conducive to cryptocurrency adoption, with Bitcoin seen as a hedge against hyperinflation and financial instability.
  • The partnership between Giga Energy Solutions and oil and gas companies in Argentina not only helps reduce emissions but also provides a new revenue stream for the struggling economy, presenting a win-win scenario for both parties involved.
Waste Gas

Cryptocurrency companies have been increasingly looking to power mining operations in more sustainable and affordable ways, as governments worldwide crack down on energy-intensive crypto operations by introducing more regulations in the sector. We have previously seen companies across the U.S. establish mining operations on existing oil and gas sites, using waste gas from fossil fuel production activities to power mining. But this is getting more and more difficult as the government pursues a green transition and some states introduce strict regulations on digital currencies. Now, many crypto companies are looking to Argentina to set up similar operations and bolster the country’s flailing currency. 

As governments worldwide put pressure on oil and gas companies to decarbonise, many have sought innovative ways to prevent CO2 from being released into the atmosphere. This has largely been supported by the incorporation of carbon capture and storage (CCS) technology into operations. However, some have begun to work with cryptocurrency companies that are seeking to use waste energy from gas-flaring activities to power digital currency mining. Previously, gas released from flaring on oil sites was not captured and reused, as it was deemed to not be economically viable. Governments are increasingly calling on oil and gas companies to stop highly polluting flaring practices. However, many companies are finding an alternative solution by letting crypto companies use their waste gas

Some of the first of these operations took place in 2019, when Giga Energy Solutions signed agreements with several oil and gas producers in East Texas to use their waste energy. Giga puts shipping containers filled with thousands of Bitcoin miners on an oil well, diverting the natural gas into generators. This gas is then transformed into the electricity that is used to power the miners. This helps oil and gas companies reduce their emissions by around 63 percent compared to conventional gas flaring activities.

Now, Giga is looking to expand its crypto-mining operations into new markets. The Mendoza province in Argentina is home to the world’s second-largest shale gas reserve – Vaca Muerta, which could provide immense quantities of waste energy to be used by digital currency miners. In March, Giga announced plans to expand into Argentina following the successful rollout of operations across the U.S. and its entrance into Shanghai. It will partner with the oil and gas company Phoenix Global Resources, as well as the IT services company Exa Tech, to develop a 2 MW project on Vaca Muerta. 

This will help the oil and gas producers both reduce emissions as well as turn waste into something valuable. Brent Whitehead, the co-founder of Giga, explained “By capturing stranded natural gas to power modular data centres for energy-intensive computing, Giga is actively contributing to reducing global methane emissions.” 

Argentina has been battling an economic crisis with an inflation rate that rose above 211 percent in December, according to official data. This marked the highest inflation level since the 1990s. The country’s libertarian President Javier Milei has been hoping to avoid hyperinflation through strict austerity measures. In December, the new government devalued the peso currency to try and tackle inflation. 

As the country has faced greater financial insecurity, with a highly volatile currency, the government has increasingly embraced digital currencies in recent years. Milei is seen as a crypto-friendly President and at the end of last year, the government “ratified and confirmed” that contracts can be set in Bitcoin. Grayscale Investments stated, “Milei sees Bitcoin as a crucial tool in countering the inefficiencies and corruptions of centralised financial systems.” If Argentina is seen to welcome cryptocurrency, this could encourage other countries in the region to follow suit. 

In addition, while Bitcoin has had its ups and downs in recent years, its value has increased by 170 percent over the last six months and has touched several all-time high prices, making it very attractive. Giga has achieved revenues of over $10 million so far this quarter, according to the co-founder of the company Matt Lohstroh. Giga plans to launch small-scale operations before expanding. The company expects to eventually reduce carbon emissions by around 30,000 tonnes a year at the Vaca Muerta upstream facility, with excess power being sold to the Argentinian grid. 

However, it is not the only crypto company looking to develop operations in Argentina, which is one of the biggest methane emitters globally. There is a huge opportunity to develop crypto mining operations in Argentina, particularly under the leadership of a pro-crypto president. Giga will likely be one of many crypto companies to enter the Argentinian oil and gas market over the coming years with companies such as these offering a win-win scenario for fossil fuel companies.  

By Felicity Bradstock for Oilprice.com

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  • JESSE CRISSUP on April 07 2024 said:
    I am an expert in all drilling methods for resources of all kinds. 20 years ago co2 was drilled for and used by food companies to store food in for a preservative. I understand the science behind the concept of co2 but maybe we should stop packaging food with it. Burning the byproducts of the oil and gas wells for energy is a very important part of energy conservation. Crusoe industries builds some of the most efficient server buildings and has been very successful at developing the technology. Burning poisonous gases like h2s is immediately beneficial for life but long term impacts are still very environmentally sensitive and have only been studied for agenda based analysis. Co2 is actually greening the planet but has obvious consequences. Sea level rises are blamed by co2 levels while it’s more likely to be from increased erosion and water displacement from topsoils and other sources displacing water with solids. Shale gas is the easiest source of energy to power our current systems but isn’t properly maintained as prices are manipulated by traders and we see massive swings that could be mitigated by following data models for managing a consistent drilling practice. Political policies are driven primarily by under education and greed from government elected officials as they directly influence the values of energy companies that they purchase stocks in even though they underperform dramatically. Hopefully private investors like bitcoin farms can create enough capital to influence the direction of basic lack of intelligence in the public. If big energy companies would spend a very small amount to educate and develop a better understanding and cleaner approach for profits we could progress towards a sustainable future without destroying the economy. To achieve unrealistic goals of current misguided policies by leaders worldwide we would make energy more expensive and in turn increase poverty by reducing the amount of money available for already struggling people. By creating the energy models proposed from political leaders we would make poor people poorer and that is not ethical whenever other approaches are available. The models created by bitcoin companies can be applied in many different industries to reduce pollution and increase efficiency for consumers by maximizing the potential of existing technologies. For example wind turbines have a very tall tower that is primarily nailed by solar rays every day. Why is that vertical real estate (subsidized by tax dollars) not being utilized by solar energy providers? The misuse of subsidies and mismanagement of energy needs an entire overhaul and kudos to bitcoin greed for its innovative approach.

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