A 150,000-square-foot warehouse that houses high-end vintage cars was located on a Houston residential street. 200 oil and gas executives and bitcoin miners met up in the warehouse to drink beer and chat shop on Wednesday night in August.
Although these two groups may appear to be at opposite ends of social and professional spectrums, their worlds are colliding fast. It turns out that the industries are compatible partners.
Hayden Griffin Haby III is an example of an oilman who has become a bitcoiner. This Texas native, father of three, has spent 14 years in oil & gas. He is a perfect example of what this monthly meetup should be about.
Haby began his career as a surface landman, where he helped to negotiate land contracts. Later, he started his own oil company. For the past nine months, Haby has been exclusively in the bitcoin mining business.
Haby says that he was “orange pilled” in November 2020. This is a term that describes the act of convincing someone who doesn’t believe in bitcoin investing to invest in it. Limpia Creek Technologies was founded a month later by Haby. It powers bitcoin mining rigs using flared, vented and stranded natural gases.
Haby stated, “When I heard that you could make so much money per million cubic feet (a measure used to measure natural gas), rather than just burning it into the atmosphere, I couldn’t help but look away.” “You can’t see that.”
China expelled all crypto miners from its country this spring, a phenomenon Haby refers to as the ‘Chexit’. The flames were then fueled with kerosene. He said, “This is an opportunity that we didn’t see coming,”
CNBC’s Haby says they already see demand pouring into Texas and that he believes the state has the potential to capture the majority of the Chinese havehrate seeking a better home on friendly shores.
Bitcoin miners are most concerned about finding affordable sources of electricity. Texas, with its crypto-friendly politicians and deregulated power grid is an ideal location. This union is made even more harmonious by miners connecting their rigs with other stranded energy like natural gas that has been thrown away on Texas’ oil fields.
“This is Texas, boys. Haby said, “We have what you need.” “We are the energy capital of the planet.”
Haby said, “I think Kevin Costner said it the best: If you build it they will come,”
Parker Lewis is one Texas’s de facto bitcoin ambassadors. He is well-known by everyone. Everyone loves him. He is the future mayor of Austin, according to almost any bitcoiner.
Lewis is an executive with Unchained Capital which offers bitcoin-native financial service firms. Although he’s not in politics yet, he’s busy promoting the cryptocurrency across Texas. The Houston Bitcoin Meetup was just 20 people who met in a brightly lit conference room inside an office in May. Lewis then decided to join the group.
Lewis stated that he knew Houston would explode due to its energy connection to mining. If Lewis organized a good meetup Lewis said to CNBC. It’s also crucial that Texas is the bitcoin capital of world.
His efforts are paying off. More than 200 people attended Wednesday’s meetup from Texas, California, Colorado and Louisiana as well as New York, Australia, New York, Australia, and the UK.
Wednesday night was a buzzing affair. To be heard, you had to shout. No one mentioned cryptocurrency other than bitcoin. The room was filled with an unmistakable sense of stealth and FOMO. People who attended this event came to it, at least partially, because they didn’t want to be left behind.
The idea of extracting excess natural gas from drilling sites, and using it to mine bitcoin, is still an avant-garde technology.
Haby is a friendly and open-minded person who shares the locations of his company’s mine sites. CNBC would be able to give Haby’s ‘West Texas’ as much, but if the name of ‘Limpia Creek’ is any indication, it would put them 100 miles north of Big Bend National Park.
His secrecy was par for a course that evening.
Alejandro de la Torre, a Bitcoin miner, was born in Spain. However, he has spent many years mining bitcoins all over the globe, including in China. De La Torre received a call at 3 AM from his boss telling him that he needed to travel to Texas after Beijing clamped down on crypto. The next day, he was in Austin.
He has been shipping new-generation mining equipment to the U.S. since then.
De La Torre stated that it’s all done through ships and on the Pacific side. The location of the rigs is what determines the port.
De La Torre didn’t divulge more information because, as he explained, any additional details about the destination or the gear could give his competitors an advantage.
Bitcoin enthusiasts care as much about privacy as the oil and gas men. CNBC was greeted by vague statements about business deals from some who cited nondisclosure agreements. Some others were only willing to speak on condition of anonymity. Some attendees were concerned about their job security if their employer found out that they were there.
They weren’t wealthy tycoons; they were mostly young executives who wanted to make a name for themselves and take a chance on bitcoin mining.
Oil and gas companies have been struggling for years with how to deal with an oil spillage. While oil can be easily transported to remote locations, gas delivery requires a pipeline.
A drilling site next to a pipeline will chuck gas in the ground and pay whatever the buyer is willing to fork out. “There is no other choice. There is no middle finger. Haby explained that whatever gas is released on that day must be sold.
However, if the pipeline is 20 miles away, it becomes more difficult.
Most often, the well isn’t large enough to justify the expense and time required to build a new pipeline. Most drillers will dispose of their natural gas on-site if they can’t find an immediate way to sell it.
Venting it is one option. This releases methane directly into air, but this is a bad choice for the environment as its greenhouse effects have been shown to be stronger than carbon dioxide. Flamming it is a more eco-friendly option. This involves actually setting the gas on fire.
Adam Ortolf is the U.S. business development manager for Upstream Data. Upstream Data manufactures and supplies portable mining solutions to oil and gas facilities.
“When CH4, or methane combusts the only exhaust is H2O and CO2 vapor. Ortolf continued, “That’s literally what comes out of mine mouth when I exhale.”
Ortolf points to the fact that flares only 75-90 percent efficient. Ortolf stated that some methane is being released even though a flare is used.
On-site bitcoin mining is especially effective in this situation.
Ortolf states that 100% of methane is burned when it is fed into an engine or generator.
He said that nobody would run the gas through a generator unless it is profitable. Generators are expensive to purchase and maintain. Producers won’t internal combust gas if it isn’t economically viable.
Bitcoin allows oil and gas companies to economically combust their methane with a flare, rather than externally.
Haby stated that stranded gases are no longer a thing.
However, Ortolf took years to convince people that parking an ASIC-equipped trailer on an oil field is smart and financially sound.
Ortolf said, “In 2018, I was laughed out of the group when I spoke about mining bitcoin using flared gas.” “The idea of bringing hydrocarbons on the market without a counterparty was absurd.”
Three years later, business at Upstream is booming. It was founded by Steve Barbour, an engineer. It works with 140 Bitcoin mines in North America.
Ortolf stated that this was the greatest gift the oil-and-gas industry could have received. “They had left a lot of hydrocarbons untapped, but they are now able to sell energy regardless of where they are located.”
This is helping to reduce the overall carbon footprint at some of these oil-and-gas sites. Recent production statistics show that approximately 1.5 billion cubic feet of natural gasoline is being wasted each day in the United States alone. These are only the reported figures, so actual numbers are likely to be higher.
Bitcoin miners are able to get the electricity they need at a fraction of the cost.
There are many grand visions of bitcoin mining, but it is important to remember that there is still work to be done on Capitol Hill in order to keep the plan from scaling. Washington politicians are currently trying to determine how and what to regulate cryptocurrency and the various ancillary services that make it up the larger ecosystem of digital currencies.
Another topic of discussion at the Houston Bitcoin Meeting was political activism.
“Who knows a representative or staffer?” One person in the crowd asked the group. A minimum of half a dozen people raised their hand and one of them confirmed that they would reach out Senator Cruz.
The audience felt a sense of momentum. Many people pointed out that the nation’s bitcoin contingent had paralyzed a $1 billion rubber-stamped bipartisan bill. This was no small feat considering the fact that the voting bloc has never been seen as a threat to the Hill.
It’s more than being defensive for the tens of million of bitcoin-loving voters. They are attempting to get like-minded people elected to office, so they can do something “before they do it” to them, as one audience member said to the group. As many of their representatives don’t know bitcoin, they’re teaching them.
“We must target anyone who is anti bitcoin. This same attendee said that there are 45 million Americans and they are not silent.
