These 23-year-old Texans made $4 million last year mining bitcoin off flare gas from oil drilling
HOUSTON — When Brent Whitehead and Matt Lohstroh were sophomores at Texas A&M University, they decided to get into the business of mining bitcoin on the oil fields of East Texas. The year was 2019, and at the time, the idea of oil and gas companies joining forces with bitcoin miners was considered both avant-garde — and a major taboo.
But Whitehead, an engineer hailing from a family with a long history in oil and gas production, and Lohstroh, a finance major with a bitcoin obsession, ignored the skeptics, and sunk all the cash they had earned from their high school side gigs in lawn care and landscaping into Giga Energy Solutions, a company that mints bitcoin from stranded natural gas.
For years, oil and gas companies have struggled with the problem of what to do when they accidentally hit a natural gas formation while drilling for oil. Whereas oil can easily be trucked out to a remote destination, gas delivery requires a pipeline. If a drilling site is right next door to a pipeline, they chuck the gas in and take whatever cash the buyer on the other end is willing to pay that day. But if it's 20 miles from a pipeline, drillers often burn it off, or flare it. That is why you will typically see flames rising from oil fields.
Beyond the environmental implications of flare gas, drillers are also, in effect, burning cash. To these two 23-year-old Aggie alums, it was a big problem with an obvious solution.
Giga places a shipping container full of thousands of bitcoin miners on an oil well, then diverts the natural gas into generators, which convert the gas into electricity that is then used to power the miners. The process reduces CO2-equivalent emissions by about 63% compared to continued flaring, according to research from Denver-based Crusoe Energy Systems.
“Growing up, I always saw flares, just being in the oil and gas industry. I knew how wasteful it was,” Whitehead told CNBC on the sidelines of the North American Prospect Expo summit in Houston, a flagship event for the industry. “It's a new way to not only lower emissions but to monetize gas.”
Whitehead tells CNBC they have signed deals with more than 20 oil and gas companies, four of which are publicly traded. Giga also says they're also in talks with sovereign wealth funds, and they are expanding, fast. Giga's 11-person team is adding another six employees this month.
Lohstroh and Whitehead are part of a growing movement of people placing big bets on the potential for bitcoin mining to transform the economics of the energy industry.
“They are making their clients revenue through stranded energy bitcoin mining and solving the environmental challenge with flared gas at the same time,” said Lee Bratcher, president of the Texas Blockchain Council.
The Giga executives are also big believers in the power of bitcoin to create a new kind of financial freedom.
“No one controls it, and you don't have to ask permission to use it,” said Lohstroh. “That's really what drew me to bitcoin.”
It's a similar sentiment for Whitehead, who tells CNBC that his views on self sovereignty, privacy, and individualism are part of what sent him down the proverbial bitcoin rabbit hole.
“I wasn't so much focused on the price, as I was the adoption. I thought this was something great for humanity,” said Whitehead.
Oil and gas meets bitcoin
You can think of bitcoin mining both as the security layer for the network and as the method by which new bitcoin are entered into circulation.
A bitcoin mining rig runs a program on a computer to try to solve a puzzle before anyone else does. Solving that puzzle is what completes a block, a process that both creates new bitcoin and updates the digital ledger keeping track of all bitcoin transactions.
“The cool thing about bitcoin that is under-appreciated by a lot of the naysayers is that it's a portable market; you can bring it right to the source of energy,” said Steve Barbour, founder of Upstream Data, a Canadian company that manufactures and supplies portable mining solutions for oil and gas facilities.
休斯顿——当 Brent Whitehead 和 Matt Lohstroh 在德克萨斯 A&M 大学读大二时，他们决定在东德克萨斯的油田从事比特币开采业务。那一年是 2019 年，当时，石油和天然气公司与比特币矿工联手的想法被认为是前卫的，也是一个主要的禁忌。 但怀特黑德，一位出身于石油和天然气生产历史悠久的家庭的工程师，以及对比特币痴迷的金融专业人士洛斯特罗，无视了怀疑论者，把他们高中时在草坪上的业余演出赚到的所有现金都花光了。 Giga Energy Solutions 是一家从搁浅的天然气中铸造比特币的公司。
多年来，石油和天然气公司一直在努力解决在石油钻探过程中意外撞到天然气地层时该怎么办的问题。虽然石油可以很容易地用卡车运到偏远的目的地，但天然气输送需要管道。如果钻探地点就在管道的隔壁，他们就会把天然气塞进去，然后拿走另一端的买家当天愿意支付的任何现金。但如果它距离管道 20 英里，钻探人员通常会将其烧掉或燃烧掉。这就是为什么您通常会看到从油田升起的火焰。
除了火炬气对环境的影响之外，钻井者实际上也在烧钱。对于这两位 23 岁的 Aggie 校友来说，这是一个有明显解决方案的大问题。
Giga 将一个装满数千名比特币矿工的集装箱放置在油井上，然后将天然气转移到发电机中，发电机将天然气转化为电力，然后用于为矿工供电。根据总部位于丹佛的 Crusoe Energy Systems 的研究，与持续燃烧相比，该过程减少了约 63% 的二氧化碳当量排放。
“长大后，我总是看到耀斑，只是在石油和天然气行业。我知道这是多么浪费，”怀特黑德在休斯顿举行的北美展望博览会峰会期间告诉 CNBC，这是该行业的旗舰活动。 “这是一种新的方式，不仅可以降低排放，还可以将天然气货币化。”
怀特黑德告诉 CNBC，他们已经与 20 多家石油和天然气公司签署了交易，其中四家是公开交易的。 Giga 还表示，他们也在与主权财富基金进行谈判，而且他们正在快速扩张。 Giga 的 11 人团队本月将再增加 6 名员工。
Lohstroh 和 Whitehead 是越来越多的人们押注比特币采矿以改变能源行业经济的潜力的运动的一部分。
德克萨斯区块链委员会主席 Lee Bratcher 说：“他们通过搁浅的能源比特币采矿为客户赚取收入，同时用燃烧的气体解决环境挑战。”
Giga 的高管们也坚信比特币能够创造一种新的财务自由。
Lohstroh 说：“没有人控制它，你不必征得使用它的许可。” “这真的是吸引我关注比特币的原因。”
怀特黑德也有类似的看法，他告诉 CNBC，他对自我主权、隐私和个人主义的看法是让他落入众所周知的比特币兔子洞的部分原因。
“我不太关注价格，因为我关注的是采用率。我认为这对人类来说是一件好事，”怀特黑德说。
石油和天然气遇到比特币
您可以将比特币挖掘视为网络的安全层和新比特币进入流通的方法。
比特币挖矿设备在计算机上运行一个程序，试图在其他人之前解决一个难题。解决这个难题是完成一个区块的过程，这个过程既可以创建新的比特币，又可以更新跟踪所有比特币交易的数字分类账。
“很多反对者低估比特币的一个很酷的地方是，它是一个可移动的市场；您可以将其直接用于能源来源，”加拿大公司 Upstream Data 的创始人 Steve Barbour 说，该公司为石油和天然气设施制造和提供便携式采矿解决方案。
