Residents of Elk County in the heart of Pennsylvania unfortunately found themselves in the middle of a bitter soap opera with technological overtones. Reason? Several natural gas wells. And a company decides to exploit them for bitcoin mining. At first, they may seem like components that don’t have much in common—a rural community, some old wells and bitcoins?—but together they have shaped a story that is followed closely from other latitudes.

There are reasons for it to be so.

What happened? Residents and officials of Elk, a county of 31,000 people located in northwestern Pennsylvania, found themselves with an unexpected headache. This is because of the four natural gas wells located at Longhorn Pad C, a platform set up next to a cemetery and a Methodist church. The bed, which was opened in 2011, was taken over by a company that wanted to benefit from the wells for the rest of its life after years of being idle. Problem: Doing so has sparked anger among residents and regulators who are supposed to control the facility.

Why headache? history revealed Capital and Principal, which explains that the company Diversified Production, which noticed the wells, used them for an unorthodox purpose… Definitely not the purpose associated with a deposit: exploiting them in crypto mining. To achieve this, it has installed a noisy infrastructure that has already caused a handful of complaints from residents. Not only that. The company requested regulatory permissions, but—always Capital and Principal– still wouldn’t take them.

“After a recent review, the Department of Environmental Protection (DEP) determined that Diversified was in breach because it had installed equipment for cryptocurrency operations before the plan was approved,” said Tom Decker of the DEP’s Northwest Regional Office. .

Gas wells for crypto mining? That’s it. The rig is owned by Diversified Energy Company, the parent company of Diversified Production, and has applied for permission to install engines and a generator for cryptocurrency mining. The goal is to use what is known as a machine. well mining, which would make it possible to power a cryptocurrency data center with energy from an oil or gas field. Diversified’s will be the first platform of its kind in Pennsylvania to face an authorization process for this practice.

Is it a new offer? No. Earlier in 2022, ConocoPhillips company presented a pilot project in Bakken, North Dakota, aimed at harnessing the gas it produces during oil extraction for crypto mining. The initiative is simple, and the underlying philosophy is not much different from Elk’s project: Take advantage of gas, a byproduct that is not profitable to commercialize and will eventually be incinerated for Bitcoin mining.

The same idea was used by Giga Energy Solutions, a company that uses gas from Texas oil fields to power powerful computers used in cryptocurrency mining.

Which company is behind it? Capital a Main points to Diversified Energy Company, which defines its goal as: “Buy and manage mature oil and gas properties to generate cash flow and ensure stability and growth for the long-term benefit of our stakeholders.” To that end, the company has owned and operated oil and gas wells across the US with a significant presence in Appalachia.

The Alabama-based company justifies its effort to “minimize” its “environmental footprint”, emphasizing: “From acquisition through retirement, we focus on improving and managing natural gas and oil wells.” Not everyone sees it the same way. There are those who warn that the company cannot undertake to plug wells once their useful life and environmental impact is complete. Robert Routh of the Clean Air Council, for example, warns of the difficulties of measuring the contamination of the furthest wells.

Cover photo: Bybit (Flickr)

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