Texan Bitcoiners Start Mining In Argentina Using Flared Excess Gas

Two Texas-based bitcoin miners have turned to the foothills of the Andes mountains in Argentina to mine bitcoin using flared natural gas. CNBC reports: Brent Whitehead and Matt Lohstroh, both graduates of Texas A&M University, have been mining bitcoin on the oil fields of East Texas since 2019. That's when they founded Giga Energy with the goal of taking flared natural gas and turning it into electricity to run bitcoin mines, which are notoriously power-thirsty. On Tuesday, Giga announced its first foray into Argentina, following expansion across the U.S. and into Shanghai. The company is partnering with Phoenix Global Resources, an oil and gas company with operations in Mendoza, and with IT services company Exa Tech to launch a two megawatt bitcoin mine on top of Vaca Muerta.

Giga's system involves placing a shipping container full of thousands of bitcoin miners on an oil well, then diverting the natural gas into generators, which convert the gas into electricity that's used to power the miners. The process reduces CO2-equivalent emissions by about 63% compared to continued flaring -- or burning -- of unused gas, according to research from Denver-based Crusoe Energy Systems. It also turns wasted energy into a valuable asset for oil producers.

On the small pilot site in Argentina, Exa Tech is handling operations on the ground, Phoenix Global is providing the gas and Giga is supplying the equipment. Lohstroh told CNBC that Giga has generated over $10 million in revenue so far this quarter. It's not the only miner that sees opportunity in Argentina, which ranks 12th on the list of the top global emitters of methane, according to World Bank data. Giga's mine is intentionally small to start and isn't intended to be profitable yet. The company first wants to make sure it can successfully import all the necessary equipment before scaling the operation. The mine has been running a test since December, and Lohstroh estimates the site has mined in the range of $200,000 to $250,000 worth of bitcoin. Giga projects the mine is set to reduce CO2 emissions by approximately 30,000 tons per year at the upstream facility. The site is also designed to sell any excess power to the Argentina grid as a way to both generate revenue and curb operational redundancies.

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