Oil and gas companies will dominate Bitcoin mining within five years

Bitcoin mining is often criticized for its excessive consumption of electricity resources, but well-known podcast host Marty Bent proposed Bitcoin mining as a new energy solution, which he said actually reduces waste in the oil and gas fields.

In a blog post on April 15, Bent revealed that he has been mining Bitcoin with Great American Mining (GAM) since last year, using excess natural gas, a byproduct of the company’s oil mining, to power his Bitcoin mining rigs.
GAM deployed its first small-scale mining facility in the form of an oilfield container last December, which Bent said was the first step in encouraging oil and gas producers to become “the largest miners in the Bitcoin network.”

He elaborated on his views on oil and gas companies’ involvement in Bitcoin mining in a podcast:
“What we’re trying to accomplish at Great American Mining is for these oil and gas companies to have that lightbulb moment and realize that they should invest in bitcoin mining and build out the mining infrastructure in their own fields so that they can become much more efficient in terms of addressing the waste of resources… and in the long run, overall, help bitcoin, protect bitcoin, and further distribute bitcoin from a mining perspective.”
Bitcoin miners are looking for cheap and abundant energy, while oil and gas companies are looking to make a profit as efficiently as possible. GAM uses natural gas that is usually disposed of as a waste byproduct or sold (sometimes at a loss) as energy for Bitcoin mining.
“If designed correctly, a container full of Bitcoin mining machines would have much higher uptime and be 5 times more profitable than pumping gas into a pipeline and selling it.”
Bent said there is no need to use warehouses or build steel structures to mine Bitcoin when stacked ordinary shipping containers can be used:
“You’re seeing a trend now with containers for bitcoin mining. Instead of building all the infrastructure like a big warehouse, they’re actually using the container model as a way to build it on site… About a year ago, that wasn’t the case. Now, you’re seeing very large sites where you can stack 40, 50, 60 bitcoin mining containers… It’s cheaper that way.”
The concept is becoming increasingly popular. The Winklevoss Twins have invested in a Texas-based company, Crusoe Energy Systems, which converts waste from surplus natural gas into energy for bitcoin mining. Canadian oil mining company Black Pearl Resources is also mining bitcoin to help it offset operating costs. Another Canadian company, Upstream Data, sells and rents mobile bitcoin mining equipment to oil and gas producers for the same purpose.

The U.S. Still Lagging Behind in Bitcoin Mining Infrastructure Development

Currently, China is the top destination for industrial-scale Bitcoin mining facilities. With affordable energy costs, the country accounts for approximately 60-70% of the total energy consumption in the global Bitcoin mining industry.
As of today, the Bitcoin network’s annual electricity consumption is estimated at 73.374 TWh. As mining becomes more expensive over time, its energy consumption is likely to increase, leading entrepreneurs to seek alternative solutions.
Bent said he believes Bitcoin mining needs to be more geographically dispersed — China currently dominates Bitcoin mining. He said Bitcoin mining is a huge economic opportunity for the U.S. oil and gas industry:
“We are still early in this game and in our journey at GAM, but Oil & Gas is confident that over the course of the next five years they can realize this vision. They may fail (unless governments start subsidizing Bitcoin miners), but we are definitely going to try new things.”