crypto, a negative becomes a positive
An old adage says “it will happen when someone can make a buck at it”. This was quite true for environmental issues over the years. Action just did not happen because nobody could make a buck at it. This or that issue required expenditures and the upside was doing the right thing. Times have changed a bit with climate change, but there is also plenty of room to make a buck in this era of speculation, marketing and VC valuations. But, I digress. Let’s start with the negative.
Crypto-currency mining is energy intensive to say the least. The numbers are staggering. About six months ago it was said that Bitcoin mining consumed as much electricity as Norway. Even if some of that is sustainable it is sustainable energy that is not being used elsewhere. At the end of the day it is safe to say crypto mining directly or indirectly requires considerable electricity that is generated with non-renewable resources. It is too big a requirement not to.
We can also safely say oil production will be with us for the foreseeable future. There is simply no way to transition away from this size of an energy source in the near term. During oil production so-called associated gas is liberated from the well. This gas is generally seen as low quality and is often unused. It may be re-injected into the well, but it is often flared, or worse, vented. These latter two options both release methane into the atmosphere, which is a much more potent GHG than CO2. The EPA states the Global Warming Potential (GWP) of methane is between 28 and 36 times that of CO2.
The other week a manufacturer of micro-turbines presented an interesting case study. In it associated gas fuels the turbines, which generate the electricity for mining. The case study prominently states the gas is free, so the crypto mining has no ongoing energy costs. Even with overhead and start-up costs the crypto should have a high profit margin. This is the buck.
What is the environmental upside? We know GHG’s in the form of CO2 are produced. But, because the gas is used i.e. not flared or vented the amount of methane released into the atmosphere is reduced. Considering the difference in GWP there is quite possibly a net positive GHG impact. Now, this is simply a bit of logic, but it would be interesting to put some numbers around this scenario.
We are back to the old adage of making a buck. In this case it might just be an incentive to create a positive environmental impact. There are plenty of other components to the larger picture, but the particular case could well be beneficial. Crypto mining is also well suited for remote, in the vicinity of the well, operation. Just as oil will be here for a while, crypto mining seems to be here now. Creative solutions to mitigate crypto’s GHG impact are needed because we can not build out renewable sources of energy fast enough. This one might be net positive