We are a world built on the rails that enable the production of energy and energy. Whether we’re talking about your smartphone in your hand, the shirt on your back, the house or apartment you reside in, or the electricity delivered to your home… none of that would be available without the generation and production of energy.
In this sense, it is imperative that the reader understand not only how important energy and energy supplies are to the world, but also how sensitive these mechanisms are. Whether we are dealing in molecules (such as oil and gas) or electrons (energy), both are commodities, meaning that supply and demand have a large influence on the price of these products. The pull or push of supply and demand can be influenced by forces such as the climate (outside of human influence), as well as by human legislation, such as regulations on emissions standards, tariffs and sanctions.
“The Verde Mining course ‘How to Mine with Flare Gas’ was fantastic. The equipment, information, classroom and field instruction are top notch. I left with all the tools and contacts necessary to confidently source, structure, finance, build and operate a flare gas mine. This is more than just a course of instruction, it is an intimate, student-centered, hands-on relationship-building experience. Verde Mining is passionate about its mission and I highly recommend anyone, at any stage of their journey, experience that atmosphere of dedicated and expert instruction.”
–Joe Hamlin
Another factor that weighs on the pricing mechanism of these products is their transportation to the market. As discussed by Paul Cockerham, CEO of Verde Mining, on the Hashrate Up podcast (linked here), there is an additional difficulty for oil and gas producers in transporting material to that market (or buyer) when a project must build infrastructure to enable transmission. Will the owners of the land that a project must pass through allow the construction of infrastructure through their property? They have every right to refuse. Then there is the question of paying for such infrastructure to get a molecule like natural gas to a buyer. All of these dynamics must be incorporated into decision-making about what to do with the production of a resource, and especially with a resource that arises as a byproduct of the production of a completely different resource, in this case oil.
There are many obstacles for producers to overcome. It is no surprise that so many have chosen to simply vent or flare (aka flare) the natural gas obtained from oil production rather than undertake capital expenditures (capex) to build such infrastructure. This is why bitcoin miners are engaging in joint venture (JV) agreements with oil producers and at the same time offsetting these operations by paying for this resource at the point of production; the mouth of the well. This allows the producer to avoid the capital expenditure of building the infrastructure to transport their gas production to a buyer by bringing the producer on site and earning revenue from bitcoin production by integrating bitcoin mining into their production stack.
“It is rare in this business to find someone who has extensive experience in both O&G and bitcoin, and who is willing to share all of his valuable knowledge. Enter Paul Cockerham, the OG of flue gas mining. I attended the Verde course in Midland and received the best education one can imagine in the flue gas niche. Paul’s level of transparency, passion, and teaching skills were off the charts. I don’t think you will find any better course or instructor. Five star rating!
–Frank Eakin
Verde Mining is taking a cleverly novel approach to this relationship. In addition to providing these services to oil producers with complementary natural gas production, the Verde Mining team also organizes educational courses to teach producers how they can incorporate bitcoin mining operations into their projects. They have a course here in a few weeks that will last 3 days and covers: miner assembly, repair and configuration, network and IT configuration, and engineering, maintenance and electrical work. Complete with on-site operating tutorials and financial modeling coverage for operational prudence. For those who are interested, or have an employer who is interested, in such education, check out their twitter, linkedinand send inquiries to: [email protected].
We need as many people and organizations as possible to educate themselves not only on the value of bitcoin mining, but also on the knowledge necessary to run safe and properly functioning bitcoin mining operations.
This is a guest post by Mike Hobart. The opinions expressed are entirely their own and do not necessarily reflect those of btc Inc or bitcoin Magazine.
