A Nevada-based company is poised to host a massive, carbon-intensive bitcoin “mining” operation in Alberta, after announcing last month it had bought up 14 natural gas wells in the Quirk Creek area southwest of Calgary.
The oddly-styled news release from Black Rock Petroleum says the company is acquiring the gas wells’ owner—cited in the release alternately as Caledonian Midstream or Caledonian Mainstream—and will use a gas plant near Millarville, AB to power up to a million bitcoin “rigs” relocated from China. The deal will run for at least 24 months, and analysts say it amounts to “a multi-billion-dollar investment using fossil fuels as a power source,” CBC reports.
“Earlier this year, Chinese authorities cracked down on bitcoin mining due to apparent environmental concerns and other issues, ordering miners to shut down,” the national broadcaster writes. The million bitcoin machines “would represent a significant chunk of China’s prior total mining capacity, experts say, with major impacts on energy consumption in the province.”
“In China, they were using hydroelectric power for at least part of the year, and then the rest of the year they would be using Chinese coal instead,” Alex de Vries, the researcher and economist who runs the Digiconomist cryptocurrency analytics website, told CBC. “But if they’re coming to Alberta and start running on natural gas all year round, it’s not improving the situation of this network, which is already responsible for more CO2 emissions than we are saving with all electric vehicles around the world combined.”
While it’s hard to get a handle on the number of computers involved in bitcoin operations worldwide, de Vries estimated that a million devices in Alberta could amount to one-third of global capacity.
U.S.-based bitcoin engineer Brandon Arvanaghi said North American bitcoin operations have been expanding in response to the crackdown in China. He told CBC it’ll be a logistical challenge to bring that much new “mining” capacity to Alberta.
“To facilitate that, you need a lot of land, you’ll probably need a substation, you’ll need Internet connectivity out there, a lot of staff who know how to operate these miners,” he said. ‘Basically, there’s a lot of things that can go wrong with this.”
Earlier this year, news reports had electricity demand from bitcoin operations quadrupling in four years to equal the annual consumption of Argentina. Operators were looking to nuclear generation as a possible option to meet their profligate electricity demand while cutting their carbon footprint, while a bitcoin “mine” in New York State was generating enough electricity demand to keep a fracked gas plant open.
CBC has more on the Alberta deal.