In an interview with bitcoin magazine, Steve Barbour, founder of Canadian company Upstream Data, says “Bitcoin’s a great arbitrage mechanism for these companies. Anywhere you go, oil and gas producers are having issues.”
Upstream Data, helps transform companies idle gas, natural gas and uses it to mine bitcoin. In the end it is not a means to make a profit nor is it an arbitrage mechanism but it is a way for oil companies to stay regulatory compliant while reducing their environmental impact that they would usually produce.
Upstream Data offers three different mining packages all formatted to help the oil and gas companies fulfill their needs in terms of equipment and service required. In package one involves buying the mining rig, supplying the gas and converting this gas into power, and the producers pocket all of the mining profits. The second option, they only provide the gas and power conversion without buying the skid, and a portion of the profits are kept by Upstream. With the third option Upstream would park the skid on site and convert gas to energy for the company, the conversion is free in return for free gas. Although it may seem like the oil and gas companies are getting the short end of the stick, in essence they are being relieved from the industries rules and regulations in compliance as well as environmental.
Barbour says “I think we’re a pretty good example for why the energy waste argument is a load of crap. Bitcoin mining by nature of free competition is the most competitive market on the planet. Everyone is looking for low value energy, which happens to correlate to waste, so wasted energy is pretty much guaranteed to be profitable.”
Similarly this week Crusoe Energy Systems closed funding with seed financing round with Winklevoss Capital’s help to a total of $5.1 million to develop their mobile modular data centers to provide large-scale mitigation services for oil and gas operators in North America.