Digital pipelines
Episode Stats
Words per Minute
216.79776
Summary
In this episode, I sit down with Scott Johnson of Digital Shovel to talk about Bitcoin mining, natural gas storage, and other energy storage solutions that can be used to generate revenue from mining Bitcoin and other cryptocurrencies.
Transcript
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Okay, well, coming again from the floor of the Global Energy Show here in Calgary, and
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It's not all just oil, gas, machines, equipment, things like that.
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There's other people in attendance, other presenters.
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And as far as energy goes, I mean, it's something quite unique and new that you guys are working
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on, which is, I guess, digital currency mining.
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Can you explain how that ties into an energy show?
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Yeah, we like to refer to it as a digital pipeline.
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I mean, some of our earlier customers in 2018 were doing that, where you've got stranded
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gas or associated gas that is not worth compressing and trucking or running a pipe in a gathering
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system, but you still want to generate some revenue off of it.
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But marrying that with a Bitcoin mining farm, generating power on site, and then basically
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digitally converting that natural gas right into money on site is a great way to capitalize
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So, I mean, mining digital currency, some people might not necessarily understand that, but
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it basically takes some really heavy-duty computing power.
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And one of the things people, I guess, have been critical of is that you can draw energy
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But when you're talking about isolated gas deposits that you're using, this is energy
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that wouldn't have been utilized otherwise anyways.
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I mean, two important parts that you touched on there.
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One, when we got into the industry, there were clients that had generators and just hooked
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So they were just doing that to deal with the natural gas so that they could take the
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oil because they weren't able to flare for a prolonged period of time.
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They already had the generator there and they were just burning the heat into the night sky.
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On the grid side of it, though, it's a common misconception.
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Like when it first started, yeah, we just ran 100% of the time, all the time.
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Now what happens is most Bitcoin miners are curtailing loads.
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So they're consuming power when there's idle capacity.
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But then when the peak comes up and everybody's AC is on or industry is using a lot of gas,
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Bitcoin miners will turn off and they don't have that impact.
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In fact, in many regions, they've actually helped to lower power prices by utilizing that
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underutilized capacity, which brings down the price for consumers as a whole.
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So, yeah, I mean, you're more of a demand power with gas and so on.
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But, I mean, in hydro areas and things like that, then using those other capacity times
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is just a more efficient use of the generation.
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And so this is kind of a portable ability to mine as well?
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Like these operations can be set up in different areas and moved?
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The solution, we started with big 40-foot shipping containers.
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We now make a modular unit that will actually fit inside of a shipping container or can fit
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You can move them around with a 5,000-pound forklift or a skid steer.
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Same way you would set down a portable generator or a pump jack or something like that, you can
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put this down right at a wellhead, take the natural gas, convert.
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And if, for whatever reason, it doesn't make sense at that site any longer, you can pick
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It's not like a permanent data center that's an immovable object.
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Yeah, we have approximately 50 units in Alberta.
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We have approximately 1,500 units across North America.
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There's some homegrown solutions, people that do this as well.
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So there's pretty wide adoption of this in Alberta.
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So is this in partnership with the energy producers or is it just kind of a matter of
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Most of our clients actually just buy the equipment from us and then we'll go and operate.
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They might go partner with a midstream or they're going to go and partner with somebody that's
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actually just the owner at the wellhead and do it there.
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So it's a variety of different relationships depending on what the business plan was for
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And I mean, I just remember as a young guy in the oil field, there was nothing more wasteful
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to see than go out in the night back then when flaring was so common.
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I mean, to capture that and make use of it with something like that.
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And does this apply to a number of different digital currencies or is it just one?
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You can mine any digital currency you want that is mineable.
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However, most people just want to stick with Bitcoin.
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But then, I mean, you're already speculative being a little bit in oil and gas.
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You don't need to add that extra level of speculation.
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Bitcoin mining, it's not stable, but it's dramatically more stable than the altcoins or the other
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You know, it's been a day and a half at the show talking with some of the producers and
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There's been a lot of education around it because there's a lot of people, A, that don't
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They think it's this overly complicated thing when the reality is you plug the servers in,
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you enter a couple configuration details, and they just run.
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And then there's some people that are trying to understand what the use case was of the equipment
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and then others that have looked at our solution that, frankly, have tried to do it themselves
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and have realized it's pretty complicated to build a modular data center that you can just
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drop in the field and go and really took a liking to the offering that we have.
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Where can people find more information about this if they're looking to get involved?
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Like, is this scalable for a smaller operation or is it typically larger groups?
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Yeah, that's one of the big benefits of our solution.
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We go down as small as 100 kilowatts, which is a relatively small wellhead, and you can
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And then we can go all the way up to, you know, we've built 100 megawatt sites, which
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are, and they scale in modular blocks, which is nice in the sense that, you know, the wellheads
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aren't always going to produce the same amount of gas.
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So you might go and put one megawatt worth of units there, but in six, nine months, it's
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Well, you can take a module off and go put that in another site.
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But all of our stuff's at digitalshovel.com, and pretty much any social media is digital
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I just love hearing some of the newer, innovative things that are coming out at these shows, too.
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They're just talking about pump jacks and derricks.
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You've got to look for every possible way to capitalize on a market, and especially in
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Well, thank you very much again for coming to talk to us, and I hope the rest of the show goes