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    Default Need Energy: Operator, Landman, Engineer(?)

    Hi all, I've stopped in for my semi-annual posting binge.

    Long story short: Bought several MW of load in Bitcoin miners, currently getting them tested and rigged up in mobile containers. Looking to get these things energized. Either off-grid or on grid if conditions are right (as in, probably partnering up with an energy provider in some capacity). Just for full disclosure: current miner configuration is set for well over $1mm USD/year.

    My preferred avenue is starting up a conversation with Medicine Hat. I noticed they are shutting down gas wells because they cannot operate them profitably. I don't want to approach them at this precise moment, because I do not understand what costs are involved in operating a gas well. Hence why I have returned here. I know this forum is likely one of the best places to come for a high concentration of O&G knowledge and experience.

    There is more profitability here than I am letting on, I just don't want to post it publicly.

    If you have a good idea, or know someone, or are someone, who can assist in getting these fired up, there is pie available to be shared.

    *Edit, Please note: the play here is not to deal and stay in Crypto per se.
    The play here is to deal in Energy and real optionality w/ Energy related assets.
    Did not come for lectures or criticism, we all understand the laws of thermodynamics.


    Thanks guys.
    Best bet is to Gmail me at murraymack
    Last edited by themack89; 11-20-2020 at 09:47 AM.
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    Is this the same as what Iron Bridge ( unsuccessfully ) tried to do?
    Originally posted by Thales of Miletus

    If you think I have been trying to present myself as intellectually superior, then you truly are a dimwit.
    Originally posted by Toma
    fact.

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    Anyone that invests in bitcoin miners in Canada doesn't know how the bitcoin difficulty factor works. 0 chance of being successful.
    Nolan

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    Quote Originally Posted by killramos View Post
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    Is this the same as what Iron Bridge ( unsuccessfully ) tried to do?
    Quote Originally Posted by pheoxs View Post
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    Anyone that invests in bitcoin miners in Canada doesn't know how the bitcoin difficulty factor works. 0 chance of being successful.
    A lot of people have tried unsuccessfully, usually from a "mine the coin for profit" angle. We have a couple successful energy traders on the team who view the coin production as a hedge.

    Look up Real Options and the dots will start to connect. I appreciate the concerns though.

    *Edit, also Hashrate derivatives weren't a thing before (proxy for difficulty factor)
    Last edited by themack89; 11-20-2020 at 09:44 AM.
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    I wonder how successful this will be with gas making a comeback. I suppose BTC is ramping higher than gas so you know your metrics, but I doubt people are giving away gas wells for free at the moment.

    What does a gas well need to run? Depends on the well. What condition of fuel does your generator need? There are tons of variables... Im not super familiar with med hat but your best bet is finding one well that supplies you with the gas you need, versus having a bunch of low producers - which is likely the wells they are shutting in.

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    This isn’t about turning profit in Bitcoin, it’s about maintaining well production while getting rid of the gas.

    If the Bitcoin machine pays itself off in - 18 months on current blocks, it’s a huge success.

    The well can keep going instead of shutting it down.
    "The most merciful thing in the world, I think, is the inability of the human mind to correlate all its contents... some day the piecing together of dissociated knowledge will open up such terrifying vistas of reality, and of our frightful position therein, that we shall either go mad from the revelation or flee from the light into the peace and safety of a new Dark Age."

    -H.P. Lovecraft

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    Quote Originally Posted by riander5 View Post
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    I wonder how successful this will be with gas making a comeback. I suppose BTC is ramping higher than gas so you know your metrics, but I doubt people are giving away gas wells for free at the moment.

    What does a gas well need to run? Depends on the well. What condition of fuel does your generator need? There are tons of variables... Im not super familiar with med hat but your best bet is finding one well that supplies you with the gas you need, versus having a bunch of low producers - which is likely the wells they are shutting in.
    https://www.bnnbloomberg.ca/commodit...-wells~1781374

    This is pretty much why I am asking about operating cost of the well.

    If I laid out a few base case scenarios for gen configuration, could you fill in some gaps on operating costs? Or am I even framing the question properly?

    I guess it would help me if there was like a bullet point list on the personnel you need to operate a gas well, and the materials / resources required to do it.

    Quote Originally Posted by Darkane View Post
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    This isn’t about turning profit in Bitcoin, it’s about maintaining well production while getting rid of the gas.

    If the Bitcoin machine pays itself off in - 18 months on current blocks, it’s a huge success.

    The well can keep going instead of shutting it down.
    Correct.
    Last edited by themack89; 11-20-2020 at 09:55 AM.
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    I think you VASTLY underestimate how much a 1MW genset would cost that can run off syngas.

    You're basically taking a very expensive capital project (Bitcoin miners) and fusing it with another very expensive capital project (genset) all for the sake of getting free electricity (assuming you get a free gas well).
    Nolan

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    Produce gas
    Dry gas
    dispose of water / liquids
    maybe dry gas again
    use gas

    does 1 medicine hat gas well produce enough gas? can you get it dry enough on site? Transport costs? disposal costs?

    500 mw generator use 4000 m3/day of gas for reference.
    https://www.generac.com/Industrial/p...eous-generator
    Cost? I dunno, mid-high six figures?

    couple thoughts from an layman.

    Going to an oil producer could be a better bet as they may be dealing with a problem of trying to tie in gas assets. I know in the permian for a while take away capacity for gas was limiting production for operators. Might be resolved now though.
    Last edited by dirtsniffer; 11-20-2020 at 10:05 AM.

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    Quote Originally Posted by themack89 View Post
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    Hi all, I've stopped in for my semi-annual posting binge.

    Long story short: Bought several MW of load in Bitcoin miners, currently getting them tested and rigged up in mobile containers. Looking to get these things energized. Either off-grid or on grid if conditions are right (as in, probably partnering up with an energy provider in some capacity). Just for full disclosure: current miner configuration is set for well over $1mm USD/year.

    My preferred avenue is starting up a conversation with Medicine Hat. I noticed they are shutting down gas wells because they cannot operate them profitably. I don't want to approach them at this precise moment, because I do not understand what costs are involved in operating a gas well. Hence why I have returned here. I know this forum is likely one of the best places to come for a high concentration of O&G knowledge and experience.

    There is more profitability here than I am letting on, I just don't want to post it publicly.

    If you have a good idea, or know someone, or are someone, who can assist in getting these fired up, there is pie available to be shared.

    *Edit, Please note: the play here is not to deal and stay in Crypto per se.
    The play here is to deal in Energy and real optionality w/ Energy related assets.
    Did not come for lectures or criticism, we all understand the laws of thermodynamics.


    Thanks guys.
    Best bet is to Gmail me at murraymack
    So, you've got the computing infrastructure purchased and it's being packaged and your economics is based on paying for grid power. Correct?

    And now you want to explore purchasing gas from someone and using that to generate 100% of your power? (Doesn't sound like it).
    Or, you're looking at buying/owning an abandoned, producing well and feeding a gas turbine to generate your power. Correct?

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    Quote Originally Posted by pheoxs View Post
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    I think you VASTLY underestimate how much a 1MW genset would cost that can run off syngas.

    You're basically taking a very expensive capital project (Bitcoin miners) and fusing it with another very expensive capital project (genset) all for the sake of getting free electricity (assuming you get a free gas well).
    The cost basis we got the miners for was quite low, almost for free. Even if we spin at break even, it pays off the asset. In any case, I came here seeking outside the box thinking. You are saying "this is impossible", what I am offering is a slice of the pie of you come up with a notion of "how this may be possible" given the current socioeconomic environment of Alberta, an ultra low cost capital base, and only to at least satisfy the requirement of breaking even.

    We are also exploring Solar and Hydro. Basically stranded energy.
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    Quote Originally Posted by themack89 View Post
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    The cost basis we got the miners for was quite low, almost for free. Even if we spin at break even, it pays off the asset. In any case, I came here seeking outside the box thinking. You are saying "this is impossible", what I am offering is a slice of the pie of you come up with a notion of "how this may be possible" given the current socioeconomic environment of Alberta, an ultra low cost capital base, and only to at least satisfy the requirement of breaking even.

    We are also exploring Solar and Hydro. Basically stranded energy.
    I'm starting to think you bought the bankrupted Medicine hat bitcoin mining company. Hence the location and cheap miners haha
    Nolan

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    Quote Originally Posted by ThePenIsMightier View Post
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    So, you've got the computing infrastructure purchased and it's being packaged and your economics is based on paying for grid power. Correct?

    And now you want to explore purchasing gas from someone and using that to generate 100% of your power? (Doesn't sound like it).
    Or, you're looking at buying/owning an abandoned, producing well and feeding a gas turbine to generate your power. Correct?
    Not committed to any particular path at the moment, and open to many.

    Ideally, however we energize, it is mutually beneficial for all parties.
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    Quote Originally Posted by dirtsniffer View Post
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    Produce gas
    Dry gas
    dispose of water / liquids
    maybe dry gas again
    use gas
    Do all of these items happen on site before its tied into feed civilization? Or is there wild variation from site to site.

    Quote Originally Posted by dirtsniffer View Post
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    does 1 medicine hat gas well produce enough gas? can you get it dry enough on site? Transport costs? disposal costs?
    Ballpark requirement of around 1mmcf/d assuming a 13 HR.

    Quote Originally Posted by dirtsniffer View Post
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    Produce gas
    500 mw generator use 4000 m3/day of gas for reference.
    https://www.generac.com/Industrial/p...eous-generator
    Cost? I dunno, mid-high six figures?

    couple thoughts from an layman.

    Going to an oil producer could be a better bet as they may be dealing with a problem of trying to tie in gas assets.
    Essentially, with our current team we have zero experience with tying into a well or gas infrastructure.

    Who is 'the guy' that we'd be looking for to be able to answer these questions you are asking? E.g. their title, or would it be more than one person.
    Last edited by themack89; 11-20-2020 at 10:38 AM.
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    I wish you the best of luck, but people who actually had experience operating wells and field facilities couldn’t make it work even as a sideshow and couldn’t give away the mining equipment when they were done with it.

    The liabilities alone, which the government will make you with no producing assets pay up front for, in those gas wells/fields will kill you.

    If you want to pay someone to provide you with economics based advice around the costs of operating wells maybe start with an independent qualified reserve evaluator. They can at least get you your ballpark operating cost and liability metrics for the area you are considering operating in, if you can afford them. Also don’t expect any of these guys to pick up the phone for the next 3 months during busy season. But really, what you are talking about is starting a small oil company just to mine coins.
    Last edited by killramos; 11-20-2020 at 10:25 AM.
    Originally posted by Thales of Miletus

    If you think I have been trying to present myself as intellectually superior, then you truly are a dimwit.
    Originally posted by Toma
    fact.

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    Quote Originally Posted by killramos View Post
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    I wish you the best of luck, but people who actually had experience operating wells and field facilities couldn’t make it work even as a sideshow and couldn’t give away the mining equipment when they were done with it.

    The liabilities alone, which the government will make you with no producing assets pay up front for, in those gas wells/fields will kill you.
    These were the initial concerns. Internally there is a slowly developing lean towards Solar or existing Hydro which is spilling.
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    Quote Originally Posted by themack89 View Post
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    Not committed to any particular path at the moment, and open to many.

    Ideally, however we energize, it is mutually beneficial for all parties.
    Ok. So you're going to need to own a fair bit more equipment. Let's take the huge assumption that the gas you find is of a composition reasonable enough to feed a turbine. (While I think you can use some engineering to find a turbine that'll run on a blended methane/ethane/propane feed, it will still need to be sweet and have very little water, which is unlikely). Let's assume you don't need to do any gas conditioning upstream of the turbine... You'll need to buy:
    Inlet compressor (maybe)
    Inlet metering (hopefully doesn't have to meet Directive-17, because it's very expensive)
    Turbine(s)
    Electrical mumbo jumbo (maybe). I feel like something like switch gear or a transformer or MCC's are going to be involved.
    Some sort of permit for all the evil, evil CO2 you're generating.
    Permit for a power generation facility because you're >1.0MW. (MAYBE).

    If that last one is real, the permitting requirements are very onerous and time consuming. I know I've heard about this >1.0MW thing from a person who was taking waste heat to make steam to generate part of their own plant's power from a steam generator and they definitely did not want to go over 1MW.

    Overall, it feels like the cost of all this extra equipment you'd have to buy is going to chew up your margins and add much complexity.

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    Quote Originally Posted by themack89 View Post
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    Do all of these items happen on site before its tied into feed civilization? Or is there wild variation from site to site.



    Ballpark requirement of around 1mmcf/d assuming a 13 HR.



    Ballpark requirement of around 1mmcf/d assuming a 12 HR. Essentially, with our current team we have zero experience with tying into a well or gas infrastructure.

    Who is 'the guy' that we'd be looking for to be able to answer these questions you are asking? E.g. their title, or would it be more than one person.
    These questions make me think you need some help on the gas side. Apologies if this is something you already knew. I'm only trying to help.
    Gas wells don't produce what goes into the furnace in your house. For simplicity, let's say that "pipeline gas" that you burn in your house or that industrial facilities burn is essentially nearly pure methane.
    Wells produce lots and lots of methane but it's mixed with other shit that no one wants like water, CO2, ethane, propane, butane, hopefully not H2S, etc.
    A "gas plant" removes those substances so that they can sell "pipeline gas" (aka pretty close to pure methane) to ATCO or whoever so they can sell it to users.

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    Quote Originally Posted by ThePenIsMightier View Post
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    Ok. So you're going to need to own a fair bit more equipment. Let's take the huge assumption that the gas you find is of a composition reasonable enough to feed a turbine. (While I think you can use some engineering to find a turbine that'll run on a blended methane/ethane/propane feed, it will still need to be sweet and have very little water, which is unlikely). Let's assume you don't need to do any gas conditioning upstream of the turbine... You'll need to buy:
    Inlet compressor (maybe)
    Inlet metering (hopefully doesn't have to meet Directive-17, because it's very expensive)
    Turbine(s)
    Electrical mumbo jumbo (maybe). I feel like something like switch gear or a transformer or MCC's are going to be involved.
    Some sort of permit for all the evil, evil CO2 you're generating.
    Permit for a power generation facility because you're >1.0MW. (MAYBE).

    If that last one is real, the permitting requirements are very onerous and time consuming. I know I've heard about this >1.0MW thing from a person who was taking waste heat to make steam to generate part of their own plant's power from a steam generator and they definitely did not want to go over 1MW.

    Overall, it feels like the cost of all this extra equipment you'd have to buy is going to chew up your margins and add much complexity.

    These questions make me think you need some help on the gas side. Apologies if this is something you already knew. I'm only trying to help.
    Gas wells don't produce what goes into the furnace in your house. For simplicity, let's say that "pipeline gas" that you burn in your house or that industrial facilities burn is essentially nearly pure methane.
    Wells produce lots and lots of methane but it's mixed with other shit that no one wants like water, CO2, ethane, propane, butane, hopefully not H2S, etc.
    A "gas plant" removes those substances so that they can sell "pipeline gas" (aka pretty close to pure methane) to ATCO or whoever so they can sell it to users.
    I'm guessing there are buried economics in here which push over and/or pull under the 1.0MW threshold then. Are you aware of any physical constraints for how much this could scale if it is all off-grid? E.g. Are there scenarios where you need to start considering modularity vs buying larger equipment.

    Perhaps are you be available for a call? I could PM you.
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    Have a gander at some of the electrical generating systems already commercially availible for oil wells that have no pipeline. Lots of modular units available that just need a pipe to the wellhead.

    Then you want your mining shit to be modular too, so if the well dies, you truck it 1 mile away and hook it all up to a new well.

    However, my gut feel is that it's going to be vastly cheaper to just buy the gas, instead of owning the wells themselves.

    Love the idea, anyone who wants to burn methane is a friend to me.
    ...

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