Proposal by Russian Ministers and Officials: Use Petroleum Company's Associated Natural Gas to Generate Electricity and Excavate Bitcoin

Time:2021-12-26 Source: 888 views Trending Copy share

As Bitcoin has soared to a record high of US$67,016 stimulated by positive ETF news, according to a report by the Russian media "Kommersant" yesterday (20), Russian authorities seem to have increased interest in this and are considering the use of associated natural gas (AGS). ) Power generation to mine Bitcoin.

According to the report, Vasiliy Shpak, Deputy Minister of Industry and Trade of Russia, submitted the proposal to the Central Bank of Russia and the Ministry of Digital Development on the 7th of last month and requested approval to use the country's oilfield equipment to mine cryptocurrencies.

The proposal submitted by Shpak was originally conceived of a series of proposals from local oil and gas companies. These companies expressed the hope that the associated natural gas can be used to power a nearby data center (DPC) to mine bitcoins, so as to improve the efficiency of natural gas use.

Associated natural gas is a by-product of natural gas produced during oil drilling. However, due to the extremely high cost of building natural gas infrastructure, natural gas cannot be used well and can only be exhausted through combustion, which is quite a waste. The Russian government is also trying to reduce unnecessary natural gas combustion to reduce emissions, but due to the lack of necessary infrastructure, this goal has been difficult to achieve.

"Digital Financial Assets Law"

In order to implement the project, Russia is planning to organize corresponding power plants for production, and it may also consider subsequent exports in the future.

In terms of supervision, the central bank explained to Kommersant that the future circulation procedures will introduce the "Digital Financial Assets Law" to be supervised by a separate law, and the supervisory agency is currently discussing relevant corresponding measures.

The report also pointed out that so far, only Gazprom Neft, the third largest oil producer in Russia, is the only company involved in such projects, mainly owned by the Russian government through the Federal State Property Management Agency and the Russian holding company Rosneftegaz.

Gzaprom Neft, which was able to produce 1.8 BTC in just one month last year, is currently working hard to expand the scale of its cryptocurrency mining project due to regulatory uncertainty.

Although mining Bitcoin through natural gas has been regarded by entrepreneurs and politicians as a way to solve the waste of natural gas heat.

Igor Dorofeev, head of the Data Center Industry Participants Association, believes that the cost of this idea has to be considered at many levels. It is not a core business for oil companies, and the cost of serving the data center itself is also very high.

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