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Bitcoin, a battery of value. part 3

August 27, 2020

Residual fuels also have an alternative for use in Bitcoin. They can be used to generate electrical energy and dedicate that energy to mining Bitcoin.

Residual fuels

Remaining fossil fuels from industrial processes. The stranded natural gas and the associated burned natural gas are the most representative at this point. A stranded gas storage facility is a natural gas field that has been discovered but remains unusable for physical or economic reasons. The gas found in an oil well is commonly referred to as associated gas rather than stranded gas. However, some gases burned from oil wells are stranded gases that cannot be used for economic reasons.

Read on: Bitcoin, a battery of value. Part 1.

The torch burned

Bitcoin, a battery of value. part 3Bitcoin, a battery of value. part 3

In English gas flares or flare stacks, flaring natural gas (primarily methane, CH4) is a way to dispose of exhaust gas used in industrial facilities such as oil refineries, chemical plants or natural gas processing plants in areas where this gas is produced, including oil wells, gas fields and landfills . Flaring is known as “flaring” in the oil industry and has several purposes.

In industrial plants lBurners are primarily used to burn combustible gas released by pressure relief devices in the event of unplanned overvoltages in plant equipmentwhat is known as “safety burning”. When starting or stopping – partially or fully – they are also often used for the intended combustion of gases for relatively short periods of time. Burning torches protects equipment in many oil and gas production facilities from the dangers of overpressure.

Other use, When oil is extracted from offshore or inland reservoirs, the natural gas (APG) associated with that oil is also brought to the surface. This practice is known as routine flaring, which is also known as production flaring. It is a method and current practice for removing undesirably large amounts of the associated petroleum gas (APG) during crude oil production. The gas is first separated from the liquids and solids downstream of the wellhead, then released in a chimney and burned in the earth’s atmosphere. generally in an open diffusion flame. When this happens, the unwanted gas (mostly methane dominated natural gas) has been deemed unprofitable and may be referred to as stranded gas, flue gas, or simply “exhaust gas”. Routine incineration should not be confused with safety incineration, maintenance incineration, or other incineration practices characterized by shorter durations or lower amounts of gas removal.

Routine incineration occurs particularly in areas of the world where there are no pipelines or other infrastructure to transport gas – For example, liquefaction plants or gas-to-liquid hydrocarbon (GTL) plants – large amounts of this associated gas are generally incinerated as waste or unusable gas. Combustion of this gas can take place at the top of a tower or near the bottom in a specific combustion pit.

These practices are considered to be “a waste of valuable resources and a major source of greenhouse gases”. One possibility is to inject the associated gas back into the reservoir in order to store it for future use and to keep the borehole pressure high, which facilitates oil production (manufacturability). .

Gas stranded

A volume of gas can become economically stranded for one of two reasons:

  • The resource may be too far from a natural gas market, making pipeline construction unaffordable.
  • The resource may be in a region where gas demand is saturated and the cost of exporting gas beyond that region is too high. This reserve is likely to be tapped in the future when the existing resources run out.

A physically stranded gas, a gas field that is too deep to drill, or is below an obstacle can be considered physically stranded. The continuous development of drilling technology enables access to many hard-to-reach fields.

Alaska has stranded a large natural gas resource in its Prudhoe Bay oil field. The largest gas plant in the United States exists there exclusively for the re-injection of gas connected to oil fields. Commercialization of gas awaits completion of the Alaska gas pipeline to take it to the lower 48 states. Construction of the pipeline has been delayed by the availability of inexpensive natural gas in Canada and the development of unconventional gas fields in the lower 48 states, as well as environmental and political considerations.

Canada has stranded a large amount of gas on its arctic islands, the Beaufort Sea, and the Mackenzie Delta. Commercialization of this gas would require the completion of the Mackenzie Valley Pipeline to transport it south along the Mackenzie River. Some companies want to combine it with Alaskan gas by building an offshore gas pipeline in the Arctic Ocean from Alaska to the Mackenzie Delta. The Alaskan government is opposed to this option because it would prefer to bring the gas to southern Alaska first and then ship it on the Alaska Highway across the Yukon. In either case, the pipeline would serve the continental distribution system in Northern Alberta.

Russia, which has the largest natural gas reserves in the world, has stranded a lot of natural gas in Siberia. In some cases, the easiest way to get it to market is to pipeline it down the Bering Strait and then feed it into the proposed Alaska pipeline. Other options are moving to southern China or western Europe. Another alternative would be to build terminals for liquefied natural gas (LNG) in Siberian ports, where it could be shipped to any port in the world using an LNG regasification terminal.

Effects of gas flares

Improperly operated flares can release methane, volatile organic compounds, sulfur dioxide (SO2) and other sulfur compounds that are known to exacerbate asthma and other breathing problems. Other emissions from improperly handled flares can include aromatic hydrocarbons (benzene, toluene, xylenes) and benzopyrene, which are thought to be carcinogenic.

Burning can affect fauna and flora by drawing birds and insects into the flame. On September 13, 2013, approximately 7,500 passerines were attracted to the torch and burned at the LNG terminal in Saint John, New Brunswick, Canada. Similar incidents occurred at the flare of offshore oil platforms and gas carriers. Lights are known to attract moths. A pamphlet, published by the Convention on Biological Diversity Secretariat, describing the Global Taxonomy Initiative states: “A taxonomist working in a tropical forest has found that the torch of an oil refinery has released hundreds of these moths (falcon or Sphinx) attracted and killed).

In the months and years that the refinery was in operation, enormous numbers of moths would have been burned, leading to the belief that many plants in a large area of ​​forest would have lost the ability to pollinate.

Through the end of 2011, 150 billion cubic meters (5.3 trillion cubic feet) of associated gas were being fired annually. This corresponds to approximately 25% of the annual natural gas consumption in the USA or 30% of the consumption in the European Union. If that amount of gas hit the market at a face value of $ 5.62 per 1,000 cubic feet, it would be worth $ 29.8 billion.

Also at the end of 2011, 10 countries carried out 72% of the incinerations and 20 countries 86% of the incinerations. The 10 countries that burned the most gas at the end of 2011 were (in descending order): Russia 27%, Nigeria 11%, Iran 8%, Iraq 7%, USA 5%, Algeria 4%, Kazakhstan 3%, Angola 3% , Saudi Arabia 3% and Venezuela 3%.

ANDThis combustion is a significant source of carbon dioxide (CO2) emissions. In connection with the burning of fossil fuels and the production of cement, the carbon dioxide emissions from the flaring tripled in 2010 compared to the previous figures (years 1750-1970) (1,300 ± 110 gigatons, Gt, CO2) 420 ± 35 GtCO 2).

For a year, 2.4 billion tons of carbon dioxide are emitted through flaring, which is roughly 1.2% of global emissions. This may seem insignificant, but as of June 2011 it is more than half of the certified emission reductions (a type of carbon credit) issued under the rules and mechanisms of the Kyoto Protocol.

Satellite data shows that global flare-ups decreased by about 20% from 2005 to 2010. The most significant volume declines in terms of volume were recorded in Russia (-40%) and Nigeria (-29%). In 2016, the World Bank launched the “Zero Routine Flaring” initiative to end this practice in 2030. In 2019 it was already 19% lower than in 2018.

The World Bank estimated that 145 billion cubic meters of gas were burned worldwide in 2018, almost as much as in Central and South America in a year.

Bitcoin is an option for oil and gas producers, flaring can be reduced by using Bitcoin as a battery of value, and in particular Bitcoin mining is an alternative to using residual fuels such as: stranded gas and associated gas, have bitcoin in the energy currency “an incentive to use these fuels. This gives them a flare-up reduction subsidy. Bitcoin is a way of monetizing residual fuels and exchanging the flaring for the use of this energy on site.

Here are some initiatives that are already underway:

Great American Mining Co.

“Supporting OG producers in building a digital pipeline for stranded gas”.

Digital pipeline. Bitcoin’s monetary economy will drive incredible innovations in the energy sector, and therefore Bitcoin will drive incredible innovations in entire industrial production structures. Bitcoin will be the catalyst and foundation for a third industrial revolution.

Bitcoin mining is a grant to mitigate flares for oil and gas producers. Bitcoin mining is a mechanism to efficiently convert energy into programmatic financial reliability.

The energy currency = Bitcoin. All of the bitcoin mining nodes compete with each other to solve a crypto hash puzzle. Once a miner finds a hash below a certain threshold, they can add a block of transactions to the ledger. This process is known as “Proof of Work” and requires a lot of power.

Read on: Bitcoin, a battery of value. Part 2

Bitcoin mining is the solution to the stranded / stranded gases problem for the gas and oil industry. We believe that within 5 years the world’s greatest bitcoin miners will be OG companies. Why? OG producers have the ability and the incentive to bring stranded gas to market.

Upstream Data Inc.

“We help oil and gas producers save and monetize gas.”

Since 2017, they have been developing a creative solution for vented and flared natural gas in upstream oil and gas facilities, a problem that has persisted since the Drake well began producing oil in 1859.

The solution is to couple modular Bitcoin mining data centers with natural gas engines;; together, the remaining energy is converted into useful work and monetized. Data centers don’t need expensive utilities like pipes or power lines. All you need to get started is a natural gas source and an inexpensive internet connection such as a mobile phone or satellite.

You develop products that are easy to use for remote applications. Mining data centers include automated and remote control options and can be scaled up to virtually any amount of stranded power.

To run:

Bitcoin and its technologies not only have the potential to be money, but also the first application of a secure, permission-free, open, limitless, decentralized, uncensored and neutral monetary system. Applying the features of this protocol is a variety of things difficult to imagine today. If we name a few industrial sectors where Bitcoin has been a catalyst, we have:

  • The mining hardware industry, including this industry, did not exist until January 2009.
  • The money industry and the financial sector.
  • The data storage industry saw an innovation in the blockchain.
  • In the crypto industry, Bitcoin has advanced the largest civilian public key cryptography deployment in history, as it turns out that people only protect keys when those keys are tied to a security.
  • The industry of trust, society works with trust, and every trustworthy application in society can find a new architecture in these trustworthy networks.
  • The programming and computer industries.
  • The education and content creation industries, a range of innovations and new paradigms to educate and share with people.
  • The energy industry in some industries.
  • Among other.

Now bitcoin can be a catalyst and the basis for an industrial revolution for the use of residual fuels not only in the oil and gas industry, but also an option to use fuels and energies that generally cannot be consumed regardless of what it is about. its source. Bitcoin is a store of value.

Bitcoin is neutral, the protocol does not serve the goals of an organization, institution, group, legal fiction or a nation state. Bitcoin serves people. Let us imagine Bitcoin as a country without borders or borders, in which benefits and risks, incentives and disincentives, capacities and properties are freely accessible and which, in order to work without interruption, consumes energy that that of a country like Austria or Venezuela corresponds. The higher the energy consumption, the more secure the network is. Bitcoin is a festival of common goods, and risk sharing and network resources is a pillar of its functionality.

Bitcoin is an alternative to hosting universally available resources like energy. Mining companies benefit and at the same time contribute to the security of a network that forms the basis for a completely decentralized and open currency system. Money is worth, you cannot make solid money cheaply.

Bitcoin can help decentralize power generation and energy markets. Bitcoin mining allows energy producers to be subsidized by providing a means to consume energy that is not consumed due to a lack of local demand. This energy can secure the Bitcoin network while it is being consumed on site. This can have a major impact on the energy sector, conserve the planet’s resources and contribute to climate change.

It is a mutually beneficial relationship, the bitcoin mining industry also has a great alternative in using these energy sources which represent lower cost of electricity tariffs. This encourages mining participation and decentralization in terms of geographic location and ownership.

The value of Bitcoin has no upper limit and is the result of the seamless interaction of the forces of supply and demand in a free, global, open and censorship-resistant market. It is a valuation mechanism that is free from interference by the monetary authorities. Therefore, there is no limit to the amount of energy that can be used to generate all of the computing power required to secure the Bitcoin network.

I close this document with an excerpt from a book that I translated into Spanish. «El Internet del Dinero, vol. 2 “by Andreas M. Antonopoulos, chapter” Immutability and proof of work “:

‘Bitcoin is not just an accounting system; It is the first digital artifact to provide an everlasting story that offers true digital immutability. There is no other system that offers digital immutability at this level. It is a system of self-evident immutability on a planetary level that is thermodynamically guaranteed. Planetary scale, because for this you have to present resources that are only available in a planetary scale. Thermodynamically guaranteed, as the exact amount of energy can be calculated and there is no shortcut. Information theory tells us that to flip the x number of bits it takes that number of joules and there is no other way to do it. Of course, because the number that is presented as proof of work shows exactly how much work has been accumulated. It really is a monument.

Note: The idea that Bitcoin was a battery of value came to me in 2017 when I was watching a series of documentaries titled “Islands of the Future,” particularly the episode on the Portuguese island of Madeira.

21 million thanks Guillermo Romero for his contribution in helping me write this document.

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