A Russian provincial governor has claimed that associated gas produced at oil drilling sites could provide a solution to ongoing Bitcoin mining-related concerns.
Earlier this month, the BTC mining hotspot of Irkutsk unveiled the nation’s first-ever year-round ban on crypto mining in the southern part of the oblast.
This move came just months after Moscow imposed a wintertime ban on crypto mining in 10 Russian and Russian-controlled regions until 2031.
Russian Gas Alternative for Irkutsk Bitcoin Miners?
Per the Russian news agency Interfax, the Irkutsk Governor Igor Kobzev has urged major players in the mining market to join forces with oil and gas companies.
He said that the parties should unite to build data centers that use “alternative fuel sources.”
Kobzev made the comments during an April 25 address on the state of affairs in the region. He claimed that the Irkutsk government was “not against mining as a phenomenon.”
However, he reasserted claims that miners need to overcome electricity shortages. And he said his government had a duty to ensure residents and enterprises in the region enjoyed uninterrupted electricity supplies. Kobzev said:
“The regional government is ready to act as a platform to coordinate interaction between mining operators and enterprises working in the oil and gas production sector. There are already successful cases of firms building data centers powered by autonomous generation. These firms use associated gas.”
Russian oil firms have been working with crypto miners on associated gas-related pilots since the start of the current decade.
Some of the nation’s biggest BTC miners and oil firms, including BitRiver and Gazprom Neft, started working together in 2022.
Russia Starting to Feel Crypto Mining Boom Downside?
Russia has seen one of the world’s biggest booms in Bitcoin and altcoin mining in recent years. With many miners forced out of China, Russian miners have claimed that taxing their industry could bring Moscow hundreds of millions of dollars’ worth of revenue.
But this growth has taken a toll on many areas’ energy grids. The Ministry of Energy is reportedly mulling issuing three more regional mining bans as networks in some areas begin to suffer.
Other parts of the country claim they have surplus power that they can use to power miners’ rigs.
But Kobzev appears keen to keep miners in southern Irkutsk away from public grids at all costs. He pledged to support associated gas-powered crypto mining initiatives “in every possible way.”
He also said that such a partnership could help improve the Irkutsk environment by reducing flaring.
Could BTC Miners Switch to Russian Gas Power?
When drilling for crude oil, producers often release pockets of natural (associated) gas. If drillers do not have any infrastructure that lets them capture this gas, they must instead burn it using flare stacks.
Many industries are hesitant about using associated gas, as it tends to produce intense but irregular bursts of energy, rather than uninterrupted flows.
Some Russian miners, however, say that they are happy to use this model of energy flow, provided they can pay discounted rates.
Kobzev was optimistic about the said that a failure to stamp out crypto mining-related energy problems could see the capacity deficit in southeastern Siberia hit just shy of 3GW by 2030.
But critics say that efforts to ban crypto mining in southern Irkutsk have instead resulted in a rise in illegal and quasi-legal operations.
Some claim that rising Bitcoin prices have also played a role, with miners now increasingly reluctant to turn off their rigs.
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