Ecoark Looking to Power Cryptocurrency Mining with Constrained Natural Gas
San Antonio-based Ecoark Holdings Inc. plans to begin beta testing a cryptocurrency mining approach in May that would be powered by natural gas that is constrained by a lack of infrastructure.
The diversified holdings company established a strategic initiatives team in February to analyze ways to deploy capital for the test project. Led by CFO Brad Hoagland, the team is looking at opportunities related to environmental, social and governance initiatives that would reduce emissions.
“By redirecting power back to the grid when green sources of energy production are unable to supply the required load, we alleviate grid pressure and help fill gaps that currently hinder the growth of green energy technologies,” said Hoagland.
“We plan to mine a diversified basket of higher margin, established cryptocurrencies. Our strategy entails reselling cryptocurrency back into the market, as permitted by applicable laws, and redeploying the capital raised toward accretive growth projects within this sector.”
Ecoark plans to use “regionally constrained energy that is otherwise lost” because of a lack of commercial natural gas infrastructure to economically process and/or transport volumes to market.
There are no plans to use flared gas from individual wells for the pilot because of the “unpredictability of gas production uptime, personnel requirements to service non centrally located assets, lack of oversight and control, surface use issues, and gas quality issues.”
The “modularized infrastructure approach” would allow Ecoark to become a “spot midstream” operator, allowing it to create mobile gas market hubs. The company said it is working with several publicly held midstream companies “to relieve pipeline capacity constraints and allow additional third-party molecules to be transported, thereby creating additional revenue synergies.”
Ecoark, founded in 2011, manages a portfolio that includes White River Holdings, which has more than 11,000 acres of drilling rights in Louisiana and Mississippi. Subsidiary Banner Midstream Corp. has 20,000 acres of active mineral leases in Louisiana, Mississippi and Texas.
Portfolio companies also include Permian Basin operator Shamrock Upstream Energy and hydraulic fracturing sand provider Pinnacle Frac Transport. In addition, Capstone Leasing provides equipment to oilfield operators.
Ecoark also is partnering with BlackBrush Oil & Gas LP and GeoTerre LLC to develop the Austin Chalk formation, which extends from South Texas into Louisiana. Drilling recently was completed on the Deshotels 24 No. 1-H horizontal in Avoyelles Parish, LA.
Other companies are also looking to convert wasted natural gas for crypto mining.
For example, Casper, WY-based Wesco Operating Inc. is using a flaring mitigation system by EZ Blockchain to convert natural gas into electricity to power crypto mining operations.
The Smartgrid Flaring Mitigation System was deployed…