CASPER, Wyo. – Wyoming’s land has been mined for generations, so it seems fitting that a very new mining concept is starting to take hold.
Last year, three Casper entrepreneurs with years of experience in the gas and oil industry launched Highwire Energy Partners, a business that takes advantage of Wyoming’s oversupply of natural gas in order to mine cryptocurrency.
The concept of cryptocurrency is still confusing and alien to most people. In short, cryptocurrency, such as Bitcoin, is a digital asset that can be used for purchases. There is no physical money involved, and the currency is completely decentralized.
The process of mining cryptocurrency is hugely energy-intensive. Mining involves using an array of very powerful computers to solve random “problems” to verify bitcoin transactions. Miners send their verifications to the network pool and are then rewarded cryptocurrency.
“They’re basically buying our computing power,” said Will Reese, who partnered with Kris Holbrook and Wayne Neumiller on the new enterprise.
“It is a significant network of computing power, and that’s part of the intrinsic value of Bitcoin,” he said. “It’s the strength and security of the underlying network that at the end of the day, is provided by miners like me or like the big farms across the United States or across the world.”
Being able to mine cheaply and efficiently is key for profitability, and that’s where Wyoming’s abundant gas supply comes in handy.
“They use a significant amount of power, and the trick with Bitcoin mining everywhere is to find an economic source of energy,” said Reese.
Highwire’s concept is to tap directly into natural gas that would be flared off, or at wells that are destined to be shut-in. To do that, Highwire takes custom huts about 14×14 in size directly to the well, and powers them using a field generator run off the natural gas at that well.
They say the concept adds value to Wyoming’s gas economy by giving value to wells that otherwise may never have been profitable.
“If you need to build the millions-of-dollars worth of pipeline, you need a number of very good wells to justify that,” said Reese. In many cases it’s not economically viable to tap a particular well into the pipeline, but Highwire can take their equipment and tap directly into the mouth of the well. Additionally, gas that’s a byproduct of oil wells can also be used to mine cryptocurrency rather than simply being flared off.
“I think that’s one of the kind of the beauties of Bitcoin, that the network itself can monetize energy that we just can’t get to market can’t use efficiently right now.”
Reese says they are running cryptocurrency units at several Wyoming locations, and the company recently secured leases on unused gas wells in South Dakota at basement-level prices.
“I think it’s a very good solution a very young solution for the oil and gas industry,” said Reese.