Wyoming natural gas flared for cryptocurrency mining exempt from taxation
oilcity.news
oilcity.news
Note that it's not just gas that might be flared off - They're also trying to set up crypto mining on wells that would be otherwise shut-in. In other words, wells that are scheduled for shutdown are no longer going to be shut down, because these 3 guys are going to keep them open to burn off every last bit of gas they can extract.
And for some reason they're getting a tax break to do it?
This doesn't really make sense, IMO. I don't really mind if they're going to use the minimal heat from natural gas flares to do something, but if they're going to interfere with the process of shutting down wells then they're not exactly doing the environment any favors.
Why do we need to give them a tax break for keeping wells open longer than they otherwise would be? Why not have them pay taxes like everyone else on those wells? Doesn't make sense. Feels like a major handout to these few people in exchange for burning more natural gas. Not cool.
The state giving them arbitrary tax breaks appears to be a new concept, unless I'm mistaken.
Say a well would be closed because it's not profitable. Now the gas that would be vented through normal operation and has "no value" is converted to something with value.
So the well stays profitable and open when it otherwise wouldn't be able to.
This is Wyoming you're talking about, and Wyoming views the oil & gas industry positively (it's over 15% of the state's jobs). Wyoming's goal is not to see the industry die. The environment isn't high on their list of priorities.
Also, as a state with a population lower than that of SF, Seattle, or Boston for example, it's normal to see these specifically targeted tax breaks for small startups.
However using gas that would have been burned or vented anyway doesn't seem so bad.
Of course this makes it so there is no incentive to close these vents completely.
Probably an incentive to declare more gas as “flare off”
Incentives to just burn baby burn for bitcoin power are growing. Already was there for power plants, more money to be made in bitcoin than powering hospitals and tv sets.
Are you sure that follows from HB 189? To avoid tax the gas just needs to be certified that it would have been vented. I don't see anything that would encourage keeping small leaks.
>Natural gas that is consumed on the site and would have otherwise been vented or flared under the authority of the Wyoming oil and gas conservation commission has no value and is exempt from taxation as long as the natural gas is certified by the Wyoming oil and gas conservation commission as to have originated from a qualifying well.
They're basically buying up wells that are too low pressure to continue using for mainstream production, and then instead of closing them off they're extracting all of the remaining gas and burning it.
Seems like a terrible idea to give them a tax break for burning more natural gas that would otherwise be left in the ground.
I'd be okay if it was just the flare-off from refineries, but that's not all they're doing.
Good thing that’s not what they’re doing.
The reason to use it on site for crypto mining is that transporting power over distances is expensive and difficult.
> The reason to use it on site for crypto mining is that transporting power over distances is expensive and difficult
Transporting electricity over distances is not expensive nor difficult in 2021. Regardless, it doesn't make sense to give someone a tax break for turning electricity into heat instead of putting it into the grid.
I can only imagine that constructing new infrastructure to produce and transmit the power over even longer distances from remote oil fields to a grid, is even worse.
It sounds like you have experience in this area though... can you tell me how it isn't expensive or difficult to build transmission lines / towers into remote locations?
Isn't it kind of like turning gas into heat, into electricity, back into heat?
A far weaker security guarantee – when network security is the entire point – is certainly not better.
Bitcoin is irrelevant to your otherwise valid point that environmental externalities should indeed be accounted for in power generation.
"Natural gas that is consumed on the site and would have otherwise been vented or flared under the authority of the Wyoming oil and gas conservation commission has no value and is exempt from taxation as long as the natural gas is certified by the Wyoming oil and gas conservation commission as to have originated from a qualifying well,” the new law reads."
But for cryptocurrency mining, you still need a generator and Internet access.
It would be interesting to read more about how the costs work out.
Every thing else cannot cost zero except for the fuel (which is what it should be since it is actually waste being recycled) so there must be no tax either on that in order to even have a chance.
You can assume the coin will be what generates tax revenue instead.
Regardless, the business might fail, but even a thin margin might still allow the most respectable scaleup when the raw fuel itself is truly free.
It might require a lot of mining installations to dim some of the brighter flares, but there should be no net increase in CO2 emission from the portion of that waste natural gas running through generators rather than the flares.
Alternatively it could also be expected that the CO2 from generators would be more physically feasible to capture without emisssion, and the coin might be lucrative enough to pay for it. It would be great if the business performance allowed for this to be one of the highest expenses and still yield adequate returns. And capture technology ideally should be able to be brought within reach in advance of it becoming cost-effective under non-free energy models.
In a free energy economy you should be able to afford to be as environmentally responsible as possible.
No doubt it would be very interesting to compare to solar and hydro mining.
That's Empire building/colonialism right there. There is no ambiguity, no justification, and no misunderstanding it. That is a group of people organizing to displace and disenfranchise the native residents of another place for policy and political gains. This is how you divide a country. This is how you provoke civil unrest. This is how you shove a wedge in interstate relations.
If you honestly endorse that type of activity; you are so far from a countryman of mine that I cannot even articulate where you "jumped the shark" politically and culturally speaking, and it is my sincerest hope no one ever takes you seriously. The architecture of States in the U.S. was always based on sovereignty, suborned to a federalized layer on top for the resolution of interstate conflict.
What you suggest would be nothing less than something capable of disrupting the freedom of movement in the United States as each state is pushed to defend itself from deliberate encroachment and political subversion by out of State elements.
On the one hand, maybe we'd finally break up the National political parties and get a more factionally driven federal level. More likely, there's be a crisis of Unity the likes of which hasn't been seen since the Civil War.
Washington was right. The only thing that could unmake the United States... Is the United States.
I disagree, but even if it were... so what? There is no law anywhere against attempting to increase the size and scope of an individual or organization's power and influence.
What I have suggested is aimed to solve the problem of a vast and longstanding over-representation by a minority holding the majority hostage, to balance out the misrepresentation of the electorate. Republican senators haven’t represented a majority of the U.S. population since 1996 and haven’t together won a majority of Senate votes since 1998. Yet the GOP controlled the Senate from 1995 through 2007 (with a brief interregnum in 2001–02) and again from 2015 until 2021.
Sorry, but what the GOP has done and continues to do is precisely empire building. Say the residents of Washington DC and Puerto Rico, all US citizens who have no representation in the US Senate, decided to move into Wyoming and Montana and establish residency, the US Constitution guarantees their right to do that under the Privileges and Immunity Clause, which states, "The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States." The courts have judicially recognized this as a fundamental Constitutional right.
> That is a group of people organizing to displace and disenfranchise the native residents of another place
What? No sir, it is an exercise of US Constitutional rights no different from exercising 1st Amendment Rights, the freedom of assembly and freedom of association. You're claim is false that this would disenfranchise anyone, because all their rights remain intact And, what native residents? The only native residents in the United States are Native Americans, Alaska Natives and Latinos.
> What you suggest would be nothing less than something capable of disrupting the freedom of movement in the United States...
No, it is an exercise of that freedom guaranteed by the US Constitution and the constitutions of every state in the union, as well as the Supreme Court.
What you're talking about and defending is Communism and Fascism. We don't particularly care for that kind of thing here in my United States of America.
Check out https://theweek.com/articles/953819/democrats-getoutofmanhat...
Needs some organization https://twitter.com/jcrben/status/1433936349891944448
People have moved around in mass numbers throughout US history. What you're doing is choosing arbitrary criteria for which people are "native" (read: legitimate) residents of a place, and which people are invaders. That's not defensible.
For natural gas wells without infrastructure, this is a great alternative. It almost certainly makes some uneconomical wells economic. And if bitcoin goes to 200k, you can bet this practice will be booming.