Cryptocurrency mines found at Colorado at oil and gas sites

Methane can be used to power computers, so that they can do the complex mathematical equations needed to mine for crypto.

ADAMS COUNTY, Colo. – The department regulating oil and gas operations in Adams County is working to create new rules to regulate an unexpected feature near oil and gas sites: crypto currency mines.

Earlier this year, inspectors found four suspected crypto mine sites at oil and gas wells operated by two oil and gas operators. The county refused to name the operators or the companies working with them to mine crypto on Wednesday.

“They were utilizing that natural gas that didn’t have a pipeline to go into power generators to run servers involved in crypto currency mining,” said Jenni Hall, Adams County director of community and economic development.

Oil and gas operations naturally emit methane gas, a key component of natural gas. Most oil and gas sites have an adjacent pipeline where the gas is collected and sent to another facility to be processed. But some don’t have that access, so the gas has to be capped.

Hall said these operators at older well sites are using the excess methane to power generators on the site that then power computers, which help solve complex math equations that result in crypto currency.

“Crypto currency mining takes a lot of data processing,” she said. “And that’s a pretty substantial energy load.”

(You can see a more details explanation about the mining process in the video above. For anyone who wants a deeper dive into the meaning of “crypto mining,” check out this explainer.)

The trend isn’t new in Adams County. Hall said oil and gas operators do this in many states. from Washington to New York.

But Adams County is asking operators to hold off for a bit until they can create regulations for these currency mines.

“We get concerned about things that could cause fire hazards. That’s common, especially in our dry climate, ”Hall said. “We know that generators produce fumes, produce noise. We want to make sure that we calibrate the levels appropriately. ”

“We are going to be in the process over the next few months of really looking into best practices of communities that have already dealt with this.”

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