A governor from a Russian province has suggested that gas released from oil drilling could help address issues related to Bitcoin mining.
Recently, the crypto mining center of Irkutsk implemented the country’s first year-round ban on cryptocurrency mining in its southern region.
This decision followed a recent winter ban imposed by Moscow on crypto mining across 10 Russian and Russian-controlled areas, set to last until 2031.
Could Russian Gas Help Irkutsk Bitcoin Miners?
According to Interfax, Governor Igor Kobzev of Irkutsk has encouraged key players in the mining sector to collaborate with oil and gas companies.
He proposed that these stakeholders work together to create data centers utilizing “alternative fuel sources.”
Kobzev expressed these views during a speech on April 25 about the regional situation. He stated that the Irkutsk government does not oppose mining as a concept.
However, he reiterated the challenge miners face in terms of electricity shortages, emphasizing the government’s responsibility to provide steady power to residents and businesses in the area. Kobzev remarked:
“The regional government is willing to facilitate interaction between mining operators and oil and gas companies. There are successful examples of businesses establishing data centers powered by independent energy sources, using associated gas.”
Since the beginning of the decade, Russian oil companies have collaborated with crypto miners on projects related to associated gas.
Major Bitcoin miners in Russia, like BitRiver and Gazprom Neft, began their partnerships in 2022.
Is Russia Experiencing the Negative Effects of the Crypto Mining Boom?
Russia has witnessed a significant surge in Bitcoin and altcoin mining in recent years. With many miners relocating from China, those in Russia assert that regulating their industry could generate hundreds of millions in revenue for Moscow.
However, this expansion has strained energy grids in various regions. The Ministry of Energy is reportedly considering three additional local mining bans as some networks begin to face difficulties.
Conversely, other areas claim they have excess energy available for miners’ operations.
Nonetheless, Kobzev seems determined to keep miners in southern Irkutsk away from public energy grids. He vowed to support initiatives to mine crypto using associated gas “in every possible way.”
This partnership could also enhance the environmental conditions in Irkutsk by reducing gas flaring.
Are BTC Miners Open to Using Russian Gas Power?
While extracting crude oil, producers often encounter pockets of natural gas. If they lack the necessary infrastructure to capture it, this gas must be flared off.
Many industries hesitate to utilize associated gas due to its inconsistent energy output, which can be intense but irregular.
Some Russian miners, however, are open to this energy model as long as they can access it at discounted rates.
Kobzev expressed optimism that failing to resolve energy issues linked to crypto mining could lead to a capacity deficit of nearly 3GW in southeastern Siberia by 2030.
Yet, critics argue that the intention to ban crypto mining in southern Irkutsk has instead led to an increase in illegal or semi-legal operations.
Additionally, some believe the rising prices of Bitcoin have made miners more hesitant to switch off their equipment.
The post Russian Governor Says Gas Solution May Solve Region’s Bitcoin Mining Woes appeared first on Cryptonews.
