Untapped gas to power Bengal Energy’s mobile outback bitcoin mining donga

From this little green shed in remote Queensland, a group of energy engineers are about to try making hundreds a day mining bitcoins using surplus local gas.

Bengal Energy chief operating officer Kai Eberspaecher. Picture: Peter Wallis

Exploration in Australia’s remote Cooper Basin is usually associated with oil and gas. Now it’s the setting for bitcoin mining, powered by untapped gas from local wells.

Canada’s Bengal Energy will be conducting a pilot program that involves outfitting a donga with 66 machines that are mining bitcoin in the basin, at a location 165km west of Eromanga in outback Queensland.

Many worry at the ever increasing energy needed to mine bitcoin. Mining computers run complex computations to bring new bitcoins into circulation. Bengal Energy’s argument is that it uses excess gas that can’t be distributed to generate power.

The Toronto listed company operates in the basin extracting oil in a joint venture with Santos Energy and Bridgeport Energy. Bengal Energy chief operating officer, chemical engineer Kai Eberspaecher, said the company acquired a portfolio of gas wells that were out of operation from Santos and Beach Energy.

“There was a significant lag between the time that our wells would be ready to produce and the time the pipeline would be ready (due to) supply issues with Covid, tools, people, resources and whatever,” he said.

Bengal Energy chief operating officer Kai Eberspaecher with the bitcoin mining donga. Picture: Peter Wallis

“We were basically looking at six months of having wells ready but without an outlet. We were dealing with stranded assets.”

While it was possible to produce power from the gas on location, the grid was too far away. Hence it hatched the idea of mobile bitcoin mining dongas that connect to the internet using the NBN’s SkyMesh satellite service.

Mr Eberspaecher, who leads a team of about six people, said the dongas would be monitored remotely using the same satellite internet service.

He said that during the trial, the donga will house 66 miners that had been bought second hand. Each mined bitcoin at about 13 terahash per second. Together those miners generated 0.005 bitcoin per day, around $300.

Future installation of newer machines would see the mining operation scaled up by 10 to 20 times and an ability of the mobile miner to go after stranded gas in a bigger way. So income would rise to about $3000 per day.

Mr Eberspaecher poses with the bitcoin miners. Picture: Peter Wallis

In the proof of concept, he said power consumption would be 100 kilowatt hours. With the scaled up miner, consumption could rise to about 1 MWh, at least 10 times.

That would equate to the power used by at least 40 homes based on a CSIRO study in South Australia that found daily domestic power consumption rates were between 10 and 25 kWh, depending on the size of homes and the season.

Mr Eberspaecher said the team eventually planned to reduce its carbon footprint by introducing solar panels and an electrolyser to produce green hydrogen as fuel for mining. He said only “2 to 3 per cent” of power would be used to keep equipment cool.

The dongas are produced in Brisbane. Remote monitoring will take place from Brisbane and Calgary, Canada.

Originally published as Untapped gas to power Bengal Energy’s mobile outback bitcoin mining donga