Cryptocurrency mining firm Diversified Energy has abandoned natural gas-powered mining operations and associated gas wells in Elk County, Pennsylvania, violating local laws and endangering the environment.
What is Diversified Energy doing?
Cryptocurrency miners who use proof-of-work models like bitcoin employ vast arrays of computers to solve mathematical problems in order to verify transactions and earn money.
As Tron Weekly explained, citing a report by local outlet GoErie, Diversified Energy restarted the Longhorn Pad A natural gas facility in 2022 after nearly a decade of inactivity. It used those leftover gas reserves to power its own bitcoin mining facility on the site.
The company was accused of failing to obtain air quality permits from the state's Department of Environmental Protection before it began operations, although it did get this permit by 2023.
However, a site visit by the DEP found that Diversified Energy's mining infrastructure had been removed, leaving the area empty, and served the company with a formal notice of violation for natural gas well abandonment.
Why is closing these wells so important?
In 2021, the Natural Resources Defense Council spotlighted a Reuters investigation that showed the United States could have as many as 3.2 million orphaned and abandoned wells. While some states count the numbers in hundreds or thousands, Pennsylvania alone is home to more than 330,000 of these wells.
"Orphaned and abandoned oil and gas wells are located everywhere," said NRDC senior advocate Joshua Axelrod, in the article.
"They can be in the middle of a forest, in backyards, in farm fields, even under sidewalks and houses."
The main problem with these abandoned wells is that they can leak. They're the source of chemicals like hydrogen sulfide, benzene, and arsenic, which can seep out and contaminate the surrounding air, soil, and groundwater.
Additionally, they're a source of methane, which is an odorless gas that contributes to ground-level ozone pollution and can seep into nearby buildings, posing a major health concern for area residents.
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For sure 👍 How does cryptocurrency mining affect communities and consumers?
Cryptocurrency mining can be seen as a get-rich-quick scheme, and as Diversified Energy's actions indicate, those operations sometimes show little concern for the environment or nearby communities in that quest for cash.
It costs over $100,000 per site to plug a well, and with Diversified Energy's failure to live up to its commitments, the state's abandoned wells are a "disaster waiting to happen," both for the economy and the environment, Tron Weekly explained.
The energy demands for crypto mining operations are often hard to predict and can lead to brownouts or blackouts during peak demand periods in the areas where they're located.
The Energy Information Administration estimates that these mining operations account for as much as 2.3% of all electricity consumption in the U.S. each year.
Earthjustice shared some examples of how these energy-hungry operations are impacting the grid and raising prices for ratepayers.
Kentucky approved $12.7 million in infrastructure upgrades to help power Blockware Mining, and consumers will shoulder some of those costs. In Texas, electricity rates are estimated to have risen by $1.8 billion per year due to the expansion of crypto mining in the state, according to consulting firm Wood Mackenzie.
The silver lining is that some data centers are choosing renewable energy over dirty fuels for power, which may also help drive growth in sustainable energy markets.
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