Lloydminster’s Upstream Data is mining for more than just black gold

Click to play video: 'Saskatchewan oil companies power cryptocurrency mining'
Saskatchewan oil companies power cryptocurrency mining
WATCH: Upstream Data has quadrupled in size over the last year as it data mines for cryptocurrency, including bitcoin – Apr 16, 2021

Stephen Barbour plied his trade as a heavy oil and gas engineer for over a decade in Lloydminster.

Over his tenure, he saw a common problem, one that he believed to have the solution to.

“There’s a lot of vent gas and waste gas off of the upstream oil wells here,” Barbour explained. “It’s a problem that pretty much any local oil company has been trying to attack for a long time.”

Read more: Bitcoin hits new record, trading above $62,700

His solution was developing the company, Upstream Data.

Its data centres can be tied into oil wells and powered by excess gas on-site, then, in turn, use that energy to run computers that mine for bitcoin.

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“When I learned about bitcoin, and that it was energy-intensive, it was pretty obvious that you could just drop a bitcoin mine on an oil well and consume the waste gas there,” he said.

“The process is pretty simple,” he continued. “We just build a genset, like a natural gas engine that’s fueled by the gas, it generates electricity, and then we distribute that electricity to the computers.”

Read more: Okanagan man trading home for Bitcoin in red-hot real estate market

Although Bitcoin, a digital currency also known as cryptocurrency isn’t the only type, it is the most well known.

You can make money by data mining for bitcoin, but the process requires computers doing countless calculations, which in turn requires a lot of energy.

Even though it’s become quite common now when Upstream first entered the market the idea was a tough sell.

“I almost got, you know, my eyes rolled at,” Upstream CSO Ryan Dutton explained. “Almost politely like, laughed out of meeting or conversations a year ago. People were like, what, you strap on this machine and I make these Mario coins,” he continued. “I’d get laughed at, then these same guys are calling me a year later saying wow, this bitcoin is really a thing.”

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As cryptocurrency popularity rises so too has the demand on Upstream units, the boom causing Barbour to quadruple his company size over the last year.

“We’ve grown a lot in the last year,” he said. “Business-wise, last year I have 8-9 deployments, and from what you’ll see in the shop is we’re at like 85-90.”

Read more: Bitcoin’s carbon footprint could be offset by blockchain’s green applications, experts say

As the price for bitcoin is constantly fluctuating, so does the market for Upstream products. However, the high returns for end-users helped the company in its initial push to market.

“At that time they made a lot of money, like, one little V-8 engine was making $2,500 dollars a day, which is unbelievable,” Barbour said.

Even though the pandemic hurt bitcoin’s prices, they’ve begun to rebound in 2021. Currently, one bitcoin is worth over CAD $72,000.

Although monetarily beneficial, that’s not the only positive offered by the data miners.

Read more: Tesla cars can now be bought with bitcoin, says Elon Musk

They also offer a solution to gases that would’ve been flared or vented off, reducing the emissions at every site that they’re deployed.

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“Producers are willing to invest in this tech. If they can get a reasonable payout, and it solves an environmental issue, which is their emission profile, if they can reduce that,” Barbour said. “When we can offer them a product that reduces their tax obligations which is their carbon penalties, it’s exciting. It’s exciting to them, it’s exciting to everyone, just wasting less resources is exciting, I think.”

Something that his customers agree with.

“We’ve worked with them since early 2020 on this part of our greenhouse gas emissions project, to reduce it,” said Rife Resources operator Travis Desilets. “So, yeah, it generates a little profit on the other end, and it’s good. It drastically reduces our emissions and keeps us legal, so it’s great.”

Barbour’s units have found their way across Saskatchewan, and Alberta, while also spanning all over the United States.

It’s something he hopes will continually grow, as he plans to have over 200 active units before the end of 2021.

“There’s not a producer out there wanting to be wasteful, everyone is using all of the technology that we can to be good stewards of the resource,” he said.

Click to play video: 'Focus Saskatchewan – April 17, 2021'
Focus Saskatchewan – April 17, 2021

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