Coal: another article I would have ignored had it not been in The WSJ. Bitcoin miners are giving new life to old fossil-fuel power plants. Link here. Without question, the number one energy that is not being reported enough in the mainstream media is the energy cryptocurrency miners require. For investors this is great news.
Across America, older fossil-fuel power plants are shutting down in favor of renewable energy. But some are getting a new lease on life—to mine bitcoin. In upstate New York, an idled coal plant has been restarted, fueled by natural gas, to mine cryptocurrency. A once-struggling Montana coal plant is now scaling up to do the same.
The drive for power has its roots in bitcoin’s intractable mathematics: To operate securely, the cryptocurrency’s network relies on computers solving puzzles; in return the solvers get fresh bitcoin. The higher the bitcoin price, the more of these miners compete to solve the puzzles—a process that chews up electricity. The more competition, the harder the puzzles get and the more electricity is used.
A University of Cambridge index pegs the annual power consumption of bitcoin mining at around 130 terawatt-hours, more than three times higher than at the beginning of 2019. That would be more than the power consumption of Argentina.
The coal-fired Hardin Generating Station in Montana had been struggling for years. Late last year, a Nasdaq-listed miner called Marathon Digital Holdings Inc. MARA partnered with Hardin’s owner to transform the power plant into a hub for mining bitcoin.
“It was an idle asset,” Fred Thiel, Marathon Digital’s chief executive, said in an interview. “We were able to get access to a large amount of power at a very attractive price.”
The project is in the process of scaling up, with more than 100 megawatts of power capacity planned. Marathon Digital, whose investors include BlackRock Inc. and the hedge fund Renaissance Technologies LLC, said that by tapping the Montana coal plant, its break-even costs to produce a bitcoin will fall to $4,600, 38% less than previously.
Much, much more at the link. Again, this is a most-under-reported story and a story energy investors should be following closely.
The bigger story line: the renewable energy story will never keep up. We're gonna need a lot more natural gas.
From social media: "I will bet you my net worth versus your net worth that we will see $200-oil before we see $400,000 Bitcoin. Link here.
Coal, China: China's coal output rises 11.1% in the first four months. Link here.
Oil, China: China's implied oil demand rose to 14.87 million bpd and continues to grow steadily.
That increase represents an increase of almost 2 million bopd year/year. At this rate, China will overtake the US before Biden leaves office. The US is currently using 17 to 18 million bopd and is the world's largest crude consumer in the universe. Warning: the numbers were based on 2021 / 2020 -- and we all know that 2020 was a "dead" year. With that factoid, some suggest these recent numbers should not be extrapolated.
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