Argentina’s state-owned energy firm enters block reward mining by using waste gas

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A state-owned energy firm has thrown its hands in the ring to join the league of block reward miners operating in Argentina. YPF Luz, the renewable arm of YPF, has announced that it will be striking a partnership with an unnamed international mining company looking to set up shop in the South American company.

YPF Luz said in a statement that its role would be to supply energy to the mining giant, and in furtherance of the objectives, it had begun building a 1 megawatt (MW) plant in the heat of Vaca Muerta. The region, nestled in the Southernmost part of the country, is best known for its extensive shale oil deposits, a high-quality crude oil found between layers of shale rock.

Martin Mandarano, CEO of YPF Luz, told reporters that the operations of the new plant will be renewable, making use of the waste gas from previous oil production. The move comes on the heels of a public outcry about Bitcoin’s energy consumption in the face of the looming global energy crisis as winter approaches.

“We started to develop this generation pilot for cryptocurrency mining with a vision for sustainability and business from flare natural gas, which cannot be harnessed during exploration and at the beginning of the production of an oil field,” said Mandarano to Telam, a regional news outlet.

Mandarano added that his company has plans to build a second plant seven times larger than the one being built at Vaca Muerta. He disclosed that the second plant of 8MW will be ready by the end of the year.

Mining in Argentina spiked in 2021 due to the administrative inefficiencies and cheap energy stemming from power subsidies and FX controls. With cheap electricity, mining firms began to take note, plotting their appearance in the country. Canadian Bitfarms seized the initiative to boost its hash rate with a mining plant in Rio Cuarto, Cordoba.

Go green or go home

Globally, the call for block reward mining to rely on renewable energy sources has been amplified in recent years. Fearing a mining moratorium, mining firms have begun exploring alternative energy sources like solar and hydroelectric.

In El Salvador, the government’s mining plant relies on geothermal energy. In the U.S., privately owned mining firms are testing powering their plants using flared gas, a by-product of the oil production process.

Other firms are also exploring the possibility of using coal residue to power their mining plants, a strategy used by Stronghold Digital Mining in the U.S. as Congress probes into the activities of mining firms.

Watch: The BSV Global Blockchain Convention panel, Blockchain mining & energy innovation