Eb3 Energy- Hero ImageDigital Capital
EnerBlock has over 100+ years of combined multi-disciplinary experience in the energy sector. At our core we are upstream energy investors, scientists, engineers, explorers, drillers, developers, and producers. We leverage our collective expertise to identify, acquire, construct, and optimize primary energy production assets that fuel the Eb3 digital capital business strategy.
“In 18 years of doing deals, I don’t think I have ever seen a more symbiotic business relationship than upstream oil and gas production and Bitcoin compute. It’s a match made in heaven, one solves the others’ inherent problems, and it wouldn’t surprise me one little bit for this integration strategy to become commonplace in the industry, which I suppose would make us one of the earliest pioneers of the practice.
It is literally not possible to mine bitcoin at a lower energy cost. It’s The 21st century equivalent of the 20th century legendary wildcatters. Now that is exciting.”
Energy is the capacity to do work. Energy is not a material substance, but can be stored and measured over many forms. Energy is never destroyed, but can be transferred from one form to another. This principle is known as the conservation of energy. This principle is very important to understand as it relates to economic energy and money.
Pure play Bitcoin miners face significant challenges with a single revenue source and low hodle rates, often forced by financial covenants to sell all mined Bitcoin. Selling equity is dilutive and value-destructive, compounded by high energy costs and Bitcoin price volatility.
Vertical integration with upstream oil and gas production offers a compelling solution. This strategy leverages stable cash flows from oil and condensate sales while using onsite natural gas to power Bitcoin mining operations. This approach can achieve an 85-90% Bitcoin hodle rate and reduce electricity costs to $0.005 to $0.009 per kWh.
EnerBlock’s financial models show that scaling Bitcoin mining with sub-one-cent electricity costs and substantial cash flows can disrupt traditional Bitcoin miners’ economic viability. These miners may face obsolescence or need to shift upstream in the energy value chain, a challenging task for those reliant on grid infrastructure. This integration stabilizes revenue and positions companies to lead with enhanced profitability and financial resilience.
The United States has vast reserves of natural gas, particularly from shale formations, which have kept prices persistently low. According to the U.S. Energy Information Administration (EIA), this trend is expected to continue, driven by advancements in extraction technologies and expansive shale deposits.
However, gas contracts in mature, low-pressure basins often capture only 55-60% of the spot price market index, reducing profitability. Factors such as pipeline and processing costs, market dynamics, and declining well pressure contribute to these less favorable financial outcomes.
EnerBlock aims to transform these wellhead economics through the vertical integration of oil and gas production with Bitcoin mining. By using natural gas onsite to power Bitcoin mining operations, we bypass traditional market constraints and optimize gas utilization. Our financial analysis suggests this integration can improve the effective price per thousand cubic feet (mcf) of natural gas to a range of $9.00 to $34 per mcf.
This strategy maximizes the value of natural gas, stabilizes revenue streams, and provides a robust hedge against market volatility. By leveraging this dual revenue model, EnerBlock harnesses the full potential of natural gas resources, driving down operational costs and ensuring efficient, sustainable, and highly profitable Bitcoin mining operations.
Compressing and expanding natural gas for pipeline transport involves significant energy consumption and inherent inefficiencies. Compressor stations, essential for maintaining gas flow, require substantial fuel, leading to energy losses primarily in the form of heat. Additionally, leaks, maintenance downtimes, and fuel gas usage further reduce the volume of gas available for end use.
Bringing the end use of natural gas to the wellhead or a central gathering point can substantially reduce these inefficiencies. This approach eliminates extensive compression and long-distance transport, minimizing loss and shrinkage and maximizing the volume available for conversion into electrical power.
EnerBlock’s strategy integrates Bitcoin mining operations directly at the site of natural gas production. By leveraging the full volume of extracted gas, we convert it into valuable electrical power without the losses associated with traditional pipeline transport. This enhances the overall economics of gas production, ensuring a higher return on investment for each cubic foot of gas.
This innovative approach not only improves the efficiency of natural gas utilization but also stabilizes and maximizes revenue streams. By transforming natural gas directly into electrical power at the wellhead, EnerBlock achieves unprecedented levels of operational efficiency and profitability, showcasing the benefits of localized energy conversion for optimal resource utilization and economic outcomes.
Natural gas stands out as one of the most efficient and cost-effective prime energy sources for electricity conversion, due to its high energy density, low emissions, and abundant supply. Recent studies by Catherine Woods of Ark Invest, corroborated by EnerBlock’s analysis, reveal that installing natural gas generators at mature gas wells to utilize otherwise vented or stranded gas can produce electricity at significantly lower costs than traditional public Bitcoin mining companies pay.
Natural gas combined-cycle plants achieve thermal efficiencies around 60%, compared to 33-40% for coal plants. The levelized cost of electricity (LCOE) for natural gas is approximately $41 per MWh, much lower than coal at $60 per MWh. While solar and wind have LCOEs of $36 and $30 per MWh respectively, their intermittency issues make natural gas more reliable.
Additionally, natural gas emits 50-60% less CO2 than coal and 20-30% less than oil, enhancing its environmental appeal. EnerBlock’s financial models suggest that leveraging natural gas can reduce electricity costs to $0.005 to $0.009 per kWh, providing a competitive edge and driving less efficient Bitcoin miners into unprofitable territory. Natural gas’s combination of low cost, high efficiency, and environmental benefits positions it as a superior fuel for sustainable and profitable energy production.
Cogeneration, or combined heat and power (CHP), maximizes the efficiency of natural gas by generating electricity and useful thermal energy from a single fuel source. In this process, a gas turbine or engine generates electricity, and the waste heat is captured and used for heating, cooling, or industrial processes, boosting overall energy efficiency to up to 80%. Incorporating the heat produced by ASIC miners, which generate substantial heat during Bitcoin mining, further enhances the system’s efficiency.
Mechanically, cogeneration systems use heat recovery steam generators (HRSG) or heat exchangers to capture waste heat. The gas turbine or engine drives an electrical generator, and the exhaust heat is converted into steam or hot water for additional uses. This approach extends the life of power generation equipment by reducing thermal stress and improves fuel utilization.
Cogeneration not only reduces greenhouse gas emissions but also offers significant cost savings and energy security. By maximizing gas reserves and integrating ASIC miner heat recovery, cogeneration is a key strategy for efficient and sustainable energy production.
EnerBlock aims to replace natural reserve depletion with solar energy by viewing gas reserves in terms of electrical power capacity. This innovative approach, stemming from our experience in converting natural gas to power Bitcoin mining, reveals a fascinating synergy.
As gas reserves decline, we plan to integrate modular solar power and battery storage to maintain energy production, ensuring a sustainable and renewable energy supply. This strategy not only offsets reserve depletion but also leverages the unique strengths of both natural gas and solar energy systems for continuous, efficient power generation.
EnerBlock’s strategy includes capturing waste heat from Bitcoin mining and power generation processes. This waste heat, which would otherwise be lost, is repurposed for heating and other energy needs, dramatically improving overall efficiency. Utilizing waste heat helps reduce energy waste, lower operating costs, and enhance sustainability.
Implementing CHP systems leads to significant efficiency gains by using energy more effectively. Traditional power generation methods lose substantial energy as heat, but CHP captures this heat for additional uses. This results in energy efficiency levels of up to 70%, compared to about 36% for conventional methods, optimizing the use of natural gas and other resources.
CHP systems contribute to sustainability by reducing greenhouse gas emissions and fuel consumption. By maximizing the energy extracted from natural gas, EnerBlock minimizes its environmental footprint. This sustainable approach supports long-term resource conservation and aligns with global efforts to reduce carbon emissions.
The economic benefits of CHP systems are substantial. By improving energy efficiency and reducing fuel costs, EnerBlock can achieve significant cost savings. Additionally, the increased reliability and resilience of CHP systems help mitigate financial risks associated with energy supply disruptions, enhancing overall economic performance.
EnerBlock leverages technological innovation to maximize the benefits of CHP systems. By integrating advanced technologies and optimizing energy management, we support maximal hashrate and operational efficiency. This continuous innovation drives improvements in energy systems, ensuring that EnerBlock remains at the forefront of the industry.
Potential joint ventures with landfills and agricultural partners provide EnerBlock with diverse and sustainable revenue streams. By converting organic waste into Biomethane, these partnerships not only generate additional income but also contribute to environmental sustainability. This strategy ensures a stable energy supply and strengthens EnerBlock’s market position.
Biomethane offers a consistent and renewable energy source. Unlike some renewables, Biomethane is not intermittent and can be produced continuously from organic waste. This reliability enhances EnerBlock’s energy security and operational stability, providing a steady supply of clean energy.
Utilizing Biomethane significantly reduces greenhouse gas emissions. By capturing methane from organic waste, EnerBlock helps mitigate climate change while also generating carbon credits. These credits can be traded or sold, providing additional financial benefits and reinforcing our commitment to sustainability.
Integrating Biomethane into EnerBlock’s energy mix supports further renewable energy adoption. This approach not only diversifies energy sources but also complements other renewable technologies, enhancing overall system efficiency and sustainability. EnerBlock’s commitment to renewable integration ensures long-term environmental and economic benefits.
Solar energy integrates seamlessly with oil and gas operations, utilizing overlapping land areas for dual purposes. This integration maximizes land use efficiency and simplifies negotiations with landowners, promoting the development of renewable energy projects alongside traditional energy production.
Advancements in solar technology have significantly improved efficiency and reduced costs. Studies show that the cost of solar photovoltaic (PV) systems has dropped by more than 70% over the past decade (NREL, 2020). These cost reductions make solar a viable and competitive energy source, especially when combined with Bitcoin mining to monetize electricity production in remote locations.
The emergence of advanced battery storage systems enhances the viability of solar energy. Battery storage addresses the intermittency of solar power, enabling the capture and use of excess energy generated during peak sunlight hours. This ensures a stable and reliable energy supply, aligning with EnerBlock’s sustainability goals and reducing reliance on the traditional power grid.
EnerBlock aims to create diversified, contained energy systems that model decentralized power grids. These microgrids offer utility-like power reliability and address the growing challenges facing the U.S. power grid, such as increasing demand from emerging technologies. Decentralized solar energy systems enhance grid resilience and provide a scalable solution for meeting future energy needs.
Solar energy development offers significant economic benefits, including reduced operational costs and increased energy security. The integration of solar with Bitcoin mining provides a continuous revenue stream, while decreasing dependence on volatile energy markets. This strategic approach enhances EnerBlock’s economic resilience and supports long-term profitability through sustainable energy practices.
As electricity-hungry data centers powering rapid AI innovation proliferate around the country, utilities and regulators are grasping for credible plans to expand the nation’s aging power grid as it struggles to keep pace.
- Data centers consumed 690 million megawatt hours in 2021, with about 17% of that total computing demand coming from digital currency mining
- Demand for energy-intensive compute is expected to exceed 38GW by 2030 (DigitalBridge 2023).
- More than 8% of the world’s electricity will be consumed by data centers in 2030 vs 1% in 2020 (IEA 2022).
- The GPU market is forecasted to grow 10x between 2022 to 2032 (Allied Markets 2023).
EnerBlock’s mission is to build sustainable energy solutions that solve complex problems while creating economic value for stakeholders by tapping into new energy paradigms made possible by Bitcoin.
Our approach leverages innovative strategies to address critical challenges in the energy sector and beyond.
Solve Critical Power Grid ImageEnerBlock invests in reducing power grid load by repurposing existing infrastructure and marginally economic assets to build dependable off-grid facilities for power-hungry performance compute. By integrating Bitcoin mining with energy production, we alleviate stress on the traditional power grid, enhance grid resilience, and ensure reliable power supply in remote and underserved areas.
Solve Unfunded Well Plugging LiabilitiesBitcoin mining offers a unique solution to the issue of unfunded well plugging liabilities. By converting stranded and flared gas into a profitable energy source for mining operations, EnerBlock creates a revenue stream that can fund the plugging and remediation of abandoned wells. This approach not only addresses environmental concerns but also repurposes otherwise wasted resources.
sustainable, build economies imageEnerBlock is committed to driving sustainability by integrating renewable energy sources, such as solar and Biomethane, into our operations. This strategy reduces greenhouse gas emissions, promotes efficient energy use, and supports the circular economy. By building value through diversified energy projects, we stimulate local economies, create jobs, and contribute to the broader goal of energy independence and security.
Our innovative use of Bitcoin mining as a catalyst for energy development exemplifies our dedication to solving complex problems with cutting-edge solutions. EnerBlock’s holistic approach ensures that we not only meet the energy demands of today but also pave the way for a more sustainable and economically vibrant future.
“What I love most about geology is the endless pursuit of understanding our planet’s intricate systems and the thrill of discovering untapped resources. At Mitchell Energy, I witnessed George Mitchell’s visionary approach to the Barnett Shale, transforming challenges into groundbreaking opportunities. That same innovative foresight is what excites me about EnerBlock, and BITEX 66. We’re not just harnessing oil and gas; we’re revolutionizing the energy landscape by integrating these resources with cutting-edge Bitcoin mining technology. As a geologist, this creates a whole new economic paradigm in which to develop and refine geological prospects.”
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