An American company proposing a large-scale bitcoin mining operation in the Quirk Creek Gas Plant has not made any formal applications with the Alberta Utilities Commission to move ahead with the project.
In mid-July, Black Rock Petroleum outlined a plan for 200,000 bit miners to be moved from China to the Quirk Creek Gas Plant, next to the Mclean Creek Provincial Recreation area and 30 kilometres west of Turner Valley. In another press release two weeks earlier, Black Rock also announced it “has entered an agreement to acquire Caledonian Midstream Corporation”, which currently owns and operates 14 producing natural gas wells at the Quirk Creek Gas Plant.
Bit miners are banks of computer servers used in the process of producing bitcoin and are known to use high levels of energy.
The July 15 press release from Black Rock Petroleum said they have entered into an agreement with Optimum Mining Host Limited Liability Co. (OMH) to distribute the bit miners, pay for the electrical supply costs and maintenance of the bit miners.
Repeated calls from the Western Wheel to Black Rock Petroleum president and CEO Zoltan Nagy have gone unreturned.
As of this week, it is unclear if Black Rock Petroleum has acquired Caledonian Midstream and when or if they plan to apply for permits to run a bitcoin mining operation at the Quirk Creek Gas Plant.
The long-term plan, according to the press release, is for Black Rock Petroleum to operate up to one million bit miners at three Alberta facilities, including the Quirk Creek Gas Plant. Another 300,000 bit miners are planned for a second site and 500,000 more at a third site.
Nagy believes the natural gas production at the Millarville-area plant will continue to be strong and that they will be able to access cheap electricity to run the bitcoin miners, the press release said.
“Current production levels are good, and our engineers have looked at the property’s historical production records and analyzed recent reserve evaluations, and we are confident we have the expertise, technology and resources to materially increase production and, in turn, the cash flow of the site and to host and operate bitcoin miners at an energy cost of circa three cents Canadian per KWH,” the press release reads.
Alberta Utilities Commission (AUC) senior communications Geoff Scotton said a bitcoin mine operation at the Quirk Creek Gas Plant would need approvals and an agreement with the local electricity provider, in this case, Fortis.
Scotton wrote in an email that it is within the AUC’s mandate to review companies that “intends to operate its own generator as a source of electrical energy…or be able to demonstrate that they meet the criteria for an exemption from approval” and “to assess whether approval of a proposed power plant is in the public interest, having regard to its social, economic and environmental effects.”
To date, Scotton said there have been no applications to the AUC for bitcoin mining at the Quirk Creek Gas Plant.
A CBC article written in August on the proposed plan to bring bit miners from China to the Quirk Creek plant drew concerns from some Foothills residents.
Richard Manning lives in Black Diamond and said information about the proposed bitcoin mining operation should have been shared by Provincial officials and said his calls to Highwood MLA RJ Sigurdson have gone unanswered.
“This is quite an alarming thing,” Manning said. “Why haven’t we been apprised of this?”
Access to the area could be further limited, Manning said.
“For those of us who like to go fishing and go around outdoors, things are going to be quite different,” he said.
The Black Rock press release said there will be high-level armed security at the site.
