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This is weird. The law appears to be a targeted benefit for 3 Wyoming entrepreneurs who are starting a company to mine cryptocurrency using natural gas that mig

This is weird. The law appears to be a targeted benefit for 3 Wyoming entrepreneurs who are starting a company to mine cryptocurrency using natural gas that might otherwise go unnused -- or even unburned at all. (Photos of their setup: https://oilcity.news/startup/2021/03/05/modern-miners-new-casper-business-mines-bitcoin-at-unused-gas-wells/ https://oilcity.news/startup/2021/03/05/modern-miners-new-ca... ) Note that it's not just gas that might be flared off - They're also trying to set up crypto mining on wells that would be otherwise shut-in. In other words, wells that are scheduled for shutdown are no longer going to be shut down, because these 3 guys are going to keep them open to burn off every last bit of gas they can extract. And for some reason they're getting a tax break to do it? This doesn't really make sense, IMO. I don't really mind if they're going to use the minimal heat from natural gas flares to do something, but if they're going to interfere with the process of shutting down wells then they're not exactly doing the environment any favors. Why do we need to give them a tax break for keeping wells open longer than they otherwise would be? Why not have them pay taxes like everyone else on those wells? Doesn't make sense. Feels like a major handout to these few people in exchange for burning more natural gas. Not cool.

cascom 5y ago
This is not a new concept, and this company is not the first mover, for example: https://www.crusoeenergy.com/ https://www.crusoeenergy.com/
- PragmaticPulp 5y ago
  > This is not a new concept, The state giving them arbitrary tax breaks appears to be a new concept, unless I'm mistaken.
  - cascom 5y ago
    I don’t know what the economics look like, but I think the goal is to eliminate deadweight loss from the tax, such that if that tax were imposed only 20% of wells would be economic, vs say 60%. Furthermore i would presume there is tax revenue and jobs associated with these operations that don’t exist were the gas just flared.
    - maxerickson 5y ago
      The chain is probably secure enough, there's no loss if the gas is flared vs burned for mining, just a different flow of funds.
nightski 5y ago
Agreed, there should not be economic incentive in that case. But the OP could be interpreted as they are allowed to utilize the wells that are "destined" to be shut-in (until they are shut-in). What leads you to believe they are going to be kept going longer than the shut-in date?
rattlesnakedave 5y ago
From the text of the bill it appears the tax break is specifically exempting gas that would otherwise have been flared or vented from a current productive facility. It doesn’t look like mining facilities setup on would be shut in wells qualify.
- BoorishBears 5y ago
  I noticed that too but it feels like a workaround that lets them not have to openly state the fact they're enabling wells to stay open... Say a well would be closed because it's not profitable. Now the gas that would be vented through normal operation and has "no value" is converted to something with value. So the well stays profitable and open when it otherwise wouldn't be able to.
lowkey_ 5y ago
> Why do we need to give them a tax break for keeping wells open longer than they otherwise would be? This is Wyoming you're talking about, and Wyoming views the oil & gas industry positively (it's over 15% of the state's jobs). Wyoming's goal is not to see the industry die. The environment isn't high on their list of priorities. Also, as a state with a population lower than that of SF, Seattle, or Boston for example, it's normal to see these specifically targeted tax breaks for small startups.

cascom 5y ago

This is not a new concept, and this company is not the first mover, for example: https://www.crusoeenergy.com/ https://www.crusoeenergy.com/

PragmaticPulp 5y ago
> This is not a new concept, The state giving them arbitrary tax breaks appears to be a new concept, unless I'm mistaken.
- cascom 5y ago
  I don’t know what the economics look like, but I think the goal is to eliminate deadweight loss from the tax, such that if that tax were imposed only 20% of wells would be economic, vs say 60%. Furthermore i would presume there is tax revenue and jobs associated with these operations that don’t exist were the gas just flared.
  - maxerickson 5y ago
    The chain is probably secure enough, there's no loss if the gas is flared vs burned for mining, just a different flow of funds.

nightski 5y ago

Agreed, there should not be economic incentive in that case. But the OP could be interpreted as they are allowed to utilize the wells that are "destined" to be shut-in (until they are shut-in). What leads you to believe they are going to be kept going longer than the shut-in date?

rattlesnakedave 5y ago

From the text of the bill it appears the tax break is specifically exempting gas that would otherwise have been flared or vented from a current productive facility. It doesn’t look like mining facilities setup on would be shut in wells qualify.

BoorishBears 5y ago
I noticed that too but it feels like a workaround that lets them not have to openly state the fact they're enabling wells to stay open... Say a well would be closed because it's not profitable. Now the gas that would be vented through normal operation and has "no value" is converted to something with value. So the well stays profitable and open when it otherwise wouldn't be able to.

lowkey_ 5y ago

> Why do we need to give them a tax break for keeping wells open longer than they otherwise would be? This is Wyoming you're talking about, and Wyoming views the oil & gas industry positively (it's over 15% of the state's jobs). Wyoming's goal is not to see the industry die. The environment isn't high on their list of priorities. Also, as a state with a population lower than that of SF, Seattle, or Boston for example, it's normal to see these specifically targeted tax breaks for small startups.