MARA Holdings Inc., the world’s largest publicly traded bitcoin miner, has launched an innovative pilot project aimed at using excess natural gas to power its mining operations. The initiative, which produces 25 megawatts of electricity, marks a strategic move to secure energy resources amidst growing competition with AI data centers for power.
The company’s decision comes as power-hungry artificial intelligence (AI) data centers have started outbidding other industries for electricity. This shift has forced businesses like MARA to find alternative ways to secure energy for their operations. Speaking on the challenges faced by cryptominers, Fred Thiel, Chief Executive Officer of MARA, said: “The AI guys are prepared to pay almost any price for energy because of their demand, so it makes it very hard for bitcoin miners to be able to compete.”
New Approach to Energy Sourcing
MARA’s latest project offers a workaround to the intensifying battle for power by producing its own electricity. By using excess natural gas, the company avoids reliance on expensive regional grid electricity and circumvents competition with AI-driven data centers. This initiative is the first time MARA will own its power generation facilities, a rare move in the cryptomining industry. Thiel described the initiative as a necessary adaptation, stating, “Bringing cryptomining to the raw power supply allows MARA to circumvent some of the competition.”
The project is being conducted in collaboration with NGON Solutions, a firm specializing in capturing and converting natural gas. In this setup, MARA purchases natural gas directly from independent oil producers at the wellhead, converting the otherwise wasted byproduct into electricity to run its nearby mining operations. This process takes advantage of gas that would typically be flared—a common practice in shale basins, particularly in Texas and North Dakota.
A Response to Energy Scrutiny
Cryptocurrency mining has faced increasing scrutiny in recent years due to its significant energy consumption and environmental impact. According to federal estimates, cryptomining accounts for as much as 2.3% of the United States’ total electricity consumption. This has led to restrictions on cryptomining operations in places like New York and prompted federal proposals to tax the industry’s power use.
MARA’s new project aims to address some of these concerns by avoiding additional strain on regional power grids. “We want to avoid putting additional load on the grid,” Thiel noted, highlighting the environmental benefits of using excess natural gas to fuel mining operations instead of drawing from traditional energy sources.
By setting up operations in remote locations, such as shale basins and wind farms, MARA has found a way to access cheaper and more sustainable energy sources. This approach not only benefits the environment but also provides a financial lifeline to energy producers in these areas. As Thiel explained, “We can bring energy markets to where the energy is,” referring to MARA’s efforts to capture power in areas where traditional energy transmission lines and pipelines are lacking.
Pioneering a New Era for Publicly-Traded Miners
While smaller cryptominers have previously set up mobile mining operations in shale basins, MARA is the first publicly-traded company to undertake such an initiative. The pilot project, which started last month but had not been previously reported, represents a significant milestone for the company and the broader cryptomining industry.
The initiative reflects MARA’s strategy to adapt to the evolving energy market, as competition with AI companies for power escalates. By harnessing excess natural gas, MARA is not only securing a more sustainable and cost-effective energy source but also demonstrating leadership in finding innovative solutions to the challenges facing the cryptomining sector.
As the cryptocurrency landscape continues to evolve, MARA’s approach may serve as a model for other miners seeking to balance their energy needs with growing environmental concerns and competition in the tech industry.