Irkutsk Seeks Crypto Mining Collaboration With Oil Firms To Address Energy Concerns

The Irkutsk government has expressed its readiness to facilitate cooperation between Bitcoin miners and oil producers, aiming to address the region's energy concerns related to cryptocurrency mining. This initiative comes after the region implemented a year-round ban on crypto mining in its southern part, following a wintertime ban imposed by Moscow on 10 regions until 2031.

Governor Igor Kobzev of Irkutsk has called on major players in the mining market to collaborate with oil and gas companies to build data centers powered by alternative fuel sources. During an address on April 25, Kobzev emphasized that the regional government is not opposed to mining but is committed to ensuring uninterrupted electricity supplies for residents and enterprises. He stated that the government is prepared to act as a platform to coordinate interactions between mining operators and oil and gas production enterprises, citing successful cases where firms have built data centers using associated gas.

Russian oil firms have been exploring the use of associated gas for crypto mining since the beginning of the decade. Major players like BitRiver and Gazprom Neft have already started collaborating on related projects. The governor's proposal aims to leverage associated gas, which is often flared during oil drilling, to power mining operations. This approach not only addresses energy shortages but also reduces environmental impact by minimizing gas flaring.

Russia has experienced a significant boom in Bitcoin and altcoin mining, with many miners relocating from China. However, this growth has strained energy grids in various regions. The Ministry of Energy is considering additional regional mining bans due to network strain. Kobzev's support for associated gas-powered crypto mining initiatives underscores the region's commitment to finding sustainable solutions for the industry. He pledged to support such initiatives in every possible way, highlighting the potential environmental benefits of reducing gas flaring.

Despite the challenges, some Russian miners are open to using associated gas, provided they can secure discounted rates. Kobzev warned that failure to address crypto mining-related energy problems could result in a capacity deficit of nearly 3GW in southeastern Siberia by 2030. Critics, however, argue that bans on crypto mining have led to an increase in illegal and quasi-legal operations, exacerbated by rising Bitcoin prices that make miners reluctant to shut down their rigs.