Bitcoin Mining as a Solution to Landfill Methane Emissions
MCJ Startup Series with Vespene Energy
Today's guest is Adam Wright, CEO and co-founder of Vespene Energy, which uses landfill methane to fuel Bitcoin mining.
At MCJ we’ve spent some time at the intersection of Bitcoin as an incentive mechanism for halting methane emissions with Crusoe Energy and their work with flared waste gas at oil wells. But understanding the actual scale of the landfill emissions problem and how the status quo doesn't provide an economic incentive for improvements is pretty mind-blowing. Perhaps a carbon tax could pass some day or fines for landfill owners could aim to remedy the issue, but we need landfills and collaborative solutions for all the waste we produce. Vespene's answer is to provide a carrot rather than a stick. The company offers operators the financial upside of the biogas that their sites produce in exchange for Vespene being able to use it.
Adam describes Bitcoin mining not as the end-all-be-all for Vespene, but instead as an immediate economic consumer for biogas that doesn't require facilitating a buyer or hooking up a ton of expensive infrastructure. It essentially bootstraps an energy business with a third-party, logistics-free, economic model attached. And it's a model that can unlock totally different use cases once it's in place, including EV charging and more. Vespene is on the early side of building out its business, and they'll no doubt learn a lot about the real-world atoms at play as they move forward. But if they can incentivize the halt of the 15% or more of the US's methane footprint that comes from landfills, they can make a real difference on the climate front.
In this episode, we cover:
[3:25] Adam's journey transitioning from submarines and ocean conservation to landfill-based climate problems and Bitcoin
[5:25] The problem of methane in landfills today compared to other sources
[7:30] Landfill projects, EPA regulations, and issues with underreporting
[12:50] Vespene's solution
[15:18] An overview of biogas
[12:34] U.S. landfill ownership and community beneficiaries
[20:34] An overview of Bitcoin and its implications from a climate perspective
[22:41] Demand side of Vespene's solution and uses for Bitcoin data processing
[25:55] How Vespene uses Bitcoin as a tool
[35:18] Bitcoin mining as a low-margin but scalable business
[37:09] Profitability from a Bitcoin mining perspective
[39:25] Vespene's progress to date
[43:02] Geographic nature of landfills and benefits for Vespene's business
[47:10] Vespene's funding from the crypto and climate worlds
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Episode recorded on October 17, 2022.