Minister of Service Alberta and Red Tape Reduction and Member of Parliament for Morinville – St. Albert Dale Nally traveled to Texas for the 2023 North American Blockchain Summit.
Let’s keep cryptocurrency and natural gas flowing, says Dale Nally, Minister of Service Alberta and Red Tape Reduction and Member of Parliament for Morinville—St. Albert.
From November 13-18, Nally joined the Canadian Blockchain Consortium on a visit to Texas for the North American Blockchain Summit, an event peppered with Republican superstars like Texas Sen. Ted Cruz and presidential hopeful Vivek Ramaswamy.
He came with a message:
“Alberta benefits from low corporate taxes, reduced red tape, a young, educated workforce and our doors are open for business — it’s a message that has been well received by blockchain miners from all over North America,” he said.
And Alberta has another advantage over other jurisdictions, which often deny cryptocurrency mining operations the right to set up due to the high energy demands of mining sites on power grids.
“We have thousands of orphaned and abandoned wells in this province, and many of them can be brought back into operation, generating royalties and generating electricity for these blockchain miners,” Nally said.
Bitcoin and similar digital currencies use a decentralized network of computers to record virtual transactions. The process allows users to exchange digital currency (e.g. Bitcoin) out of sight of banks or governments.
“Miners” use computers to solve puzzles that verify transactions, allowing them to earn Bitcoin.
However, as digital recording of these transactions increases, the “puzzles” that miners must solve become increasingly complex and energy-intensive.
Orphan gas wells could directly supply electricity to buildings equipped with computers dedicated to cryptocurrency mining.
Last year, Sturgeon County Council gave the plans the green light, with some restrictions. One company interested in locating in Sturgeon County estimated that each facility would use 10 MW of electricity, create four jobs and generate about $19,740 in tax revenue annually.
Nally sees this idea as a win-win solution for the industry and the environment.
Some processing facilities could use flare gas that escapes from abandoned wells to fuel their operations. Heat generated by mining stations could also be used in greenhouses, he explained.
However, a Sturgeon County Council report found that allowing the facilities to connect to gas wells would be inconsistent with the county’s guiding principle for environmental management.
“While this type of development would enable circular economic opportunities, it would also increase emissions,” the report said.
The county has also heard complaints from residents about noise generated by an unauthorized facility that began mining in 2020.
Blockchain Operations is “actively discussing” setting up a store in the province, but Nally could not name a specific group due to “competitive and privacy reasons.”
“But they are very interested,” he said.
High-profile scams such as the fraudulent FTX cryptocurrency exchange have increased public distrust of crypto, and Nally said the risk of investing in untrustworthy operations was an important topic during the summit.
“Responsible blockchain operators would like to be in compliance with regulations, a light touch, if you like, that would reassure residents that this is a safe environment to invest in,” he said .
New blockchain methods don’t require as much energy, according to Alfred Lehar, a finance professor at the University of Calgary’s Haskayne School of Business.
“The only blockchain that consumes a lot of energy is Bitcoin,” Lehar said.
However, Bitcoin mining could be a good fit for the province thanks to Alberta’s large energy reserve, he said.
Lehar thinks blockchain technology could potentially be useful for things like insurance contracts and land titles.
“(It would) save a lot of money on the economy,” he said.
It could also eliminate many “back office jobs” and save businesses money.
According to Lehar, there is a large startup scene in the blockchain space, with thousands of people looking for new applications for the technology.
“I think it’s important for Alberta to attract this startup sector and really embrace this new technology in government regulations,” Lehar said. “If the government provides a safe and strong legal framework for these businesses to operate and helps create a legal way to digitize assets and put them on a blockchain, then that would definitely help a lot with technology development and attract a lot of these startups . Alberta.”
Nally also visited weapons, defense, aerospace and technology company Lockheed Martin and toured their Fort Worth production facilities.
The North American Blockchain Summit took place November 15-17 in Fort Worth, Texas.