Here’s the hard truth Pennsylvania, we really have to have an honest conversation about crypto mining. Not the future-of-finance hype, but the down-and-dirty, ground-zero reality unfolding in our own back-yards. In particular, the puzzling and disappointing recent trend of pairing crypto mining with abandoned and soon-to-be-abandoned natural gas wells. It sounds like a win-win, right? Reinvigorate dying coal plants and power the smart city renaissance. But what if it's a Faustian bargain? What if we’re really setting ourselves up to lose long-term environmental and economic sustainability in exchange for short-term political gains?

Quick Profits, Mounting Liabilities?

I’m not against crypto, and I’m absolutely not against innovation. I am a fierce opponent of concerted or reckless exploitation, particularly when it shifts the burden and risks onto taxpayers and future generations. The example of Diversified Energy’s abandoned Longhorn Pad A well in Elk County should make anyone shiver with both worry and anger. This is the company that’s taken the lead in suckling the last remaining profits from dead wells. They’ve even linked a cryptocurrency mining operation to further squeeze every last penny of profit. When the well inevitably tanks, they get up and leave, leaving catastrophic damages for somebody else to rehab.

This isn't just about one bad actor. It exposes a fundamental flaw in the business model. Though saline wells have long been considered nonhazardous, these companies are still incentivized to delay plugging them because plugging costs real money – often more than $100,000 per well. Crypto mining is a short-term fix, just another way to push problems further down the road. That road only goes so far, and when it does, we, the taxpayers, end up with the bill. Diversified’s expansion into onshore AI data centers powered exclusively by off-grid energy sources is all the more alarming. It indicates a systemic prioritization of profit over responsible environmental protection. Are we sleepwalking into a future where Pennsylvania is dotted with orphaned wells fueling cyberspace daydreams?

  • They operate without proper permits.
  • They allegedly violate consent orders.
  • They leave behind potentially leaky, unplugged wells.

Natural gas consists of about 95% methane. Because of this, it serves as a strong climate forcer, holding in heat many times better than carbon dioxide on shorter timescales. Pennsylvania is the state most plagued by orphaned and abandoned wells. These nature-based, largely invisible sources of methane emissions are dangerous to our climate ambitions. Connecting crypto mining to these wells only exacerbates the issue. This generates a massive appetite for gas from wells that would otherwise be plugged. Second, it incentivizes companies to delay appropriate plugging.

The connection to the climate is unavoidable. Methane leaks are the biggest threat to our short-term global warming goals. By letting crypto mining shore up these legacy gas wells, we’re just further subsidizing pollution. It’s the equivalent of bailing water out of a sinking boat using a bucket with holes in it. Instead, we’re going for a solution that makes the problem even worse. We are gambling with the future!

Methane Leaks: Invisible Threat?

Let's be clear: the cost of plugging these wells will be borne by someone. Either these companies fund these projects, or the state pays for it, with taxpayer money. Diversified Energy’s asset retirement obligations, or liabilities for retirements of these assets, are alleged to be well below industry standards. This creates the all too real potential that Pennsylvania taxpayers will be left holding the bag for their environmental liabilities.

In fact, the Ohio River Valley Institute has denounced Diversified’s business model as “failure Appalachia”—built to fail Appalachia. That’s a scathing judgement, but it certainly is accurate. The company makes money by buying older generation assets and running them cheaply. They might be offloading cleanup duties onto third parties. It’s a potently effective example of the old adage of privatizing profits and socializing losses.

Whose Burden Is It, Really?

We need to ask ourselves: is this the kind of economic development we want in Pennsylvania? A short-term growth achieved through unsustainable practices such as environmental destruction and dumping future financial liabilities on taxpayers? I think not. We require greater regulation and more oversight, yesterday. Join us as we talk about the real price tag of this latest gold rush in crypto mining. Otherwise, we'll be left with silent wells, loud risks, and a legacy of environmental damage that we can't afford.

We need to look at states like Texas that have faced these poisons’ travails from the oil boom. It’s a painful benefit, but we can always learn valuable lessons from their mistakes. Don't be reactive. Be proactive.

We need to ask ourselves: is this the kind of economic development we want in Pennsylvania? A short-term boom fueled by environmental degradation and the shifting of financial risks onto the public? I think not. It's time for stricter regulations, increased oversight, and a serious conversation about the true cost of this crypto mining gold rush. Otherwise, we'll be left with silent wells, loud risks, and a legacy of environmental damage that we can't afford.

We need to look at states like Texas, who have faced similar issues from the oil boom, and learn from their mistakes. Don't be reactive. Be proactive.