Why Power Plants Are Already Mining Bitcoin (And It's Genius)

Peter Brecht00:01

Let's see here. That's recording. All right. And the beautiful part is we can edit anything out. All right. Welcome to Local Energy. My name is Peter Brecht. I'm here with my co-host, Wade Spear, and our guest today is Joe Dillon at Atacon Energy Solutions. Joe, thank you so much for taking the time out of your day to meet with us, and I'm so excited to talk with you.

Joe Dillon00:23

Hey Peter, Wade, thank you. I'm excited to talk, happy to make the time and looking forward to talking some energy today. Be good.

Peter Brecht00:30

Yeah, so you kind of snuck up on me on Twitter. Have someone we follow mutually and there was some conversation around the grid and stability and I was like, who's this Joe guy? Like your profile photo is not you or it's some version of you that a caricature of some sort. But anyways, there was some comments there and I just, I of looked on your profile and then the one thing that stood out to me is

Your actual your Twitter bio is you're obsessed with the grid, right? You're you're just this is like all you do all you live and breathe so Connected with you you were gracious enough to come on as a guest. But your background is It starts offshore right offshore oil and gases is where you began So I kind of wanted to touch on that a little bit and you know Maybe share about your past and where you've been

Joe Dillon01:21

Yeah, Peter, happy to, and maybe it'll give a little color on kind of how I ended up where I am today. So coming out of college, I was working in Houston doing some land development work and some like environmental permitting work for industrials and had the opportunity to go move overseas in my mid-20s to work for initially the American Bureau of Shipping, which for...

Those not familiar with the offshore world is kind of I always referenced it like they're kind of like the UL labs or the standard impores of things that float where you're the regulatory agency that's certifying the seaworthiness and operational ability of offshore boats platforms, etc. And so I

Wade01:59

Thanks

Joe Dillon02:11

Started with them on the oil and gas side in Singapore, which at the time was the largest offshore Rig building nexus in the world. I think there was like 22 or 23 different offshore rigs under construction at the time This was back in the mid-20 teens when the offshore was was

Very hot, similar to kind of what we're, think we're at the beginning of now that I'm sure we'll get into. But so I was with them for about two or three years and I think something that frustrated me a little bit is you were kind of the guy that goes around and points out what's wrong, but you weren't able to like fix anything because that wasn't really the role. You had to, you can kind of be in that regulator hat. And so after about three or three years or so, I switched over and spent the next probably eight years overseas working for Transparency.

Wade02:31

Right.

Peter Brecht02:31

Yeah.

Wade02:49

Hmm.

Peter Brecht02:51

Mm-hmm.

Joe Dillon03:00

Ocean, InSco, which is what is now Valaris, building... I was kind of one of their project manager, senior project manager, so they just sent me whatever was most broken and said, hey, this project's way behind, this project's broken, this person messed it up, come fix it. That kind of culminated in Brazil, where I was given an old 1980s semi-submersible drilling rig that was ranked

52 out of 54 rigs in Brazil. So by corollary, wasn't so great globally. And I got that January. And by the end of the year, we were up to, we took it through a shipyard and then we got back to work and we were up to about number two in Brazil and we got rig of the year globally for Inscow that year. So really that turnaround story was almost compelling enough for me to maintain a role as oil went to $10. But unfortunately oil went to $10.

Wade03:45

No one.

Peter Brecht03:48

Wow.

Yeah.

Joe Dillon04:00

I rotated back to the states and kind of finished up my MBA with Carolina and got into, started working with Honeywell running their Smart Grid Solutions business, which is their global energy efficiency and demand response business.

And which is there's interesting corollaries there to tie back to like how you build oil rigs, where you have kind of this system where you're trying to balance all of these different loads against the generation from your power plant inside the, inside the rig. And you're kind of islanded where if you mess up, you lose your power and that's bad. And so, ran that business for several years and realized it was just, it was almost too hard to change from within a big corporate environment. So about.

Peter Brecht04:34

Mm-hmm.

Joe Dillon04:48

Five years ago I founded Atacon Energy as a real as an industrial development firm that's really focused on that scene where load meets generation so flexible load co-located load at generation or you know placing new greenfield thermal generation at points where the grid needs it you know the and I can keep rambling here a little bit Peter I know I'm of running but

Peter Brecht05:15

Yeah, no, it's great.

You're answering all my questions without even me asking, so it's good. Yeah, yeah.

Joe Dillon05:18

What?

Wade05:19

And I'm learning a lot here, so

You know.

Joe Dillon05:21

One more quick point is like looking at the amount of intermittent renewables we've placed on the grid over the last 15 years, which isn't political, that's just facts. The penetration rate, we're kind of getting into that low double-digit penetration rate of renewables across some of our larger grids, and that has created instability potential within the grid. As far as you have reduced spinning mass during parts of the day where the wind is blowing and the sun is shining and you have

Peter Brecht05:31

Mm-hmm.

Joe Dillon05:51

Increasing transmission challenges since we used to pretty tightly co-locate generation with population or with users, now we've got intermittent renewables kind of geographically, spatially separated as well as, less unknown time production. And so it's kind of gone from being a

Wade05:53

Okay. Okay.

Joe Dillon06:13

Command and control system on how the grid is operated to really moving toward more of a market-based structure. And we've seen that over the last 20 or 30 years, but we're starting

To see just tons of new volatility entering the market from there. And we think that you're gonna need somewhere between 600 gigawatts and a terawatt of new generations slash flexible load just to balance the

Wade06:32

Okay. Okay.

Joe Dillon06:40

Intermittent renewables that have been added to the grid so that I would say excludes what we're gonna need for all of the new large buyers such as the AI Hyperscale, the Bitcoin is pretty flexible, but you also have a lot of EV Adoption and just general we've essentially gone from a grid for 40 years where we were growing it to basis points point two percent to a grid that's now growing it five to seven percent a year and So we're starting to see some of those dislocations

Wade06:51

Okay. Okay.

Joe Dillon07:10

And so that's what we're pretty locked in on that. Think, I graduated right around when from Tulane in New Orleans, right around when Hurricane Katrina hit and

Having lived overseas quite a bit in my life, I've seen kind of what happens when the power goes out and we really don't want to be there as a nation. And so that's kind of where we try and stay in our lane and just what can we do to help increase grid reliability and improve resiliency while leveraging some of these new low

Peter Brecht07:25

Mm-hmm.

Wade07:25

Right.

Joe Dillon07:40

That are coming on.

Peter Brecht07:42

Yeah, my wife, sorry, real quick. Yeah, go ahead, Wade.

Wade07:42

So we need... I just need to...

No, no, no, go ahead, Peter, sorry.

Peter Brecht07:49

And

We can edit that part out so it looks seamless too. That's the best part So, I'll just have to make sure the editor knows so Joe I mean one thing I think about I've spent My wife as I mentioned she's surfs and so we went to Puerto Rico for a two-week vacation and vacation is heavily in quotes because the power was out For the first three days we were there. It was 90 degrees Humidity off the charts, so no power

Then eventually you have no water because you have no power. And I mean, it's Puerto Rico, so you kind of are okay with it because the surf is good and the rum is good and all that fun stuff. But the reality is, I mean, if we have the fragility of our grid, the town I live in would be up in arms within a day or two of power being out like that. So I don't know. Just, hopefully you're successful in what you're doing. But wait, I know you had a question. Sorry, I'll turn over to you.

Wade08:39

Thank

No, yeah, I was just wondering, so when you refer to flexible load, like what are you talking about? I is this like being able, you're kind of talking about like storage and being able to bring it online whenever you need it or kind of what are you referring to there with flexible load?

Joe Dillon09:03

So our most recent portfolio project we create, we built out is up in North Dakota near the Bismarck area and that is co-located at a plant called Coal Creek Station and it's run by Rainbow Energy. They have been trading physical power for 30 years. They also have a pretty big energy business broadly. Private so they're a little bit more under the radar but

Wade09:31

Right.

Joe Dillon09:32

We put down a data center there that's about a 220 megawatts of load and it sits directly co-located with the plant. And so you could throw a baseball and hit the generation facility. That plant has some interesting characteristics where it's a 1.2 gigawatt plant. It's one of MISO's five black start generators. So if you have a full blackout in MISO, this is one of the ones you use to kind of reboot the grid.

Wade09:43

Okay.

Joe Dillon10:02

Unique decision was made in the 60s where they decided to build a high voltage DC line directly to downtown Minneapolis and place the generation facility on top of approximately 50,000 acres of the cleanest burning lignite coal in the United States. And so they've continued to lean into that. It's the conservation efforts they do are amazing and they also have all of their, clean coal and scrubbing everything. And it's the largest carbon capture project in the world, I think that's kind of continuing to

To kind of inch along, but from a performance perspective, that effectively lets us take that power plant and make it look like a battery. So we can kind of step through some of the different benefits to it. On one hand, the...

You the plant is getting a firm consumer of power at a firm price. And that is one area kind of those northern plain states and northern Midwest. The economics for a lot of thermal generation has been really impaired because of the wind that has come up and because of to some extent the solar. When that happens, now you're running into plants that were built to be baseload plants like steamers, big turbines. They take a long

Wade10:52

Right.

Mm-hmm.

Joe Dillon11:16

Time to heat up and cool down and when you cycle them, the stuff just breaks. This is some of the most well-engineered generating facilities in the world, but they're designed to run all the time. And so this helps preserve that base load demand for those plants. While simultaneously, we've interlocked the power supply with the plant and with the grid. So if there is a grid stress event or

Peter Brecht11:20

Mm-hmm.

Joe Dillon11:41

Some kind of power pricing event that requires us to we need to dispatch more onto the grid to help lower prices for consumers, we can take that 220 megawatts down to about seven in about 90 seconds, which is

You could go faster, but the DC line can only change a hundred megawatts a minute. So it's probably the largest fast responding large load in the country we think the fastest large flexible load in the country What that results in is it allows you to capture economics from when the grid is very volatile and prices are very high and it also allows the plant to operate at a base level I mean, it's the largest employer in North Dakota

Peter Brecht12:04

Hmm.

Joe Dillon12:28

There's a lot of second-order economic effects that are pretty important for these plants as their centers of the communities they're in so That works great. That's all kind of written into the power agreements for the customers. Those customers are all institutional grade public style Bitcoin mining firms, but they've all this is not Someone with some machines in the back of a truck like these are you know public companies that are here are global in reach and have you know kind

Peter Brecht12:31

Yeah.

Wade12:32

You're

Right.

Joe Dillon12:58

Of credit worthiness that makes a lot of sense for the power groups. And so we kind of act as a.

We've been acting as a coordination layer there. We help de-risk those projects a lot where that's part of why we used multiple tenant approach where when you start getting into the sizing of these facilities, you really don't wanna have just one customer that may disappear for whatever reason, just idiosyncratic risk, and now you've got kind of a stranded asset there. It's been a, we were able to kind of bring that from PPA signing to full loading within about 18 months with two North Dakota winners.

So apologies we haven't met earlier, Peter. It was a pretty busy couple of years.

Peter Brecht13:39

Yeah, no kidding.

No kidding.

Joe Dillon13:43

So from there, that's really helped develop our thesis more deeply and we've got some active conversations with incremental power plants on how we can co-locate with them as well as a new energy campus where we're actually acquiring the generation facility out in Texas to kind of bring that to market as a load balancing, hyperscale quality campus.

Peter Brecht14:10

Gotcha. Think one thing, and you mentioned North Dakota, I think we've all read those articles or some of us have about the people in these places like North Dakota, Wyoming, that are complaining whether it's noise or power going up from these data centers and from the Bitcoin mining. I I'm sure you have to do, just to start those companies, you have to do a lot of research around the demographics and the impact on the environment, all those, right?

I what's your, I guess what's your thought process or how would you think through how those articles are portrayed?

Joe Dillon14:47

This is a really good question and this is near and dear to my heart, Peter, because I think there is a lot of education yet to have or to put out there around this topic. Think the way, so.

I think the noise issue has been relic is kind of fading away a little bit. Most of the new data centers, especially the hyper scale, like magnificent seven, Oracle, Amazon guys, they're all using closed loop systems at this point. Think the last major data center build I saw Google did.

What was then a relatively large data center in 2017 that still used evaporative cooling. Basically every design we're seeing come out of the market now is all this closed loop cooling. So you do get a lot of kind of smoke around, all of this water usage, all of this resource usage that I don't know that is substantiated by kind of what equipment is actually being put in the ground. I think there is...

Wade15:38

And

Peter Brecht15:43

Yeah.

Joe Dillon15:46

Right now we've got a couple consulting firms engaged to actually run the analysis on our Kurt Tailman activities because it's demonstrably.

Cost saving to the end consumer when these kinds of loads are placed at the generation facility than when they are maybe front of the meter. Think there is often a misunderstanding and I think there's been some interesting charts coming out that show districts and service territories that have more large load in them generally have lower electricity prices for residents. Part of that reason is a lot of the rise in retail rates over the last three

Peter Brecht16:02

Mm-hmm.

Joe Dillon16:26

For years has been due to a bunch of wire and lines build out. Like think about we spent two decades building suburbs everywhere in the country right and that is everybody has to have a line running directly to their house and a whole suburb may use five to ten megawatts of power right. Well if you put in a new manufacturing facility that moves five to ten megawatts of power you are running one line there and you are putting one meter in and that person is paying for a lot of power to keep that line full.

Peter Brecht16:35

Yeah.

Wade16:36

And

Joe Dillon16:56

Residential areas, lines are pretty empty because they're sized for Thanksgiving dinner and Christmas Eve and the 4th of July. They're sized for the peak usage at home and you don't really have a... So a lot of times a lot of those power bill increases people are seeing they're paying for underutilized lines and so at a grid level the way you can fix that and keep those lines full so those line cost is distributed to more megawatts is to have things like large flexible load or large consumer

That also have generation so they can kind of present a very steady consumption picture to the grid.

Peter Brecht17:33

Well, not to mention that you also have RTOs, which I'm sure play a factor in how all this works out as well. I mean, I'm in an RTO in California and I can tell you right now, this is something that I think about a lot is, we'll have our utility company and we'll come out and have a meeting about things and you'll have all these people show up and they get upset. Most of them, they're older folks and they're on a fixed income, retired.

They're just there to listen to what I've been to one or two of them because I'm just curious like how are these are run. And a lot of it just feels like a sales pitch because at the end of the day I know they're not going to do anything. Know the 20 or 30 people in that room in that little tiny suburban corner of California. It's not like it's going to change our utility companies mind. So I think a lot of that too like the RTOs have to play a pretty big role in the conversations you're having too.

Joe Dillon18:26

Yeah, I think that's...

Primarily one of our major engagement points, Peter, and we've seen that grow, is we are, especially as that North Dakota site has really kind of been up and running for closing in on a year at full capacity. The great example there, some of the leadership in MISO, which is kind of the RTO that's the Mississippi Valley basically, they've reached out to ask on how they can, we've had active conversations with them on how to design.

Incentive structures so they get more of that into their grid I think we talked recently with some of the heads of SPP Which is kind of the RTO of all the big square states in the middle. I'm from one of those big square states so I can say it it's fine but they're pretty actively looking at like how do we Get

Peter Brecht19:09

Yeah. Yeah, yeah, yeah.

Joe Dillon19:17

People to be able to connect faster. How are we able to improve some of this new industrial load that wants to come in because they have a problem of they have a bunch of generation and a bunch of wind and a bunch of solar, but all their load is very concentrated in Kansas City or Oklahoma City or Stillwater and not there's a lot of empty space that is you got to build lines for. And then in ERCOT you have probably a hyper aggressive approach. Historically, they've been able to be more

Independent since they operate a independent grid from FERC regulation. And that is a dynamic environment. I'm sure anything I said about that would be out of date by the time the podcast hits the air in a week or so. That is becoming, we're seeing some of them start to wake up and move that way a little bit. There's definitely a...

Peter Brecht19:52

Mm-hmm.

Yeah, yeah. Yeah, yeah.

Joe Dillon20:10

There's a lot of inertia, think, just because historically these organizations, large utilities, RTOs, they were...

Built for stability and stability historically meant keeping things the way they were because we had a pretty well designed system and you're trying to make those organizations turn into okay, now we're going to grow a hundred times faster. It's not that there people aren't talented enough or they can't do it. It's really just a cultural change that takes some time and education. And so we invest a lot of effort in that to try and cause it's going to take.

An entire nationwide effort really to kind of continue to work towards stabilizing this then you know just a couple of guys running around trying to do this helps but you need you're going to need to kind of shift the overton window a bit.

Peter Brecht20:55

Yeah.

What do you think, what's one of the biggest misconceptions from your traditional energy executives? Is there something that not everyone's aligned on that's causing that or maybe there's a few things, but is there any, maybe one thing in particular?

Joe Dillon21:15

I think we've, so I've seen the willingness to evaluate flexible load like Bitcoin miners and some of these kind of alternative technologies improve dramatically over the last two or three years. I think that something we see a lot still is there have been a lot of...

Submissions for new load interconnects in the last couple of years, right? Between AI and everything else. Prior to that, what kind of got us into this mess is there was just immense speculatively submissions around wind and solar farms where people would just go pile up a bunch of speculative slots. And then when you get into it, turns out like maybe one of them is real. I think a lot of the large RTOs and utilities are over-indexing that this is the same.

Because everything we're seeing in the market is the developers and the large hyperscalers that are coming into the market, all of their load submissions are and, it's not or. Like everything they're putting in, they're planning to execute if they can get approval fast enough. And that just is very hard to comprehend for a lot of these groups because I mean, we were talking, Texas, I think is an 80, 90 gigawatt grid and they're talking about adding

Peter Brecht22:18

Mm-hmm.

Joe Dillon22:34

20 to 30 gigawatts of load to it from just large consumers in the next five years. Like that's crazy, historically speaking, but...

Everything that we're seeing day to day is that's very real and if there's more that can come there's more capital that's willing to deploy there. I think I'm firmly on more of the this big AI push is probably closer to the middle of the first inning than the middle of the eighth which I think you've seen some you know a lot of the news lately has been like it's a huge bubble and I just think it's still very early.

Peter Brecht23:03

Hm.

I would agree with you on that. That's kind of my personal belief also. I'm not sure about, Nvidia giving a million dollars, a hundred million here and then it kind of cycling through. That's interesting to me. I'm not sure how that'll play out, but I think overall, I think we're early.

Joe Dillon23:25

The way, the way I like to put it Peter is I don't know

Who is going to allocate capital poorly and go bankrupt. What I do know is that once those facilities are in the ground, and we've seen this historically with some of the Bitcoin infrastructure, the LLCs or S-Corps that run the entity may change, but they keep running. So the megawatts still get sold. The compute still gets processed. And so I don't, you're not going to see this big capex build out and then that infrastructure go dark kind of like Fiber did. Don't, I'm pretty far away from seeing that as happening.

Wade23:48

See ya.

Joe Dillon23:59

Happening

Right now.

Peter Brecht24:01

Okay, gotcha. As I was getting ready for this interview, Kevin Kelly published an article and he's a great author. He writes something called The Technium, that's his newsletter. But he talked about there's a tension between environmentalists and technology. So environmentalists say that tech is not capable of being green.

And you have to kind of keep endlessly growing in order to keep the system going. So my question to you is, you what's your perspective between technology and environmental sustainability? Like how can those two things come together? Because at the end of the day, I look at nuclear power, like I love nuclear, like that's kind of my, I don't know why we don't do more of it. I don't understand why we don't. I think it's the greenest technology you could come up with. But realistically,

Joe Dillon24:49

I agree

Peter Brecht24:56

That's a very adversarial comment to make, right? How do we bridge the environmentalist conversation with the need for growth?

Joe Dillon25:05

This is a good question. Let me break this into a couple parts here, Peter. Think, so first on the, just a quick aside on the new thing. I mean, it's pretty obvious to me that the U.S. Navy has figured out how to build SMRs for the last 30 years. So I'm just continuously puzzled on how we can't figure out how to, and I'm certain that those contractors like money. So I'm just baffled as how deploying additional nuclear in the U.S. has been so difficult. I'm fully aligned with you there. I think from, I think what happens on the technology

Peter Brecht25:16

Yeah.

Joe Dillon25:35

Environmental debate a little bit is a lot of I think short time frames tend to like work people out of perspective a little bit like if you look back from even the 1800s to now so call it 200 years we have rapidly and aggressively decarbonized our energy pool and that even at the same time while exponentially growing it right I think something like 90 plus percent of primary energy use in the early 1800s was wood

And so we went through wood.

To coal and then oil came in and gas and you know all these are progressively been cleaner technologies as we've gone and I think you saw you know some of the recent big build out in the environmental you know with intermittent renewables the last 10 years feels like almost like they're trying to force it to decarbonize faster which is an approach you can take but I worry that you are begin to underweight the importance of

Having reliable access to electricity power as well as the available to serve your like industrial base as well as your residential base. So there has to be like kind of like a Maslov's needs where like lights and food are going to be above, completely decarbonizing the entire energy stream. And I think you just have to, I think it's and I think it happens over time and that technology is what enables the decarbonization to happen. And so, yeah, are there ways to improve it?

But yeah, we should build a whole bunch more nukes, I agree. We have a lot less grid stability work to do if we had, spent two trillion dollars on nukes, we kind of, this is where we are and now we can move forward from there.

Peter Brecht27:20

Yeah, not far from my home, the Sanofre nuclear power plants getting shut down. They shut it down and now it's, now they're deconstructing it. And when I was growing up, a friend of mine, his dad worked for the plant. He was a nuclear physicist and would go and I was like, we'd go to their house for dinner and you know, my parents were cool. My dad would ask what he does for work and they talk about it. And I was just so fascinated. I mean, this guy would get up in the morning, drive two hours to get to the office, and like the dedication, but then

Like all the cool things that he would tell us about, like what they can do with nuclear. I was always blown away by it, right? And then simultaneously, in, we have carbon California that pushed all these dealerships to okay, we need to sell more electric cars by 2030. And there's, they, what they don't realize is how many stakeholders are involved. I mean, you have, there's buyers and sellers, right? People have to want to buy it. Then you got to figure out how to charge it. There's just so much going on in that, I think

I love your point though. It's gonna take everyone to get there, but at some point, It stays even anyways. Everyone's gonna keep consuming power at the same rate or more.

Joe Dillon28:28

Yeah, like if you are incentivizing a quote cleaner emissions profile, the costs of that, I don't know, are fully appreciated, right? Since it's not like the economically optimal answer. And there's a balance here, right? Like we're not looking to catch the Erie Canal on fire again. Like we've made huge strides in the country and globally on, improving pollution. But at the same time, if you either bankrupt,

Peter Brecht28:45

Right.

Yeah.

Joe Dillon28:53

Or brown out big parts of the country while you're doing it, then that's not going to work either. So we have to kind of figure out how to combine these into a cohesive energy plan, is something I feel like we've lacked a little as a nation in last couple of days, forever.

Peter Brecht29:09

Yeah,

Absolutely. So you've touched on Bitcoin briefly and I didn't want the show to be all about Bitcoin even though I could talk about it because I have an interest in it. I think it's an incredible, I don't know you can call it asset or invention, but you work with Lightning Ventures, is that right? Okay.

Joe Dillon29:15

Sure.

I did, I have, yeah, I've been a little bit

Quieter with them the last couple years, but I know that group over there and they're really good.

Peter Brecht29:32

Okay.

Yeah, I just, my familiarity with them, I looked them up real quick as I was going through. But I mean, they're talking to Willy Woo, and Adam Beck and Preston Pish, and he's got a great podcast. And then I don't know if you follow Rob Hamilton or Becca over at Anchor Watch, but I'm fans of them too. Building an insurance product around around Bitcoin, but you know,

Joe Dillon29:48

Yeah, Yeah.

Peter Brecht29:57

What's where do you see like oil and gas specifically? We're talking to a lot of upstream folks and kind of having a background in that. How do you see oil and gas connecting with Bitcoin on a larger basis? I know I know we can take flared gas and, start start mining Bitcoin off of that. There's companies that do that, upstream data, for example. But what how if you were talking to someone that's drilling or producing.

Where would you say, look, this is a benefit of Bitcoin and why you should be taking advantage of some of those opportunities right now?

Joe Dillon30:33

Yeah, so that's a really good question. And I think that the way I think about it...

Is and part of, so what we're doing right now is we're buying an older gas generating facility out in West Texas and at one of the larger cities in West Texas and we're gonna re-energize it but it's connected to two of the largest laterals in West Texas for gas transport, right? Well, the vision there is building an energy campus out with AI campuses that have their own

Gas power generation, but then you're using that original plant as effectively balancing load across the entire facility that then interacts with the grid. Well, that balancing load is going to be batteries and Bitcoin ASICs because it's the most efficient way to maximize your gas consumption where you're having to purchase these off the market. Now, certainly I understand that there are a lot of fields where there are congested or there's, gathering issues

Peter Brecht31:21

Okay, alright.

Joe Dillon31:37

Issues.

We've been had conversations with several pipeline companies and continue to engage with them on a lot of aspects how we can work together. But I mean, there have been talks of installing flexible load at pumping stations to help reduce, monetize some of those flows that are as they're moving through the pipelines. I do think

Where and this is you everyone's right everyone's got a right to an opinion I guess but kind of where I see the market going is you're gonna see those like flare gas miners or flare gas mining setups I think are gonna continue to mature and it just screams like a product that like slumber j or haliburton big red or big blue is gonna get into it at one point and be like okay we ordered 100 000 containers we're gonna put it at every well we have to

Peter Brecht32:04

Yeah, yeah.

Right. Yeah.

I'm surprised they haven't

Already, honestly.

Joe Dillon32:29

I kind of am too, honestly,

Peter. I think that that's like a pretty like in your face solve there.

Because ultimately you do need some of that scale. I think it's going to become increasingly difficult for front of the meter or like in front of the distribution line mining to work unless you have a really unique setup with kind of how that is working. And so for me, I think about it as like, it's a tool in the business model as far as how to incorporate Bitcoin mining to improve your P &L or your revenue or your business plan.

So we look at it as an opportunity, like having a super highly flexible load is like super unique on the power grid, right? And so we can monetize that to the point where, our view is by the end of the decade, 50 to 70 % of the revenues from the facility could come from power marketing versus, versus just straight hashing and Bitcoin mining. Where I've gotten a little stuck on some of the flare gas guys is I don't exactly see what that second usage is. I guess it would be,

Peter Brecht33:07

Yeah.

Joe Dillon33:38

If your spot price rises above a certain amount, you curtail and you flow outward. But I mean, think those are, I think the team over at Upstream does a really good job. They just, have a good product and they're very straightforward and straight shooters. I think it's gonna become, continue to be in...

Peter Brecht33:43

Mm-hmm.

Joe Dillon33:59

Integrated as like a grid appliance right like the refineries the Ellen Jeep trains the pipelines it just doesn't make sense to have

Peter Brecht34:02

Mm-hmm.

Joe Dillon34:11

I mean, I've seen Exxon blow a mountain up to change a pipeline by like a couple of degrees, right? When you have that clear waste stream there that you can monetize, historically the energy industry has been very aggressive about it. So I'm pretty bullish on the energy industry getting deeper into it. I do think it's going to become harder for retail unless you're like hosting through one of these services at one of these facilities to really get as much exposure.

Peter Brecht34:16

Yeah.

This is the conversation that has really energized me the most where I've kind of found myself as I'm between, this interest in Bitcoin that I don't talk about very much just because, I don't know, it's just, it's kind of a polarizing topic for a lot of people, but then you got Bitcoin, energy, and then this, insurance and risk management side. And it's kind of fun to like talk with people that share similar interests and you can get into the weeds on it. You know.

Joe Dillon35:03

Yeah, well, I'm going to warn

You, Peter, don't go down the working capital hole because that'll break your brain. There are literal like.

Peter Brecht35:07

Yeah.

Joe Dillon35:10

Hundreds of billions of dollars just posted as collateral for like moving gas and like the potential there for having you know kind of a neutral asset or an energy-based asset like Bitcoin helps settle those kinds of collateral flows is also interesting so I it just I think that's part of why it's an interesting topic especially if you've been in the energy space because it just starts touching like all the different pieces and it's a helpful construct.

Peter Brecht35:27

Yeah.

Don't tease me now, I gotta go find someone

To dig into that one and I'll just spend days on it now. Well, Joe, this has been such a great conversation. I know we lost Wade there, I think he had a call that came in. Thank you for coming on. Please give people a handoff where they can find you or connect.

Joe Dillon35:40

You

Sure, I'm on LinkedIn at Joe Dillon, Joseph Dillon, and then you can find me on Twitter, it's at Tulane Joe, or I go by that Joe you know on there. And our website's at AtaconEnergy.com, and yeah, feel free reach out, send me a DM, ping me. We're pretty active in the space and always love to talk. There's more addressable work to do than there are bodies to do it, so we're just doing the best we can.

Peter Brecht36:03

Yeah, yeah.

Yeah.

Well, Joe, thanks for coming on. Wade, I will give you a call after this and we'll talk again soon. But thank you guys and we'll talk next week.

Joe Dillon36:30

Awesome, thank you Peter, thanks for having me.

Peter Brecht36:32

Alright, hey before I let you go, and I know you got a busy day, but the word Adakon what does Atacon stand for?

Joe Dillon36:35

Yeah.

Adakon is, so I have an Osage Indian out of Oklahoma, is my heritage, and Adakon is the Osage Indian word for sun, power, oil, and energy.

Peter Brecht36:50

I love that. That's great. I love that. That's really good.

Joe Dillon36:52

Pretty good, right? So technically it's energy

Solutions, but we don't need to talk about that part.

Peter Brecht36:57

Right, right, right. Yeah, no, it's still cool. The etymology is amazing. I love it. So cool.

Joe Dillon37:01

Yeah, so I saw that

And I was like, this is cool. It's like it's a nod to heritage. Everybody in the oil industry has got like Smith drilling inc. You you want something that's a little has a little bit of a name to it. And I love telling that story. So that's the origin. Yeah. Well, some guy in Germany has got just Atacon.com. I got to try and track it down. But I got the Atacon energy and we'll just keep plucking away.

Peter Brecht37:09

Right. Yeah. And the domains available, right? So that's the other part, right? Yeah.

Yeah, I love

It. Yeah, we got our localenergy.com domain. That was a journey. That stuff's fun, right? It's enjoyable. Well, man, thank you for coming on. I forgot to hit, let me hit stop here.

Joe Dillon37:29

That's a good one. Yeah.