A startup company is proposing to build a large Bitcoin mining operation on Alaska’s North Slope later this year that’s expected to be powered by the region’s abundant natural gas — a test of an operation that it wants to grow into the largest in the nation.
The project from Wasilla-based Stax Capital Partners would be the first of its kind for the state, and the company wants to “create the playbook for sustainable, at-scale Bitcoin mining in Alaska,” said chief executive Sparrow Mahoney. She said Alaska is “the only place this makes sense, long term, for the industry.”
Stax recently applied for a permit with state land managers to set up shipping container-like pods housing natural gas generators and computers at a site some 30 miles south of the massive Prudhoe Bay oil field. The generators would be fueled by the basin’s huge stores of “stranded” natural gas — an industry term for gas that doesn’t have a pipeline connecting it to potential customers.
Bitcoin mining doesn’t have the same type of impact as hard rock mining — it’s a digital process that uses computers to create valuable cryptocurrency.
Nonetheless, the rapid proliferation of Bitcoin mining operations and other data centers is drawing increasing public opposition tied to their demand for electricity and property in Lower 48 communities.
Alaska policymakers have recently been pitching companies on the state’s ample unsettled land and, potentially, the ability to generate power using the large quantity of stranded gas at the North Slope oil fields, which is otherwise reinjected underground.
But developing new industries in the region is challenging due to its remote location and steep construction costs. And oil companies on the North Slope haven’t ever sold large quantities of gas for Alaska-based data centers or Bitcoin mining, so it’s not yet known whether their asking price would be low enough to offset the higher costs of building and operating infrastructure in the Arctic.
Stax’s gas generators would have the capacity to produce 50 megawatts of electricity — about the same amount as Alaska’s largest coal plant, in the Interior community of Healy. The company is “in conversation” with a number of potential natural gas suppliers on the North Slope, Mahoney said, though it has not yet signed a contract with any of them.
The company’s plans dwarf another test Bitcoin project on the North Slope that was proposed last year — a 1.4-megawatt partnership between oil company Hilcorp and a small infrastructure firm. Mahoney declined to reveal the exact cost of Stax’s project, but confirmed it would exceed $10 million.
Mahoney also would not say how Stax expects to move the gas the 30 miles from the oil fields to its proposed site — located at the Franklin Bluffs pad, which was built during construction of the trans-Alaska oil pipeline. But one option could be to tap into a small, existing gas line that runs along the oil pipeline, which carries fuel used by the oil pipeline’s pumps.
The proposed Bitcoin mine comes as numerous Alaska lawmakers are separately pushing the construction of an enormous new gas export project that would connect the North Slope oil fields to a port on the Kenai Peninsula. There, the fuel would be liquefied and transferred to cargo ships that would deliver it to buyers in Asia.
While that project has drawn renewed political support from President Donald Trump’s administration, it’s also struggled to draw investors in part because of its price tag of $44 billion or more.
Stax’s project would be an “innovative” way to profit from North Slope gas without requiring construction of the export project, according to Phil Wight, an energy historian at the University of Alaska Fairbanks.
But the Bitcoin mine could also come with significant impacts, he added: further industrialization of the environmentally sensitive Arctic region, as well as the carbon emissions that stem from burning natural gas.
“It just gets into this really problematic situation where, suddenly, we are burning gas that we wouldn’t otherwise burn, and we are not executing an energy transition,” Wight said.
Mahoney said her project would require “no new drilling” and that its location 30 miles south of the main North Slope oil fields is aimed at avoiding additional air pollution there.
Mahoney grew up in Alaska, graduated from Wasilla High School and once worked for Frank Murkowski when he was a U.S. senator. She has worked in the cryptocurrency industry before, helping the Iditarod develop its own “Iditacoin.”
Stax was only established a year ago. But it’s working with multiple established players in Alaska, Mahoney said.
Anchorage finance firm McKinley Alaska Private Investment has committed the money needed for the pilot project, she said, and another advisor to her company is Brian Murkowski, an energy consultant and brother of current U.S. Sen. Lisa Murkowski. Jim Shine, an attorney and former high-level official at the state’s land management agency, is handling some of the permitting work.
Stax aims to begin construction by the end of 2025, Mahoney said. If the initial, temporary project is successful, the company aims to expand; it’s eyeing power generation with a capacity of a gigawatt, or 20 times the size of the initial development.
But even the pilot 50-megawatt project would be considered significant in the Lower 48, where a New York Times analysis of what it called the nation’s 34 “largest” Bitcoin mines only examined operations larger than 40 megawatts. The country’s biggest mine, currently, is a 700-megawatt facility in Texas run by a company called Riot Platforms.
Mahoney said that Alaska could benefit from Stax’s proposed project by selling its own gas to the company; the state owns a royalty share, typically at least 12.5%, of gas produced by companies operating on the North Slope.
“What we’re doing is showing that there’s a large, viable, commercial opportunity based on infrastructure and resources that exist today,” Mahoney said. “We can monetize this together, today. And it represents an opportunity of tremendous magnitude for the state and for everyone.”
• Nathaniel Herz welcomes tips at natherz@gmail.com or (907) 793-0312. This article was originally published in Northern Journal, a newsletter from Herz. Subscribe at this link.
