#1225 Daniel Batten on Making Millions Turning Trash Into Bitcoin

Daniel Batten is an ESG analyst, and the co-founder of CH4 Capital. In this conversation we talk about a wild idea, taking waste from landfills and turning it into energy, then mining bitcoin right there on-site. Why would you want to do this? Not only can you mine bitcoin with cheap energy, there is also the potential to capture methane instead of leaking it out into the environment, and make bitcoin mining a net negative methane emission. ======================= Backed by world-class investors, including Google's AI Fund, Range has redesigned wealth management from the ground up. Range delivers a tech-first experience that provides fast, high-quality, transparent wealth management services making it simple to optimize and grow your wealth. With Range, you get comprehensive services like tax optimization, investment management, and estate planning with no hidden fees. That means no AUM fees. Get started today with code POMP15 for 15% off any quarterly plan for your first year at ⁠range.com/pomp⁠ ======================= Pomp writes a daily letter to over 250,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. Daniel Batten is an ESG analyst and the co-founder of CH4 Capital. In this conversation, we talk about a wild idea of taking waste from landfills, turning it into energy, and then mining Bitcoin right there on site. Why would you want to do this? Well, other

• 0:45Anthony Pompliano?

  than being able to mine Bitcoin with cheap energy, there's also the potential that you could capture methane instead of leaking it out into the environment and make Bitcoin mining a net negative methane emission. That would be absolutely incredible. It's not just a pipe dream, though. Daniel and his team are working on exactly this idea, and that's what we talk about today. Here is my conversation with Daniel Batten. This episode is brought to you by Range. Are you day trading, a crypto enthusiast, or a tech worker? Or are you just an overall investing enthusiast? Listen up, you need Range. Backed by some of the world-class investors, including Google's AI fund, Range has redesigned wealth management from the ground up specifically for us. They deliver an all-in-one tech-first experience that provides fast, data-driven, high-quality services

• 1:30Anthony Pompliano?

  to anyone looking to manage their money in a modern world. Get all your stuff done in one single place. Tax optimization, investment management, equity compensation planning, and small business support, they handle it all. And the best part is, you ain't going to be asked to pay 1% because they don't have any assets under management fees. You're not also going to be asked to do quarterly meetings in a stuffy office with a dude with bad cologne and a tie, because you can message them whenever you want. You won't be asked to walk in the door with hundreds of thousands of dollars to get started either. They don't have minimums. The bottom line is this: Range offers incredible optionality when it comes to managing your money. The founders built Range for themselves to solve all these old-school

• 2:12Anthony Pompliano?

  problems, and now it's available to all of us. Use code POMP15 for 15% off any quarterly plan for your first year at range.com/pomp. Again, use code POMP15 for 15% off at range.com/pomp.

• 2:29Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 2:54Anthony Pompliano?

  All right, guys. Bang, bang. I've got Daniel here with me. Daniel, I thought a great place for us to start this conversation is this idea of reducing methane. Obviously, there is a ton of talk about climate change. There's a ton of talk about the science behind it, who's causing the rise in temperature and all of these different kind of environmental issues. You're unique in that you are a ESG analyst. You're somebody who looks at these issues and wants to help solve them, but you also are a massive proponent of Bitcoin mining. Let's maybe just start with how did those two worlds intersect and why do you believe that Bitcoin mining can actually help to reduce methane and address some of these ESG concerns?

• 3:30Speaker 02

  Well, thanks, Bob. Great to be here. I was a climate tech investor or had been a climate tech investor for around four years now. So run two different funds. And there came a point when we asked ourselves the question, are we doing enough through our funds? And the answer was no. We realized that we were only looking at carbon dioxide emissions. That's not our only emission, number one. Number two, we were funding ventures that were high risk, of course. So some of the technology might never see the light of day. And the other issue was that even if they did see the light of day, it was going to take until well after 2030 before they achieved scale. So we started to ask ourselves the question, what can we do that's mitigating not only carbon dioxide, but methane,

• 4:12Speaker 02

  which the United Nations is telling us is now our number one lever to slow down climate change. Number two, what can we do that's actually low risk? So it's using technology that exists today to find climate solutions. And number three, it's going to be very fast acting. So it's something that can happen before 2030 and using existing technology and mitigating methane. We did a lot of research and long story short, we came to the surprising conclusion that using Bitcoin mobile mining units on landfills was going to make a whole stack of difference to mitigating our methane emissions.

• 4:51Anthony Pompliano?

  So when you think about mitigating, that I think is something people say, that sounds good, right? Like, I think that we should mitigate the methane emissions and let's go do that. But you will also think that Bitcoin potentially become negative emissions, which is this really unique idea. Describe how we get from something where people are concerned about Bitcoin mining and they think it's bad for the environment, to potentially being one of the only industries in the world that could claim negative emissions.

• 5:20Speaker 02

  Yeah, it's fascinating. So the first thing to understand is why methane and how that can make a contribution substantially. So for a long time now, organizations like the Environmental Defense Fund, the EPA, has said that the best way to reduce landfill emissions is by basically doing some sort of power generation with them. So rather than what happens at the moment is methane is 84 times more warming to the earth over a 20-year period than carbon dioxide. So that's why the United Nations has said it's our strongest lever to reduce climate change over the next 20 years. So the problem is, and just to give a context for landfills, so there's three big providers of methane

• 6:05Speaker 02

  to the atmosphere that come from human sources. So there's agriculture, oil and gas industry, and landfills. And until recently, we thought that landfills was our number three issue. Well, that was until last year, when the NASA Jet Propulsion Unit from Pasadena gave us the results of six years of satellite footage, and they showed that our landfill emissions were underestimated by a factor of 2.27. So what that means is landfills is actually our number two source of methane emissions. And then if you factor in that the World Bank has said that they're increasing at a rate of around 1.4% per year, that's faster than agriculture. They're actually going to overtake agriculture and be our main methane source by 2032.

• 6:49Anthony Pompliano?

  What is happening inside of these landfills, right? In terms of like, what is driving it? Are we just taking trash and we're throwing it in there and nature's kind of taking over? Or is there some process that we're running? What's happening?

• 7:00Speaker 02

  So what's happening is, so when organic waste decays, it can decay in two ways. If it decays in the presence of air, then it produces carbon dioxide. But if it produces, if it decays without the presence of air, so in a landfill, when it gets very compacted, there's no air available, then it decays anaerobically, which basically just means without air, and that produces methane. And that's particularly bad, remember, because methane's 84 times as warming. So what's happening in these landfills is you get huge amounts of inorganic and organic waste, piling together, getting compressed, there's no oxygen available, you get massive builds up of methane, and that methane, for the most part at the moment around the world,

• 7:42Speaker 02

  is simply getting vented into our atmosphere and it's causing climate havoc.

• 7:47Anthony Pompliano?

  How do we get to negative emissions if landfills are growing at this 1.4% and it's the second largest kind of culprit?

• 7:57Speaker 02

  There's a couple of ways you can do it. The first way is what people have started doing is just simply burning it. So you put up what's called a flare stack. You've probably seen them on oil fields, oil fields. So they exist on landfills as well. So on a landfill, you put up a flare stack and it just burns the methane. There's a couple of problems there. Number one, it doesn't burn it completely, so it only destroys around 90% of the methane. The other 10% still goes into the air. But the bigger issue is these things are expensive to point up, and you're actually turning a source of power and you're just wasting it. So a much better option is to use that and to generate power with it. Now, what happens there is typically when you produce power, so what that means is you get a generator on site. You purify that landfill gas, turn it into biomethane.

• 8:41Speaker 02

  You use that biomethane to go into a generator which converts into electricity. Now the problem is, what do you do with that electricity? Now, in some cases, you can sell it back to the grid, but in the US, for example, in 70% of the cases, it's just not economically feasible to sell it to the grid because the grid cannot take it. It would need a major substation upgrade. And so these landfill owners going, well, I want to destroy my methane. I would like to get some money for it if someone will pay me for the electricity that I can generate using that methane. But my only options are, I can't sell it to the grid, so I've got to get someone who wants to set up shop on site. On a landfill, I don't know about you, Pomp, but I don't want to set up my business on a landfill. I don't know a whole lot of people who do.

• 9:24Speaker 02

  And so one of the few people in the world who's actually prepared to go that extra distance and actually set up a business on a landfill is a Bitcoin mobile mining unit. So it's a very unique sort of business that is able to take itself anywhere and utilize the stranded energy. And because Bitcoin miners, their major cost is electricity. They care about this more than anyone else. If electricity is only 5% of your operational costs, you're not going to bother. But if it's 60% plus, say that it's a Bitcoin miners, you'll go to the edge of the earth to try and hunt out cheap sources of electricity. And this is why that these Bitcoin miners have made ideal users of that landfill gas methane turn into power to create electricity.

• 10:09Speaker 02

  So it's a really natural synergy.

• 10:11Anthony Pompliano?

  How much energy or electricity could be generated from a landfill? Obviously, the different sizes of landfills get you different numbers, but like on average, are we talking about being able to run two or three Bitcoin miners? Are we talking about being able to run a warehouse full of 10,000? Like, give us some numbers or some way to think about this.

• 10:30Speaker 02

  So an average landfill will be able to generate up to eight megawatts. So one megawatt, you're probably talking around about 300 Bitcoin mobile miners. So you'd multiply that by eight. So what's that? Two and a half thousand Bitcoin miners operating. So they're starting to get like a mid-sized Bitcoin mining operation. Coming back to that question just around the carbon negative emissions, why it's carbon negative is basically now what you're doing is you're not using solar or wind, which is has zero generation based emissions, but you're using actually a source of pollution as your source of energy, which is astounding. There's very few industries in the world that can do that. You're using methane, which would have gone into the atmosphere.

• 11:16Speaker 02

  And you're stopping it from going into the atmosphere. So a real key distinction. If you're taking it from a natural gas pipeline, then that would have stayed otherwise in the ground. So that's, that's not carbon negative. But if you're taking methane that would have gone into the air, you're stopping it from going into the air and you're using it to generate electricity, then that's actually emission negative.

• 11:37Anthony Pompliano?

  And how much do we need to do this to get to negative emissions? Is this like we hook up two or three landfills and we're good? Do we need to do it 100 on every continent? Like, what's the size or kind of the scope of how big of an investment this would be? And kind of how big of an infrastructure project are we talking here?

• 11:57Speaker 02

  We're looking at 280 megawatts. So what does that actually mean? Again, if you think about an average landfill is eight megawatts. So it's about 30 to 40 mid-sized landfills is enough to do it. It depends a little bit on the landfill. It depends on geographic area. Sometimes it may need to be a larger one. But it's not a humongous amount of landfills. It is absolutely feasible. And the good thing is that if we look globally, we have the potential, like if you look at the maximum, just available potential, there's upwards of 15 gigawatts of energy that could come from landfill gas. So this is actually a relatively small amount of the total available landfill gas power directed towards Bitcoin mining. And to put

• 12:42Speaker 02

  that in context, so right now, in the oil and gas industry, there is upwards of 160 megawatts being used from what was previously fled natural gas from the oil and gas industry. So it's not that much more than we're already doing in the oil and gas industry. We're simply doing it with landfills and there's a bit of an extra infrastructure to put in place the gas capture and collection systems.

• 13:07Anthony Pompliano?

  When you see this opportunity, there would be someone who would say, let's go build a company, let's raise money, go build the infrastructure, own 100% of it, or as much as we could, maybe use some debt and do it as a corporation. You all seem to be taking a little bit of a different path, where you're looking at it much more as from an investor seat, raising funds to go and deploy and kind of fund other people who are doing this. What are the pros and cons of doing it as a company versus as a fund manager?

• 13:36Speaker 02

  Well, if you're going to do it as a company, you really want to be a Bitcoin mining specialist and you have to go deep down that rabbit hole. We are not Bitcoin mining specialists. We know a bit about Bitcoin. We know a bit about four things. Well, I personally know a bit about four things. So to do a fund like this, you basically have to know a little bit about Bitcoin mining economics. You need to know about infrastructure finance. You need to know about landfill gas power gen. And you need to know about how carbon credits works on landfills as well. So we have looked at these four different areas and we said, "Okay, that's actually quite a lot to understand and synthesize. It's too much for any one person to really have deep domain expertise." But if we build a team of specialists in these areas, which we have done, now we can actually start to move ahead as a fund and we can have more impact.

• 14:21Speaker 02

  And for the last four years, I've worked out that when you're a fund manager, you have the ability to deploy capital to multiple projects in parallel. This is something that has a lot of personal appeal to me in terms of the amount of impact you can have. So for me, it was just all about how can we have more impact sooner?

• 14:39Anthony Pompliano?

  Now, when you look at funding these, um, let's say that you get 30 or 40 landfills around the world. How do you think about decentralization versus centralization? We saw a bunch of miners leave China, kind of unplug, move elsewhere. The US was the big winner. Texas, I think, now has 10% or more of all mining. The United States is somewhere around a third around the world. Do you think that this is more decentralization? Or could this actually lead to a higher concentration in Bitcoin mining?

• 15:06Speaker 02

  Definitely going to be more decentralized because landfills by definition are decentralized and they're all around the world. And so what's

• 15:16Speaker 02

  the big factor about whether a site is a good candidate or not has nothing to do with its proximity to a major population center. Obviously, you need a sufficient number of people. There's a sufficient amount of waste. But these things are all around the world and it has to do with factors which are very diverse, such as

• 15:38Speaker 02

  How humid is it, for example? Humidity is bad to Bitcoin mining, but it's really good for creating landfill gas. And so geographically around the world, you look at these different areas and it's not necessarily in the places you'd expect. It's not always in the major population centers because they may have already turned that landfill into a source of power generation and it may have been economically viable. In Los Angeles, for example, 50 megawatts, that's already selling power back to the grid. So typically, the major cities, they've had a big enough landfill that it does make economic sense to sell power back to the grid. It's normally the next level down, the smaller cities, where this has not occurred. And so it's a lot of those mid-sized landfills that we're going for.

• 16:23Speaker 02

  So I actually think it's going to lead to a lot more decentralization.

• 16:26Anthony Pompliano?

  Let's talk economics. How much for one of these mid-sized landfills will it cost to get the methane into electricity, build out the Bitcoin mining facilities and be able to actually mine Bitcoin? Are we talking on the order of magnitude of a couple of million dollars, tens of millions, hundreds of millions, billions of dollars? What does it look like?

• 16:45Speaker 02

  Yeah, for a mid-sized landfill, so around eight megawatts, you're looking at 10 to 15 million dollars.

• 16:51Anthony Pompliano?

  And so if you want to do that, let's call it on 35, about 350 to 400 million dollars, you think that we could basically do this in a decentralized fashion and turn for less than half a billion dollars Bitcoin mining into a negative emissions industry, which would then put it at the forefront of the ESG conversation?

• 17:10Speaker 03

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• 17:35Speaker 02

  That's correct.

• 17:36Anthony Pompliano?

  Now, when we look at other solutions to address climate change and kind of ESG concerns, there's a recent story that's come out around paint and the ability to put white paint on the ground. If I read it correctly, they think that as simple as just like go paint half the Sahara Desert, which again, put aside the logistics and approvals and people's willingness or appetite to go do something like that. But one of the main arguments is how inexpensive that would be to address some of this. I think that what I've read, and again, you are an expert, I am not on this, we are talking about trillions of dollars is the current estimation to address kind of climate change in general. I don't think

• 18:20Anthony Pompliano?

  you're saying Bitcoin mining with less than half a billion dollars could address all of climate change, but what you are saying is that it would lead to a negative emissions for this specific industry. And so not only would it negate or mitigate the current emissions, it would actually make it this positive story. Are there any other kind of parallels you can draw to like half a billion dollars or less investment and it has this massive impact? Or do you think that most of the ESG industry is just kind of bloated and they throw out these huge numbers, but like maybe people don't actually understand how much this is going to cost to do?

• 18:54Speaker 02

  Yeah, well, to give some context, so a couple of companies that I've invested in previously, so the maximum that they could ever mitigate in terms of emissions, one of them was 10 million tons of carbon dioxide equivalent, the other one was 20 million tons of carbon dioxide equivalent. And it would take around 15 years and that was absolutely best case scenario. That's global monopoly in 15 years, which almost never happens in the tech industry. So with using Bitcoin mining, we can mitigate 4 million tons in the first year, just with five landfills. We can achieve that within two years, what with previous technology companies I was investing in would take 15,

• 19:39Speaker 02

  best case scenario. So, so definitely in terms of one of the markers of success for this fund, we said, we want to.

• 19:50Speaker 02

  Maximize the amount of emissions reduced per dollar invested. So that was our starting thesis. So we didn't start with Bitcoin and then try and rationalize why it was good. We started with saying, let's maximize the emissions reduced per dollar invested. That led us to landfill gas. Firstly, it led us to methane. Secondly, it led us to landfills. And thirdly, it led us to saying, you know what, it's actually going to be onsite data centers that are going to be the best way to do this. And the best data center that stacks up in terms of the economics right now is going to be Bitcoin mining data centers. So that's how we got there. In terms of white paint in the desert, I haven't looked into that. You've got to remember, I'm a climate tech investor, so I tend to be naturally skeptical of anything just by disposition,

• 20:34Speaker 02

  because you have to be. However, you shouldn't

• 20:40Speaker 02

  dismiss something just because it sounds implausible. And so that particular suggestion, who knows? It could be a pie in the sky idea with a technical obstacle that no one's discovered yet, or it could be a brilliant solution. So what you've got to do with solutions like that, you just keep an open mind and you go through very thorough due diligence in the meantime. To give some context, I've come across probably around 200 different climate tech ideas, including some ones which sounded wonderful. And

• 21:11Speaker 02

  at some stage in the due diligence, either for some technical reason or some commercial reason, you found some bug and it wasn't quite as effective and it wasn't the magic bullet everyone thought it would be. And I've gone through that process a few times. So I would look at this in the same way. I'd be open minded to it, but also I wouldn't be changing the direction of our strategy for mitigating climate change until we've thoroughly done due diligence on an idea like that.

• 21:34Anthony Pompliano?

  What's the role of government in all of this? I think the state of Florida is home to the largest number of solid waste combustion facilities. Anyone who listens to this podcast will be like, Pop definitely read that on the internet somewhere. And I did in preparation for this conversation. But given that they have so many of these specific facilities, is it something where you need either government approvals or government participation to kind of accelerate these plans? Or can the private sector do it without the participation or partnership of the government?

• 22:05Speaker 02

  So it involves local government. So typically you're dealing with municipalities. So municipal solid waste. So it doesn't need central government approval, doesn't need federal government approval. It needs participation and enthusiasm. Definitely you want that. But the relationships are with the municipalities. Having said that, in the future, I believe that to do this really well, it would be advantageous to have the buy-in of central government and of local governments as well, for a very simple reason, and that is, long term, we don't really want to be doing the financing of the gas capture and collection systems. It would make much more sense for us to do partnerships with government where

• 22:46Speaker 02

  we said, look, you've got a vested interest in reducing emissions. We have a solution which can help you do that, can bring back money to local municipalities. It's good for the community, it's good for the local environment, it's good for the global environment. You fund the component at something like 20-year treasury rates for the gas capture collection, and we will fund the Bitcoin mining operations. So we could see collaborations such as that that may occur in the future.

• 23:13Anthony Pompliano?

  How much are they making off these facilities now? Like when they sell that power to somebody who would come and hook up to it, are they really making that much? Are we talking like three, four cents a kilowatt hour? Or like, what does that look like? And then what is the potential, you know, economic upside with Bitcoin mining? And really what I'm trying to get at is like, eventually are the municipalities incentivized just to do this themselves? They can figure out kind of logistically and expertise-wise how to do it?

• 23:39Speaker 02

  Yeah, so if you look, if you exclude landfills and you look at some of the cheapest available sources of electricity excluding landfills, I've seen as cheap as $25 a megawatt, so 2.5 cents per kilowatt hour. And so if you're going into landfills, it has to be a whole lot cheaper than that again, because you can't just, it's not like a solar plant or hooking up to the grid. You can't just do it immediately. You've got to invest in infrastructure, there's going to be delays. So typically, it's going to be around half that level of the cheapest available otherwise. But for the landfill owner, that can be a substantial monthly revenues. That can be tens of thousands of dollars coming in every single month to a landfill owner. And remember, they don't have to pay anything to achieve

• 24:22Speaker 02

  that revenue either. So it's simply a negotiation where you make sure you set up your site in a way which isn't going to interfere with the heavy machinery. You go and do your thing. They are mitigating an environmental problem, which is positive for them because it keeps the regulator off their back. And they're getting a source of money that otherwise they wouldn't have access to because remember we're targeting landfills, which have no option to sell it back to the grid. So there's no other competing user for that electricity. So for them, and for the Bitcoin mining unit, it's alchemy. It's turning trash into digital gold.

• 24:57Anthony Pompliano?

  When the governments start to get involved in this, there is this weird balance of you need them. They have usually control of the facility. They have in some states subsidies or ways that they can actually change the economics and the people who are converting the waste to the energy or the people who are going and taking the energy and kind of consuming it. But also there's this weird dynamic of like Bitcoin kind of was built outside the system. Bitcoin was, you know, to some degree, a parallel system. How do you balance that in your head? And like, are there risks maybe with that public-private partnership that you guys have identified?

• 25:36Anthony Pompliano?

  Or maybe even on a broader standpoint, you know, kind of the ESG conversation and the people in that industry with the Bitcoiners? I don't think most people are like, oh, those people obviously all get along and, you know, get in bed with each other. So like, how do you think about risks or challenges with some of the more kind of soft skill weird things that are at play here?

• 25:56Speaker 02

  Yeah, you're absolutely right. There's a lot of people who are going to come together who may not naturally be people who would meet with each other and do business with each other. So again, we see it a couple of ways. Firstly, with the municipalities, if you look at some of the companies out there such as Nodal Power, such as First Bean, who are doing great work already. The EPA, you know, really like what they're doing because they're solving a problem for the EPA.

• 26:22Speaker 02

  And that problem is that they drastically want to reduce methane emissions, but there's been no good way to do that. And so for the regulators, for central government, it's, they recognize, particularly the people who are in the Environmental Protection Agency, that yes, whilst they're regulators, and yes, they do have this stick called "we will find you" or "we will regulate you if you don't do that," they'd rather not have to use it. They would, it's much easier for them if they're economically centered. So a private industry can come in and offer a carrot, that's much better than them having to use the stick. And they know that. And so that's why they've been very supportive of these sorts of onsite power gen possibilities. So I actually see some natural synergies with governments, where we're solving problems

• 27:04Speaker 02

  for central government, which otherwise would go into the too-hard basket. And it's done in such a way that it's, it's actually stopping regulation. So I see this as positive. And the other sort of regulation that will stop is by partnering and working in a cooperative way by central government. Then it really takes a lot of the steam out of the whole emphasis for some more draconian regulations which have been proposed for the Bitcoin mining ecosystem. Because if the White House, for example, has said, "Look, we like this idea of using methane and destroying it in order to power Bitcoin mining," and they have said that in their report, and then they see some evidence of that actually occurring, they've also

• 27:46Speaker 02

  said in the White House OSTP report that if more of this occurs in this area, that would help give them comfort that Bitcoin can be a net positive for the environment. So whilst they have, the White House has been, in some cases, very critical of Bitcoin mining, they have also said that we're open to being dissuaded, we're open to seeing otherwise. If we can see evidence, these strong movements that are a climate, that are positive for the climate, then we can change our viewpoint on this. So I think there's a chance for cooperation here.

• 28:18Anthony Pompliano?

  Talk not only about the infrastructure, like you were mentioning earlier, you know, when you generate waste to energy, the energy is hard to move, right? And sometimes the grid can't take it because there's a surplus. And there's things that we've talked about in prior episodes with people on this podcast. I think the audience probably understands now like it's really hard to move this energy. But also, not just moving the energy, Bitcoin mining provides a persistent buyer of energy. And so how does that kind of play in? It's almost like this like beautifully designed thing that people kind of discount or don't understand the persistent buying or persistent demand is maybe one of the most important components to being able to help solve a problem like this?

• 28:56Speaker 02

  Definitely. If you've got someone who you know is going to buy energy 24/7, whenever it's available, that's the best sort of customer you could possibly get, particularly if they don't care about moving to where the energy is. So whether it's a landfill, whether it's a new wind farm, whether it's a solar farm, one of the biggest problems you have is you're in the wrong place geographically. It's not easy to hook up to the grid. And even if you do hook up to the grid, you've got to transmit power a long way. So again, what Bitcoin mining companies doing, not just with landfills, but with solar farms and wind farms, we're seeing them come in early.

• 29:40Speaker 02

  And we're seeing that even, for example, let's take solar farm, before it gets connected up to the grid, you've got a major problem right now. First problem is how do you get funding? And, you know, as someone who gives funding to infrastructure, I'm unlikely to give funding to something if your value proposition is it's going to take me 3.7 years to get grid into connected. And in the meantime, I've got no revenue and I want a whole lot of money. But if I must have give funding to something and it's now a solar farm and they say, we've got our first customer, I say, okay, I'm listening. And they say, yeah, and they guarantee us a steady price at this base level. So there's a floor price established for that electricity. I'm saying, okay, I'm listening more. And they say, and they want to buy our power whenever it's available.

• 30:24Speaker 02

  And by being that customer, now I'm looking at an equation and suddenly the economics are starting to stack up, I'm much more likely to fund it. So having a constant buyer of that electricity who doesn't mind when and they don't mind where. So in other words, they're location agnostic.

• 30:41Speaker 02

  And they are time of diagnostic is a tremendous advantage, whether it's a solar farm, wind farm, or a landfill, or any sort of potential power provider. And we've never had a customer like that ever in the history of the planet. And a lot of people don't realize just how unique Bitcoin mining is because of these accidental features where it doesn't care when, and it doesn't care where it locates to get that electricity. And I think the third thing is people don't realize is because we've also never had a user where their electricity cost is such a high percentage of the total expenses. And what that means is that you're going to do everything in your power to get cheap electricity. That makes you the ideal customer of anyone who provides electricity.

• 31:24Speaker 02

  Because the value proposition of getting that cheaply is just so important to you. It is your core business when it comes to the expense side of the ledger. So it's going to incentivize not only a lot of these landfills been mitigating the methane, it's also going to incentivize a lot more renewable energy getting onto the grid sooner, getting funded better. And then when it's on the grid, of course, we already know the story here, it's helping with the load balancing and reducing curtailment.

• 31:50Anthony Pompliano?

  Before I let you go, talk to me about CH4 Capital. You all obviously have a very specific point of view in the world. How do you think about that firm and allocating capital in the way that you guys do?

• 32:03Speaker 02

  Yeah, so we had to make a decision a little while ago about whether we went very broad or very narrow. We've chosen to go very narrow with our focus. So we're only focusing on methane mitigation, we're only focusing on landfills. And then even within landfills, we're only focusing on the ones that are currently venting all of their methane into the air. And the reason for that is that those are the ones that can make the biggest difference. So if we take a landfill that's currently venting landfill gas into the air, and we can stop that occurring, that has a massive climate benefit. It's going to be millions of carbon dioxide equivalents reduced per landfill.

• 32:40Speaker 02

  And so our philosophy is we want to start off, so we're creating this $400 million fund over the next three years, but starting off small with 50 million, and that can be enough for us to do 32 megawatts. So that's around four to five landfills. Starting off small, we've got some sites identified, we start to mitigate that, and then we achieve scale afterwards. We're also wanting at the same time to be really helping more Bitcoin mining companies to come into the space. What we found is that there's a lot of great Bitcoin mining companies out there, but their major problem has either been just identifying, well, what's a good candidate landfill? How do we even tell the ones that make economic sense? And there's a lot of learning there. We've already done a lot of that learning. So rather than a whole lot of Bitcoin mining companies having to do that individually,

• 33:25Speaker 02

  we can help reduce that learning curve. So we're actively encouraging people through an accelerator program we've just recently launched to start moving into the sector. So what we're doing is really pairing up three things. So the capital, the Bitcoin miners, and the ideal candidate landfill sites.

• 33:41Anthony Pompliano?

  When you think about five, 10 years from now, could you all be behind 30, 40, 50 of these landfill operations? Do you think that it's you kind of, you know, have the bullhorn, you get people excited about this, and then you need a bunch of other people to kind of run alongside and it's kind of more teamwork? How do you look at how this plays out?

• 34:05Speaker 02

  Yeah, very much teamwork. Yeah, we certainly don't want to be doing this alone. There's a lot we can do with one fund. However, one of the things that's great about the Bitcoin ecosystem is that we're on the same mission. And we all want to cooperate. I've literally had a phone call today with someone who is very excited about this, just talking about how we could potentially collaborate. They're particularly interested in landfills that are flaring their gas and stopping that flaring, because whilst that doesn't mitigate quite as many emissions, it still reduces some. And it's actually a much simpler proposition in terms of the amount of infrastructure. So we're talking about collaborating all the time. We can't say who, but we know that one of the large publicly traded Bitcoin mining companies is looking to aggressively move into the space.

• 34:50Speaker 02

  And and there's also, we've got the two existing ones, but we've got a pipeline of about another fifteen Bitcoin mining companies who are looking specifically, these are smaller Bitcoin mining companies, they're looking to move into the landfill gas mitigation space. And the more people who are providing funding to them, the more people are providing ASICs for them, the more people who are providing services to help them to gain carbon credits, the more people are helping them identify the right landfills, the better. The the thing here is that there are no shortage of landfills around the world. We can't tackle them all alone, so we we welcome other people coming to the space.

• 35:24Anthony Pompliano?

  Where can we send people to find you on the internet or find more about the firm?

• 35:29Speaker 02

  So best way for me personally is on Twitter at DS Patton. And then you can find out more about CH4, capital C H four, that's for methane, capital dot com. So those are the two best ways to get hold of us.

• 35:44Anthony Pompliano?

  Thank you so much, Daniel. I always enjoy talking to you. I always learn something. This is just freaking cool, to be honest.

• 35:51Speaker 02

  We think so.

• 35:51Anthony Pompliano?

  Yeah.

• 35:52Speaker 02

  We're pretty happy.

• 35:53Anthony Pompliano?

  I I wish you all the luck and and I'm cheering for you, so we'll definitely do it again in the future.

• 35:58Speaker 02

  Look forward to it, Tom.