Hey, everybody. Welcome to Orange Hatter. Today, you're listening to a conversation I had with Lisa. Lisa, welcome to the show. So excited to have you here. I spoke to your daughter. Ella, not too long ago. And she spoke so highly of you. I just had to have you come on the show. So welcome. Thank you so much for giving your time and sharing your story tonight.

Thank you, Tally. Well Ella gets in trouble if she doesn't say nice things about her mother, so I'm glad that I've sufficiently scared her into singing my praises on your show. Good for her.

She did such a fabulous job. I introduced my daughter to her and I hope they will become long time friends. So we'll just jump right in if you don't mind, share a little bit about your background with our audience so they can have understanding of where you're coming from.

Yeah, well, thank you again for having me. So I I spend most of my time in the Bitcoin space at the intersection of two key areas. First being energy, because that is my background. A long, long time ago in another universe I traded natural gas and I worked for a lot of big companies Enron being one of them. And a couple of utilities, a couple of big producers, so I feel like I speak the energy language and I sit right in Houston. So, you know, energy capital of the world. Also, what I like to call the Bitcoin mining capital of the world, even though it may not be, and then the other thing that I have been working on lately is the financial services aspect. My first Bitcoin company was Unchained in Austin. Many people are familiar with Unchained. They help people secure generational wealth and hold their own private keys for Bitcoin. And then I was with a startup that was trying to buy a bank and offer financial services to Bitcoin companies. Unfortunately, our startup Didn't get off the ground. So I am doing some consulting, but also probably announcing a next role in the coming week. So anyway, my interest sits firmly in the energy section and the banking section and, and helping people. Have conversations really on specifics of how Bitcoin mining can help improve efficiency and is a creative for energy companies. And if you like, I mean, I'm happy to give a couple of maybe real world examples to just paint the picture for folks as to what that really looks like, because sometimes you hear these words and, and you're like, okay, well, yeah, people say that it's good for. For energy companies, but I don't really understand why. So, all right, you're nodding. So I'll give you a couple of examples. So there in Texas, we our grid is the ERCOT grid. It's the electric reliability council of Texas and ERCOT manages the projects that are coming on and it is their mandate to provide reliable and efficient energy to all those that need it. So. As you can imagine, there's a lot of scramble to create power to put onto ERCOT, and there's an increasing push for renewables, it seems like everybody is ringing the bell for climate change and for wind and solar and, and I don't want to come off that I'm not pro Renewable energy. I just think that it is a little bit unfounded to think that we will affect change, you know, by 2030 or probably not even by 2050. I don't see it happening and really for a couple of reasons, but I'm going to give you an example of how Bitcoin mining can affect an energy company. And then I'm going to circle back and I'm going to give you an example of the alignment of incentives between energy companies and Bitcoin mining companies. So the example that I would give you is there's a relatively large power producer that's based in Texas. Although they have power plants throughout the United States, but they're, they're based in Texas and. Non zero percent of the time, and I, and I've heard the number estimated to be about 4 percent of the time this company pays ERCOT the grid. To take excess power. So this company is running natural gas power plants and and often they're combined cycle plants so they're using, you know, at least two different types of fuel to make a plant run. And it's more cost effective or it's more operationally efficient for them to keep running rather than shut a plant down. So they'd rather just pay ERCOT to manage the load and let ERCOT distribute you know, power as they are able, but, but this power producer pays someone to take power, right? So when you and I think about Apple, 0 percent of the time, they pay someone to take their iPhone. Right. Like 0 percent of the time McDonald's pays us to take a hamburger. It makes no sense for a huge entity that makes, you know, that is in the power generation business to pay the grid to take their power. And so, you know, it would be uniquely beneficial. And in fact, these guys are in discussions trying to make this work. They've put a team together to To investigate and go through the required process to, you know, spin up Bitcoin mining in order to absorb that power. So real world example, that's one real world example of, of where that's helpful. A lot of people talk about so this is example number two, a lot of people talk about flared gas and, and how Bitcoin helps mitigate flared gas. And yes, that's absolutely true. It's a fantastic benefit. However, there's also a lot of economic efficiency that can be gained in a field where you're not flaring. So I have a Bitcoin miner that's here in Texas. He goes by Amalgamated Sludge on Twitter, same as Dan. Dan has a property out in New Mexico where he's got about 40 wells and has the ability to direct that gas that's coming out of the ground into the Waja gathering system. Waja is a gathering system and a pipeline system that's out in New Mexico. At times that Waha gas because natural gas is priced by location. So it's, there's, I don't know how many pipelines. Typically when you're trading you're trading a specific region. So my first job I was trading in the Gulf Coast and then I moved to trade in the Northeast. And then I, at the end of my career, I managed the entire, you know, East Coast. So Gulf Coast assets. Okay. All the way up to, you know, kind of New England assets, but in Dan's case, Dan is selling into what at times is a depressed market. So what does depressed look like? Well, sometimes gas on Waha is negative, which means that the producer that has expended capital and energy and has site technicians. Who are pulling natural gas out of the ground. They're actually having to pay someone to take it away. Right. The other alternative would be to put it into some sort of a storage facility, but in Dan's case, he doesn't have that. Like many people don't have storage. So you're really a price taker. You're, you're at the mercy of whatever the market calls for. Now, at times, WAHA this, you know, in the last 12 months you know, I think normally it's, it trades pretty on par with the Henry hub and Henry hub is the delivery point for natural gas futures. It's the largest pipeline it's it's like kind of the, the namesake, if you will, most people are familiar with it. Typically trades a little bit below or, 10 cents below 10 cents above the Henry hub, but when demand is high, it could trade dollars above Henry hub. Right. And in that case, Dan's really happy. Dan sells all the gas that he can make into Waha. But when demand on Waha is very low, why would you pay someone to take natural resources that you've spent money to get? Right? So what did Dan do? Dan coordinated some capital got creative and built a Bitcoin mining site, which he has completely bootstrapped himself. You know, he's got buildings and bought generators and bought Bitcoin mining machines. So now he has the option to economically dispatch. He can either send gas into the pipeline or he can mine Bitcoin. So I'll pause there in case you have a question.

I have a question for people who are not very familiar with the way energy is bought and sold. So for an everyday person, why would someone like Dan who has a need to dispose of his excess energy by paying somebody else, why would I care about that? So let's say I'm just a regular, middle class person, right? In my mind, energy companies have a lot of money. And so if they have to pay someone else to take away excess energy, why would I care that he is able to turn that energy into something useful like Bitcoin mining?

Well. Let me just start by saying you don't have to care, right? You don't have to care about that any more than you have to care about the dry cleaner that you have in your neighborhood having an increased price of supplies or you know, lower demand from their customers because of COVID. Right? You don't have to care about Dan and Dan's business. You don't need to care about the dry cleaner and the dry cleaners business. But, I guess where my interest truly lies is in In the support of free markets and markets are efficient. So markets optimize for supply and demand. And so you don't have to care, but you know, I don't know me myself. I'm really actually pretty excited when I drive down into kind of like the bowels of all the refineries and stuff that are South of Houston, because I feel like that's the heartbeat of America, right? There's fuel that's coming on shore. And that fuel provides me you know, safety and well being and health and there's a huge chunk of the population globally that lives in energy poverty and energy poverty is defined as access to less than four hours of energy a day, four hours of energy a day or less. Right? Like if you and I lived in a situation where we had access to power our lights, our toaster, our God forbid, our cell phone charger, like we'd be screaming, right? There'd be riots in the streets. And in fact, when, when there is massive power outages at times, there are riots. So we don't necessarily have to care about Dan. It does. support an ecosystem of wealth and prosperity and safety. And we don't even have to go into the whole, you know, where I think energy is key to our own national security. Sure. Energy production leads to our national security and how Bitcoin ties into that. Which I think is an entire, another rabbit hole, but You don't need to care about Dan, but I am sure that you and all of your listeners want to go turn your light switch on and have it work or plug your phone in and have your phone get juice or, you know, your kid wants to play their video game and they want it to work. You have, daughters that are in school. I have a daughter in school. She needs to be able to log on and do her homework or research a paper or, write code for a project. I mean, I don't know, like, we all have our reasons for wanting to use energy and that's a whole another rabbit hole of, like, who should get to decide what energy use is is worthy or not, like, Right, like, we live in America, free markets rule, we should all be in support of that.

Here's my very layman understanding of how it all works and the reason for that question I just threw at you which is that it's actually to everyone's benefit that energy isn't just flared into the air having to be paid to process the excess because They're not doing it for free. You know, you think it doesn't impact you, but it does because they're gonna get that money somewhere and it probably is coming from your bill. So my understanding is if they're able to more predictably sell or utilize the energy that they have acquired, then the savings is passed along to the customers, at least that's the way I understand it in the

exactly right. Yeah, no, you're, you're, you're 100 percent right, and I think that's why I'm using Dan's name here because I feel like when we can identify people, right, it's not just this, like, nebulous topic. I mean, there is an individual who owns land that he has built buildings on and he employs people to work at so that natural resources can come out of the ground, go into a pipeline, which feed into a power generation facility, which feeds the grid so that Lisa and Tali can turn on their light switch. Right. And the more power that's feeding into those grids, the lower our prices are.

Yeah, it goes back to incentives for sure. Thanks for joining us today and learning with us today. If the discussion with our guests resonated with you and you would like to dive deeper into the world of Bitcoin, don't miss out on joining the Orange Hatter Women's Reading Club. The meetup link is in the show notes. Also, if there are women in your life whom you think would both enjoy and benefit from learning more about Bitcoin, please share Orange Hatter with them. Until next time, bye.