Lisa "Eat, pray, love, Bitcoin's all I do!" - part 1

Tali: 00:00:00

Hey, everybody.

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Welcome to Orange Hatter.

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Today, you're listening to a

conversation I had with Lisa.

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Lisa, welcome to the show.

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So excited to have you here.

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I spoke to your daughter.

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Ella, not too long ago.

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And she spoke so highly of you.

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I just had to have you come on the show.

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So welcome.

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Thank you so much for giving your

time and sharing your story tonight.

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Lisa: Thank you, Tally.

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Well Ella gets in trouble if she doesn't

say nice things about her mother, so I'm

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glad that I've sufficiently scared her

into singing my praises on your show.

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Good for her.

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Tali: She did such a fabulous job.

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I introduced my daughter to her and I

hope they will become long time friends.

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So we'll just jump right in if you

don't mind, share a little bit about

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your background with our audience

so they can have understanding

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of where you're coming from.

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Lisa: Yeah, well, thank

you again for having me.

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So I I spend most of my time

in the Bitcoin space at the

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intersection of two key areas.

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First being energy, because

that is my background.

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A long, long time ago in another

universe I traded natural gas

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and I worked for a lot of big

companies Enron being one of them.

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And a couple of utilities, a

couple of big producers, so I feel

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like I speak the energy language

and I sit right in Houston.

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So, you know, energy capital of the world.

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Also, what I like to call the Bitcoin

mining capital of the world, even

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though it may not be, and then the

other thing that I have been working on

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lately is the financial services aspect.

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My first Bitcoin company

was Unchained in Austin.

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Many people are familiar with Unchained.

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They help people secure

generational wealth and hold

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their own private keys for Bitcoin.

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And then I was with a startup that

was trying to buy a bank and offer

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financial services to Bitcoin companies.

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Unfortunately, our startup

Didn't get off the ground.

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So I am doing some consulting,

but also probably announcing a

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next role in the coming week.

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So anyway, my interest sits firmly

in the energy section and the banking

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section and, and helping people.

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Have conversations really on

specifics of how Bitcoin mining

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can help improve efficiency and is

a creative for energy companies.

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And if you like, I mean, I'm happy

to give a couple of maybe real world

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examples to just paint the picture

for folks as to what that really looks

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like, because sometimes you hear these

words and, and you're like, okay, well,

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yeah, people say that it's good for.

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For energy companies, but I

don't really understand why.

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So, all right, you're nodding.

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So , I'll give you a couple of examples.

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So there , in Texas, we

our grid is the ERCOT grid.

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It's the electric reliability council

of Texas and ERCOT manages the projects

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that are coming on and it is their

mandate to provide reliable and efficient

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energy to all those that need it.

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So.

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As you can imagine, there's a lot

of scramble to create power to put

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onto ERCOT, and there's an increasing

push for renewables, it seems like

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everybody is ringing the bell for

climate change and for wind and solar

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and, and I don't want to come off

that I'm not pro Renewable energy.

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I just think that it is a little

bit unfounded to think that we

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will affect change, you know, by

: 2030

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I don't see it happening and really

for a couple of reasons, but I'm going

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to give you an example of how Bitcoin

mining can affect an energy company.

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And then I'm going to circle back and

I'm going to give you an example of the

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alignment of incentives between energy

companies and Bitcoin mining companies.

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So the example that I would give

you is there's a relatively large

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power producer that's based in Texas.

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Although they have power plants

throughout the United States, but

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they're, they're based in Texas and.

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Non zero percent of the time, and I,

and I've heard the number estimated

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to be about 4 percent of the time

this company pays ERCOT the grid.

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To take excess power.

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So this company is running natural

gas power plants and and often they're

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combined cycle plants so they're

using, you know, at least two different

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types of fuel to make a plant run.

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And it's more cost effective or it's more

operationally efficient for them to keep

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running rather than shut a plant down.

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So they'd rather just pay ERCOT

to manage the load and let ERCOT

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distribute you know, power as they

are able, but, but this power producer

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pays someone to take power, right?

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So when you and I think about

Apple, 0 percent of the time, they

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pay someone to take their iPhone.

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Right.

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Like 0 percent of the time McDonald's

pays us to take a hamburger.

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It makes no sense for a huge entity

that makes, you know, that is in

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the power generation business to

pay the grid to take their power.

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And so, you know, it would

be uniquely beneficial.

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And in fact, these guys are in

discussions trying to make this work.

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They've put a team together to To

investigate and go through the required

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process to, you know, spin up Bitcoin

mining in order to absorb that power.

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So real world example, that's one real

world example of, of where that's helpful.

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A lot of people talk about so this is

example number two, a lot of people

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talk about flared gas and, and how

Bitcoin helps mitigate flared gas.

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And yes, that's absolutely true.

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It's a fantastic benefit.

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However, there's also a lot of economic

efficiency that can be gained in

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a field where you're not flaring.

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So I have a Bitcoin miner

that's here in Texas.

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He goes by Amalgamated Sludge

on Twitter, same as Dan.

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Dan has a property out in New Mexico

where he's got about 40 wells and

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has the ability to direct that gas

that's coming out of the ground

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into the Waja gathering system.

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Waja is a gathering system and a

pipeline system that's out in New Mexico.

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At times that Waha gas because

natural gas is priced by location.

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So it's, there's, I don't

know how many pipelines.

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Typically when you're trading

you're trading a specific region.

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So my first job I was trading

in the Gulf Coast and then I

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moved to trade in the Northeast.

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And then I, at the end of my career, I

managed the entire, you know, East Coast.

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So Gulf Coast assets.

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Okay.

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All the way up to, you know, kind

of New England assets, but in Dan's

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case, Dan is selling into what

at times is a depressed market.

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So what does depressed look like?

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Well, sometimes gas on Waha is

negative, which means that the

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producer that has expended capital

and energy and has site technicians.

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Who are pulling natural

gas out of the ground.

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They're actually having to

pay someone to take it away.

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Right.

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The other alternative would be to put

it into some sort of a storage facility,

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but in Dan's case, he doesn't have that.

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Like many people don't have storage.

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So you're really a price taker.

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You're, you're at the mercy of

whatever the market calls for.

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Now, at times, WAHA this, you know, in

the last 12 months you know, I think

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normally it's, it trades pretty on par

with the Henry hub and Henry hub is the

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delivery point for natural gas futures.

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It's the largest pipeline it's it's

like kind of the, the namesake, if you

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will, most people are familiar with it.

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Typically trades a little bit below

or, 10 cents below 10 cents above the

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Henry hub, but when demand is high, it

could trade dollars above Henry hub.

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Right.

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And in that case, Dan's really happy.

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Dan sells all the gas that

he can make into Waha.

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But when demand on Waha is very low, why

would you pay someone to take natural

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resources that you've spent money to get?

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Right?

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So what did Dan do?

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Dan coordinated some capital got creative

and built a Bitcoin mining site, which

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he has completely bootstrapped himself.

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You know, he's got buildings

and bought generators and

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bought Bitcoin mining machines.

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So now he has the option

to economically dispatch.

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He can either send gas into the

pipeline or he can mine Bitcoin.

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So I'll pause there in

case you have a question.

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Tali: I have a question for people

who are not very familiar with

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the way energy is bought and sold.

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So for an everyday person, why

would someone like Dan who has

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a need to dispose of his excess

energy by paying somebody else,

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why would I care about that?

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So let's say I'm just a regular,

middle class person, right?

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In my mind, energy companies

have a lot of money.

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And so if they have to pay someone else

to take away excess energy, why would I

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care that he is able to turn that energy

into something useful like Bitcoin mining?

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Lisa: Well.

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Let me just start by saying

you don't have to care, right?

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You don't have to care about that

any more than you have to care about

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the dry cleaner that you have in your

neighborhood having an increased price

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of supplies or you know, lower demand

from their customers because of COVID.

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Right?

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You don't have to care about

Dan and Dan's business.

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You don't need to care about the dry

cleaner and the dry cleaners business.

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But, I guess where my interest truly

lies is in In the support of free

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markets and markets are efficient.

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So markets optimize for supply and demand.

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And so you don't have to care, but

you know, I don't know me myself.

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I'm really actually pretty excited when

I drive down into kind of like the bowels

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of all the refineries and stuff that are

South of Houston, because I feel like

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that's the heartbeat of America, right?

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There's fuel that's coming on shore.

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And that fuel provides me you know,

safety and well being and health and

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, there's a huge chunk of the population

globally that lives in energy poverty

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and energy poverty is defined as access

to less than four hours of energy a

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day, four hours of energy a day or less.

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Right?

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Like if you and I lived in a

situation where we had access to

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power our lights, our toaster, our

God forbid, our cell phone charger,

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like we'd be screaming, right?

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There'd be riots in the streets.

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And in fact, when, when there is massive

power outages at times, there are riots.

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So we don't necessarily

have to care about Dan.

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It does.

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support an ecosystem of wealth

and prosperity and safety.

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And we don't even have to go into the

whole, you know, where I think energy

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is key to our own national security.

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Sure.

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Energy production leads to our national

security and how Bitcoin ties into that.

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Which I think is an entire, another rabbit

hole, but You don't need to care about

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Dan, but I am sure that you and all of

your listeners want to go turn your light

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switch on and have it work or plug your

phone in and have your phone get juice

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or, you know, your kid wants to play

their video game and they want it to work.

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You have, daughters that are in school.

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I have a daughter in school.

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She needs to be able to log on and

do her homework or research a paper

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or, write code for a project.

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I mean, I don't know, like, we all have

our reasons for wanting to use energy and

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that's a whole another rabbit hole of,

like, who should get to decide what energy

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use is is worthy or not, like, Right,

like, we live in America, free markets

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rule, we should all be in support of that.

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Tali: Here's my very layman understanding

of how it all works and the reason

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for that question I just threw at

you which is that it's actually to

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everyone's benefit that energy isn't

just flared into the air having

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to be paid to process the excess

because They're not doing it for free.

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You know, you think it doesn't impact

you, but it does because they're

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gonna get that money somewhere and

it probably is coming from your bill.

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So my understanding is if they're

able to more predictably sell or

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utilize the energy that they have

acquired, then the savings is passed

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along to the customers, at least

that's the way I understand it in the

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Lisa: exactly right.

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Yeah, no, you're, you're, you're 100

percent right, and I think that's why

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I'm using Dan's name here because I feel

like when we can identify people, right,

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it's not just this, like, nebulous topic.

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I mean, there is an individual who owns

land that he has built buildings on

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and he employs people to work at so

that natural resources can come out of

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the ground, go into a pipeline, which

feed into a power generation facility,

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which feeds the grid so that Lisa and

Tali can turn on their light switch.

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Right.

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And the more power that's feeding into

those grids, the lower our prices are.

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Tali: Yeah, it goes back

to incentives for sure.

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Thanks for joining us today

and learning with us today.

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If the discussion with our guests

resonated with you and you would

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like to dive deeper into the world of

Bitcoin, don't miss out on joining the

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Orange Hatter Women's Reading Club.

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The meetup link is in the show notes.

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Also, if there are women in your life

whom you think would both enjoy and

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benefit from learning more about Bitcoin,

please share Orange Hatter with them.

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Until next time, bye.