Court Upholds Injunction Against Rocky View County Bitcoin Mining Operation

A legal dispute over a bitcoin mining operation in Rocky View County has ended with the Alberta Court of Appeal upholding a decision that prevents the facility from continuing to operate on agricultural land.
The case involved a disagreement between landowner Roy Flowers and energy company Persist Oil and Gas regarding a bitcoin mining operation established on land near a natural gas compressor station. The appeal challenged an earlier court ruling that granted a permanent injunction against the mining activity.
According to court documents, the dispute centred on whether cryptocurrency mining was permitted under a surface rights lease originally signed in 1999. The lease granted access to the property for activities related to the exploration, development, and production of oil and gas resources.
In 2021, Persist Oil and Gas installed natural gas generators, computer equipment, shipping containers, and related infrastructure on the site. The company used natural gas flowing through an existing compressor station to generate electricity that powered computers used to mine bitcoin.
Bitcoin mining is the process of validating cryptocurrency transactions using high-powered computers. Participants are rewarded with newly created bitcoin and transaction fees for maintaining the blockchain network.
Court records indicate the landowner objected to the bitcoin mining operation shortly after it began and requested the equipment be removed. The operation continued, leading to legal proceedings.
The courts also considered municipal land use regulations. Rocky View County advised that the property was zoned Agricultural, General District, a designation that does not permit bitcoin mining operations. County officials informed the operator that a development permit and appropriate zoning approvals would be required for the activity to continue legally.
The Alberta Utilities Commission had previously approved the natural gas facility, but the court found that provincial utility approvals do not replace municipal development permit requirements.
The chambers judge concluded that bitcoin mining did not fall within the ordinary meaning of activities authorized under the surface rights lease. The court determined that generating cryptocurrency was fundamentally different from producing oil, gas, or related hydrocarbons.
Persist Oil and Gas argued that bitcoin mining helped maintain economic viability when natural gas prices were low and allowed excess gas resources to be utilized productively. However, the court found those arguments did not override the restrictions contained within the lease agreement.
The Alberta Court of Appeal dismissed the appeal in late May, leaving the injunction in place and requiring the bitcoin mining operation to cease.