Alberta judge orders Bitcoin mining shutdown

A Calgary-based oil and gas company has been ordered to remove all of its equipment from a plot of land in Rocky View County after it was found to be mining bitcoin without a permit.

The Alberta Supreme Court ruled on March 10 that Persist Oil and Gas Inc. breached its lease agreement with landowner Roy Flowers.

According to the documents, the original lease agreement was signed on November 12, 1999, between Olympia Energy Inc. and Douglas Milton Chapman for a term of 10 years. Persist later became Olympia’s successor and Flowers became Chapman’s heir.

The agreement granted the company the use of a 3.14-hectare parcel of land for a gas compression facility, along with an access road, and stipulated that the land be used solely for “the exploration, development and production of oil, gas, related hydrocarbons and related materials.”

The agreement also allowed for the construction of a pipeline and a sweet gas compression facility for cleanup and restoration purposes. In exchange for this right of use, Flowers was paid $12,150 annually.

Judge C.A. Rickards said in his reasons that Persist installed two one-megawatt gas generators, computers and equipment specifically for Bitcoin mining on the land in April 2021.

The company used natural gas to generate electricity for its mining rigs, and at times when gas prices were low, Bitcoin mining was more profitable for them.

Flowers objected to the operation on August 30, 2021, but the company not only ignored it, but also installed three more generators to expand its mining operations.

In response to Flowers’ objections, the company’s lawyers argued that he had no right to interfere with the company’s use of natural gas.

Persist continued to mine bitcoin on the leased land, using five one-megawatt generators and electricity generated from natural gas.

When Flowers approached the Alberta Land and Property Rights Board, he was told that the matter was outside the board’s jurisdiction and that he was only entitled to receive the annual contract fee.

Since the 10-year lease had expired in 2019 and had not been renewed, Flowers reported the matter to Rocky View Township officials on January 23.

On February 5, 2025, the township officials informed Flowers’ attorney that the bitcoin mining operation did not comply with local bylaws and that Persist did not have any development permits for the operation.

As a result, Flowers sought an injunction to stop the company’s operations, citing the following reasons:

The lease expired in November 2019 and was not renewed;
The mining of bitcoin was not permitted under the terms of the lease;
The lack of the necessary permits to operate;
Trespass;
The company’s nuisance.

In his ruling, Judge Rickards ruled that although the contract would not be terminated until a certificate of rehabilitation was issued, the Bitcoin mining activity was not permitted under the terms of the contract.

He emphasized:

“If Bitcoin mining were permitted, then there would be no restriction on how the company could use the natural gas. The company could even operate a marijuana greenhouse there and use that argument to make it appear legal.”

Ultimately, the court ruled in Flowers’ favor, issuing a permanent injunction requiring Persist to immediately cease mining operations and remove all equipment, including trailers, generators, and other related equipment, from the land.

However, the judge rejected Flowers’ claim that the company had trespassed and caused a nuisance.