On July 15, a small, Nevada-based energy company called Black Rock Petroleum announced a deal that, if it actually happens––and that's the biggest of ifs––would relocate the lion's share of the Bitcoin mining industry fleeing China to the oil-rich Alberta province in Canada. At today's "B Word Conference," Bitcoin fans Elon Musk of Tesla and Jack Dorsey of Square will doubtless renew their calls for the industry to go green. The Alberta tie-up would do the reverse, since all of the production transplanted from China would run on a signature energy offering from Alberta, natural gas.

"I've been studying this industry for 5 years, and few announcements shocked me more than this one," says Alex de Vries, a Dutch economist whose site Digiconomist tracks Bitcoin's carbon footprint. "That's first, because of the sheer size of the deal. And second, because even if only part of it happens, the miners moving from China to Alberta would increase the industry's dependence on fossil fuels." It's the trend we're already seeing as more and more refugees from China's sweeping lockdown resettle in coal-intensive Kazakhstan and Malaysia, which chiefly uses natural gas.

The Black Rock press release states that the company reached an agreement with Optimum Mining Host Ltd. to supply electricity for as many as one million specialized computers that generate Bitcoin from three natural gas producing sites in Alberta. The first 200,000 units would run on energy from wells at the Quirk Creek fields in Millarville, a hamlet just south of Calgary. It's operated by Caledonian Midstream, a company that Black Rock reached an agreement to purchase on July 4, just eleven days before it notched the deal with Optimum. In later phases, Black Rock would furnish electricity for an additional 300,000 computers at a second location, and 500,000 at a third site. The press release says that the locales "will be identified shortly as negotiations are concluded."

Given the planned volumes, Optimum appears to be an umbrella enterprise representing a number of Chinese miners. The press release cites that the million machines are those previously used in China that are now mothballed in storage. The computers "will be relocated from locations in China and exported to Canada to be deployed by Black Rock." The Chinese miners seem to be getting a turnkey operation. The full suite provided by Black Rock encompasses supplying all electricity, installing, maintaining and repairing the computers and other equipment, and furnishing the personnel that operate the plants. The latter service includes employing "authorized Chinese-speaking technicians" and "24-7 armed security guards with enforcement power." (The guards' specific authority is not given.)

Moving one million machines is a staggering job

De Vries estimates that prior to the China upheaval, the entire Bitcoin network ran on 2.9 million machines. Before the great unplugging, Cambridge University put China's share of total production at 46%. Hence, one million computers represents roughly one-third of all global mining capacity, and the vast bulk of the Bit miners once operating in China that are now seeking a new home. "The one million machines supposedly going to Alberta would represent most of the Chinese capacity that just went offline," says de Vries.

If it succeeds, the venture would gather a giant share of all Bitcoin output under a single company, little-known Black Rock. "That concentration would cause serious security risks," says de Vries. "The more centralized the network, the more vulnerable it to having a few powerful players take control." Global output would go back to being highly concentrated geographically, a potential peril when China reigned. Today, Canada's raging rivers, chiefly in Quebec, are famous for powering green Bitcoin mining. This project would substantially change that image.

The mass move to Alberta would worsen Bitcoin's carbon footprint

In China, the largest hub for Bitcoin production was remote Xinjiang province bordering Kazakhstan. The industry in Xinjiang ran on coal. But the miners moved their equipment south to Yunnan and Sichuan provinces in the spring to capitalize on super-cheap hydroelectric power plentiful in the monsoon seasons, and parked there until the fall. The half-year sojourn in Yunnan and Sichuan was the primary source of green Bitcoin production worldwide.

In effect, a mass migration to Alberta would move much of the output fueled by hydropower in China to natural gas in Canada. De Vries reckons that the average carbon intensity across the global Bitcoin network is 475 grams of CO2 per kilowatt hour. The figure for natural gas produced in Alberta, according to the site electricitymap.org, is 490 grams. But the move to Alberta would be replacing a footprint in China that was probably much lower due to the large share provided by hydro. De Vries puts the China number as low as 335 grams. "The overall carbon footprint gets a lot worse if the Chinese miners go to Alberta," says de Vries. "Alberta would be the new Xinjiang, without the offsetting benefits of moving to hydro half the year."

He adds that the picture is already darkening as more and more displaced Chinese miners move to Kazakhstan, which shares a border with Xinjiang, to tap cheap power generated by coal. Pollution from coal is twice that of natural gas at 900 grams per kilowatt hour. "Moving to places like Alberta and Kazakhstan makes Bitcoin not more green, but less so," says de Vries.

Doubts that migration on this size can really happen

The Black Rock press release contains a detailed breakdown of the all-in costs for the Chinese miners. They'd get bargain electric rates of $55.55 per month for each machine, plus pay an additional $125 in assorted charges for the likes of personnel, maintenance and administration. The total expense for running 1 million machines 24/7 would come to about $2.2 billion a year.

According to de Vries, that's a good deal. His calculates that one-third of the world's mining, at current prices, generates around $3 billion in revenues. In theory, the Chinese would be pocketing rich profits on their new turf.

The project faces sundry roadblocks. It's unlikely that the Black Rock operation could generate the power needed for the first 200,000 machines, let alone one million. According to de Vries, the entire Bitcoin network, pre-China crackdown, was devouring 15 gigawatts of electricity. The Alberta project, then, would require 3.5 to 5 GWh, depending on how powerful the machines are. Alberta's total production capacity for natural gas amounts to 8.4 GWh. "I don't see how all those machines could possibly fit given Alberta's current production," says de Vries.

The Quirk Creek facility that's slated to produce the natural gas powering the first 200,000 computers, as it stands today, doesn't have nearly enough juice. It consists of 14 wells on a scenic, 120 acre site at the foothills of the Canadian Rockies, as well as a plant that produces the gas, and a network of pipelines. According to one source contacted by Fortune, Quirk Creek's current output could only power a fraction of the 200,000 Bit miners that are planned in phase one.

The press release doesn't address a pivotal link in the supply chain. Who's going to turn the natural gas into electricity? Black Rock has a substantial market cap of $350 million. But it appears to be a holding company that operates no businesses prior to closing the purchase of Caledonian, owner of Quirk Creek. This writer called its CEO, Zoltan Nagy, to inquire about the how Black Rock would secure the power generation necessary to supply the Chinese miners. Nagy––who also serves also serves as CFO and treasurer––answered the phone directly.

In a brief conversation, Nagy said that the venture was "acquiring generators" that would be located near the gas plant. He added that he'd pursued the Caledonian acquisition before being contacted by the Chinese miners. "That wasn't part of the plan in buying Caledonian," he said. "The opportunity with the Chinese miners just came up."

The future of Bitcoin mining

Even if the the move to Alberta isn't remotely as big as the epic-sounding announcement suggests, it still may provide an important signal. Will the Chinese miners put a high priority on adopting renewables? Or will they go where energy's cheapest and most plentiful, without regard for whether their gigawatts flow from wind, hydro, coal or natural gas? The mining diaspora is already repurposing old fossil fuel plants in New York, Texas Montana and Kentucky, and and Chinese are flocking to Kazakhstan. The Alberta news may point to more of the same—and leave the dream of a greener Bitcoin for another day.