Exxon Mobil is now using extra natural gas to mine Bitcoin. It has been mining bitcoin in North Dakota alongside Crusoe Energy Systems of Denver for over a year, according to sources familiar with the initiative. Bakken-based trials began in late January 2021 and grew quickly by July. ConocoPhillips is also working on a similar project in the same area.
The country’s largest oil and gas company, ExxonMobil, is reportedly testing a bitcoin mining plant in North Dakota, according to sources familiar with the matter.
According to people who asked not to be identified because the project’s details are private, Exxon has been working with Crusoe Energy Systems, a Denver-based company, for over a year. Crusoe’s idea helps oil companies turn lost energy, such as flare gas, into a valuable resource.
Exxon hasn’t said much about its work in the space, but Eric Obrock, a 10-year Exxon employee, said on his LinkedIn profile that from February 2019 to January 2022, he “proposed and led the first successful commercial and technical demonstration of using Bitcoin Proof-of-Work mining as a viable alternative to natural gas flaring in the oil patch.”
Obrock’s title on LinkedIn is NGL industry outlook advisor, which refers to the natural gas liquids sector. Obrock told CNBC via LinkedIn that he’s been told he can’t talk about the subject with the media. Exxon did not respond to a request for comment.
Exxon’s bitcoin endeavor isn’t about making money with bitcoin. The company has pledged to reduce emissions as part of an industry-wide effort to meet higher environmental standards. Early in March, Exxon and other oil companies pledged to participate in the World Bank’s “Zero Routine Flaring by 2030” program.
Compared to continuing to flare, Crusoe’s crypto mining deal would cut CO2-equivalent emissions by around 63 percent.
Gas cannot be transported by a truck like oil. Instead, it must be delivered through a pipeline. If a drilling location is close to a pipeline, producers can sell it right away. Drillers, on the other hand, frequently burn off the gas when the pipeline is full or the gas is more than 20 miles away. As a result, oil fields frequently have flames erupting from them.
Drillers not only put the environment in jeopardy, but they also waste money. Bitcoin mining, for example, is simple and can be done from anywhere with an internet connection. Energy is a crucial variable expense for miners, therefore they’re also motivated to discover the lowest power sources.
Cryptocurrency mining is currently environmentally unfriendly, needing massive amounts of power, which is largely generated from fossil fuels, resulting in a large carbon footprint. While natural gas continues to be wasted, this experimental project makes cryptocurrency mining marginally more environmentally benign by avoiding the use of extra fossil-fuel-derived power.
“We continue to examine innovative technology aimed at reducing flaring quantities throughout our operations,” Exxon said. However, diverting extra gas output to cryptocurrency mining is probably less environmentally benign than finding a means to limit excess gas production in the first place.