US-based energy producer Exxon Mobil has reportedly conducted a pilot program to harness the energy from excess gas to power crypto mining rigs — and it could expand its operations to four other countries.
In a report Thursday, Bloomberg said Exxon Mobil had struck a deal with Crusoe Energy to use excess gas from oil wells in North Dakota to run Bitcoin (BTC) miners. The project reportedly uses 18 million cubic feet of natural gas per month — about 0.4% of the oil giant’s reported operations in the state, producing 158 million cubic feet of natural gas each day.
The company launched the pilot program in January 2021 and is now reportedly considering expanding to Nigeria, Argentina, Guyana and Germany, in addition to launching a similar project in Alaska. Cointelegraph reported in February that oil and gas giant ConocoPhillips was running a program to sell excess gas to outside BTC miners for fuel.
The transport of natural gas requires pipelines that cannot always safely absorb the quantity produced. Companies are often forced to burn off excess gas or release it into the air, which ultimately has adverse effects on the environment and the companies’ profit margins.
“It creates use of what would otherwise be wasted,” said Danielle Fugere, president of As You Sow, the environmental shareholder advocacy group, referring to the energy being diverted to Bitcoin miners.
According to a report by Argus Media, as of September 2021, Crusoe Energy was operating 60 crypto mining data centers in four US states, powered by “gas from the oil wells that would otherwise be flared on site.” Rather than burning the gas, diverting it to crypto mining would reportedly reduce carbon dioxide equivalent emissions by as much as 63%.
3/ @CoinSharesCo estimates that 69 TWh of wasted energy in the US is lost to flaring each year
— Messari (@MessariCrypto) March 6, 2022
Related: No longer stranded? Bitcoin Miners Can Help Solve Big Oil’s Gas Problem
While the Bakken Shale Basin in North Dakota is an important source of natural gas for the United States, Texas is also home to many oil and gas companies, in addition to crypto mining companies that see the potential for energy production in the state. By contrast, New York lawmakers have proposed suspending proof-of-work mining powered by fossil fuels in response to critics citing environmental concerns.