Crypto miners and major oil companies are now seeing eye-to-eye when it comes to power consumption, repurposing waste gas and cost. Crusoe Energy Systems has termed the process of using the flared gas that is burned off during oil drilling to power their systems as “digital flare mitigation”. It has become so advantageous for the major oil companies that they are now planning pilot programs in various locations across the world.
Exxon Mobil Corporation is conducting a pilot program using the surplus natural gas from North Dakota oil wells that would otherwise be burned off to power cryptocurrency mining operations. Sources familiar with the program say that the oil giant intends to replicate the project in four other sites across the globe.
As part of the pilot program, Exxon signed an agreement with Crusoe Energy Systems Inc. to use gas from a Bakken Shale Basin oil well to power mobile generators used to run Bitcoin mining servers on-site.
The pilot program was launched in January 2021 and by July the same year had already used up to 18 million cubic feet of natural gas that would have otherwise been burned off because of the lack of enough pipelines to transport the gas.
Expanding the pilot program
Exxon is now considering undertaking similar pilot programs in Alaska, Argentina’s Vaca Muerta shale field, Qua Iboe Terminal in Nigeria, Germany, and Guyana.
One of the people privy to the information in an interview with Bloomberg said:
“We continuously evaluate emerging technologies aimed at reducing flaring volumes across our operations,” and Exxon expects to meet the World Bank’s call to end routine flaring by 2030, spokeswoman Sarah Nordin said in an email. She declined to comment on “rumors and speculations regarding the pilot project.”
Exxon’s push comes amid the increasing push to have oil and gas producers reduce their carbon footprint to help in the fight against climate change. One of the ways of reducing the carbon footprint is by reducing the amount of natural gas they burn on site.
At the same time, there is a rash by crypto miners to use the cheap gas from oil wells to power their mining operations instead of going for power from the national grids. Although when using the gas to power crypto mining still involves burning the gas and releasing carbon dioxide into the atmosphere, the energy is at least put to use compared to just burning the gas for nothing.
Last month ConocoPhilips acknowledged supplying a Bitcoin mining firm with natural gas from the Bakken shale basin in North Dakota. Shale oil produces a lot of excess gas which is mostly burned off.
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