ExxonMobil, the top oil and gas producer in the U.S., is piloting a project to mine bitcoin in North Dakota, according to Bloomberg
Exxon has been working with Crusoe Energy Systems, a company based in Denver.
Crusoe’s technology helps oil companies turn wasted energy, or flare gas, into a useful resource.
Similar to ConocoPhillips’ mining scheme in North Dakota’s Bakken region, Exxon is diverting natural gas that would otherwise be burned off into generators, which convert the gas into electricity used to power shipping containers full of thousands of bitcoin miners.
Exxon launched the pilot in late January 2021 and expanded its buildout in July.
*Cnbc tweet on Exxon
Exxon is mining bitcoin in North Dakota as part of its plan to slash emissions https://t.co/PtcVO3SQoA
— CNBC (@CNBC) March 26, 2022
While Exxon hasn’t talked publicly about its work in the space,
Eric Obrock, a 10-year veteran at the company, said “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.”
Exxon’s bitcoin project isn’t really about making money from the cryptocurrency.
Rather, the company has pledged to reduce emissions as part of an industry-wide effort to meet higher environmental demands.
In early March,
Exxon joined other oil companies in committing to the World Bank’s “Zero Routine Flaring by 2030” initiative introduced in 2015.
The push by crypto miners into North Dakota’s oil fields may only be beginning, said Craig Thorstenson, manager of the permitting program at the state’s Division of Air Quality.
He estimated that about 90% of the gas produced in the state makes its way into pipelines to be used at power plants and elsewhere. The rest goes to waste.
Danielle Fugere, president of As You Sow, an environmental shareholder-activist group, that said it’s a positive step for Exxon to find a use for gas that would otherwise be burned off into the atmosphere. “It is creating use of what would be otherwise wasted,” she said.
But it would be better if the company worked more aggressively to transition away from fossil fuels, Fugere said.
Exxon’s bitcoin mining work in North Dakota was reported by Bloomberg
which can be trucked out to a remote destination, gas delivery requires a pipeline. If a drilling site is close to a pipeline, producers can sell it right away.
In addition to the environmental hazards, drillers are also burning cash.