One of the world’s leading oil and gas corporations, Exxon Mobil, is reportedly running a pilot program that uses excess natural gas that would otherwise be burned off from North Dakota oil wells to power cryptocurrency-mining operations. According to Bloomberg, that is citing people familiar with the matter, the firm is looking to do the same at other sites around the globe.
According to the report, the firm has an agreement with Crusoe Energy Systems, a computer software company, to take gas from an oil well pad in the Bakken shale basin to power mobile generators, which will be used to run Bitcoin mining servers on site.
The firm launched a pilot program in January 2021 and expanded in July, using up 18 million cubic feet of gas per month that would have otherwise been burned off or flared because there aren’t enough pipelines.
What you should know
According to the sources, Exxon Mobil is considering similar pilots in Alaska, the Qua Iboe Terminal in Nigeria, Argentina’s Vaca Muerta shale field, Guyana and Germany.
Spokeswoman Sarah Nordin said in an email, “We continuously evaluate emerging technologies aimed at reducing flaring volumes across our operations.” However, she declined to comment on “rumors and speculations regarding the pilot project.”
Oil and gas producers are increasingly under pressure from regulators and investors to reduce their carbon footprint to help combat climate change. This was why the International Energy Agency (IEA), released a roadmap for the world to go net-zero by 2050.
A major component of the road map was for oil companies like Exxon Mobil to phase out all unabated coal and oil power plants by 2040 and also triple the annual clean energy investment worldwide by 2030 to around $4 trillion.
Crusoe Energy, backed by Bain Capital, the Winklevoss brothers and Valor Equity Partners, has 20 portable engines permitted in North Dakota, of which 11 have operated, according to the North Dakota Department of Environmental Quality.
The start-up has similar projects in place for Equinor ASA and Devon Energy Corp., according to the state records and a Crusoe statement last spring.
Craig Thorstenson the manager of the permitting program at the state’s Division of Air Quality, explained that the push by crypto miners into North Dakota’s oil fields may only be beginning. 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.
This comes at a time when big institutions have begun getting involved in cryptocurrency. In recent times we have heard big financial giants like JPMorgan and Goldman Sachs get involved in cryptocurrency. With Exxon Mobil pushing its new initiative, we are seeing involvement in the space from the oil and gas industry.
Also considering Biden’s executive order and America’s goal to be the pioneer when it comes to cryptocurrency innovation, we should expect to hear more news like this of involvement by legacy organizations in the space.
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