Exxon Mobil pilots Bitcoin mining program with excess natural gas

Exxon Mobil is running a pilot program that uses natural gas that otherwise would have been burned off from its North Dakota oil wells to power crypto mining.

Exxon Mobil pilots Bitcoin mining program with excess natural gas

Exxon Mobil is running a pilot program that uses natural gas that otherwise would have been burned off from its North Dakota oil wells to power crypto mining and is considering doing the same in other regions around the world.

An oil well pad in the Bakken shale basin is already tapped for the purpose of powering mobile generators that power Bitcoin mining servers, according to people familiar with the matter who asked not to be identified because the information isn't public.

Using 18 million cubic feet of gas every month, which would have otherwise been flared or burned, the pilot project launched in January 2021 and expanded in July of that year.

One of the people said Exxon is considering similar projects in Alaska, in Nigeria's Qua Iboe Terminal, in Argentina's Vaca Muerta shale field, in Guyana, and in Germany, according to the source.

"We are continually evaluating emerging technologies aimed at reducing flaring volumes across our operations," spokeswoman Sarah Nordin said in an email. Exxon hopes to meet the World Bank's call to end routine flaring by 2030. Several rumors and speculations about Exxon's pilot project have been going around.

Investors and regulators are increasingly pushing oil and gas producers to reduce their carbon footprints to combat climate change.

Among other things, they need to reduce the amount of gas they flare. A rush of miners is using cheap gas in oil-producing fields to fuel their operations at the same time. Carbon dioxide is still released into the atmosphere when the gas is burned, but the energy is not wasted.

ConocoPhillips announced last month that it was supplying a Bitcoin mining firm with gas from the Bakken shale in North Dakota for the first time.

The excess gas produced by shale oil is typically vented into the atmosphere or burned off. Most natural gas consists of methane, a greenhouse gas whose warming effect is 80 times greater than that of carbon dioxide during its first two decades in the atmosphere. Crypto mining is being used to reduce methane emissions in North Dakota, Colorado, and Wyoming.

The North Dakota Department of Environmental Quality states that Crusoe Energy has 20 permits for portable engines in North Dakota, 11 of which have been operated, backed by Bain Capital, the Winklevoss brothers and Tesla Inc's first institutional investor Valor Equity Partners.

State records and Crusoe's statement last spring indicate the company has similar projects in place for Equinor ASA and Devon Energy Corp.

Exxon's decision to move gas that would otherwise be burned off into the atmosphere is a positive step, according to Danielle Fugere, president of the environmental shareholder-activist group As You Sow. She explained that it makes use of what would otherwise be wasted.