3 min read
International oil and gas giant ExxonMobil is running a pilot cryptocurrency mining program powered by excess natural gas from oil wells in North Dakota, according to a recent Bloomberg report.
ExxonMobil has reportedly reached an agreement with Crusoe Energy Systems Inc., a company that provides solutions to natural gas flaring—to take gas from an oil well site in North Dakota to provide on-site power to crypto mining hardware for assets powered by a proof-of-work (PoW) consensus mechanism Bitcoin and the current iteration of Ethereum.
Gas flaring is the practice of burning natural gas generated from the extraction of oil. Instead of simply burning it off as a derivative of extraction, ExxonMobil will reportedly turn it towards powering Bitcoin mining machines.
Bloomberg reports that people familiar with the matter asked not to be named because the information is not public.
The oil and gas company is also reportedly considering similar pilot programs in the U.S. state of Alaska, Nigeria, Argentina, Guyana, and Germany.
“We continuously evaluate emerging technologies aimed at reducing flaring volumes across our operations,” ExxonMobile spokesperson Sarah Nordin reportedly told Bloomberg.
She also declined to comment on “rumors and speculations” regarding the mining project.
Cryptocurrency mining—particularly Bitcoin mining—has generated controversy in the wake of the industry’s impact on the environment.
According to Cambridge University, the Bitcoin network consumes an eye-popping 134-terawatt hours of electricity per year. This figure also reveals that the network consumes more electricity than many countries.
A terawatt hour (TWh) is the metric used to calculate how much electricity entire countries consume per year.
The resulting carbon footprint and environmental impact of this energy consumption depend on the source of the energy itself—another matter of controversy within the crypto industry.
In September 2020, Cambridge University found that only 39% of the Bitcoin network ran on renewable energy, such as wind or solar, for example. The rest of the network was powered by environmentally harmful fossil fuels like coal and natural gas.
Using these figures, previous research by Decrypt found the Bitcoin network’s carbon footprint was broadly equivalent to over 60 billion pounds of burned coal, 9 million homes’ average annual electricity consumption, or 138 billion miles driven by an average passenger vehicle.
Other studies have claimed that the Bitcoin network actually runs on a higher share of renewable energy. One such study was published by the Bitcoin Mining Council, which claimed in July 2021 that 56% of the electricity behind Bitcoin came from “sustainable” sources.
However, the council cited its own analysis, left the word “sustainable” up to interpretation, and provided no precise energy breakdowns in the study.
What’s more, the council only collected survey data from mining companies that represented 32% of Bitcoin’s global hashpower at the time—and miners with a less-than-green energy mix were free to skip on the survey itself.
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