The United States-based energy producer Exxon Mobil could be expanding its operation to four other countries to power blockchain mining rigs by using energy from its excess gas. Exxon Mobil might launch a pilot program to use excess gas for the new venture.
In an agreement with Crusoe Energy Systems, Exxon has agreed to burn fuel flared at a North Dakota oil drilling site to power mobile generators that supply power to bitcoin mining servers which run on the gas flared at the site. It was announced in January 2021 that the pilot project would be expanded last July. Several reports indicate that Exxon may launch similar pilot projects in Alaska, Nigeria, Argentina, Guyana, and Germany.
The Crusoe project strives to make sure the future of computation is aligned with the future of the climate, that is, by avoiding the emission of methane which is wasted as a result of routine flaring activities. The company is backed by a group of strong long-term investors such as Bain Capital, the Winklevoss twins and Valor Equity Partners, the latter of which was the first major institutional investor in Tesla.
There is an estimated 18 million cubic feet per month of gas that the project uses rather than would have been flared, otherwise i.e. burned off and delivered directly into the atmosphere with no real purpose at all. The gas which is emitted from the waste plants is composed mostly of methane, which is one of the most harmful greenhouse gases that exists. According to the Department of Environmental Quality of North Dakota, Crusoe has a total of 20 portable engines permitted in the state.
After launching the pilot program in January 2021, the company is now reported to be considering expanding to Nigeria, Argentina, Guyana, and Germany, along with launching a similar project in Alaska. In a report published in February, oil company ConocoPhillips announced that it was selling excess gas to third-party BTC miners in order to meet their fuel needs.
The transportation of natural gas requires pipelines which may not be able to handle the amount of gas produced safely at every point. Often, companies are forced to burn off their excess gas or vent it into the air resulting in environmental damage as well as harming their profit margins.
“It is creating use of what would be otherwise wasted,” said Danielle Fugere, president of environmental shareholder advocacy group As You Sow, referring to the energy being diverted to Bitcoin miners.
The Crusoe Energy reportedly operated 60 data centers for mining crypto in various parts of the United States, in September 2021. Argus Media reports that the data centers are powered by oil well gas which would normally be flared on site, and instead put into crypto mining. Argus Media reports that diverting the oil well gas to crypto mining is estimated to reduce carbon dioxide emissions “by up to 63%”.
Although Exxon declined to confirm on the record that plans for this project exist, its spokeswoman Sarah Nordin told Bloomberg in an email that the company explores “emerging technologies with the aim of reducing flaring volumes.” Of course, more energy is better than burning fossil fuels wind turbines, solar panels, and other zero-carbon energy sources are best. Those technologies would prevent us from extracting fossil fuels in the first place.
