Largest U.S. Oil Producer Mines Bitcoin

Oil producer Exxon Mobil is testing a bitcoin mining project that uses natural gas to convert electricity.

Exxon Mobil, the largest U.S. oil and gas producer, is testing a bitcoin mining project in North Dakota, according to CNBC.

Largest U.S. Oil Producer Mines Bitcoin
Largest U.S. Oil Producer Mines Bitcoin

For more than a year, ExxonMobil has been working with Crusoe Energy Systems to convert emissions (energy wasted in oil extraction) into useful resources.

Utilize waste energy

Similar to plans by oil producer ConocoPhillips in the Bakken region of North Dakota, Exxon will convert emissions into electricity to power thousands of bitcoin miners. The pilot program launched in late January 2021 and expanded six months later.

However, ExxonMobil’s bitcoin mining project is not focused on profitability. Previously, the company has pledged to reduce emissions as part of its environmental protection plan.

In early March, ExxonMobil joined other oil and gas companies in the World Bank’s Zero Emissions by 2030 initiative launched in 2015. The project is expected to be implemented in partnership with Crusoe. Will help ExxonMobil reduce carbon dioxide emissions by 63%.

In addition to North Dakota, Exxon is looking for similar sites in the Vaca Muerta shale field in Alaska, Nigeria, Argentina, Guyana and Germany, according to Bloomberg.

The problem Exxon or ConocoPhillips is trying to solve has been around for years.

During oil extraction, drillers often encounter natural gas pools. However, unlike liquefied energy, which is as easily transported as oil, natural gas requires special pipelines to circulate.

If a site has prefabricated pipes, producers may be ready to sell gas immediately. However, engineers often have to dissipate energy if the pipeline is overloaded or away from the mine. That’s why we often see flames rising from oil fields.

Burning natural gas not only pollutes the environment, it also means oil fields are burning money.

To mine Bitcoin, what miners need is a stable Internet system and abundant energy. Electricity is one of the costs that affects Bitcoin mining profitability. So finding the cheapest power supply is always a top priority.

“This is a great way to solve two problems at once. We can solve both the energy needs of Bitcoin and the wasteful emissions of the energy industry,” said Crusoe principal Cully Cavness.

Environmental protection

Crusoe, which has 150 employees, also works with Norwegian oil producer Equinor, Canada’s Enerplus and Oklahoma City’s Devon Energy.

Crusoe is licensed by the North Dakota Air Quality Authority and is using 20 portable generators, 11 of which operate at mines statewide. Two of the engines were run well by XTO Energy, an ExxonMobil subsidiary.

For the past few decades, the Bakken River has been one of the most important sources of oil in the United States. However, the push to increase mining has resulted in an increase in gas volumes. That’s why Crusoe is investing heavily in this area.

“Emissions from this basin account for one-fifth of extraction,” Kafness said.

However, in a March report, the North Dakota Department of Natural Resources estimated that 93-94% of natural gas is underutilized. In 2014, that number was only around 74 percent.

Until now, oil and gas operators have prioritized burning excess natural gas rather than venting it directly into the environment. Over a 20-year cycle, methane releases are 84-86 times more likely to have a greenhouse effect than carbon dioxide, experts say.

“We can burn up to 99.9 percent of the methane emitted by generators. Not only can we use other wasted energy sources, but we can significantly reduce methane emissions,” said team leader Crusoe.

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