ExxonMobil mines Bitcoin with excess US gas, eyes worldwide expansion

Exxon's Bitcoin mining project uses 18 million cubic feet of natural gas that would otherwise be flared into the atmosphere for nothing.
Listen to this article.

ExxonMobil is considering expanding its excess gas-powered Bitcoin mining operations across four continents, reported Bloomberg last week.

In January 2021, the Texas-based oil titan (the second-largest in the world) launched a pilot project at Crusoe Energy’s Bakken shale oil field site in North Dakota.

ExxonMobil uses the site’s gas that would otherwise be burned off to power mobile generators that run Bitcoin mining rigs.

But now, according to sources close to the matter, ExxonMobil is preparing to scale up its Bitcoin mining model.

It’s said to be planning sites in Alaska, the Qua Iboe Terminal in Nigeria, the Vaca Muerta shale field in Argentina, and sites in Guyana and Germany.

Natural gas containing a large amount of methane comes to the surface as a by-product of oil fracking. 

Often this gas goes to waste because of a lack of infrastructure. Basically, there’s no way to transport it to energy producers.

As a result, sites burn off (“flare”) the gas to convert it into carbon dioxide (CO2). The rationale being that CO2 is a much less potent greenhouse gas. 

Climate experts neg mining Bitcoin with excess gas

Experts point out that reducing methane by flaring does nothing to reduce harm done by the fossil fuel industry. Indeed, some even claim it may cause oil fracking to increase. 

Arvind Ravikumar, a methane researcher at the University of Texas, called these flare mitigation schemes a scam. “At the end of the day, they’re still burning natural gas,” he said (via The Guardian).

Except frackers would typically burn that gas in exchange for nothing. In ExxonMobil’s case, it can receive valuable Bitcoin in exchange for the power generated by the flared methane.

This is essentially why critics say Bitcoin could act as a lifeline for fossil fuel companies hellbent on fracking. Bitcoin mining could make fossil fuels more lucrative.

Crypto investor Meltem Demirors weighs in on ExxonMobil’s Bitcoin scheme.

ExxonMobil nevertheless expanded its Bitcoin operation last July. Its deal with Crusoe means that 18 million cubic feet of gas are now used to mine Bitcoin rather than being simply burned into the atmosphere. 

However, ExxonMobil reportedly plans to help the World Bank in its ambition to “end routine flaring by 2030.”

ExxonMobil’s Bitcoin project isn’t unique 

Oil producers in Colorado and Wyoming have joined ExxonMobil’s North Dakota project in mining Bitcoin with excess gas. 

In Wyoming, the financial advantages are clear. Governor Mark Gordon signed a bill last April that made gas used for Bitcoin mining tax-exempt. North Dakota has a similar tax credit scheme.

This has led Wyoming-based producer Kirkwood Oil and Gas LLC to team up with Bitcoin mining firms to make use of its excess natural gas.

Read more: [‘Struggling’ coal plant emits 500% more carbon after Bitcoin mining revival]

“The sweet spot for us is stranded, low volumes of gas that don’t justify a pipeline,” Kirkwood’s land-manager Steve Degenfelder said (via Reuters).

For what it’s worth, an ExxonMobil spokesperson Sarah Nordin declined Bloomberg’s request for comment on “rumors and speculations regarding the pilot project.”

Follow us on Twitter for more informed news.