ConocoPhilips, an international oil giant, is wading into bitcoin mining to reduce carbon emissions profitably. How? Conoco has a pilot operation set up in Bakken, North Dakota. Under this scheme, instead of burning gas, which is a byproduct of drilling operations, the company is selling this gas to a 3rd party mining company. The gas won’t be burned off as a flare and is being repurposed for use as fuel.
Conoco’s representative said that the decision to move to crypto mining was a better way to reduce the environmental impact of flaring. This reflects the company’s objective to reduce and finally eliminate flaring, which is done routinely now, latest by 2030. Mining is a better and more profitable way to solve the flaring problem. Flaring occurs when oil and gas mining operations hit pockets of natural gas while drilling for crude oil.
The fact is that crude can be collected at different locations and harvesting natural gas requires a fixed infrastructure of pipelines. When gas is found and struck at any distance from existing pipelines, companies have to burn it. This is called flaring and is unprofitable in the long run. It is also harmful to the environment.
Selling it to crypto or bitcoin mining companies is more profitable. Instead of letting the gas go waste, Bitcoin miners travel to the venue where the oil is being drilled. They travel in trailers with their mining equipment and divert the gas to power generators. Conoco did not divulge the identity of the miner they are doing business with or how long this experiment has been going on. Another energy company – Crusoe Energy is doing the same thing and making money by diverting natural gas for other uses.
Miners are increasingly concerned about finding new ways to power their work and also to mitigate environmental damage. According to the Bitcoin Mining Council, they have been using a mix of sustainable energy and it is currently at 58.5%.