Exxon might take its crypto program global
Exxon Mobil Corp. is running a pilot program using excess natural gas that would otherwise be burned off from North Dakota oil wells to power cryptocurrency-mining operations and is considering doing the same at other sites around the globe, according to people familiar with the matter.
The oil giant has an agreement with Crusoe Energy Systems Inc. to take gas from an oil well pad in the Bakken shale basin to power mobile generators used to run Bitcoin mining servers on site, said the people, who asked to not be named because the information isn’t public. The pilot project, which launched in January 2021 and expanded in July, uses up 18 million cubic feet of gas per month that would have otherwise been burned off — or flared — because there aren’t enough pipelines.
Exxon, the largest U.S. oil producer, is considering similar pilots in Alaska, the Qua Iboe Terminal in Nigeria, Argentina’s Vaca Muerta shale field, Guyana and Germany, one of the people said.
“We continuously evaluate emerging technologies aimed at reducing flaring volumes across our operations,” and Exxon expects to meet the World Bank’s call to end routine flaring by 2030, spokeswoman Sarah Nordin said in an email. She declined to comment on “rumors and speculations regarding the pilot project.”
Crusoe declined to comment.
Oil and gas producers are increasingly under pressure from regulators and investors to reduce their carbon footprint to help combat climate change. That includes reducing the amount of gas they flare. At the same time, there is a rush of miners trying to use cheap gas in oil producing fields to fuel their operations. The gas is still burned, releasing carbon dioxide into the atmosphere, but the energy is put to use instead of simply being wasted.
Last month, ConocoPhillips said that has been supplying gas from the Bakken shale in North Dakota to a Bitcoin mining firm for the first time.
Shale oil produces so much excess gas that it ends up being vented into the air or burned off. Natural gas is comprised mostly of methane, a global warming agent that is more than 80 times more powerful than carbon dioxide during its first two decades in the atmosphere. North Dakota, Colorado and Wyoming are among the first places to use crypto mining to slash methane emissions.
Crusoe Energy, backed by Bain Capital, the Winklevoss brothers and Tesla Inc.’s first institutional investor Valor Equity Partners, has 20 portable engines permitted in North Dakota, of which 11 have operated, according to the North Dakota Department of Environmental Quality. The start-up has similar projects in place for Equinor ASA and Devon Energy Corp., according to the state records and a Crusoe statement last spring.
The push by crypto miners into North Dakota’s oil fields may only be beginning, said Craig Thorstenson, manager of the permitting program at the state’s Division of Air Quality. He estimated that about 90 percent of the gas produced in the state makes its way into pipelines to be used at power plants and elsewhere. The rest goes to waste.