Proof-of-Work (PoW) blockchains such as Bitcoin and Ethereum have been under the scrutiny of regulatory agencies because of the high carbon footprint they leave at their pace. PoW blockchains utilize huge amounts of electricity used in computational power to mine transactions and mint new coins.
Amid global warming concerns, oil and gas companies are increasingly under pressure from governments to foster a faster transition to clean energy, for instance, the United States 2030 Greenhouse Gas Pollution Reduction Target, or the European Union’s Green Deal, a paramount policy agenda aimed at transforming the regional economy into a net-zero greenhouse gas emissions by the year 2050.
Kill two birds with one stone
In what can be classified as a circular economy initiative, the transnational oil and gas company, ConocoPhillips, has been running a program in North Dakota, where the excess natural gas that exits from oil wells is recaptured, afterward, it is deposited into generators that convert the gas into electricity used for bitcoin mining. The solution has been up and running for over a year, and it is estimated that over 18 million cubic feet of gas are reused for crypto mining instead of just burning off.
It is a win-win for oil companies and crypto miners. For oil companies, recapturing and reusing the natural gas that otherwise is wasted in a process called ‘flaring’ -when the gas is burned to reduce over-pressurizing of equipment- represents a new business and income stream, whereas for crypto miners it is a reliable source of energy to power their on-site servers.
The winning seems to be for the environment as well. On one hand, flaring is a significant contributor to greenhouse gas emissions including CO2, methane, and others. On the other hand, the mining conversion reduces CO2-equivalent emissions by approximately 63 percent.
U.S. oil companies and others that might mimic the process will head towards Zero Routine Flaring, cushioning its position on climate change. At the same time, the proscribed PoW mining is reducing its own carbon footprint.
The giant Exxon is following the steps of ConocoPhillips
The largest U.S. oil and gas producer, Exxon Mobil Corp., in partnership with Crusoe Energy Systems Inc. has been piloting the same procedure, planning to expand the scheme to Alaska, and foreign countries including Nigeria, Argentina, Guyana, and Germany.