Oil and Gas Giant ConocoPhillips Enters Bitcoin ($BTC) Mining Fuel Business
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ConocoPhillips, an oil and gas giant with $18 billion in revenue during the fiscal year ending December 31, 2020, has entered the Bitcoin ($BTC) mining fuel businesses by supplying a cryptocurrency miner with gas in the Bakken, a region in North Dakota.
According to CNBC, a ConocoPhillips representative has confirmed there is an ongoing bitcoin pilot project in the region. Although the company isn’t running a BTC mining operation itself, it’s selling gas that would otherwise be burned to bitcoin miners, owned and managed by a third party.
The move is part of ConocoPhillips’ initiative to reduce the burning off of extra gas, a practice known as flaring, to zero by 2030. The company has reportedly published reports about its efforts to phase out flaring in its largest segments based on production.
Oil and gas companies, CNBC reports, have for years struggled with accidentally hitting a natural gas formation while looking for oil. While oil can be easily trucked to a new destination, delivering gas requires a pipeline. If a drilling site is next to one, the gas is sold for whatever a the buyer is willing to pay for it. If it’s far, they turn to flaring.
Flaring has an environmental impact and sees oil drillers effectively burn cash. Turning to BTC mining is a solution for the problem, as companies can place shipping containers full of thousands of bitcoin miners on an oil well, and divert the gas into generators that turn it into electricity used to power the miners.
Research from Denver-based Crusoe Energy Systems has shown the process reduces CO2-equivalent emissions by about 63% compared to continued flaring. A slide from a 2021 industry conference presentation by ConocoPhillips has shown the company is focusing on “gas capture projects to achieve zero routine flaring of associated gas by 2025.”
In the slide, there are photos of what appear to be BTC miners next to a title that reads “compressed natural gas & digital currency beneficial use technologies.” The company hasn’t revealed which BTC mining company it’s working with.
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