ConocoPhillips, an oil and gas conglomerate with $18 billion in revenue for the fiscal year ending December 31, 2020, has entered the Bitcoin ($BTC) mining fuel market by delivering gas to a cryptocurrency miner in North Dakota’s Bakken region.
According to CNBC, a ConocoPhillips spokesman acknowledged that a bitcoin pilot project is currently underway in the region. Although the company does not have a BTC mining operation, it does sell gas to bitcoin miners who are owned and managed by a third party.
The measure is part of ConocoPhillips’ plan to decrease flaring (the practice of burning off excess gas) to zero by 2030.
The company has reportedly published reports about its efforts to phase out flaring in its largest segments based on production.
Here we go!
ConocoPhillips, the $100+ billion oil producer, has announced that they are mining bitcoin in the United States.
Eventually every single major oil producer is going to mine bitcoin.
— Pomp 🌪 (@APompliano) February 15, 2022
According to CNBC, oil and gas companies have struggled for years with unexpectedly hitting a natural gas formation while seeking oil. While oil can be simply transported by truck, distributing gas necessitates the use of a pipeline.
If a drilling site is located near another, the gas is sold for whatever the buyer is prepared to pay. If the distance is great, they will flare.
Flaring has an environmental impact and effectively burns money for oil drillers. Companies may place shipping containers full of thousands of bitcoin miners on an oil well and channel the gas into generators that turn it into electricity to power the miners, which is a solution to the problem.
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.”