Why Is ExxonMobil Mining Bitcoin?
One of the world’s largest energy conglomerates, ExxonMobil is primarily known for producing oil and natural gas. But recently, its name is cropping up in discussions about bitcoin. In late March, a report from CNBC revealed a new bitcoin mining operation sponsored by none other than Exxon. And while the connection between fossil fuel mining and cryptocurrency may seem tenuous, it might actually make a lot of sense. In fact, Exxon’s foray into cryptocurrency could shape up as a win-win — with benefits for both the company and the environment.
Exxon’s foray into bitcoin mining
There’s not much concrete information about ExxonMobil’s interest in bitcoin other than what investigative journalists have put together in recent months. An offhand statement on LinkedIn from a company executive and whispers of a partnership with a bitcoin mining company are the only footholds for further inquiry.
What we know for sure
Exxon’s bitcoin mining operations in North Dakota’s Bakken Shale region began in January 2021 and expanded in July. According to confidential sources, Exxon is working with Crusoe Energy Systems, a Denver-based company whose technology aims to convert flare gas from the site into energy for powering bitcoin mining servers. Sources also claim Exxon’s next venture into bitcoin mining may occur in Alaska, Nigeria, Argentina, Guyana, or Germany.
ExxonMobil has declined to comment and continues to remain tight-lipped about any association with bitcoin. There are no quantifiable reports about the size of the operation, its specific location, or the nature of the company’s investment.
A digital solution to flare gas concerns?
The link between ExxonMobil and bitcoin mining comes down to the practice of gas flaring, which occurs when natural gas is inadvertently released during the drilling process and burned off to reduce greenhouse emissions. It represents a significant waste of resources.
Instead of flaring gas, Exxon is exploring a way to capture and use it as energy for on-site bitcoin mining. This could help eliminate methane emissions by combusting 100% of the gas to power bitcoin mining computers. This is where Exxon’s partnership with Crusoe comes in. If and when Exxon accidentally taps a gas repository, Crusoe hauls out containers to capture it.
This innovative solution for flare gas capture is likely the result of Exxon’s quest to deliver on environmental goals. The company joined the World Bank’s “Zero Routine Flaring by 2030” initiative in early March, and on-site bitcoin mining could theoretically help reach that goal. The oil giant could also generate profit via cryptocurrency.
“This is just a great way to bring that demand to the wasted energy and solve two problems at once,” said Crusoe Energy Systems President Cully Cavness, “Solve the energy appetite of bitcoin and solve the stranded energy, flare gas problem for the energy industry.”
Looking ahead at crypto mining and the energy industry
Crypto mining presents a potential opportunity for the oil and gas industry, and Exxon isn’t the only company exploring that potential. Houston-based ConocoPhillips has also explored bitcoin mining opportunities in North Dakota’s Bakken shale region. While confirming its program, ConocoPhillips has also remained cryptic about specifics, possibly for fear of backlash from environmental groups.
While it offers a potential solution to gas flaring, some groups argue crypto mining is an ecologically devastating way to utilize energy. With the popularity of cryptocurrency, and Exxon’s plans to decrease harmful emissions, crypto mining could prove beneficial, but until the company offers more information, potential results are only speculation.