ConocoPhillips Reducing Flaring by Selling Gas to Bitcoin Miners

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Oil and gas giant ConocoPhillips announced this week that they are partnering with an undisclosed Bitcoin mining company as part of a pilot project to reduce flaring. According to a ConocoPhillips spokesperson, they have “one Bitcoin pilot project currently operating in the Bakken [a region in North Dakota known for oil production], where gas that would otherwise have been flared is routed to a Bitcoin processor owned and managed by a third party.”

Flaring has been a persistent problem in the oil and gas industry for decades. Utilizing the gas released during oil production requires the infrastructure necessary for capturing, transporting, processing, and selling the gas. Because this infrastructure is not always economically viable, many companies simply burn off, or “flare,” excess gas. According to one estimate, “the amount of gas that is currently flared each year – about 142 billion cubic meters – could power the whole of sub-Saharan Africa.” In addition to wasted energy, flaring releases massive amounts of CO2 into the atmosphere. According to the International Energy Alliance, global flaring in 2018 “resulted in emissions of roughly 275 mega tons of CO2, as well as some methane emissions and other greenhouse gasses.”

Over the last several years, ConocoPhillips has pushed to reduce greenhouse gas emissions, in part by addressing their flaring process. According to a company report released last year, “setting a target to get to zero routine flaring by 2030, with an ambition to get there by 2025, is a key near-term action within our ambition to become a net-zero [emissions] company by 2050.” The same report does not mention Bitcoin mining, stating rather that “we have reduced flaring by utilizing closed-loop completions, central gas gathering systems, vapor recovery units, directing condensate to sales pipelines and improving uptime through operational excellence.” It appears then that their Bitcoin mining project is a relatively new venture. 

Several Bitcoin mining companies now offer services that help capture gas and convert it to electricity to power mining rigs. Generally, these companies will place shipping containers of Bitcoin miners near an oil well, divert natural gas produced from the well into generators designed to convert the gas into electricity, and then use the electricity to power the miners. Crusoe Energy Systems and Great American Mining are two companies that currently provide these services. 

At the time of this writing, ConocoPhillips had not disclosed the name of the Bitcoin mining company they partnered with on this project. However, a representative for the company clarified that they are not operating the Bitcoin mine themselves. Instead, they are selling gas that would have otherwise been flared to a Bitcoin processor that is owned and managed by a third party.

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Daniel is a data scientist who enjoys writing bitcoin and financial content. He is the co-founder of Green Candle Investments, a bitcoin and finance media company.



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