ConocoPhillips
The company released a statement regarding its first bitcoin mining project underway in North Dakota. The project is located in the Bakken, a new major source of oil and gas production in the U.S. The Bakken field is also being tapped by ExxonMobil
"ConocoPhillips has one bitcoin pilot project currently operating in the Bakken, where gas that would otherwise have been flared is routed to a bitcoin processor owned and managed by a third party," a ConocoPhillips spokesperson told CoinDesk.
The excess gas is the result of the accidental exposure of natural gas formations underground. These formations are often struck by teams drilling for oil. While oil can be stored relatively easily, gas has to be sent through a pipeline. If there's no pipeline nearby, the companies usually burn off, or "flare", the excess gas, resulting in oil fields' characteristic flames.
This practice of burning off excess natural gas rather than attempting to store or transport it is a major factor in the increasing greenhouse gas levels in our atmosphere. Of course, this excess gas also represents a business opportunity for the oil companies.
ConocoPhillips and oil companies like it have been looking for ways to address the issue of gas burn-off for years. Establishing bitcoin mines near oil fields is a positive first step, but it won't make a dent in ConocoPhillips' carbon footprint.
The company's Scope 3 emissions, characterized by the Environmental Protection Agency (EPA) as emissions that are "the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly impacts in its value chain", won't be affected at all. According to the EPA, Scope 3 often represents the majority of a company's emissions.
However, the reduction of emissions "gas that would otherwise have been flared", as ConocoPhillips wrote, is still notable. Transitioning from flaring to bitcoin mining has been shown to reduce CO2-equivalent emissions by 63%, according to Crusoe Energy Systems.
Crusoe, ConocoPhillips, and JAI Energy are the first companies to utilize bitcoin mining operations for flare gas, but they're far from the first to show interest in the opportunities digital currencies may provide to oil and gas companies.
In 2019, ConocoPhillips partnered with Chevron
"Every oil and gas company in five to 10 years will have some exposure to mining bitcoin," the founding partner of JAI, Ryan Leachman, told CoinDesk.
According to a 2021 industry event, ConocoPhillips has a goal to stop the practice of routine flaring by 2025. That goal was included in a presentation slide that also showed bitcoin-related images and text.
