Of all the corporate climate advertising floating this spring, ExxonMobil’s secret project to reduce its pollution from Bitcoin mining has to stand there as one of the weirdest.
Exxon has launched a pilot project in 2021 to extract Bitcoin at North Dakota’s Bakken oil fields, CNBC reported in March. The largest oil and gas company in the United States is also considering doing the same in Alaska and parts of Nigeria, Argentina, Guyana and Germany. Bloomberg reported. And you are not alone. Other oil companies, including ConocoPhillips in North Dakota, see energy-hungry cryptocurrency as a way to unload some of their climate footprint and perhaps make some money in the process. The United States has become the largest center for Bitcoin mining worldwide, so this could be a growing trend.
The story of how fossil fuel companies have become the dirtiest cryptocurrency in existence as a way to renew their books begins with a lingering gas problem. Whenever a company drills in search of oil, it tends to expel some methane gas from the ground as well. Methane is an even more potent greenhouse gas than carbon dioxide. If a company let that methane escape into the atmosphere, which they are shamefully guilty of doing, methane would trap heat with 80 times more power than CO2 for the next 20 years. Wow.
Oil companies often inject some of that gas back into the ground, not for the sake of their hearts, but to maintain the pressure that expels oil from wells.
But there is not always enough space to put the excess gas back on the ground. The alternative? It catches fire. Burning methane, called “burning” in industry, releases CO2. When it comes to climate, this is a harm reduction approach. Not releasing gas in the first place would be best, but releasing CO2 is slightly better than letting more powerful methane float in the atmosphere.
The downside to this, in addition to adding to a climate crisis that is killing people and making entire communities uninhabitable, is that burning methane is like rolling up a lot of money and smoking it. You see, the marketing nickname for methane is “natural gas.” More than $ 1 billion in natural gas is smoked each year in the United States through burning.
All that gas could be used as electricity, but that would require building infrastructure. And it looks like fossil fuel companies might be willing to take on those losses instead of spending the money and time (surprisingly affordable) to build pipelines to bring that gas to market. A more attractive option is to put that gas to work in place near the oil well so that it is not necessary to build a new gas pipeline to make use of the gas.
This is where Bitcoin comes into play again. The Bitcoin network uses about as much electricity in a year as the country of Malaysia. Miners are solving increasingly complex puzzles to create new Bitcoins, which require special hardware and a lot of electricity. Fortunately for Exxon and companies like it, Bitcoin mining platforms can be installed virtually anywhere where there is an abundant and cheap source of energy, such as an oil field where Exxon has so much extra gas that it is only burning it. or not.
This is where we finally get to Exxon’s possible climate argument for undermining Bitcoin. Exxon works with a company called Crusoe, according to CNBC, whose sole purpose is to help fossil fuel companies manage their waste gases by using it for cryptographic mining or other computer projects. He is “on a mission to align the future of computing with the future of the climate,” he says on his website.
Crusoe analyzed his own numbers and came to the conclusion that cryptocurrency reduces CO2 emissions by a whopping 63 percent compared to burning. Crusoe says it’s because his system is much more efficient at burning all the methane. Flares are estimated to burn only 93 percent of the methane that is supposed to burn. The rest escapes the atmosphere. Crusoe’s cryptocurrency system, on the other hand, uses 99.89 percent of methane.
Crusoe did not respond to requests for interviews The Virgin. Exxon’s media relations adviser, Sarah Nordin, declined to “comment on rumors and speculation about the project” in an email sent to us.
Exxon’s decision to use waste gas for Bitcoin instead of finding another more practical use “is probably one of the worst scenarios for an infrastructure project,” says Paasha Mahdavi, an assistant professor of political science at the University of California, Santa. Barbara.
It could be different if Exxon brought its waste gases to the grid where it could serve a possibly more important purpose such as heating and lighting homes. Then that excess gas would displace the pollution that would otherwise come from intentionally drilling the gas elsewhere. But that’s not really the case when Exxon extracts Bitcoin with waste gas.
“Better to do something useful [the gas]instead of just burning it for the benefit of no one, “says Jon Goldstein, senior director of the Environmental Defense Fund.” But at the same time, it seems [cryptomining is] it’s not really a use that’s going to do very well for society at large. It will benefit investors in cryptocurrency. ”
Other experts are more skeptical that this is really an answer to the waste gas problem. “This is basically a way to monetize burning. It’s not a way to stop burning,” says Mahdavi.
Mahdavi also warns that Exxon could do it on its own look as if to reduce pollution on paper when he’s really just moving those issues from his own books directly to those of others. Whenever Exxon releases waste gas, that’s part of the company’s carbon footprint. But if another company burns gas from Exxon’s oil fields for Bitcoin mining, who is assigned the associated greenhouse gas emissions: Bitcoin or Exxon miners? The answers are still murky, says Mahdavi.
There’s one last trap with Exxon’s cryptocurrency, and it’s a big one. Allowing fossil fuel companies to benefit from waste gas, as expected, gives them good reasons to keep drilling, Mahdavi and environmental economist Raphael Calel write in a 2020 article.
“Now there’s a potential incentive to increase your drilling because you’re getting higher performance,” Calel says. “The only thing you’ll get is an overproduction incentive for you to get this extra benefit downstream.”