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Why fossil fuel companies see green in Bitcoin mining projects

Of all the corporate climate ads floating this spring, ExxonMobil’s secret project to reduce Bitcoin pollution should be rated as one of the most amazing.

Exxon launches pilot project in 2021 to drill for Sear in North Dakota oil fields in Bakken, according to reported by CNBC in March. The largest US oil and gas company is also considering doing the same in Alaska and parts of Nigeria, Argentina, Guyana, and Germany. Bloomberg reported. And she is not alone. Other oil companies, including ConocoPhillips In North Dakota, see the energy-hungry cryptocurrency as a way to settle some of their climate traces that may make some cash on the way. The United States has become the main core Bitcoin mining worldwide, so this could be a growing trend.

The story of how fossil oil companies turned the most dirty cryptocurrency out there to green until the books start with a constant gas crisis. Whenever any company drills for oil, it usually produces methane gas from the ground, too. Methane is a greenhouse gas that is more powerful than carbon dioxide. If a company allows that methane to escape into the atmosphere, which is often embarrassing committed the crime, Methane will trap 80 times more CO2 over the next 20 years. Hey

Oil companies will often recycle some of the ground gas – not for the good of their hearts but to keep the oil pressure coming out of the wells.

But there is not always enough space to put extra gas back into the ground. Alternative? Light a fire. Methane combustion, also known as “flaring” in the speech-industry, releases CO2. When it comes to weather, this is a way to reduce damage. Not releasing gas would be fine in the first place – but CO2 emissions are slightly better than stronger methane floating in the atmosphere.

At the bottom of this – except for adding climate tension that is kill people and creating an entire community uninhabitable – not burning methane is the same as turning a silver coin into a cigarette. You see, the marketing methane is “natural gas.” More $ 1 billion Natural gas is emitted every year in the United States as it continues to burn.

All of this gas can be used as electricity, but that will require the construction of infrastructure. And it seems that the oil companies may be willing to take that loss instead of paying (amazing and affordable amount) money and time to build the pipeline to bring the gas to market. A more attractive option is to place the gas near the oil well so there is no need to build a new pipeline to use the gas.

This is where Bitcoin repeats the conversation. The Serar network uses up to as much electricity within a year as the country Malaysia. Miners solve very complex puzzles to create new Bitcoin, which requires special equipment and a lot of electricity. Fortunately for Exxon and similar companies, Bitcoin mining can be deployed very widely wherever there is a cheap, abundant source of electricity – like, say, Exxon crude oil has extra gas and only burns willy -nilly.

This is where we finally get to the possible climate debate with Exxon for Bitcoin mining. Exxon is working with a company called Crusoe, according to CNBC, whose sole purpose is to help fossil fuel companies deal with fossil fuels using cryptomining or other computational projects. It is “an operation to improve the future of computing and the future of the climate,” she said on her website.

The Crusoe refused figures and it was concluded that cryptomining reduces CO2 emissions by 63 percent compared to flame. Crusoe says this is because its system is much more efficient than burning all methane. Cover, it estimates, burns only 93 percent of the methane it is supposed to burn. The rest escaped to the atmosphere. The Crusoe cryptomining system, on the other hand, uses 99.89 percent methane.

Crusoe did not respond to requests for comment Qarka. Exxon Media Relations Advisor Sarah Nordin declined to “comment on the rumors and rumors about the project” in an email to us.

Exxon’s decision to use fossil fuels for Bitcoin instead of other tangible uses “is probably one of the worst situations in the infrastructure project,” said Paasha Mahdavi, an assistant professor of political science. at the University of California, Santa. Barbara.

It could be different if Exxon delivers its waste gas to the network where it can serve a very important purpose such as heating and lighting. Excessive gas will then remove contaminants that would have been deliberately drilled. But that really isn’t the case when Exxon mines Bitcoin on waste gas.

“It is better to do something useful [the gas]rather than being unprofitable, “said Jon Goldstein, executive director of the Environmental Protection Agency. But at the same time, it seems [cryptomining is] it really isn’t a utility that benefits the community as a whole. It will benefit cryptocurrency investors. ”

Other experts are skeptical that this is actually the answer to the waste gas problem. “This is basically a way of provoking. It is not a way to stop the flames,” Mahdavi said.

Mahdavi also warns that Exxon may do it on its own look how it reduces pollution paper When she can really only move the smoke coming out of her books directly to someone else. Whenever Exxon emits fossil fuels, that is part of the company’s carbon footprint. But what if another company burns gas from Exxon’s oil fields in Bitcoin mining, which makes the greenhouse smoke related to get allocated to – Bitcoin or Exxon Minerals? The answers are still unclear, says Mahdavi.

There is one of the latest capture of Exxon’s cryptomining, and it’s great. Allowing fossil oil companies to exploit waste gas, surprisingly, provides a good reason to continue drilling, Mahdavi and environmental economist Raphael Calel wrote in 2020 paper.

“Now there is an incentive to increase your digging because you will get a higher return,” Calel said. “All you will get is an overproduction of overproduction to get the extra profit below.”