The impact of Bitcoin Mining on the environment has been a hot topic for a while now. However, the renewable energy usage for BTC mining grew nearly 60% in a year. Next to hydro, wind, solar and geothermal energy, Bitcoin Mining is also trending towards stranded and wasted energy resources such as flared methane. Each year about 150 billion cubic meters of natural gas is flared so the potential for flare gas as an energy source for mining is huge. In this article I will dive into the theme of flare gas mining and will discuss the following topics:
- What is Gas Flaring
- Impact on the Environment
- Alternative to Flaring
- Monetizing Flare Gas Through Bitcoin Mining
- Meeting Environmental Standards & Regulation
- How it works
- The Potential
What is Gas Flaring?
At industrial plants, flare gas is used mostly when the plant (partially) starts up or shuts down, or to burn flammable gas that is released by safety valves when there is over-pressuring in the plant. At extraction sites for oil & gas, gas flares are used for similar reasons but also for disposing unwanted gas that is being created by the extraction of oil.
Impact on the Environment
According to the World Bank, each year about 150 billion cubic meters of natural gas is flared, emitting 400 million tons of CO2-equivalent emissions and other pollutants, including methane and black carbon (soot).
Alternative to Flaring
Monetizing Flare Gas Through Bitcoin Mining
Meeting Environmental Standards & Regulation
Using Bitcoin Mining to mitigate environmental impact of flaring is not only done by ‘smaller’ companies. According to CNBC, Exxon is looking at bitcoin mining as a way to meet the World Bank’s Zero Routine Flaring by 2030. Similarly, ConocoPhillips is running a test pilot project, selling extra flare gas to bitcoin miners in North Dakota which is known as an important source of new oil production in the U.S..
Some people are sceptical that gas powered Bitcoin Mining is really a win for climate, arguing that monetizing flare gas only creates an incentive for more drilling. Not only does flare gas mining make extractions more profitable, in many countries regulation states that the amount of oil a company can extract is correlated to the amount of emissions these companies are authorized to release into the atmosphere.
“You’re making fossil fuel mining more profitable, so you’re not helping” Alex de Vries – founder of Digiconomist.
How it works
In addition to the availability of a huge amount of flare gas, there are emission reduction programmes launched by the World Bank and various governments that incentivise oil & gas companies to tackle the issue of methane and CO2 emissions. These programmes, can work in favour of deploying flare gas mining operations. Some examples are: The Global Gas Flaring Reduction Partnership, Zero Routine Flaring by 2030 and The Climate and Clean Air Coalition.
How much Bitcoin you can mine capturing flare gas depends on various elements:
The amount of M3 gas being flared
The quality of the gas, most importantly % of methane
Amount of hashrate at site
Efficiency of the mining machines used
Bitcoin Mining With Fire! A Flare Gas BTC Farm Tour
180kw Off-Grid Bitcoin Mine Walkthrough with Steve Barbour
Bitcoin Mining Farm Tour at a Texas Flare Gas Site
Bitcoin Mining With Flared Gas To Reduce Carbon Emissions – Upstream Data Inc
Forbes – Business of Climate Change
The digital mining of Bitcoin and other cryptocurrencies is an incredibly energy-intensive process. EZ Blockchain keeps greenhouse gasses out of the atmosphere by utilizing wasted energy with the help of Bitcoin mining and high-density computing.
Using Bitcoin mining to combust leaking methane sources can eliminate 5.32% of all global emissions by 2045. This represents 23% of all global methane emissions: more than half the UNEP’s targeted reduction of methane of 45% by 2045.
The Anatomy of a Bitcoin Mining deployment at a wellsite.
The post will examine the primary costs related to onsite (i.e., at or near oil and gas wellheads) Bitcoin mining using excess produced natural gas: capital expenditures (CAPEX) for power generation (natural gas turbines), power generation feedstock costs (flare gas isn’t quite free), mining infrastructure costs, and mining economics.
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About the Author
Nico Smid born and raised in the Netherlands, living in Argentina with my family for a year now. Expert in international business development with 15 years of experience in guiding European companies doing business in the South American market and vice versa. Bought my first Bitcoin in June 2017 and went down the rabbit hole ever since. As of 2021, I started mining to create an extra income stream for my family. This triggered me to study the industry and I found it so fascinating that I created a business in the industry. I am a co-founder of Digital Mining Solutions providing various services to companies who want to mine bitcoin next to their core business. As part of my journey I decided to publish what I am learning in a weekly free newsletter called The Bitcoin Mining Block Post , focusing on market insights and trends.