April 17, 2021

Can Bitcoin Solve the Oil and Gas Burning Problem?

Can Bitcoin Solve the Oil and Gas Burning Problem?

Author: Felicity Bradstock

As governments seek to limit carbon emissions from gas flaring, Bitcoin data centers offera way to use this energy instead of burning it. The flaring of associated gas, a by-product of shale production, currently accounts for about 1 percent of global carbon emissions. Companies burn gas at the rig without using it as an energy source due to its unprofitability. The alternative is to simply discharge the gas into the atmosphere, releasing methane and adding harmful greenhouse gases that have a negative impact on the environment.

However, several companies are calling for an end to gas flaring within the next decade, finding other ways to use this energy.

Bitcoin producers realized that this gascould be a great source of energy for small mobile cryptocurrency data centers. One of the biggest challenges faced by digital currency producers is the high price of electricity needed to produce the currency. But if this energy is cheaper and from a waste product, it could be an ideal solution for both industries.

In 2019, it was suggested that formining Bitcoin requires more energy than all of Switzerland. This figure increased in 2020 and it is estimated that the Bitcoin network consumes about 80 terawatt hours per year.

Fluctuating bitcoin price and the Covid-19 pandemicuntil now have deterred oil companies from this idea. Bitcoin didn't seem like a viable long-term option due to its volatility, especially when the future of oil looked bleak as well.

Sergey Gerasimovich - the owner of the EZ companyThe Bitcoin mining blockchain reached out to oil and gas companies to no avail a few years ago. But “market conditions have changed,” he explained. "Now every oil and gas company we contacted in 2018 calls us back as they see Bitcoin making a lot of money."

Bitcoin is becoming more and more attractive tocompanies looking to modernize and digitalize as the price of digital currency has doubled over the past year, despite a pre-pandemic downturn.

EZ blockchain recently installed five bitcoin minesat gas facilities by independent gas company Wesco Operating Inc, most recently in Utah. There are other companies using the innovative solution, Crusoe Energy Systems Inc., which introduced low-cost / free digital Flare Mitigation programs with bitcoin companies to power 20 data centers.

Other countries have also recognized this opportunity,Russian companies are developing similar projects. In January, Russian state oil company Gazprom Neft announced a successful pilot project to use gas to generate electricity for cryptocurrency mining at a Siberian drilling site.

Vekus was the first Russian cryptocurrencythe company that developed such a power source for mining digital currency. Vekus used a shipping container to create a mine, demonstrating the potential of digital currency mines to be deployed at oil and gas facilities across the country.

Russia is the largest producer of flare gas in the world, followed by Iraq, the United States and Iran, which together accounted for 45 percent of global gas flares in 2017-2019.

Other cryptocurrency companies may enter intosimilar deals with oil and gas companies if they have a Proof of Work (PoW) option to process transactions. This could make digital currencies more sustainable in the long run, as electricity costs currently account for a large proportion of their production costs.

As oil and gas companies are experiencingWith growing pressure from regulators and governments to cut carbon emissions over the next decade, the exchange of bitcoin for gas may offer a simple solution.

Source

"Elliott Wave Theorist": in Russian

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