For over a year, Exxon has been working with Crusoe Energy Systems, a company based in Denver, said the people who asked not to be named because details of the project are confidential. Crusoe’s technology helps oil companies turn wasted energy, or flare gas, into a useful resource.
Similar to ConocoPhillips’ mining scheme in North Dakota’s Bakken region, Exxon is diverting natural gas that would otherwise be burned off into generators, which convert the gas into electricity used to power shipping containers full of thousands of bitcoin miners. Exxon launched the pilot in late January 2021 and expanded its buildout in July.
While Exxon hasn’t talked publicly about its work in the space, Eric Obrock, a 10-year veteran at the company, said on his LinkedIn profile that from February 2019 to January 2022, he “proposed and led the first successful commercial and technical demonstration of using Bitcoin Proof-of-Work mining as a viable alternative to natural gas flaring in the oil patch.”
Obrock’s title on his profile is NGL industry outlook advisor, referring to the natural gas liquids market. Obrock told CNBC through a LinkedIn message that he’s been advised that he can’t speak to the media on this topic. Exxon didn’t respond to a request for comment.
Exxon’s bitcoin project isn’t really about making money from the cryptocurrency. Rather, the company has pledged to reduce emissions as part of an industrywide effort to meet higher environmental demands. In early March, Exxon joined other oil companies in committing to the World Bank’s “Zero Routine Flaring by 2030” initiative introduced in 2015.
The type of crypto mining arrangement it’s pursuing with Crusoe reduces CO2-equivalent emissions by about 63% compared with continued flaring.