
Using Flared Gas to Mine Cryptocurrency
Two major challenges associated with greenhouse gas emissions facing the world are derived from two sources: flaring of mined gas and the energy intensive cryptocurrency mining. Natural gas – or mined gas – flaring has been occurring since the beginning of oil production over 160 years ago.
In contrast, bitcoin mining has been an ever-growing environmental concern since its more recent inception about 12 years ago. While the greenhouse gas emissions of flared gas and bitcoin mining are old and new challenges, respectively, two companies have teamed to tackle both challenges with one innovative solution. Crusoe Energy and INNIO Waukesha are using mined gas to power cryptocurrency mining.
Bitcoin’s big environmental impact
Every day, cryptocurrencies are traded, leading to computers racing to complete computations that generate a 64-digit hexadecimal number for each cryptocurrency. These computations go recorded in a public ledger allowing anyone to confirm each transaction. Each computer that solves these computations first receives a payment per transaction that can be as much as US $225,000 at current prices. Each of these transactions require a massive amount of energy.
A crypto mining rig is a basic computer that is equipped with multiple graphics processing units (GPUs) – or graphics cards. GPUs are specialized electronic circuits that are designed to rapidly manipulate and alter memory to accelerate the creation of images in a frame buffer that is intended for output to a display device. GPUs are used in many different embedded systems, such as, mobile phones, personal computers, workstations, game consoles, and more. Each GPU requires a significant amount of electricity to power operations because the GPUs on the mining rigs operate 24 hours a day, 7 days a week, 365 days a year, requiring much more electricity than using a computer for the normal tasks. A single rig with three GPUs requires a minimum of 1000 watts of power when operating. This is about the same as using a medium sized window-based air conditioning unit. Keep in mind that crypto mining businesses maintain hundreds, even thousands of rigs in one location.
Crypto mining rigs not only consume a vast amount of power, but they also generate a vast amount of heat. Unsurprisingly, the more rigs that are operating, the hotter the environment in which they operate becomes. This means there is a significant requirement for cooling. And, despite the many fans that are integrated into the rigs, there is absolutely a need for external cooling. Enter bigger fans or the much more effective air conditioning units. All of this adds to the total energy consumption. Some analysts estimate that one bitcoin transaction can require as much as 1,544 kWh of electricity, which is equivalent to about 53 days of power used in an average home within the United States.
Flaring headwinds
Enter the challenge of flared gas. Across the extractives industry, associated gas flaring has long been a vital part of the exploration, production and processing of natural gas. The industry has employed the use of controlled burning as a general practice for common reasons that include pressure relief to prevent the risk of explosions from the simple venting of large amounts of reactive gases; waste product removal from chemical production processes; combustion of volatile organic compounds; and more. According to the International Energy Agency, flaring has resulted in around 265 megatons (Mt) of CO2, nearly 8 Mt of methane and black soot and other greenhouse gases being directly emitted into the atmosphere. Five countries – Russia, Iraq, Iran, the United States and Algeria – accounted for more than half of all volumes flared globally in 2020.
While businesses across the extractive industry have long recognized that capturing associated gases could provide multiple benefits such as surplus energy for consumers, on-site operational power, and increased long-term revenue, it has been more practical to adhere to the industry-recognized justifications that flaring these gases yields them operational and economic advantages. These justifications are now facing serious challenges rooted primarily in environmental headwinds. The industry is in the midst of a tipping point that is shifting communities, regulators, investors, shareholders and the industry itself from tepid tolerance to overt opposition of flaring.
Mitigating the mining menaces
Crusoe Energy and INNIO Waukesha have collaborated to deploy a new technology that can help not only reduce carbon emissions generated by cryptocurrency mining, but also carbon emissions produced by the flaring of excess gas in the oil and gas industry.