PHOTO ( TOP ) COURTESY OF CRUSOE ENERGY ; PHOTOS ( BOTTOM ) COURTESY OF GIGA ENERGY
Gas-flaring technology promises reduced emissions A more surprising development involves bitcoin miners setting up on oil fields to secure cheap electricity from excess natural gas . Although at odds with the narrative of boosting renewables in the energy mix , miners insist their cooperation can help reduce emissions .
The production of oil leaves raw natural gas as a byproduct , which is often unable to be fully captured or transported due to logistical reasons . Instead , producers burn the gas in a process called “ flaring ,” which sends carbon dioxide and methane into the atmosphere . Bitcoin miners are now swooping in to buy the gas cheaply from oil companies in Texas , Wyoming and other U . S . states and then divert it into generators to produce electricity to power their computers .
Crusoe Energy , a startup that has patented flaring technology and has worked with oil firms in North Dakota , says its gas generators can reduce methane emissions by about 99 % and carbon dioxide emissions by up to 68.6 %.
“
There
’ s a massive amount of flared gas in the U . S . The amount of flared gas in Texas could power the state of Texas .”
— Matt Lohstroh , co-founder , Giga Energy
Texas-based startup Giga Energy , which specializes in building bitcoin mining farms powered by stranded and natural gas , is also cooperating with oil companies .
“ There ’ s a massive amount of flared gas in the U . S .,” says Matt Lohstroh , the co-founder of Giga . “ The amount of flared gas in Texas could power the state of Texas .”
While the startup is targeting Series A funding from investors in 2023 , and its founders are bullish about its prospects , Lohstroh is mindful that the company ’ s operations may not have a long-term future in the United States amid the country ’ s push to meet net-zero pledges .
“ Our largest expansion is going to be internationally ,” he says .
Cutting energy use through ‘ proof of stake ’ Not all crypto assets guzzle electricity like bitcoin . The Ethereum network , whose native cryptocurrency ether is second only to bitcoin in market capitalization , slashed its energy use by ditching “ proof of work ” in favor of “ proof of stake ” ( PoS ), an alternative protocol that its developers say uses 99.9 % less electricity . Ether is minted by validators who “ stake ” their coins as collateral and are chosen randomly to validate transactions . The mechanism does not involve the competition among high-powered computers that generating bitcoin does .
Despite PoS ’ s energy efficiency , critics argue the protocol is flawed and could lead to big digital asset holders ’ taking control of the blockchain — an idea that is anathema to libertarian proponents of bitcoin .
For all the challenges facing the cryptoasset industry , ranging from market volatility to pressure from regulators , advocates insist it is here to stay and only one among a number of sectors under pressure to minimize its carbon footprint . “ We think that the industry can work together to reduce emissions ,” says CleanSpark ’ s Holyoak . “ Crypto mining is not standing between the planet and its emissions targets .” ■
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