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Distributed Bitcoin mining might be a useful strategy for capturing and reducing natural gas emissions.

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Distributed Bitcoin mining might be a useful strategy for capturing and reducing natural gas emissions.


Drilling for oil and natural gas produces methane, a powerful greenhouse gas. The worldwide oil and gas industry emits 265 billion cubic meters (bcm) of natural gas annually, which represents enormous amounts of energy that might be used for bitcoin mining. Oil and gas businesses release the remaining 125 bcm of methane directly into the atmosphere while flaring/burning about 140 bcm of natural gas emissions to turn methane into less hazardous carbon dioxide. It would only take 25 bcm, or 10%, of worldwide natural gas emissions to maintain Bitcoin's current hash rate.

All 265 bcm of the natural gas emissions from the oil and gas sector cannot be captured and turned into energy. Although methane emissions from both flared and vented sources could be used for bitcoin mining, ARK predicts that vented methane will be the first to be targeted because it is 120 times more toxic than carbon dioxide when released into the atmosphere and businesses haven't invested in infrastructure costs for ecosystems that support flaring. Only half of the 125 bcm of vented methane emissions, which are the most convenient and efficient places to mine bitcoin, according to ARK, occur at well sites.

According to ARK's research, installing natural gas generators at well sites and using methane that would otherwise be vented to mine bitcoin might produce energy for a lot less money than the current fees paid by commercial bitcoin mining operations. Bitcoin miners might use vented methane to undercut "pure play" bitcoin mining firms and drive them into the red, assuming there are no supply restrictions on mining hardware. Moreover, employing vented methane to mine bitcoin would become even more appealing if utility authorities implemented carbon abatement pricing programs. 

As competitive advantages, bitcoin miners frequently point to their economies of scale and low levelized cost of electricity (LCOE). The LCOE of a natural gas generator employing stranded methane, according to ARK's study, is currently lower than that of publicly traded bitcoin mining firms. The network's hashrate would probably rise if more businesses or people mined bitcoin at well sites, decreasing the average revenue/hashrate of miners elsewhere. Public mining businesses paying about three cents for power today might be put out of business if bitcoin miners employing vented natural gas were to earn revenue/hashrate at a price below 6 cents.

While there are alternative ways to use vented methane, ARK thinks that bitcoin mining is the best option because it is distributed, extremely scalable, and has modular hardware that can be moved between working well locations. Bitcoin mining might mean the difference between high and low returns on investment in oil and gas sectors because oil and gas wells frequently have short lifespans.

Article Credit: Ark Invest

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