The adoption of Bitcoin mining using flared gas has grown rapidly over the past few years, driven by the advancements in mining technology and the push for more sustainable energy practices. It has evolved from a niche solution to a mainstream business model, with numerous companies now actively engaging in this space, turning waste into profit while reducing the environmental impact of gas flaring. This trend is expected to continue as more miners look for cheap and eco-friendly energy sources. This article will dive into the theme of flare gas mining and will discuss the following topics:
What is Gas Flaring
Why is Gas Flared?
The Environmental Impact
Alternatives to Flaring
Monetizing Flare Gas Through Bitcoin Mining
Meeting Environmental Standards & Regulation
How it Works
The Opportunity for Miners
How Much Bitcoin Can you Mine with Flared Gas?
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What is Gas Flaring?
Gas flaring is the process of burning excess natural gas that is released during oil extraction and production. Instead of capturing and utilizing the gas, it is combusted in an open flame, usually through a flare stack, to prevent the release of methane and other hydrocarbons directly into the atmosphere. Flaring gas is done at industrial plants like refineries and gas processing facilities but also common at oil & gas extraction sites and offshore rigs.
Why is Gas Flared?
Flaring occurs for several reasons. In many cases, oil fields, particularly those in remote locations, lack the necessary pipelines or processing facilities to transport and utilize the gas, making flaring the default option. It also serves as a safety measure, preventing explosions or other hazards when there is a pressure build-up. Additionally, some oil companies choose to flare gas due to operational inefficiencies, finding it more economical to burn the gas rather than invest in the infrastructure needed to capture and use it.
The Environmental Impact
If the gas would be not be flared, methane will be released directly into the air. This is very bad for the environment as the greenhouse effects of methane are more than 80 times stronger than the carbon dioxide (CO2) which is released after flaring. Unfortunately, even with flaring 10-25% of the methane is still being vented into the atmosphere without being combusted.
According to the World Bank, in 2023, global gas flaring at upstream oil and gas facilities rose by 9 billion cubic meters (bcm), increasing from 139 bcm in 2022 to 148 bcm—a 7 percent rise. Meanwhile, oil production grew by just 1 percent, resulting in a 5 percent increase in global flaring intensity, which measures the amount of gas flared per barrel of oil produced.
Alternatives to Flaring
The alternatives to flaring are capturing, storing, or transporting the gas, but building the necessary infrastructure is often expensive and logistically complex. Several innovations help reduce gas flaring by capturing and repurposing the gas. Gas-to-liquid (GTL) technology converts flare gas into liquid fuels like diesel, while compressed natural gas (CNG) units allow gas to be transported to nearby markets. Small-scale LNG plants offer another solution by liquefying gas for easier storage and transport. Some operators reinject gas into reservoirs to enhance oil recovery, while others use it for on-site power generation, supplying electricity to local operations or the grid.
However, these technologies come with high upfront costs, making them economically impractical without strong financial incentives or regulatory support. This issue is particularly pronounced for smaller operators, who lack the economies of scale that larger companies can leverage to make flare gas utilization financially viable. As a result, many continue to burn off this valuable resource rather than invest in the infrastructure needed to harness it effectively.
Monetizing Flare Gas Through Bitcoin Mining
Instead of flaring gas as a waste by-product, Bitcoin mining transforms it into a monetizable asset, turning an environmental liability into an economic opportunity. By deploying generators on-site, companies can convert this gas into electricity instead of wasting it. The on-site power generation which is not used by the local operation can be used to power up ASIC Bitcoin miners.
In many cases Bitcoin mining does make it economically sustainable to combust methane in generators. Bitcoin mining is an ideal solution for monetizing flared gas because of its flexibility and adaptability. Its modular setup allows operations to adapt the load to the gas available. Portability enables mining containers to be deployed wherever stranded gas exists, also in remote areas. Additionally, its interruptible means mining can seamlessly adjust to variations in gas flow without affecting other industrial processes, making it a highly adaptable and practical use case for flare gas mitigation.
Meeting Environmental Standards & Regulation
Using Bitcoin Mining as a solution to monetize flare gas capturing is not the only reason why companies are engaging in it. Next to an economic incentive, capturing flare gas to mine Bitcoin also helps companies meet environmental standards. The process of combusting flare gas in a generator reduces not only the emission of methane up to 98%, but also CO2 emissions by about 63% compared to continued flaring.
Mining Bitcoin with flared gas is often considered environmentally friendly. However, some oil producers operate under regulations that tie their allowable oil extraction levels to their emissions. In other words, reducing flaring can enable them to increase oil production because their permitted extraction is correlated with the emissions they generate.
This creates a contradictory dynamic: while Bitcoin mining with flared gas helps reduce emissions from existing operations, it can also incentivize greater fossil fuel extraction if producers use these reductions to justify expanding production. In such cases, the net environmental benefit is questionable because the increased oil output leads to additional emissions from both extraction and eventual combustion. Instead of a straightforward emissions reduction, the policy structure may unintentionally create a feedback loop where reducing flaring indirectly contributes to more fossil fuel consumption, undermining broader climate goals.
How it works
Explained in a very simplistic way: the flare gas is captured at the production site . The gas is run through a generator that converts it into electricity. If the generator does not produce the exact voltage and frequency required by the mining operation, a transformer is needed. The mining machines are installed in a fully equipped container. The mobile data centers taps into the onsite generators or transformer, powering the ASICs in the container to produce Bitcoin.
Raw flare gas can contain impurities such as hydrogen sulfide (Hâ‚‚S), water vapor, and other contaminants that can damage generators and reduce efficiency. Depending on the gas composition at each site, gas treatment can be needed which might impact the financial feasibility of a mining operation. Some generators can handle lower-quality gas, but treating it improves efficiency, reduces maintenance costs, and extends equipment lifespan.
The Opportunity for Miners
According to the World Bank, global gas flaring at upstream oil and gas facilities was 148 billion cubic meters in 2023. At current market prices, the value of the gas flared in 2023 could have ranged between $9 billion and $48 billion. Eliminating gas flaring could prevent the release of at least 381 million tonnes of carbon dioxide equivalent emissions into the atmosphere each year.
In 2023, the top nine countries for gas flaring were Russia, Iran, Iraq, the United States, Venezuela, Algeria, Libya, Nigeria, and Mexico. Collectively, they accounted for 75% of global gas flaring while producing 46% of the world’s oil. The U.S. (where around 37% of the Bitcoin miners are located) is the number four country when it comes to flaring gas.
In addition to the availability of a huge amount of flare gas, there are emission reduction programmes launched by the World Bank and various governments that incentivise oil & gas companies to tackle the issue of methane and CO2 emissions. These programmes, can work in favour of deploying flare gas mining operations. Some examples are: The Global Gas Flaring Reduction Partnership, Zero Routine Flaring by 2030 and The Climate and Clean Air Coalition.
How Much Bitcoin Can you Mine with Flared Gas?
The amount of Bitcoin that can be mined using flare gas depends on several factors. First, the volume of gas being flared, measured in cubic meters, plays a crucial role. The quality of the gas is also important, particularly the percentage of methane it contains. It is a must to conduct a gas analysis in order to determine the potential of a source.
Additionally, the hashrate density and the efficiency of the mining machines used impact the mining potential. Lastly, factors such as the block subsidy, transaction fees, and network difficulty influence overall profitability.
