Russian Oil Company Builds Bitcoin Farm in Siberia

It's sucking gas out of the ground and turning it into cryptocurrency.

Odd Pivot

The Russian oil company Gazpromneft recently added an unusual feature to its oil drilling field in Siberia: A functional Bitcoin mining farm.

The company, which is the oil subsidiary of the Russian gas monopoly Gazprom, has started to use its excess carbon dioxide emissions as an energy source for crypto mining rigs, CoinDesk reports. It seems like an unusual combination, but the idea is to reclaim wasted energy into lucrative cryptocurrency.

Closed Loop

The process of drilling for oil releases excess flammable gases — primarily methane and extra natural gas that the facility can't handle. Typically, oil companies will burn that gas away to keep it from leaking into the atmosphere, which is why rigs sometimes spout large flames. The idea is that burning the methane converts it to carbon dioxide, which is less harmful than methane as far as greenhouse gases go. But all that heat and energy just goes to waste, so Gazpromneft's plan is to make use of it by converting the excess heat into electricity and using it to generate crypto, according to CoinDesk.

It's not the first time this idea has come up. Bloomberg reported last year that natural gas companies in the U.S. had already started to open similar facilities, using the excess energy from disposing of the gases to power data centers that included, yes, Bitcoin farms.

Timeshare Opportunity

While it provides the infrastructure, the Russian energy company isn't the one actually doing the mining. Instead, mining companies can send their equipment to the Siberian facility to farm for their own Bitcoin.

And so far, the system appears to work: A Russian crypto mining firm using the facility generated 1.8 Bitcoin in one month — that's about $50,000 at today's prices — according to CoinDesk, burning through 49,500 cubic meters of excess gas in the process.

READ MORE: Russian Oil Drilling Giant Opens a Crypto Mining Farm Run on Gas Energy [CoinDesk]

More on crypto mining: Bitcoin Is Going To Use As Much Electricity As Austria By The Year’s End