Decentralized exchange ENEDEX is the next evolution of quantum proof, cross chain energy trading built on Polkadot, Moonbeam and DCore for trading traditional and future energy products.
Anyone who cares about the environment feels rage coming up when the topic of natural gas flaring pops up. Flaring is the burning of associated gas that is a by-product of oil extraction. There is nothing wrong with the gas other than that it is too expensive to capture and transport the gas to a market where it can be used. The oil and gas industry is under pressure to address the issues related to natural gas flaring. Could bitcoin mining be the solution to the oil and gas sector’s natural gas flaring problem?
Scope 1, 2 and 3 emissions
The oil and gas industry has begun taking steps to reduce their greenhouse gas (GHG) emissions in recent years with the more progressive companies communicating their ambition to be net zero companies by 2050. It is helpful to know the difference between scope 1, 2 and 3 emissions to better understand what levers these companies can pull to reduce their carbon emissions.
Direct emissions
Scope 1 is related to all direct emissions from activities of an organisation or under their control. Scope 1 emissions relate to for example fleet vehicles, energy use in company facilities and in the case for energy companies the exploration and production activities of oil and gas.
Indirect emissions
Scope 2 emissions are indirect emissions from electricity or fossil fuel products purchases and used by the organisation. Scope 3 are all other indirect emissions from activities of the organisation, occurring from sources that they do now own or control. Scope 3 emissions are usually the greatest share of the carbon footprint.
Most of the efforts to reduce carbon emissions are focussed on reducing scope 3 emissions considered the share of the total carbon footprint these emissions represent. However, unfortunately scope 3 emissions are not entirely under the control of oil and gas companies which means that reducing them is a complex and difficult task.
In order to make an immediate impact companies have started to look at scope 1 emissions. The emissions related to flaring of associated gas are scope 1 emissions and under control of oil and gas companies. Site dependent flaring of natural gas can contribute up to 90% of GHG emissions for a particular production site.
Bitcoin mining
The explosive growth of Bitcoin and other cryptocurrencies have not escaped the attention or an industry that sits on potentially cheap access to energy. Mining Bitcoin could represent a significant opportunity for oil producers to diversify while meeting decarbonisation targets while creating a new revenue stream that could be a hedge oil and gas price exposure in the short to medium term. In fact, several producers have already started to deploy the low-cost access to energy through the mitigation of natural gas flaring and brought Bitcoin mining operations to oil production sites. The carbon emission reducing solution has proven successful and is poised to develop as a trend with a number of other companies looking into Bitcoin mining. The Norwegian state-owned oil company Equinor is among them and is exploring how it can leverage unused gas in its own crypto currency mining operations.
Opportunity
Rome wasn’t built in a day and although mining Bitcoin with natural gas that otherwise would be flared is not the same as mining Bitcoin with energy from renewable sources, it still reduces the waste of an otherwise perfectly good commodity. Through the way of mining oil and gas companies are getting exposure to Bitcoin and other crypto currencies. Oil companies might choose to follow the footsteps of Michael Saylor and his flagship Microstrategy and place the mined digital assets on the balance sheet. Another way that oil companies could maximize their revenue is by capitalizing on DeFi developments and leverage opportunities by ‘staking’ crypto projects based on Bitcoin or Ethereum earning an interest from, or invest in, promising projects. Combining cryptocurrency mining operations with the energy sector reducing natural gas flaring is a simple and elegant solution.
$ENE
$ENE provides the ability to hedge the financial exposures in energy and crypto offering with a solution to the financial elements of cryptocurrency mining for renewable energy and traditional oil and gas companies. ENEDEX listed products include cross pair trading of traditional and renewable energy products with BTC and ETH. ENEDEX will be implementing technologies of Polkadot and Moonbeam on top of DCore to offer near gas-less fees and functions as a platform for DeFi developers to build and list decentralized product. Join the revolution!
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