mining

US energy company opens crypto mining facility in Middle East to use stranded natural gas

Denver-based Crusoe Energy will help the Middle East nation to cut the gas flaring with the pilot project scheduled for the end of 2022.

As the heated up discussion around the ethical aspects of using fossil fuels in crypto mining remains one of the key topics for the industry, an unexpected partnership between a Denver-based mining company and the government of a gas-rich Middle Eastern country sets a horizon for a positive role of crypto in cutting the fossil fuels waste. 

On Wednesday, June 1, Bloomberg reported that Crusoe Energy, an operator repurposing wasted fuel energy to the computational power of crypto mining, would start its work in Oman, a nation that exports 21% of its gas production and seeks zero gas flaring by 2030.

The American company will open an office in the capital city of Muscat, and install its equipment for capturing gas waste at well sites. It already held a workshop with Oman’s largest energy producers, OQ SAOC and Petroleum Development Oman. The first pilot project will be launched by the end of this year or in early 2023, according to Crusoe’s CEO Chase Lochmiller.

The government of Oman’s interest in the partnership is driven by an aim to cut the country’s gas flaring — burning off the excessive flammable gas in the process of extraction. Together with Algeria, Iraq, Lybia, Egypt and Saudi Arabia, Oman accounts for 90% of flaring in the Arab region, while the region itself accounts for 38% of global flaring. In 2018, by the UN’s Economic and Social Commission for Western Asia estimate, 10% of all the gas consumption in Oman went for flaring.

Related: Go green or die? Bitcoin miners aim for carbon neutrality by mining near data centers

In an official statement, Lochmiller emphasized his company’s mission to set a presence in the Middle East and Northern Africa to help local governments in their fight with flaring:

“Having the buy-in from nations that are actively trying to solve the flaring issues is what we are looking for.”

In March, media reported that Exxon Mobil partnered with Crusoe to run a pilot project of Bitcoin mining at the Bakken shale basin in North Dakota. However, this information wasn’t confirmed by the companies.

Cointelegraph reached out to Crusoe Energy for additional information, the post will be updated later.

Bitcoin daily mining revenue slumped in May to eleven-month low

Bitcoin miners have had a tough month, with revenue and profitability tanking in May. Hash rates remain high, however.

Bitcoin (BTC) mining revenue and profitability have continued to slide along with the asset’s price this year as the crypto winter deepens.

May has been one of the worst months for Bitcoin miners in the past year as revenue and profitability continue to tank. Bitcoin daily mining revenue tanked as much as 27% in May, according to data from Ycharts sourcing data from Blockchain.com.

On May 1, the analytics provider reported daily revenue of $40.57 million for BTC miners, but by the end of the month, it had fallen to $29.37 million. Daily mining revenue hit an eleven-month low of $22.43 million on May 24.

BTC daily mining revenue YTD – ycharts.com

Daily mining revenue spiked to a peak of around $80 million in April 2021 but has since fallen 62% to current levels.

Mining profitability, which is a measure of daily dollars per terahashes per second, has hit its lowest levels since October 2020, according to Bitinfocharts. The crypto metrics provider currently reports mining profitability of $0.112 per day for 1 Th/s.

Furthermore, the metric has seen a decline of 56% since the beginning of the year and is down more than 75% since the 2021 highs of $0.450 each day per Th/s.

BTC mining profitability 1y – bitinfocharts.com

Bitcoin network hash rates remain high, however, with the current daily average at 211.82 exahashes per second, according to Bitinfocharts. The figure is down roughly 16% from its all-time high of just over 250 Eh/s on May 2.

High hash rates but low profitability may suggest that there is a far greater level of competition in the Bitcoin mining sector than seen previously. In earlier bear markets, miners have powered down their rigs as the asset price dropped and the operations became temporarily unprofitable.

Related: Controlling 17% of BTC hash rate: Report on publicly listed mining firms

Additionally, miners to exchange flows have just hit a four-month high, according to Glassnode, suggesting that they may be making preparations to sell some to cover the falling revenue.