Russian oil companies propose using excess gas in oil extraction for crypto mining – Times of India



NEW DELHI: Russian oil companies have suggested the use of associated petroleum gas (APG) for generating electricity that can be used in the energy-intensive process of digital coin minting, Kommersant, a Russian business daily reported on October 21.
Coin minting data centers can utilise the excess gas released during oil extraction which would otherwise be wasted.
Based on the suggestion of oil companies, government institutions and ministries in Moscow are planning to initiate cryptocurrency mining at the extraction sites of Russia’s oil companies, reported.
The ministry of industry and trade has sought the feedback of the ministry of digital development and the Central Bank of Russia (CBR) on the proposal.
The project has the capacity to attract foreign investors, especially from China where authorities have effectively prohibited bitcoin mining recently, the report said.
On the other hand, mining activities aren’t prohibited in the Russian Federation, although it is not properly regulated either.
The main cryptocurrency regulating law in Russia, the Digital Financial Assets (DFAs) law, was adopted in July 2020. The legalization of crypto mining is gaining ground in Russia, among lawmakers.
The chairman of the Financial Market Committee Anatoly Aksalov said in September that crypto mining should be registered and taxed accordingly.
Currently, the state-run oil company, Gazprom Neft is the only oil company that has an actual crypto mining project since January 2021. It has been able to mint 1.8 BTC in a month during the pilot test, reports.
Gazprom Neft is the subsidiary of Russian energy giant Gazprom, which is the third-largest oil producer in the country. Gazprom Neft launched a crypto mining project at its oil field in West Siberia in Khanty-Mansi Autonomous Okeug, a region in Tumen Oblast.
Russia ranks top in flaring associated gas from oil production in the world followed by Iraq. The US and Iran account for 45 per cent of the global gas flaring.
Flaring is the burning of greenhouse with oil extraction. Turning gas into electricity to fuel cryptocurrency mining is the best environment friendly alternative that can be practiced in the times of growing digital assets.
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