Exxon is mining bitcoin in North Dakota as part of its plan to slash emissions

According to people with knowledge of the matter, ExxonMobil is piloting a project to mine in North Dakota.

The people who asked not to be named said that Exxon has been working with a Denver-based company called Crusoe Energy Systems for over a year. Oil companies use Crusoe's technology to turn wasted energy into useful resources.

Similar to the mining scheme in North Dakota's Bakken region, Exxon is converting natural gas into electricity and using it to power shipping containers full of miners. Exxon expanded its buildout in July after launching the pilot in January.

Eric Obrock, a 10-year veteran at Exxon, said on his profile that he proposed and led the first successful commercial and technical demonstration in the space.

Obrock is an advisor to the natural gas liquids market. Obrock told CNBC that he can't speak to the media about this topic. Exxon did not respond to the request for comment.

Exxon's project is not about making money from thecryptocurrencies. The company pledges to reduce emissions as part of an effort to meet higher environmental demands. Exxon joined other oil companies in committing to the World Bank's Zero Routine Flaring initiative.

The type of mining arrangement it is pursuing with Crusoe reduces CO2 equivalent emissions by about 63%.

The company is also considering similar pilots in Alaska, Nigeria, and Argentina, according to a report.

What happens when drillers accidentally hit a natural gas formation has been a problem for years.

If a drilling site is close to a gas line, producers can sell it immediately. If the gas is 20 miles away, drillers burn it off. That is the reason why you see flames from oil fields.

The drillers are burning cash as well.

Because the primary variable cost is energy, miners are incentivized to find the cheapest sources of power.

Cully Cavness, president of Crusoe, said that it was a great way to bring that demand to the wasted energy and solve two problems at the same time.

Crusoe has 150 employees and works with companies like Equinor, Canadian oil producer Enerplus, and Oklahoma City-based Devon Energy.

The Division of Air Quality show Crusoe can run 20 portable engines, with 11 currently in use at well sites across the state. Two of the engines are used at wells run by XTO Energy, a subsidiary of Exxon. Most of Crusoe's data centers are located in the Bakken.

We are moving the needle on flared volumes.

In its most recent Global Gas Flaring Reduction Partnership report, the World Bank recognized Crusoe as offering an innovative solution to flaring.

The last couple decades have seen a boom in new oil production in the U.S., thanks to the boom in the practice of fracking.

The permitting program at North Dakota's Division of Air Quality has been worked on by Craig Thorstenson since 1989. He says that North Dakota has always been an oil state, but that growth in the Bakken lifted the state to second in the country before it slipped to third last year.

The change was quite a shock for the people who were born and raised in the state.

The population boom was due to people wanting to get jobs. People are living in Walmart parking lots.

More drilling meant more wasted gas, which affected the entire Williston Basin that spans across Montana, the Dakotas and into Canada. That is a big reason why Crusoe invested so much in the area.

The basin was flaring up to a fifth of the gas that was being produced there.

The amount of wasted natural gas is going down. In a March report, the North Dakota Department of Natural Resources estimated that between 85% and 98% of natural gas is being captured. The commission had a capture goal in the year.

Flares are less damaging to the environment than venting, which releases methane directly into the air and produces greenhouse effects that have proven to be 84 to 86 times as powerful as CO2 over a 20-year period.

Even with flaring, some methane escapes due to wind and other factors, according to Adam Ortolf, who runs business development.

Producers won't run it through a generator unless they can make money.

Crusoe's systems are built to make the process financially viable for drillers. The company's equipment can be brought onto the oil pad to convert wasted natural gas into electricity, which can be used to power computing at the well site.

When we put it through our generator, we get up to 99% of the methane to be burned.

Methane is the low-hanging fruit according to Cavness, who spoke at the latest global climate summit in Glasgow, Scotland.

The thing we want to solve as an energy industry is that.

Texas miners power down to help the grid.