Flared Gas Mining
Learn how flared gas mining turns wasted oilfield gas into power for cryptocurrency mining.
Definition
Flared gas mining is cryptocurrency mining powered by natural gas that would otherwise be burned off at an oil or gas site. Instead of flaring the gas into the open air, operators run generators that supply electricity to ASIC miners, usually for Bitcoin mining. The goal is to turn wasted energy into useful compute power.
How It Works
Oil wells often produce natural gas alongside crude oil. In remote locations, there may be no pipeline, processing plant, or local buyer. When the operator cannot sell the gas economically, it may be flared, meaning burned on site.
In a flared gas mining setup, the gas is captured near the flare stack and sent through basic treatment equipment. This can remove liquids, reduce pressure problems, and make the fuel suitable for a generator. The generator converts the gas into electricity for mining containers filled with ASIC machines, network gear, ventilation, and cooling.
The miners connect to a mining pool and perform proof of work like miners on a traditional grid. The main difference is the energy source. The site is usually modular, so containers can move if oil production declines, gas volume changes, or a better location appears.
Economics depend on gas quality, volume, generator efficiency, hardware cost, uptime, internet access, maintenance, and coin price. Projects also need permits and must follow rules on emissions, oilfield safety, and power equipment.
Why It Matters
For miners, flared gas can offer low-cost power where grid electricity is unavailable or expensive. That can improve margins, especially when mining difficulty rises or block rewards fall.
For producers, mining can create revenue from stranded gas while reducing routine flaring. Burning gas in a generator is not emission-free, but it can be more productive because the same fuel creates electricity and hash rate.
The model shows why location matters in mining. Profit is not only about efficient machines; it is also about finding energy that is cheap, reliable, and underused. See our Bitcoin mining guide for more context on power cost and profitability.