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Iraq to Mine Bitcoin with Flare Gas Following El Salvador’s Volcano-Powered Miner

Last Updated April 17, 2024 1:23 PM
Teuta Franjkovic
Last Updated April 17, 2024 1:23 PM
By Teuta Franjkovic
Verified by Peter Henn

Key Takeaways

  • Iraq and US discuss reducing reliance on fossil fuels, with the Middle Eastern country exploring the use of flare gas.
  • Parts of the cryptosphere think this could be a sign that Iraq is considering Bitcoin mining.
  • The potential scheme has echoes of the way El Salvador uses volcanic energy to power Bitcoin mining.

Iraq’s Deputy Prime Minister, Muhammad Ali Tamim, recently engaged  in significant discussions with US Secretary of State Antony Blinken during a US-Iraq Higher Coordinating Committee meeting.

After El Salvador gained international attention for using volcanic energy to power Bitcoin mining, Iraq could potentially pursue a similar path. Iraq is exploring the use of flare gas from its extensive oil fields for power, while the cryptoverse hopes it can use it for Bitcoin mining.

Iraq Eyes Flare Gas Capture to Reduce Pollution, Spurs Bitcoin Mining Speculation

Deputy Prime Minister Tamim expressed a commitment  to reducing Iraq’s reliance on fossil fuels and decreasing pollution. Additionally, he highlighted Iraq’s ambition to forge new technological partnerships aimed at capturing flare gas. This is a harmful byproduct of the oil industry, so capturing it could offset its environmental impact. The focus of their dialogue  was on the future partnership between the two countries, specifically addressing Iraq’s environmental and energy strategies.

He also stated :

“The Iraqi Government is widening its partnership and conducting agreements so that we’ll be able to, for example, use technologies to capture flaring gas, to create and achieve independence in energy, and also to invest in other sources of energy, including renewables and solar energy.”

The mention  of deploying technologies to capture flare gas  has sparked speculation within the crypto community about Iraq’s potential entry into Bitcoin mining. This is driven by the fact flare gas can power energy-intensive processes like Bitcoin mining. Therefore, it presents a sustainable way to reduce environmental waste while generating value from previously discarded resources.

Iraq to Power Bitcoin Mining with Flare Gas, Following El Salvador’s Lead

Following the innovative footsteps of El Salvador, which famously harnessed volcanic energy to power its Bitcoin mining operations, Iraq is setting its sights on a similarly resourceful approach to cryptocurrency. Iraq plans to capitalize on the abundant flare gas from its oil fields as a powerful source for Bitcoin mining.

This strategic move not only aims to reduce environmental waste but also positions Iraq as a pioneer in the sustainable use of natural resources for advancing digital finance. The initiative marks a significant step in the nation’s efforts to integrate cutting-edge technology with traditional energy sectors, promising a new era of economic revitalization and technological advancement.

Utilizing Flare Gas in Iraq’s Oil Fields: Challenges and Opportunities

When extracting and refining crude oil, “waste gas” or flare gas  accumulates and pressurizes the equipment. Typically, this gas is either converted into useful forms of energy like electricity or flared into the atmosphere, releasing pollutants. In Iraq, converting flare gas has been economically challenging due to the remote locations of its oil fields.

As a result, much of this gas has historically been burned off, contributing significantly to atmospheric pollution. Iraq’s Rumaila oil field, the world’s biggest producer of flare gas, has started capturing and repurposing up to 60% of this byproduct. The country has set a goal  to end all gas flaring by 2027, reflecting a strong commitment to environmental sustainability.

Bitcoin Mining and Carbon Credits as Innovative Solutions

The process of Bitcoin mining, which requires substantial energy, has seen innovative approaches globally, including the use of nuclear energy and even bio-waste. In Texas, the startup Giga uses flare gas from local oil fields to power mobile Bitcoin mining rigs. Given Iraq’s status as a major producer of flare gas, the country could potentially scale up similar operations, using an otherwise wasted natural resource to generate electricity and facilitate Bitcoin mining. Such a move could provide dual benefits: reducing environmental harm while boosting the economy.

Moreover, Iraq could explore the burgeoning market of carbon credits. By capturing flare gas, Iraq would not only cut its carbon footprint but also engage in the carbon credit market. Blockchain technology  could offer a transparent, immutable record of Iraq’s environmental efforts, providing a credible foundation for selling carbon credits. This could also offer Iraq a significant revenue stream while it moves away from fossil fuels.

As Iraq navigates its energy needs and looks to fulfill its financial obligations, the dual approach of leveraging Bitcoin mining and engaging in the carbon credit market presents a compelling case. By turning environmental challenges into economic opportunities, Iraq could benefit both the planet and its economy.

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