In the oil and gas industry, stranded natural gas — gas produced as a byproduct but too costly to transport to market — is often flared or vented into the atmosphere, wasting energy and contributing to greenhouse gas emissions. A Chicago-based company, EZ Blockchain, is turning this problem into an opportunity by using the otherwise wasted gas to power bitcoin mining rigs directly on site.
The Business Case for Stranded Gas Mining
EZ Blockchain designs and deploys mobile data centers that consume natural gas to generate electricity for proof-of-work cryptocurrency mining. Founded by Sergii Gerasymovych, the company targets regions like the Appalachian Basin and North Dakota’s Bakken formation, where significant volumes of associated gas are flared daily.
“In the Appalachian Basin, small gas producers are struggling with low market prices and are forced to shut down wells,” Gerasymovych explained. “With bitcoin mining, they can stop selling gas to pipelines and use it for mining instead. The effective price per thousand cubic feet (MCF) can reach $10 — ten times what they currently get.” This value proposition is compelling: instead of paying to dispose of gas or selling it at a loss, producers can essentially print money by minting bitcoins.
Overcoming Industry Skepticism
Despite the clear economic incentives, EZ Blockchain faces significant hurdles in convincing traditional oil and gas operators. “The biggest challenge is education,” Gerasymovych noted. “Producers need to understand bitcoin mining in general, even though the risks for them are low. They come from a century-old industry that moves slowly and is risk-averse.”
The company must also adapt its technology to local conditions. In the Appalachian Basin, where wells are smaller and gas volumes limited, EZ Blockchain developed smaller mining units capable of handling 500 MCF of gas or 2 megawatts of electricity. In contrast, the Bakken region is dominated by large producers, which brings its own set of challenges: longer decision cycles, multiple layers of approval, and compliance requirements.
“In North Dakota, we are working with very large oil producers. Each project, even a small 1-1.5 MW installation, requires approval from many management levels,” Gerasymovych said. Nevertheless, he remains optimistic, pointing out that the stranded gas in North Dakota alone could power one-third of Bitcoin’s entire network. He insists that bitcoin mining can be done completely off-grid, solving both an economic and an environmental problem.
Industry Growth and Competition
EZ Blockchain is not alone in this niche. Competitors like Crusoe Energy Systems (U.S.) and Upstream Data (Canada) are also deploying similar solutions. The concept of using flare gas for bitcoin mining has gained traction as environmental concerns about flaring intensify and as bitcoin miners search for cheap, sustainable energy sources.
The company currently splits its focus: working with large producers in North Dakota and small gas producers in Ohio. As more oil and gas companies become educated about the technology and see real returns, the adoption of stranded gas mining is expected to accelerate across North America’s energy-rich regions.
Do you think bitcoin mining with stranded gas has a bright future? Share your thoughts in the comments below.