YPF Luz powers cryptomining operation using waste "flare" gas from a shale oil field

Argentina's state-owned utility YPF Luz has entered the crypto mining space, striking up a partnership with a currently unnamed international mining company. Through the partnership, the renewable energy arm of YPF, has been piloting a 1 megawatt (MW) operation in n the Loma Campana area, providing power generated from waste gas left over from oil production. It also plans to open a second pilot, with a capacity of 8MW before the end of 2022.

According to the company, crypto miners will pay YPF Luz for the energy, with pricing "sometimes tied to the price of the blockchain” or set a “fixed price'' for their global data processing. The equipment will also be moved from oil well to oil well as flare gas at one site becomes unavailable: "Once the well is completed and oil and gas are already in production, the generation and mining equipment will be removed to another well at the start of development, because it is modular equipment and easy to transport," the company said in a development.

Speaking about the project to national news agency Télam, Martín Mandarano said: “We started to develop this generation pilot for cryptocurrency mining with a vision of sustainability and business from flare natural gas, which cannot be harnessed during exploration and at the beginning of the production of an oil field.”

However, while Mandarano argues that the project was developed with a “vision of sustainability,” capturing flare gas at oil well sites is far from sustainable and, in fact, props up big oil and doing little to make mining greener. Likewise, cryptomining is now thought to use as much energy as conventional data centers, consuming between 120 and 240 billion kWh of energy per year (between 0.4% and 0.9% of the world's electricity usage), and during the middle of an energy crisis, this extreme energy consumption is coming under increasing scrutiny.