An oil well pad near Sidney is pictured in June 2021. The structures at right contain a Bitcoin mining operation powered by excess natural gas produced as a result of oil extraction on the site.
SIDNEY — On a sun-baked oil pad not too far from the North Dakota border, the iconic infrastructure of the Bakken oil field towers over pink gravel, pumpjacks pulling energy-packed hydrocarbons from thousands of feet deep beneath the Eastern Montana prairie.
A flare stack and multi-story storage containers stand along the pad’s perimeter, along with a sign announcing the site’s owner, Houston-based Kraken Oil & Gas. On the far side of the pad, though, a line of metal buildings set up by a Colorado startup represents a decidedly nontraditional arrangement for the oil industry. Humming generators wire electricity to a handful of squat boxes that look like a cross between shipping containers and hot dog stands. From beneath awnings, whirring fans blast streams of scorching hot air out their sides.
Inside, behind a tangle of power cords and networking cables, a full wall of each container is packed with high-tech computing equipment, powerful servers chugging away to put natural gas produced as a byproduct of the pad’s oil production to use on an entirely different type of extraction: mining digital cryptocurrency.
“Instead of burning it, we try to bring something to the site so we can use it and create something beneficial,” said Sidney native Bruce Larsen, Kraken’s president.
Kraken has dug in here for the oil released by hydraulic fracturing, or fracking, the technology that, along with horizontal drilling, spurred the Bakken oil boom in North Dakota and this stretch of eastern Montana in the late 2000s and early 2010s. Even as the boom has cooled from its peak over the last decade, production has continued on pads like this one, where the liquid oil pulled from the earth is piped away, headed toward refineries that convert it to gasoline or plastic. On sites without a pipeline connection, producers truck liquid oil away in tanks instead.