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Crusoe Energy captures energy from flare gas on oil fields and uses it to “mine” bitcoin. The company is now one of the largest miners in the United States and has attracted investment from Coinbase. The crypto world is increasingly focused on the climate, especially after criticism from Elon Musk. Sign up for our daily newsletter, 10 things before the opening bell here.
Hunter Lowe, a 27-year-old electrician from Tennessee, was working around $ 10 an hour in his home country and supporting a family of three when he decided to move to North Dakota and look for a new job.
He didn’t expect to end up working in the bitcoin business.
But Lowe is now an electrician at Crusoe Energy, a company that captures flare gas from oil fields and uses the energy to “mine” bitcoin. He says his systems reduce CO2 equivalent emissions from gas flaring by up to 63%, and each has the equivalent effect of taking about 1,700 cars off the road.
Lowe describes it as “the best job I’ve ever had,” which pays “more than fair”. And he says business has been good during the crypto boom in 2021. “We get busier and busier every time another company finds out about our existence,” he told Insider.
Crusoe isn’t the only company in the industry, others including EZ Blockchain are doing similar things. Still, it’s one of the biggest, and it has attracted investment from the listed cryptocurrency exchange Coinbase and the Winklevoss Capital of the Winklevii twins.
Crusoe extracts bitcoin directly on site
So how does it work? When oil companies drill for black stuff, they often hit natural gas as well. Yet most drillers lack the infrastructure to sell the gas and therefore burn it in a process called flaring, creating the distinctive flames above oil sites.
This is where Crusoe comes in. He installs a pipeline system to divert natural gas from flares to generators. They generate electricity which is then used to power computers directly at the oil site.
Computers ‘mine’ bitcoin, that is, they solve complex puzzles that help secure the bitcoin network and create new coins. A bitcoin was worth around $ 39,000 on Thursday.
“We pay the operator for the gas we use in our generators, providing them with an additional revenue stream where they previously burned zero gas,” Crusoe chairman Cully Cavness told Insider.
He said Crusoe, which has deployed units to North Dakota, Colorado and Montana, among other states, is now one of the largest bitcoin miners in North America.
The focus on bitcoin’s energy consumption has intensified
Yet for some people, paying oil companies for their by-products only supports the fossil fuel industry. Others argue that bitcoin is socially unnecessary and that there are much better uses for energy.
New York University economist Nouriel Roubini called cryptocurrencies unnecessary and inefficient, for example, saying “the Flintstones have a better monetary system.”
Elon Musk, once the most prominent bitcoin evangelist, suspended payments for Tesla cars in the token and attacked his “insane” energy consumption. Bank of America analysts have estimated that every billion dollars worth of bitcoin entry uses the same amount of energy as 1.2 million cars.
Still, Cavness says that Crusoe “maintains a [environmental] standard to only select projects if they are net greenhouse gas reducers. “
He also said that Crusoe’s pricing is such that “we are not creating an economic incentive to pull out of traditional gas capture systems halfway.”
And he says the company’s generators aren’t just focusing on bitcoin, but are increasingly powering other power-hungry processes like cloud computing.
Investors are tech savvy
Musk’s attacks on bitcoin’s power consumption have highlighted the problem, and crypto companies are paying more attention to the climate than ever before.
The green focus appears to be helping Crusoe, who recently raised $ 128 million to help expand their torch capture technology to more than 100 units, up from around 40 currently. Investors included Valor Equity Partners, Bain Capital and the Agnelli family’s Exor.
As someone who has worked for Halliburton and natural gas companies, Lowe admits he was skeptical of “anything green” in the past. However, being at Crusoe has changed his mind and he maintains that his job is “definitely for the best”.
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