Is Bitcoin Mining the Solution to this Major Environmental Concern?
Denver-based company Crusoe Energy System Inc. to install data centers at shale drilling sites to take advantage of the excess natural gas supplies, and turn it into electricity with which it powers the data centers for mining Bitcoin.
The company has now has opened eight such operations across the US and is further planning to open 30 more in the first half of next year.
These centers are touted as a way to solve the growing problem of gas flaring. It is a popular but controversial way of eliminating unwanted gas, a byproduct of numerous industrial processes including landfill gas production, wastewater treatment, petrochemical process, and oil and gas recovery, which has become a major environmental concern.
The greenhouse gases it generates contribute to the burden of global warming. Gas flaring is running rampant that rose to a record in Texas this year.
Now, Crusoe is harnessing some of the surplus gas to turn it into electricity. Through this electricity, the company is powering the data centers that generate revenue by mining the leading cryptocurrency Bitcoin.
The company is planning to install 70 units next year, with a capacity of 1 megawatt each.
“It’s a very creative way to solve an environmental and economic problem for the oil and gas industry,” said Alex Urdea, the chief investment officer of Upper90 Capital Management LLC, which will be providing Crusoe with $40 million of project financing.
The business model, he said is attracting interest from large gas and oil producers. Earlier this year, Bitcoin billionaire Winkelvoss twins’ Winklevoss Capital Management LLC was also involved in an investment round where Crusoe raised $5 million of seed capital.