When it comes to greenhouse gases, methane is the worst. It has more warming potential than carbon dioxide and slashing its use -- and waste -- presents an opportunity to make significant progress in quickly reducing global warming.
That's the reason why a slew of climate investors, nation-states, venture capitalists (including us), and bitcoin whales have invested hundreds of millions of dollars in Crusoe Energy, a company that takes what would have been wasted methane and uses it to power data centers, telecommunications equipment, and... yes... bitcoin mining operations.
While a lot of folks (including us) have been skeptical of claims that bitcoin mining can be used to bring more renewable energy onto the gird and actually be a boost to renewable development, the data from Crusoe on its ability to reduce methane emissions is compelling.
Crusoe currently has about 86 data centers that have prevented 2.5 billion cubic feet of flaring and eliminated up to 99.89% of methane emissions -- which trap 82.5 times more heat than CO2 of a 20-year timeframe. From a greenhouse gas perspective, the more methane the world keeps from reaching the atmosphere, the better able the planet is to avoid making the climate crisis worse.
Every year, Crusoe's operations could reduce up to 650,000 metric tons of CO2 equivalent emissions -- the same as taking about 140,000 cars off the road.
Globally, methane gas flaring from oil and gas operations equalled the entire gas demand of Central and South America and resulted in 265 Mt CO2, nearly 8 Mt of methane (240 Mt CO2-eq) and black soot and other GHGs being directly emitted into the atmosphere, according to data from the International Energy Agency (the world's energy watchdog). And the U.S. accounts for a large percentage of those flared emissions.
If the world wants to hit the Net-Zero Emissions by 2050 Scenario it'll require all non-emergency flaring to be eliminated globally by 2030, resulting in a 90% reduction in flared volumes by 2030, according to the IEA.
It's why the company has been able to raise over half a billion dollars from investors like G2 Venture Partners, LowerCarbon Capital, Founders Fund, MyClimateJourney Collective, Felicis Ventures, and some big international state-backed investment entities.
Some industry insiders see Crusoe's initial mining business along a continuum of bitcoin and cryptocurrency mining operations.
The first tier are miners that are entirely agnostic about the source of their power. These burn-the-world miners have sited their operations in coal-reliant regions like China's Xinjiang (which has other issues) or Kazakhstan. In one case, these miners even resurrected a coal power plant in Montana that was slated for closure.
The second tier are miners like Core Scientific and Greenidge that are using emissions offsets (planting trees, buying renewable power in other locations) to make their operations carbon neutral.
.Another tier of miners use renewable power for a percentage of their operations, but rely on the grid when that intermittent power isn't available -- and offset the fossil fuel emissions with projects that remove carbon dioxide from the atmosphere or develop renewable power projects in other places.
Some miners also site their mining locations next to emission free sources of power like nuclear power plants, or large scale hydropower facilities. Groups taking this approach are BitFarms, CleanSpark, Iris, and the recent collaboration project announced between Blockstream, Block and Tesla.
While zero-emission, these sites (like all cryptocurrencies) are subject to the criticism that the underlying services they provide don't add value and are taking energy away from other operations that need to decarbonize as well.
The core complaint from environmentalists against bitcoin and other cryptocurrencies is that there's no intrinsic value to them. To many in the environmental movement these operations are just energy sucking exercises in hyper capitalist speculation, creating nothing more than intangible wealth untethered from real goods and services or national economies and the latest in a long line of speculative bubbles dating back to the tulip mania of the 17th century.
"When we think about bitcoin mining as a large consumer of energy, if we can channel that energy consumption in a way that actually reduces the emission sources of other industries like flaring, it can actually be used as a mechanism to create an economic way to generate a massive climate improvement over the status quo," says Crusoe Energy co-founder and chief executive, Chase Lochmiller. "By doing this, bitcoin mining can both create value as the infrastructure layer for a new digital monetary ecosystem, while also being a mechanism to reduce emissions from legacy industries, a true win, win."
And as Crusoe scales, it's hoping to build out a network of more data centers that can provide distributed computing power for more traditional IT businesses.
In fact, the company is pitching its services beyond the crypto community that provided its initial growth.
The new CrusoeCloud service it launched aims to offer compute power to things like artificial intelligence research, machine learning, computational biology, and therapeutic drug discovery simulations.
Artificial intelligence and high performance computing have been vital contributors to recent breakthroughs in fundamental material science and biological innovation that are creating unprecedented opportunities to create new, fossil fuel free industries that can meet global demand for food, clothing, shelter, and transportation.
If Crusoe can build a network of more energy-efficient and renewable energy-powered data centers it'd be moving into one of the areas of power demand that's growing the fastest.
Globally data centers account for about 1% of total electricity demand -- and in the U.S. these buildings typically use 10 to 50 times the amount of power of a traditional commercial building. In other words, they're a huge consumer of energy and as demand for digital services increases they're growing exponentially.
“After deeply studying the technologies and operators in the flare mitigation and modular datacenter spaces, we concluded that Crusoe is in a category of its own with regard to operational excellence, talent density in the team, potential for rapid growth, co-founder vision and proven commitment to high environmental standards,” said Ben Kortlang, Partner at G2 Venture Partners, one of the big investors in Crusoe, in a statement. “Eliminating methane emissions from flaring is one of the best opportunities and lowest hanging fruit for climate goals this century, as was broadly agreed at COP26 in Glasgow. In addition to reducing flaring, Crusoe’s next step of growth will also enable and accelerate renewable power generation.”