Meet the company mining bitcoin using the flare gas from oil drilling – and drawing investment from Coinbase and the Winklevii

Bitcoin mining flare gas
One of Crusoe Energy’s flare-mitigation centres in Montana.

  • Crusoe Energy captures the energy from flare gas at oil patches and uses it to “mine” bitcoin.
  • The company is now one of the US’s biggest miners and has attracted investment from Coinbase.
  • The crypto world is increasingly focused on the climate, particularly after Elon Musk’s criticisms.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Hunter Lowe, a 27-year-old electrician from Tennessee, was working for around $10 an hour in his home state and supporting a family of three when he decided to move to North Dakota and look for a new job.

He never expected to end up working in the bitcoin business.

But Lowe is now an electrician at Crusoe Energy, a company that captures the flare gas from oil patches and uses the energy to “mine” for bitcoin. It says its systems slash CO2-equivalent emissions from gas flaring by up to 63% and that each one has the equivalent effect of taking around 1,700 cars off the road.

Lowe describes it as “the best job I’ve ever had,” which pays “way more than fair.” And he says business has been good during 2021’s crypto boom. “We’re getting busier and busier every time another company finds out about us,” he told Insider.

Crusoe isn’t the only company in the business, with others including EZ Blockchain doing similar things. Yet it’s one of the biggest, and has attracted investment from the listed crypto exchange Coinbase and the Winklevii twins‘ Winklevoss Capital.

Crusoe mines bitcoin directly on site

So how does it work? When oil companies drill for the black stuff, they often hit natural gas too. Yet, most drillers lack the infrastructure to sell the gas and so burn it off in a process called flaring, creating the distinctive flames above oil sites.

This is where Crusoe comes in. It installs a piping system to divert the natural gas away from the flares and into generators. They produce electricity which is then used to power computers directly at the oil site.

The computers “mine” bitcoin – that is, they solve complex puzzles which help to secure the bitcoin network and create new coins. One bitcoin was worth around $39,000 on Thursday.

“We pay the operator for the gas that we use in our generators, providing them with an incremental revenue stream where they were previously flaring the gas for zero,” Crusoe’s president Cully Cavness told Insider.

He said Crusoe, which has deployed units in North Dakota, Colorado, and Montana among other states, is now one of the biggest bitcoin miners in North America.

The focus on bitcoin’s energy use has intensified

Yet, for some people, paying oil companies for their byproducts is simply propping up the fossil fuels industry. Others argue that bitcoin is socially useless and there are much better uses for energy.

New York University economist Nouriel Roubini has slammed cryptocurrencies as pointless and inefficient, for instance, saying that “the Flintstones had a better monetary system.”

Elon Musk, once the most prominent bitcoin evangelist, has halted payments for Tesla cars in the token and attacked its “insane” energy use. Bank of America analysts have estimated that each $1 billion of inflows into bitcoin uses the same amount of energy as 1.2 million cars.

Yet, Cavness says Crusoe “maintains an internal [environmental] standard to select projects only if they’re net reducers of greenhouse gasses.”

He also said Crusoe’s prices are such that “we don’t create an economic incentive to opt out of traditional midstream gas capture systems.”

And he says the company’s generators aren’t only focused on bitcoin, but are increasingly powering other energy-intensive processes such as cloud computing.

Investors are keen on the technology

Musk’s attacks on bitcoin’s energy consumption have shone a light on the issue and crypto companies are paying more attention to the climate than ever.

The green focus appears to be helping Crusoe, which recently raised $128 million to help expand its flare capture technology to more than 100 units, from around 40 currently. Investors included Valor Equity Partners, Bain Capital, and the Agnelli family’s Exor.

As someone who’s worked for Halliburton and natural gas companies, Lowe admits he was skeptical about “the whole green thing” in the past. Being at Crusoe has changed his mind, however, and he argues its work is “definitely for the better.”

Read the original article on Business Insider

Amazing photos show the Air Force’s biggest plane testing flares to lure away enemy missiles

C-5M Super Galaxy cargo plane flares
A 436th Airlift Wing C-5M Super Galaxy releases flares during a test at Eglin Air Force Base, Florida, May 12, 2021.

  • The giant C-5M Super Galaxy released flares during a defensive countermeasures test on the Eglin range.
  • Flares are high-temperature heat sources used to mislead surface-to-air or air-to-air missiles’ heat-seekers.
  • See more stories on Insider’s business page.

A C-5M Super Galaxy, belonging to the 436th Airlift Wing, from Dover Air Force Base, Delaware, was involved in a defensive countermeasures testing campaign that saw the US Air Force’s largest aircraft release flares, at night, over an area of the Eglin range, Florida.

Each night, the C-5M released more than 15 flares, repeating the same operation several times, entering the area from different entry points and angles, to increase aircraft and crew combat survivability by evaluating and fielding improved defensive systems capabilities.

Flares are high-temperature heat sources used to mislead surface-to-air or air-to-air missiles’ heat-seeking targeting systems, creating the pyrotechnic visual effect similar to a fireworks display.

Such countermeasures are used against MANPADS (Man Portable Air Defense Systems) and IR-guided surface-to-air missiles.

The giant C-5M Super Galaxy released flares at 300 knots and 1,500 feet: A unique opportunity for both the 9th Airlift Squadron’s operational aircrew involved in the testing and the US Air Force photographer Samuel King Jr., who took the amazing shots you can find in this story.

C-5M Super Galaxy cargo plane flares
A C-5M releases flares during a test at Eglin Air Force Base, May 12, 2021.

“There are rare situations when the aircraft does pop flares,” said Capt. Bryan Chanson, 9th AS pilot in a news release.

“The crew is usually focused primarily on flying out or away from the potential threat and hoping flares do their intended jobs. The testing allowed us to gain the situational awareness to concentrate on flare dispense in a safe environment.”

C-5M Super Galaxy cargo plane flares
A C-5M releases flares during a test at Eglin Air Force Base, May 12, 2021.

“Countermeasure testing like this is a Team Eglin event,” said Capt. Daniel Clarke, 46th TS Defensive Systems Flight commander. “Our test engineers work hand in hand with the 96th Range Group to ensure resources are ready to test and collect data and the 96th Maintenance Group ensures every flare tested is loaded on to each aircraft.”

Interestingly, the C-5M Super Galaxy testing with flares was just the start of a two-month test program, according to the Air Mobility Command.

Through the end of June, the 96th Cyberspace Test Group will execute flare testing on four more aircraft from Air Force Special Operations Command, Air National Guard, Air Force Reserve Command Test Center and AMC.

Let’s wait for some more cool flares shots then!

C-5M Super Galaxy cargo plane flares
A C-5M releases flares during a test at Eglin Air Force Base, May 12, 2021.

Read the original article on Business Insider