Could Bitcoin Mining Help with Gas Flaring
Could Bitcoin Mining Help with Gas Flaring?
A company based out of Denver has found an interesting and creative way to solve a problem that has been plaguing shale drilling sites. Crusoe Energy Systems Inc. has started to install data centers at these drilling sites as a way to capitalize on the excess natural gas supplies, and it is helping with the issue of gas flaring.
Gas flaring refers to the burning off of the excess gas that is being products at the sites. This is something that many drilling companies do because the pipelines do not have the needed capacity to hold the gas. Essentially, the gas is wasted, and burning it is not healthy for the environment. Fortunately, something is being done about it. However, it’s not happening in a way that many people at all expected.
Crusoe Energy Systems has found a way to take advantage of this and to help reduce the amount of gas flaring. They have already set up eight data centers at these shale drilling sites around the country. They use some of the excess gas in order to create electricity, which they then use as a means to mine Bitcoin, which helps to generate revenue. In the first half of 2020, the company plans to have another 30 of these centers created, and by the end of the year, they want to have 70 installed.
Each of the facilities would have a capacity of a megawatt. The CEO of the company said that this could help to keep around 10 million cubic feet a day of gas from being flared. This is a smart and novel way to help solve a problem that would have only gotten worse. It also helps to ensure that the company can make a profit through the generation of the Bitcoin. It is not clear exactly how much the company is earning through their mining operation, but with eight data center facilities currently dedicated to mining, it is likely a fair amount.
How Will the Expansions Be Funded?
The initial capital of $5 million was raised through investors in 2019. Upper90 Capital Management LLC has already agreed to provide the company with project financing in the amount of $40 million. The company also raised another $30 million when they sold equity to investors. Because of the unique idea of the plan, and the fact that it can actually work, there has been quite a bit of interest from a number of oil and gas producers. There is the potential that it could include revenue sharing.
These facilities are going to have a substantial amount of computing power. Crusoe Energy Systems has already said that they want to use that power as a means to help develop an artificial intelligence cloud-computing service.
Hopefully, the creation and implementation of the data centers proceed smoothly. The data centers are helping to protect the environment from the gas flaring already. With additional data centers installed, it can help even more.