In January of 2019, Chase Lochmiller and Cully Cavness, recently reunited prep school pals from Denver, drove out to the snow-covered plains of Wyoming to bring a piece of tech culture to the American heartland. Trembling in -20F (-29C) temperatures, they wired up a prototype of their brainchild: a machine that harnesses the “waste gas” from oil rigs to power mining for cryptocurrency.
Cryptocurrencies such as bitcoin, the most-popular decentralized digital currency, have a notoriously large carbon footprint (bitcoin mining alone consumes about half as much electricity in a year as all of the UK). So to leverage a cheap source of energy to run their bitcoin mining operations, Lochmiller and Cavness found themselves partnering with oil companies to repurpose a byproduct, primarily methane, that’s typically vented or burnt off in flares.
“We flipped the switch and saw all the bitcoin mining servers light up green, and you could see the flare physically shrink a little bit,” said Lochmiller, a self-described “city kid” who had never before set foot in an oilfield.
“It was kind of a Frankenstein moment, like ‘Oh my god, it’s alive!’”
Their creation is part of a niche wave of tech startups that are now eyeing the oil and gas industry to help power the cryptocurrency boom. Lochmiller and Cavness, who started a bitcoin mining company called Crusoe Energy, see their fix as a marriage between two problems capable of “solving” one another: the wasting of gas flaring that contributes to the climate crisis, and the need for cheaper energy as crypto increases in popularity.
Chase Lochmiller and Cully Cavness, founders of Crusoe Energy, show off their modular data centers. Photograph: Crusoe Energy
Climate experts, however, warn it’s a “false solution” so long as oil and gas production is allowed to continue. The world’s leading authority on climate science concludes that only a dramatic reduction in greenhouse gas emissions will help avert a climate calamity; merely finding alternate uses for “waste gas” doesn’t confront the dire need to curb fossil fuel consumption. If anything, researchers warn, oil companies may feel incentivized to drill even more.
“At the end of the day, they’re still burning natural gas,” said Arvind Ravikumar, a methane researcher at the University of Texas at Austin, who deemed flare mitigation and companies proposing similar technologies a “scam”.
Lochmiller and Cavness, however, say their work helps the industry produce oil in as clean a way as possible, buying time, …….