Is Crusoe Energy a Climate Tech Company?
By Chase Lochmiller, Co-Founder and CEO of Crusoe Energy
This question was recently posed on a Twitter poll and we appreciate the significant interest and questions around Crusoe’s business. The short answer is, yes. Our core mission is to align the future of computing with the future of the climate. We are building large-scale computing infrastructure to tackle the world’s most energy intensive computing problems in a way that can reduce emissions from existing sources and accelerate development for more carbon-free power. As the CEO and one of the co-founders of the business, I wanted to provide some more context and detail about Crusoe and explain why the problems we are solving are important for the climate.
What is Climate Tech?
Climate tech is technology focused on mitigating the warming impacts of greenhouse gasses on the planet. This can manifest in many different ways. The world is adding greenhouse gasses to the atmosphere that have the equivalent warming impact of about 50 billion tonnes of carbon dioxide every year. This is the current cost of supporting modern life for the nearly 8 billion people that live here. Climate tech is focused on reducing those costs. So what are ways we can make that happen? Broadly I think there are 4 categories that help to achieve this.
Transition Opportunity: We can transition the energy input sources we use to power society to those with a lower/zero GHG footprint
Reduction Opportunity: We can reduce the emissions of the industries and processes that use energy and enable modern society
Removal Opportunity: We can remove the output emissions from the atmosphere
Change in Behavior Opportunity: We can change our behavior to demand/consume/use/do less, which in turn, requires fewer energy inputs
What is flaring?
When an oil company drills an oil well, oil and gas come out of the ground together. As a liquid the oil can be easily transported either by oil pipeline, truck or rail car, but when the well is not connected to a gas pipeline, the associated gas produced is very difficult and expensive to transport to a market. In these cases, the most economic thing to do with the gas is to burn it on site in a flare. Globally we flare about 14 billion cubic feet of gas per day, which is enough to power sub-saharan Africa.
This has been a problem that has plagued oil production for the last 160 years. Given the magnitude of this problem and the increasing understanding of its climate impact, the World Bank has started an initiative to end routine flaring by 2030. According to the IEA, in 2020 flaring accounted for 265 million tonnes of CO2 emissions and 8 million tonnes of methane emissions. So even though gas gets flared, a significant amount of methane is escaping into the atmosphere uncombusted. Why is this a problem? Methane has a 20 year global warming potential (GWP) of 84, which means that 1 tonne of methane will have the same warming impact as 84 tonnes of CO2 over a 20 year period. So on a CO2-equivalent basis, flaring accounts for 937 gigatons of CO2e emissions, of which the associated methane emissions account for more than 70%. That’s almost 2% of the total global GHG emissions!
What’s Crusoe’s role in all of this?
Crusoe has developed a modular, scalable and economic solution to flaring called Digital Flare Mitigation. The key insight that led to its development was that moving data is much easier and cheaper than moving gas. Digital Flare Mitigation colocates mobile data centers on locations that are flaring and repurposes the flare gas to power energy intensive computing applications like digital currency mining, AI research, rendering and scientific computing. By using stoichiometric combustion with the highest grade catalysts, we are able to reduce the methane emissions compared to flaring by over 98% and the CO2e by 63%. By having an economically viable solution, Crusoe can scale Digital Flare Mitigation quickly around the globe to make a bigger impact on methane emissions, without having to wait for regulatory based subsidies. So in the framework for “what is climate tech?” I outlined above, Crusoe today is a business focused on reducing emissions from existing industries, namely we focus on reducing the emissions of one of the oil industry’s largest emission sources, flaring. Crusoe to date has deployed 86 mobile data centers that mitigates more than 10 million cubic feet per day of gas from being flared.
But our mobile data centers are also useful in creating value in other forms of stranded energy and accelerating the transition to more clean power development. Grid-connected power sources often suffer a disconnect between when power is being produced and when it’s being demanded, leading to challenging economic outcomes. Crusoe can use our mobile data center technology and flexible computing workloads to create an economic floor in purchasing off-peak power, while curtailing during peak demand to make more clean power available to the grid. Almost no other large scale industrial application can curtail and ramp up such significant workloads on demand. This flexible demand creates a dependable price floor to offtake power at reasonable pricing, which in turn enables the economic underwriting of new clean energy development.
We named the company Crusoe Energy after the fictional character Robinson Crusoe, who was stranded on a desert island and had to be innovative in managing his resources to survive. We try to harness that same sense of innovative spirit to unlock value in stranded energy with computation.
So how can I access these amazing carbon reducing computing resources?
Crusoe operates large scale computing infrastructure that tackles many of the world's most energy intensive computing problems. We have a significant and growing bitcoin mining business that is paving the way for bitcoin to be a mechanism to reduce existing emissions and catalyze more carbon free power development. We also recently launched Crusoe Cloud, where users can leverage our technology to tap into the lowest cost and lowest impact GPU cloud computing solution in the world. By mitigating waste methane, each running GPU is equivalent to removing a car from the road while powering the most advanced computing applications in the world. For more information, email us at email@example.com! We are also actively hiring for many roles. If our mission sounds exciting to you, come join us!
Disclosure: MCJ Collective is an investor in Crusoe Energy. We invited Chase to share his perspective here to foster more learning and collaboration around this important topic, which is what MCJ is all about.
✍️ The Draw-down
Weekly climate art from MCJ Artist-in-Residence, Nicole Kelner.
📍 Get Local
This week’s local climate issue of note, brought to you by Climate Cabinet.
This week, Arizona Corporation Commissioner Sandra Kennedy continues to make headlines for her vote to reject the Coolidge Gas Project, a massive new gas plant planned near the historically black community of Randolph. The Arizona Corporation Commission regulates utilities for the entire state of Arizona - and Commissioner Kennedy is up for re-election in November. You can support her campaign (up to $180) here.
🍿 The Leanback
Learn about Twelve this week with Pique Action’s mini-documentaries.
🎙My Climate Journey Podcast
This week Jason spoke with Dr. Johanna Wolfson, General Partner at Azolla Ventures, about their climate tech investment thesis and the role of catalytic capital in advancing climate innovation. He also caught up with Mike Kelland, CEO of Planetary, to learn more about their ocean-based carbon removal technology.
👋 MCJ Meetups!
May 12: MCJ Boston Meetup from 7:30 - 9:00 pm EDT at Cambridge Brewing Company
May 18: MCJ SF Bay Area Meetup from 5:30 - 8:00 pm PDT at Spark Social SF
👩💻 Climate Jobs
For more open positions, check out the #j-climatejobs channel in MCJ Slack.
Dozens of climate tech jobs got posted in response to this Twitter thread from MCJ Partner, Cody Simms.
In addition to those posted above:
SALT Global is seeking a Carbon Projects Origination Lead and Carbon Projects Financing Lead as they develop a novel means for financing new climate projects.
Noya is seeking a Mechanical Engineer, a Controls Engineer, and other positions for their distributed carbon capture platform.
Toucan is seeking a Head of Product, a Head of Marketing, and other key positions as they develop a leading technology for bridging carbon credits onto the blockchain.
Carbon 180 is seeking a Policy Director and Senior Development Advisor as they work to help support the development of policies to bring carbon removal to gigaton scale.
For more climate events, check out the #c-events channel in MCJ Slack.
“Aspen Ideas: Climate” (Miami, May 9-12)
“New Opportunities for Climate Action” (Virtual, May 12, 3pm EDT)
“The Future of Grid Energy Storage” (San Francisco, CA, Thursday, May 12th, 6PM EDT)
“Women in Climate virtual webinar” by The Nature Conservancy (Virtual, May 13, 11am ET)
“AirMiners XPRIZE Carbon Removal Milestone Winners” (Virtual, May 18)
“Industrial Climate Tech Summit” by Nomadic Venture Partners (Golden, CO, June 1)
“CLIMATE TRANFORMATION Summit” (June 2-3)
“For ClimateTech Summit 2021” (Virtual, September 15-16)
“Fund Your Climate Tech Startup” Seminar (Virtual)
💭If you have feedback or items you’d like to include, feel free to reach out.
🌳If you’d like to become an MCJ community member, apply today.
📨If someone forwarded this to you, sign up for the newsletter.