Why We Invested in Crusoe Energy

G2 Venture Partners
G2 Insights
Published in
3 min readApr 21, 2022

Flared gas is a major environmental problem.

It wastes the earth’s resources, causes substantial emissions and provides no economic benefit.

When oil production is not near a gas pipeline, the produced gas cannot be economically transported, so it is burned in an open flare. An estimated 8–15% of this gas escapes as methane to the atmosphere, where it is 82.5x more potent greenhouse gas than CO2.¹

The problem is huge and growing.

In the US ~1.3% of gas production is flared², representing over $2B of annual wasted value. Globally the problem is ~10x larger, representing over 1% of global excess emissions³.

The problem is hard to solve.

Because gas production is highly variable and declines quickly, it is uneconomic to build expensive fixed infrastructure to move the energy to market. Building pipelines, or compression/liquefaction to truck the gas to market, or building electricity generation & transmission lines are all uneconomic, high-fixed-capex solutions.

Crusoe has the solution.

Crusoe Energy’s Digital Flare Mitigation® (DFM) technology uses the stranded gas to power modular data centers. They have productized their solutions to enable field deployment in <7 days, high uptime and rapid redeployment to match changing gas supply.

While fixed infrastructure to move gas molecules from remote sites to end markets is impractical and uneconomic, Crusoe’s mobile, modular solutions that convert gas into easily transportable data.

This solution benefits all stakeholders:

  • Environment: Reduces CO2e emissions by 63–92%⁴
  • Operators: receive a risk-free, zero-capital solution to reliably mitigate flaring
  • Compute markets: get access to low-cost⁵ data centers for: carbon-negative cryptocurrency mining, and carbon-negative cloud compute.

After an extensive deep dive into flare mitigation solutions, we concluded that Crusoe is the clear leader in scale, operational excellence, talent, and vision. G2 led Crusoe’s $350M Series C round, providing capital to deploy more DFM and accelerate Crusoe’s path to eliminating routine flaring well ahead of the World Bank’s Zero Routine Flaring by 2030 goal.

We’re proud to back Crusoe’s visionary founders Chase Lochmiller and Cully Cavness on their mission to align the future of computing with the future of climate. This is exactly the type of investment G2 loves to make… in exceptional teams applying emerging technologies to decarbonize traditional industries.

Want to join their team? See job openings here

Article in The Information: https://www.theinformation.com/articles/crusoe-energy-valued-at-1-75-billion-for-clean-bitcoin-mining

Sources:

¹ https://climatechangeconnection.org/emissions/co2-equivalents/ ; EDF; EIA

² https://www.eia.gov/dnav/ng/ng_prod_sum_a_EPG0_VGV_mmcf_a.htm ; EIA

³ Assumes 36.4 Bn tons of excess global CO2e emissions annually. Source: https://www.weforum.org/agenda/2021/11/global-co2-emissions-fossil-fuels-new-data-reveals/

⁴ Crusoe’s generator combusts the gas at 99.98% efficiency. This represents a 63% reduction in CO2e assuming the data center does not displace any other compute resource. It represents a 92% reduction in CO2e assuming it displaces the equivalent amount of compute powered by average grid electricity.

⁵The largest cost for data centers is energy for operating compute resources and for cooling. Crusoe has access to the lowest-cost energy in the market, making them the low-cost operator in cryptocurrency mining and cloud compute.

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Published in G2 Insights

G2 Venture Partners is a venture and growth capital firm investing in transformative technology companies at their inflection points to build a sustainable future. | www.g2venturepartners.com

Written by G2 Venture Partners

We invest in transformative technology companies at their inflection points to build a sustainable future.

Responses (1)

What are your thoughts?

The environmental focus of this investment is fantastic, but don't you find the name of this company hurtful? It is named after a slave trader/owner who represented the worst of colonialism.

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