Dubai Oil Producers Move Into Bitcoin Mining With Crusoe Energy Stakes
Crusoe Energy, the privately held U.S. company that pioneered bitcoin (BTC) mining by using wasted natural gas as a power source, is expanding in the Middle Eastern region with investments from Mubadala — the sovereign wealth fund (SWF) of Abu Dhabi — and the Oman Investment Authority (OIA).
Crusoe this week announced the OIA and Mubadala were each part of a $350 million funding round that closed in April. “This investment will power Crusoe’s efforts to expand internationally as it works to align the future of computing with the future of the climate,” according to a statement sent to CoinDesk by the company.
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As part of the expansion, the Denver-based miner will initially open an office in Oman’s capital city of Muscat and in Abu Dhabi shortly thereafter. Crusoe will start with hiring two or three people for the offices and about eight field personnel, CEO and co-founder Chase Lochmiller told CoinDesk. Lochmiller expects to have pilot-level technologies deployed at one site in each country in the first quarter of 2023.
While not commenting on the size of the investments by the two nations, Lochmiller did allow that the stakes were “meaningful.” The expansion of Crusoe’s patented digital flare mitigation systems establishes the company as the first flare gas bitcoin miner in the Middle East and North Africa (MENA) region, he added.
Crusoe currently has several mobile sites across the U.S., and a customer roster that includes energy producers Devon Energy (DVN), Kraken Oil & Gas, Canada’s Enerplus (ERF) and maybe Exxon (XOM), where Crusoe is reportedly working on a pilot project to use flared gas to power bitcoin mining operations at the energy giant’s North Dakota oil wells.
‘A global problem’
In the flaring process, excess natural gas is burned off into the atmosphere as part of oil drilling operations. It has become standard industry practice because of the lack of transportation infrastructure. The process is under environmental scrutiny, however, with the U.S. President Joe Biden pledging to cut methane emissions from oil and gas operations.
It is not just an issue in the U.S. but “a global problem with a global impact,” said Lochmiller, who said the MENA region is responsible for over 38% of the global flaring in 2020. Oman accounted for about 1.8% or 2,517 million cubic meters of that emission, while the United Arab Emirates accounted for approximately 0.7% or 955 million cubic meters.
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Using this otherwise wasted flared gas to mine digital assets has emerged as a popular trend among both the crypto and energy industries. Those involved point out the win/win of reducing emissions while powering mining rigs.
“We’re excited to expand our Digital Flare Mitigation technology to the Middle East to help solve the region’s long-standing flaring challenges, while also empowering a new generation of digital technology in the region,” Lochmiller said. “Both OIA and Mubadala saw the value in Crusoe’s digital flare mitigation technology and how it can actually bring a flexible mechanism to both reduce emissions and bring new technologically enabled industries to the country,” he added.
“Our hope is that these two locations can be a launching point for continued expansion into other nations in the region, ‘’ Lochmiller continued, noting Oman’s and Abu Dhabi’s MENA neighbors — Saudi Arabia among them — face similar challenges.
