Midland Reporter-Telegram: Denver Firm Aims To Use Natural Gas To Run Computers

Crusoe Energy Systems of Denver has developed the Digital Flare Mitigation system, which uses natural gas that would be flared to power computer server farms. The company has systems in place in the Williston and Powder River basins and is talking with several Permian Basin operators.

Call it the circle of energy.

Energy producers are seeking ways to end the flaring of natural gas. Technology companies are seeking energy to power their energy-hungry computers.

One Denver company thinks it has the solution to both issues. Crusoe Energy Systems has developed Digital Flare Mitigation service, which can use natural gas produced at the well site to power a server farm.

"It's a data center in a customized shipping container, a bunch of servers with energy-hungry computers in a box," Cully Cavness, Crusoe president and co-founder, said in a phone interview.

He explained the service can take the natural gas at the well site and feed it into a gas-fired generator to power the computers. The service also uses internet via satellite for increased efficiency and mobility.

Cavness said the computers are used for applications outside the energy industry, from blockchain applications to crypto currency.

Crusoe currently has systems in place or about to be in place in the Bakken, Powder River and Denver-Julesburg basins and is looking to come into the Permian.

Cavness said the company is talking with several Permian Basin operators and that it's a matter of getting out the company's name and what it offers.

"They're interested because they produce so much gas that it has become a real problem for some operators. We want to offer them a solution that is better than flaring," he said.

Crusoe is a blend of energy and technology, he said. Co-founder Chase Lochmiller, who serves as chief executive officer, comes from a technology background. He has served as a general partner at Polychain Capital, a fund that invested in blockchain technologies, digital assets and energy-intensive computing applications. Cavness is a third-generation oil and gas professional and formerly was vice president responsible for finance and later pipeline development at Highlands Natural Resources.

"I've been in a situation where we were drilling for oil and produced quite a bit of gas along with that oil," Cavness said. "It sparked my interest in what to do with that gas."

Crusoe and its employees are proud to be "from an energy background and behaving like professional oil and gas service providers," Cavness said. "All of our procedures and insurance, for example, are standard for what operators would expect from a high-quality service company. We're oil and gas people with a technology component."

What is key is that Crusoe's system offers producers an outlet for the natural gas they would otherwise flare, keeping them in compliance or returning them into compliance with their permits, he said. And it benefits the environment because much less flaring means much less emissions of pollutants such as nitrogen dioxide, sulfur dioxide and volatile organic compounds. Even methane can be reduced, since flaring doesn't always burn 100 percent of the natural gas, particularly in windy conditions, he said.