Denver-based Crusoe Energy Systems buys manufacturer to expand operations
A Denver company that powers cryptocurrency mining and data production with otherwise wasted methane at oil and natural sites has bought another Colorado business to help expand its operations.
Crusoe Energy Systems said Tuesday that it acquired Easter-Owens Electric Co., a third-generation family business that manufactures specialized electrical systems and modular data centers for a number of industries.
Cully Cavness, Crusoe’s co-founder, president and chief operating officer, said Easter-Owens’ 70 employees at its Arvada site will join Crusoe’s 170 employees. The companies didn’t release the deal’s financial details.
Easter-Owens has been a supplier to Crusoe for a few years, Cavness said. Company officials said buying Easter-Owens will allow Crusoe to produce its data centers and related equipment as well as support the company’s third-party manufacturing business.
“Our plan is to grow and invest in this team, in this really high-quality facility they operate here,” Cavness said.
“Cully, Chase and the Crusoe team are building an innovative and important business in our hometown of Denver that aligns with the values and culture of Easter-Owens and the Easter family,” Dave Easter, Easter-Owens CEO, said in a statement. “I look forward to helping ensure a smooth and successful transition for all involved.”
Chase Lochmiller, Crusoe’s CEO, and Cavness started the company in 2018. They’re both Kent Denver School graduates. Lochmiller, who helped create a cryptocurrency hedge fund, “brought the tech side of the partnership,” said Cavness, who has experience in the energy and oil and gas industries.
The partnership grew from discussions the two had about the environmental impacts of flaring at oil and gas sites to burn excess methane gas that otherwise would be released into the atmosphere. Cavness said an average of about 7% of the gas that goes through a flare isn’t combusted and escapes into the air.
Methane is a potent greenhouse gas, trapping 80 times more heat in the short term than carbon dioxide does. Colorado was the first state in the country to regulate methane emissions and the Environmental Protection Agency is developing federal regulations to address climate change.
Crusoe Energy taps the methane emitted at oil and gas sites, converts it to electricity with power-generation systems and uses the electricity to run mobile data centers next to the site. The company runs about 100 data centers in Montana, North Dakota and in North Park in Colorado.
“We go to places where oil and gas operations are flaring natural gas and don’t have access to the traditional pipeline market,” Cavness said. “We deploy systems that capture otherwise wasted energy and natural gas.”
Crusoe started converting the energy to mine Bitcoin, but has diversified into other types of applications that require intensive computer processing and large volumes of power, such as artificial intelligence. The time the modular units are at an oil and gas site ranges from approximately one to three years.
Crusoe pays oil and gas companies for the methane, the main component of natural gas and a byproduct of oil and gas development. Cavness said the company is tapping into approximately 10 million cubic feet of gas per day across its operations and expects the volume to keep growing.
“The Easter-Owens acquisition is part of that rapid expansion of our company,” he added.
Crusoe closed a $350 million equity offering in April. Cavness said the company has worked to be one of the lowest-cost operators of cryptocurrency mining and other high-performance computing services by using a “very unique energy source” and designing an efficient system.
“We’re really built for this type of moment, this type of downturn,” said Cavness, referring to the recent declines in the Bitcoin and high-tech markets.