Corsicana group protests against Riot Blockchain’s Bitcoin mining facility

Jackie Sawicky, 42, scrolled on Facebook in late April when she saw a video of a surprising announcement about economic development from the city of Corsicana. Confused, she clicked to see.

She learned that Castle Rock, Colo.-based Riot Blockchain, one of the largest Bitcoin mining companies in the world, is building a massive crypto-mining facility on a 265-acre property in the Navarro County community of about 50,000 residents. It sits near the end of a high-voltage transmission line – known as a switch – that will supply the electricity needed to extract digital currency.

“You had two very valuable resources,” said Chad Harris, Commercial Officer at Riot. “You had the Navarro switch and you had water.”

When completed, the plant will have a maximum capacity of 1 gigawatt, enough power to power 300,000 to 1 million homes in the United States. It is over 30% larger than Rio’s capacity at the existing facility about two hours away in Rockdale.

“27 months ago, I read an article in a magazine that took me to Rockdale, Texas, and a team of four people raised money and built the largest Bitcoin mine in North America,” he said. “And today there is the team of people over 440 strong, and we come to Corsicana to build the largest in the world.”

When the announcement video ended, Sawicky, 42, and a self-proclaimed environmentalist, immediately began organizing opposition to the project through a Facebook page called “Concerned Citizens of Navarro County,” which has more than 500 members. She also started a change.org petition, titled “NO to Riot Bitcoin Mine in Navarro County,” which has 632 signatures with a goal of 1,000.

“They announced it as something we should be grateful for,” Sawicky said.

The grassroots organization says that they do not want the burden of the plant on the already fragile infrastructure. Bitcoin mining is energy-intensive and “dependent on cheap energy to make money,” according to a recent report from Houston-based global energy business consulting firm Opportune LLP.

“They use our resources, and what do we get in return?” said Sawicky, who considers cryptocurrencies a Ponzi scheme. “We can not go into a store and buy anything from them.”

The group is fighting against a state that has rolled out a welcome mat for crypto miners, and encourages them to move in and take advantage of cheap electricity prices. Governor Greg Abbott has worked with the Texas Blockchain Council lobby group to make the state more attractive to miners. In February, he did twitret“Lone Star State is poised to become a world leader in blockchain and cryptocurrency.” Other states, including New York, have imposed moratoriums on cryptocurrencies.

Riot, which generated $ 213 million in revenue last year, says the operation will have an economic impact of $ 1 billion for the county over 10 years.

Phase one of the project will create 270 direct jobs to erect four 100,000-square-foot buildings on the property about 10 miles south of Corsicana off FM709. Riot will not know if it will need more hiring until after it has completed the final planning process, said Riot spokeswoman Trystine Payfer.

The company expects the site to be online, but not at full capacity, by July 2023. Riot is still in negotiations for tax cuts, which the Rockdale site also received. Riot has not disclosed an approximate figure for taxes it expects to pay. The company plans to share financial consequences, Payfer said.

“99.9% of people are ecstatic,” Harris said.

A controversial project

Miners have flocked to Texas due to the state’s deregulated grid and support policy.

Payfer declined to say how much water and electricity Rio’s Rockdale site uses, saying it had not completed forecasts for use on the Corsicana site. When Dallas Morning News asked for data on Riot from the state power grid, said spokeswoman for the Electric Reliability Council of Texas, Trudi Webster, that ERCOT does not comment on specific operators.

Opponents say the announcement is particularly bad timing given that Navarro County is in a drought and Rio’s facilities use water to cool equipment. A state government page shows that 100% of the county’s residents feel the effect of the 27th driest of the 128 years recorded.

The radio station KRVF-FM 106.9 The Ranch in Corsicana posted about the Bitcoin mining plan on its Facebook page and received mostly skeptical comments, including: “How much of our precious water supply do they waste?”

One commentator acknowledged the negative comments and said: “How funny how people get angry and become experts every time something new comes to town.”

Harris told The news that Riot started talking to the landowner in the Corsicana area last fall. The owner liked the idea of ​​selling his land to a company that could add jobs to the community, Harris said. At the announcement event, Harris said the salary would range from around $ 15 to $ 35 per hour, in addition to paid positions. He also noted that the Rockdale website, which employs around 225 full-time employees and 400 full-time contractors, has a salary of $ 10 million.

“Many people do not understand cryptocurrencies, but everyone knows jobs and sales taxes,” said Harris, who plans to move to the community.

Sawicky said she believes crypto companies are benefiting from general confusion about the still new industry.

“Every time I’m in public, I ask people if they’ve heard of the Riot facility, and they usually say something like ‘I’ve heard of it, but I do not understand,'” she said.

Will the bills go up?

A 2021 University of California Berkeley study based on the state of New York found that mining increased monthly electricity bills by about $ 8 for individuals and $ 12 for small businesses. But Corsicana City Councilwoman Susan Hale said she does not think that will be the case in Corsicana because of Texas’ unique tool market.

Lee Bratcher, head of the Texas Blockchain Council, said he does not believe any crypto mining company can guarantee that it will not increase electricity prices any further. He said there are three possibilities: The facility could cause society’s prices to fall, remain the same or rise slightly.

“My best guess is that they remain the same,” Bratcher said.

Similarly, spokesman Mike Hoke of the Public Utility Commission of Texas said that electricity prices are affected by state or regional factors, which means that a large power user down the street, such as the Riot Blockchain, will not directly affect local electricity prices.

Crypto-miners say they can help balance supply and demand online because they take as much power as they can get in non-rush hour. And when the network can not handle them during high periods, they log off and sell the power back to the network to make money and keep the power on for homeowners and businesses. In February, Harris spoke with The news about voluntarily shutting down the Rockdale area ahead of a winter storm in Texas.

Any increase in prices noticed at a place like Rockdale this year may be a result of other factors. Power prices have skyrocketed across the state because natural gas prices have skyrocketed. Electric bills are over 70% higher than a year ago for private customers in Texas.

But ERCOT is aware of the strain that many crypto miners can have online and has taken steps to curb the speed at which they come online. In March, it established an interim process that requires impact assessments to be submitted before miners are allowed to connect to the grid. It also selected a working group to come up with a more permanent set of standards for mining projects in Texas.

“Although it has historically taken about two years before the activities related to a request for high-load interconnection have been realized, crypto mining projects often become operational in less than a year,” according to a report by Houston-based law firm Vinson and Elkins LLP .

The inhabitants of Corsicana are also worried about the water bills. One of the city’s water sources, Halbert Lake, recently underwent an expansion, which led some to wonder if this was a preparation for Riot and if they would have to pay the bill. However, the city says that Riot will get the water from Navarro Mills Lake, which is 97.1% full, and not from Halbert Lake, which is 88% full. During an economic development meeting on June 7, the Corsicana authorities said that there is enough water for Riot without having to upgrade the system.

Do the inhabitants have a say?

The economic development meeting on June 7 ended with a member of the public standing up to say: “We need a public forum, and we must vote on this project!”

Sawicky and other members of her grassroots organization claim that the project was considered behind closed doors and should have been voted on by the community because of its proximity to homes. Comparing the Corsicana area, which is in the middle of a neighborhood, to that of Rockdale, which has a small population of about 5,300, is like comparing apples to oranges, she said.

A neighbor of the Corsicana facility, Carla Steele, posted on Facebook that she “strongly” protests against the project.

“I live in the country for a reason,” she wrote. “I raised my family here on land that has been in our family for generations. We breed livestock and crops. We live by and for the country. I want my grandchildren to be able to enjoy the family land as much as those who came before them. “

One thing neighbors should not worry about when the facility is built is the noise. Riot uses an immersive cooling system where the computers live in a mineral oil substance, which means that neighbors should not hear anything. Riot says the first phase of construction, which could cause some noise, is estimated to last 365 days.

City Councilwoman Hale said she is aware that neighbors living near the project are not happy about it. But because Navarro County has no regulatory laws, these neighbors have no say in the project, she said.

“I understand why people are worried, but I also think that when you live in a city without regulations, there is nothing you can do,” she said. “They say we did not ask for their input, but what kind of input? It’s not an exchange. “

While the facility is in Corsicana, it is in an unincorporated area, meaning the city and its residents have no say in how the land is used, said John Boswell, economic development director for Corsicana and Navarro County.

Hale said she and others did research and do not think the bills will increase. The city will sell the facility for about $ 2 million in water per year, and it has the resources to do so, she said.

Corsicana mayor Don Denbrow reiterated Hale and Boswell, saying the project is a “good addition” to the county.

Sawicky is not convinced.

“The city says it has no control over this, but they are the ones cheering on it,” she said. “They did not tell us in advance because they knew we would be against it.”

Riot will be the county’s largest taxpayer and a top-10 employer when the plant is completed, Boswell said. It will also indirectly increase retail and housing markets in Navarro and surrounding counties, he said.

“Chad Harris encouraged us to contact people in Rockdale,” he said. “We did, and they had positive things to say about Riot Blockchain.”