This small eastern WA town could become a bitcoin mining hub

by James · November 17, 2022

Skeptical of sustainability

Anything that takes that much power could represent “a lost opportunity,” said Glenn Blackmon, the state’s senior energy policy adviser.

This power could be used to build out charging infrastructure for electric vehicles or to convert buildings from natural gas to high-efficiency electricity, he said.

“We need a lot of clean electricity … to make the energy transformation of our economy that is necessary for us to meet our climate goals,” Blackmon said. “And adding a new burden like blockchain processing is, at best, an additional requirement for clean electricity.”

There’s also a scenario, Blackmon said, where Merkle Standard could end up in a situation where it negotiates to get power from somewhere else, possibly introducing fossil fuels into the mix, he said. He said the state energy office will pitch the Legislature to close a loophole in the Clean Energy Transformation Act and prevent that from happening.

Otherwise, the state does not stand in the way of the project. Just keeping an eye on it. It’s not really the state’s responsibility to decide what is or isn’t a good use of electricity, Blackmon said.

“There are a lot of different things people can do with electricity that they haven’t done historically,” he said.

The potential environmental threat posed by cryptocurrency has drawn a few local opponents in Pend Oreille County, causing a few hiccups.

Richards, the Army veteran who runs a website called Protect Pend Oreille, and retired biologist Ed Styskel objected to the county’s decision that it was not important to the project. Both argued that the Merkle Standard was not upfront about how loud the entire operation could be and how that noise might affect local wildlife, such as the American white pelican that hangs out in the area for part of the year.

In May, the county hearing examiner shot down the complaint and approved a conditional use permit, with the requirement that the crypto operation must comply with state noise regulations.

Stahl calls Richards a “fiction fantasy writer.” Stahl claims that the old wood chip processor was higher than the crypto equipment. But, notes Richards, the newsprint mill did not operate 24/7.

The crypto operation has also come under fire from Responsible Growth NE Washington, a local environmental group that started five years ago protesting — and effectively chasing away — a proposed smelter in nearby Newport.

“When you want that much power, somewhere along that line … you’re going to find coal,” said Phyllis Kardos, a retired teacher and manager of responsible growth.

Kardos says she’s not opposed to reviving the factory and bringing back those jobs. But she worries about the impact of an industry that takes so much electricity and, in her view, gives so little back.

“Someone has to speak for the environment,” she said. “People want to come here, not because of a smelter, or not because of a cryptocurrency. They want to come here because of the rural lifestyle, the environment we have now.”

A question that remains is how long the Merkle Standard will last in today’s market conditions.

Perhaps the market will swing up again, as it has done before, and Merkle will reap the profits.

Or maybe the company will do like others and take the miners to cheaper pastures. Merkle has already shipped some computers to a server farm in South Carolina, where Stahl said the process was much smoother.