Local Texans Lay Into Bitcoin Miners Exploiting Energy Woes

Jackie Sawicky has a message for Bitcoin miners moving into Navarro County, Texas: “Don’t piss on our boots and tell us it’s raining.”

Sawicky, the founder of the Concerned Citizens of Navarro County group that operates on Facebook and Twitter, and many others in the community are frustrated with Bitcoin mining startup Riot Blockchain moving into their neighborhood—all with little transparency from local officials. The company’s chief commercial officer, Chad Harris (who goes by GigaChad on LinkedIn and Twitter), made a surprise announcement on April 27 that Riot Blockchain intended to build the biggest Bitcoin mine in the world, right in Navarro County—amid the worsening climate crisis, electricity blackouts, and water shortages.

Many locals are worried about what Riot Blockchain’s move into their neighborhood will bring. Citizens in the nearby city of Corsicana within Navarro County are frustrated that the state’s lax zoning laws have silenced their voices. According to Sawicky, much of the process “has been done behind closed doors,” referring to internal emails she obtained from a Freedom of Information Act (FOIA) request. One email showed that the company first pitched the project to the city council as a data center. Another email from December 2021, roughly four months before the project was publicly announced, warned that there would be backlash once the mine was publicly announced.

“In his surprise announcement, he said that they had been working on this for months and months,” Sawicky said. “Well, that was the first we’d heard about it.”

In response, Sawicky started a petition on Change.org that sought to halt the development of Riot Blockchain’s bitcoin mine, and which has now amassed more than 850 signatures. But it hasn’t stopped the development of the mine. After the current phase of construction is finished in July 2023, the facility—located on a 265-acre site seven miles outside of the city of Corsicana (just over 60 miles from Dallas)—will have 400 megawatts of energy capacity. This is supposed to balloon to 1,000 megawatts of capacity upon completion.

“When asked to have a town hall, we are denied,” Terry Wayne Garner, a local resident and member of Concerned Citizens, told The Daily Beast. “This mine will cause unnecessary harm to our entire ecosystem in our county and others.”

Noise is one major concern. A facility of several Bitcoin mining rigs could approach 100 decibels—equivalent to a jackhammer. While no one has studied the effects of the constant humming, comparable noise pollution is known to alter the behaviors and breeding patterns of animals and can even affect pollination of certain plants. Crypto mines often attempt to insulate sound, but citizens in other towns with crypto mines like Cherokee County, North Carolina, have found such solutions to be futile.

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“Everything has been hush-hush and our elected officials and city council brush their constituents off like a fly,” Katrina Barnhart, another Navarro County local, told The Daily Beast.

Residents also fear what will happen to nearby water systems, which are typically used to cool Bitcoin mining facilities. Texans who face the prospect of drought are nervous the mines will sap up available water, as well the dumping of used heated water back into those systems. The Greenidge Generation Bitcoin mine on Seneca Lake, New York is reportedly warming the lake, with locals comparing it to a hot tub. Navarro County locals are concerned their area might see similar consequences.

But the biggest concerns people have about Riot Blockchain and other Bitcoin miners are tied to energy usage—which has been a recurring summertime theme in Texas thanks to increased temperatures. Mining sites use massive amounts of energy, and Riot Blockchain in particular receives electricity substantially cheaper than anyone else in the county. Its mining site has secured a power discount from TXU Energy Retail Company LLC for 2.5 cents per kilowatt hour until 2030, which is significantly cheaper than the 18.5 cents per kilowatt hour paid by many Texans.

Meanwhile, 17 percent of Navarro County residents are in poverty. Thousands of seniors living on a fixed income and there’s a high rate of single mothers and single-parent households.

Unsurprisingly, Riot Blockchain is pushing back on these concerns. Alexis Brock, the marketing coordinator at Riot Blockchain, told The Daily Beast that the facility will not impact the price of energy or utility costs for residents. During times of high demand, the Bitcoin mining operation can shut down and sell electricity back to ERCOT, Texas’ largest energy provider, at spot prices of 18.5 cents per kilowatt hour.

“The company has been able to position themselves in long-term energy contracts which allows for Riot to power down operations and redirect energy back into the grid,” Alexis Brock, the marketing coordinator at Riot Blockchain told The Daily Beast. “Bitcoin miners act as a power plant source or backup generator that can support the Texas grid during times of high energy demand.”

Locals don’t see it that way. “This is a predatory, exploitative, parasitic industry,” Sawicky said, charging that Bitcoin mining will likely raise the costs of utilities for everyone in the county. “It's Texas consumers who end up paying those for that demand response and that excess energy.”

Riot Blockchain recently announced that they made $9.5 million in power credits in July 2022, curtailing mining operations in Texas during periods of high demand caused by the summer’s record high heatwave. This is considerably more than the $5.6 million they made the same month selling Bitcoin.

On July 22, Riot Blockchain broke ground on their new facility—but according to Sawicky, they didn’t obtain the necessary permit for stormwater runoff from the Texas Commission of Environmental Quality. (Gary Rasp, a spokesperson from the governing body, confirmed this to The Daily Beast.) It also fits a larger trend of Bitcoin mining companies taking advantage of lax regulations while building their facilities, without giving much notice to locals who are also concerned about the environmental impact.

Bitcoin mining uses more than 88 terawatt hours of energy per year—as much as the entirety of Belgium or Kazakhstan. To make the energy usage more palatable, political advocacy groups are using environmental talking points to develop cryptocurrency friendly legislation in places like Texas. Many proponents of Bitcoin, including Texas Governor Greg Abbott, say that Bitcoin’s high energy usage is actually good for the electricity grid because it creates demand for more energy and keeps it flexible.

“The industry has seen a significant increase of renewable energy usage and sustainability,” Brock said, referencing self-reported data from the Bitcoin Mining Council indicating that 59.5 percent of the energy used for Bitcoin mining was sustainable.

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However, in June 2021, China banned cryptocurrency mining due to energy and environmental concerns. At the time, the country was home to roughly 75 percent of the world’s Bitcoin mining capacity, powered mainly by renewable hydroelectric energy. Many of these miners moved to the U.S. and started running on grids tied to natural gas, leading to a drop in the usage of renewable energy sources from 42 to 25 percent. Some mining companies even brought an old coal plant back online.

This is in spite of the fact that crypto enthusiasts are making bold claims that Bitcoin and other cryptocurrencies can actually serve to decarbonize the planet and reduce the effects of climate change.

“If we are in a climate emergency, then we should be doing whatever is necessary to decarbonize the grid as quickly as possible,” Dennis Porter, the co-founder of the Bitcoin advocacy nonprofit Satoshi Action Fund, told The Daily Beast. He argues that Bitcoin mining can help us meet that goal, provided that miners are granted the flexibility to put electricity back into the grid.

And the key to enabling that, Porter argues, is less regulation. “I want to try to do that as best as I can, without having to use the long arm of the government to force us in a specific direction,” he said. (His co-founder, Mandy Gunasekara, orchestrated the Trump-era withdrawal from the Paris Climate Accords.)

Joshua D. Rhodes, a research associate at Webber Energy Group who has consulted for Bitcoin mining companies in the past, cast doubt on some of these claims. Rhodes’ research has found that miners would need to shut off at least 15 percent of the time to draw in more renewable energy. “It is also pretty early to make any definitive claims as it takes time for new demands to result in new supply,” he told The Daily Beast. Short-term increases in energy costs can be expected, he added. (Though he’s dubious the mining facilities will lead to blackouts.)

Meanwhile, John Boswell, who serves as the director of economic development at the city of Corsicana and Navarro County, told The Daily Beast he believes Riot Blockchain’s mining operation will be a net benefit to the community by expanding the property tax base and providing hundreds of new jobs.

“We will address any concerns citizens may have about our Corsicana Facility,” Brock said. “We encourage citizens to ask us questions so we can provide complete transparency to the community.”

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Nevertheless, Navarro County residents remain skeptical and dissatisfied with communication from the county and Riot Blockchain. On Twitter last month, Harris took aim at the Concerned Citizens of Navarro County, writing about the group: “The reality, they don’t want facts. They promote misleading information and when given the opportunity to talk to me directly, it’s chaos.” Harris then blocked the account, according to a screenshot posted onto a private Facebook group and viewed by The Daily Beast.

Sawicky does see a silver lining to this conflict: the disdain for the mine seems to have united progressives and conservatives in the area alike.

“They are constantly erasing us folk in the country, pretending there's all this excess cheap energy,” Sawicky said, adding that it is cheap until the mine drives up costs. “We’re poor, and a lot of people are vulnerable and living on fixed incomes.”

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