Crypto Company’s cryptic attack blocked in rural Kansas
Published 3 hours ago
Above image credit: People sign petitions and buy “no crypto” signs before the McLouth City Council meeting last week. (Cami Koons | Flatland)
MCLOUTH, Kansas — Parked cars along Lucy Street in the center of a normally quiet village.
Flashlights shone as people gathered around folding tables and cutting boards outside the fire station, where the city council meeting was about to begin.
“Anyone want to sign a petition against crypto?” Robin Courtney asked, holding up two clipboards that were nearly filled.
“Yes ma’am!” someone replied, grabbing a clipboard.
In early February, Courtney saw a post on Facebook about a cryptocurrency mining facility being built less than half a mile outside her small hometown.
“I kind of went down the rabbit hole,” Courtney said after seeing the post.
Since then, the town of 858 people has rallied.
A Facebook group was started, scraps of wood spray-painted with “No Crypto Mining” were displayed in front of houses and businesses, and the inboxes of county officials and state representatives were flooded with emails against the project.
Concerns surround just about every aspect of Crypto Colo Center Corp. (CCC). Potential neighbors worry about the environmental impact, the associated noise, the integrity of the property owners and the safety of the operation.
As of Monday afternoon, CCC’s application for a conditional use permit was pulled from consideration and the Jefferson County Board of Commissioners issued a 12-month moratorium on similar cases.
It can be considered a battle won. But McLouthians don’t think this is the end of the land use war.
Origin
In December 2022, CCC applied for a conditional use permit on behalf of the property owners Dei Vitae Enterprises.
Under CCC’s plan, it would harvest natural gas available on the property to produce 32.4 megawatts of power — enough to power 13,000-29,000 homes per year, according to the Nuclear Regulatory Commission — offering co-location services.
Colocation services (sometimes called carrier hotels) house, operate, protect, and manage servers for outside companies that use them for things like crypto mining or other online functions that require massive amounts of computing.
CCC also plans to build an Internet Exchange Point (IXP) in the region to provide the high internet speeds required by co-location facilities. Kansas is one of 17 states without an IXP, although Kansas City is home to one of the larger IXPs in the country.
In late January, property owners within a 1,000-foot buffer zone of the CCC property were notified of the application and asked to submit a public comment to Jefferson County.
The application and the letter to surrounding property owners were included with many other documents in the Planning Commission’s staff report, published on February 22.
Edith Williams started the private Facebook group “Keep JeffCo Rural” in early February. It has gained more than 700 members and is the primary way people have shared information and research on the issue.
“I was appalled at how close it is to the city,” Williams said.
Interested locals began investigating and found stories where similar operations in North Carolina affected quaint rural towns with near-constant turbine-like noise and disturbed wildlife.
Noise is the primary concern for most residents in and around McLouth.
More than 75 emails and letters were sent to the county’s planning commission, all opposing the facility. Many of the letters described quiet mornings and evenings spent on front porches and feared that the rural lifestyle valued in McLouth would be tarnished.
They also fear that the noise will cause people to move out of the already struggling city.
People pointed to a large explosion and fire that occurred on the property in mid-December. According to Jefferson County Fire District #9, six surrounding fire districts responded to extinguish the fire.
According to the staff report, CCC did not provide an emergency plan. Safety from such incidents is a major concern for the community, considering that CCC will operate gas and oil wells and cool machinery that is in operation.
The CCC site is approximately 0.5 miles outside the city limits of McLouth. As such, the city does not have the power to do much. According to the county planning rules, however, a town within a three-mile radius of the area targeted for a conditional use permit application can submit a recommendation to the county.
About 140 McLouthians — roughly one-sixth of the city’s residents — showed up last week to make sure their city council knew the will of the people.
Many came to learn more about the project, share their frustrations with each other and get “we say NO to crypto” signs.
CCC was not represented at the council meeting.
Council members made a unanimous motion to recommend denial of the conditional use permit, acting on the original plans submitted by CCC, although they noted that CCC had submitted revised plans earlier that day.
People planned to turn out just as strong on Monday as the Jefferson County Planning Commission was to recommend approval or denial of the CCC’s plan to the Jefferson County Commission.
But they didn’t need to.
Earlier in the day, the conditional use permit was withdrawn by the property’s new owners. Dei Vitae Enterprises sold the property to another company over the weekend.
Immediately, the Jefferson County Board of Commissioners approved a resolution to prohibit the installation or development of data centers in Jefferson County for 12 months.
Stuck in the web
That doesn’t necessarily mean the end of the controversy.
Those against the project have been distrustful of CCC, Dei Vitae Enterprises and related entities since its inception.
Firstly, the two companies are in active litigation and have a complicated relationship.
The staff report included a lengthy document from Phil Hook on behalf of ARC Energy Development, an established company in the area, which paints a murky picture of the ownership of the oil and gas wells on the property. According to the document, the rights have shifted between KLMKH Inc. (another oil and gas company) to Dei Vitae and to ARC Energy.
The same document also questions CCC’s ability to meet its energy needs through its gas reserves alone and raises concerns about the toxicity of the gas it plans to harvest.
Representatives of CCC stated in an interview with Flatland that the company had the rights to its wells, and they had tested negative for hydrogen sulfide (a toxic gas common in oil and gas refining).
People in McLouth note that CCC’s history has evolved over time.
At one point, the company’s website boasted the support of Kansas lawmakers. The claim was removed after Kansas Representative Lance Neelly attended the city council meeting in solidarity with McLouth.
As of Wednesday, the CCC website was nothing more than a landing page. Previously, it described land, natural gas wells, IXP potential and employees.
Such swings fuel the passion of Keep JeffCo Rural Facebook posts.
The city voiced its opposition, and the county planning commission’s staff report was negative, but it did not recommend denial of the CUP.
“Although the application for this use was complete, the information provided therein is lacking,” the report said. “Stated public benefits have been offered by CCC, but no evidence demonstrating such benefits has been provided to employees. Staff recommends that CCC be given an opportunity to provide this information before a decision is made.”
Steve Cisneros, vice president of government relations for CCC, said future applications will be much richer, including more environmental reports, emergency plans and a better explanation of the job opportunities the facility will provide.
According to Cisneros, most of these studies have already been conducted.
CCC’s submitted economic impact plan mentioned it would create 35 jobs, but did not specify their nature or whether they would be available to local residents.
David Diaz, chief technology officer at CCC, has worked on IXPs and facilities like the one CCC plans to build. Diaz said all of these developments employed and trained local workers in these positions and gave them the core networking skills to later land jobs at Google and the like.
“The same thing would happen here,” Diaz said of the CCC site.
During the first year of CCC’s operations, Diaz estimates there will be about 50 such positions, and he hopes many of them will be filled with eager Jefferson County applicants.
“It’s really stuff you pick up on the job and go through training,” Diaz said. “As long as you have an interest in technology and a motivation, you can learn this.”
Cisneros said the company wants nothing more than to be part of the fabric of Jefferson County. If that means waiting a year, according to the moratorium, that gives more time to make amends with the community.
“We want to be part of the community, part of the fiber,” Cisneros said. “If they feel they haven’t been heard, that’s something we can improve. That’s what we’re going to do is improve. We want to help the community and work with them and walk side by side.”
Cisneros and other members of the CCC plan meetings to get to know the people of McLouth and make them feel included in the development.
So far, this effort has not been made. According to Cisneros, CCC acted on the advice of its legal counsel.
Mayor Keith Meador said McLouth will not be won easily.
“I don’t think there’s anything they can do or tell us that will change that,” Meador said. “The level of noise that this thing would create would be harmful to the human environment and to our animals … In my opinion, there is no amount of money that this could generate that justifies destroying it.”
Meador’s voice cracked as he talked about the way he’s seen his city react over the past month.
“This town pulls together for everything. They stand side by side, shoulder to shoulder to fight something, and then they stand toe to toe, nose to nose to fight for each other,” chuckled Mead. “They love their community.”
Keep JeffCo Rural is still as active as before Monday.
Courtney said she doesn’t see the community backing down. She noted that the issue has brought people closer together.
“I haven’t seen people come together like that, other than (for) our high school sports team,” Courtney said. “It gives you hope that when the time is needed, we’ll all have each other’s backs.”
Cami Koons covers rural affairs for Kansas City PBS in association with Report for America. The work of our Report for America corps members is made possible in part through the generous support of the Ewing Marion Kauffman Foundation.
