Bulls Gap crypto mine discussions continue, even after ban

BULLS GAP — Despite a Hawkins County ban against cryptocurrency mines and data centers, ExoticRidge is still pursuing its Bulls Gap project, and residents are still fighting it. ExoticRidge, a Kentucky-based company, seeks an air pollution permit with the Tennessee Department of Environment and Conservation for two natural gas engines. The permit application was filed before the Hawkins County Board of Commissioners banned the company's operations in a Sept. 22 meeting. TDEC received over a dozen public comments concerning the permit during a monthlong period. Commenters asked the state to deny the permit — citing energy, health and legal concerns — and for updates on the application's status. Informational meeting TDEC held two meetings in late November to answer these questions and hear more from the community. John Fuss and Jan Compton fielded attendees' questions at a Nov. 25 session. Fuss is a manager within TDEC's Division of Air Pollution Control, while Compton is TDEC's director of external affairs for its Johnson City office. Many questions fell outside of Fuss's — and the permit's — purview. Attendees asked about noise, odor, radiation and more. They asked about the mine's possible effect on livestock and perceived lack of economic benefit. Fuss said the air pollution division can only act within its authority. It's bound by the Tennessee Air Quality Act and state regulations, which consider health-related air pollution standards — not these other factors. Noise, he said, is a zoning issue as it relates to nuisances. One Bulls Gap resident said the state hasn't considered the issues Hawkins County residents are most concerned about. "If you put blinders on a horse, it can only go in one direction," he said. "I suggest you take the blinders off." The crowd clapped in agreement. TDEC's Johnson City Environmental Field Office has a broader scope, representing more TDEC divisions. Fuss encouraged residents to reach out to the office at 423-854-5400 about water or solid waste concerns. Attendees also asked how TDEC can consider granting a permit to a business banned by county rule. Again, this factor lies beyond the division's responsibility to ensure air pollution follows regulations. Compton said there are too many counties — with ever-changing laws — for TDEC to tailor its actions by location. However, even if TDEC grants the permit, ExoticRidge can't violate the county's ban. Jennifer Donnals, the senior communications advisor for TDEC, told the Kingsport Times News in late October that an environmental permit doesn't give the power to break municipal rules. Hawkins County and TDEC work independently of each other, Compton said at the Nov. 25 meeting, and the permit will not override the ban. If ExoticRidge operates without county approval, Fuss said it would be an issue for the county to enforce. A few residents asked why TDEC doesn't consider the combined emissions of an area, since ExoticRidge's site is next to a gas fractionation plant. Fuss said emissions can be grouped together only if the sites share common ownership, location and business type. ExoticRidge and the plant do not meet these parameters beyond location, he said. Residents were also concerned about TDEC's ability to hold ExoticRidge accountable for its effects on the area. Fuss said the permitting process includes verifying the information ExoticRidge gave TDEC about its emissions. The permit is a legally enforceable document; purposefully providing false information is a crime. "That permit will have conditions in it that have limits, that have testing requirements, that have record-keeping," Fuss said. Violating these requirements results in penalties such as fines. If anyone has information relevant to the air pollution permit, Fuss said to email air.pollution.control@tn.gov. This does not include public comment. ExoticRidge CEO Will Daugherty told the Times News in a written statement that his company takes the community's concerns seriously. "We will continue working directly with Hawkins County officials, community members and regulators to ensure that all aspects of the project are clearly explained, responsibly managed and fully compliant with Tennessee's environmental standards," he wrote. "We value the opportunity to engage with the community and will remain available for constructive dialogue in the days ahead." Daugherty comment Daugherty continues to advocate for his project in the two months since the county's ban. "The sentiment expressed by a lot of the commissioners and the mayor was that [the ban] was a temporary stopgap, and they were hopeful we could come up with some common sense restrictions," Daugherty said during a phone interview before the TDEC meeting. ExoticRidge has invested "quite a bit" of time and money into the site, he said. He's been working on this project for over a year, and already bought the generators that await TDEC approval. This, along with the site's fuel source — a flame byproduct from the neighboring gas fractionation plant — has driven Daugherty to try changing his public perception. He's met with Hawkins County Mayor Mark DeWitte. He's attended meetings: the county commissioners, industrial development board and Bulls Gap Board of Mayor and Aldermen — speaking at the latter on Nov. 17. Daugherty said he wants to be a good partner to Hawkins County. The company has been put on a scale it can't be, he said, due to a limited fuel source and no intention to tap into local utilities beyond an internet connection. He said the site would have two generators and 1,500 "shoebox" computers, named for their relative size. That's five times as many computers as the company's next-largest site, although Daugherty said this location would have a similar footprint to another project.The site would also have data pods, which are around the size of shipping containers. Daugherty said these pods typically emit 70 decibels at 50 feet. The generators, according to manufacturer Caterpillar, emit 72 decibels at 50 feet. "[The sound from the pods] is dependent on how hard you're running the equipment," Daugherty said. "For this particular site, our goal is to have it running in a very efficient mode, which keeps it from getting hot and reduces the cooling requirements — [which is where] most of the noise originates from." He said the crypto mine should emit an equal or lesser amount of noise as the flame byproduct, and can further mitigate the noise with trees and other methods. This, along with less light from the flame and tax revenue, makes the project a net benefit for Hawkins, he said. Daugherty said the site's expansion depends on how much fuel is available, and he believes the two generators to be sized appropriately. "If there's additional gas, our prerogative was to use what's available and to diminish the flare as much as we can — or, ultimately, entirely," Daugherty said. "If there's excess fuel after our utilization from these two generators, that is something we would make an evaluation of." If ExoticRidge wants to expand, Daugherty would have to return to TDEC for approval. Fuss estimated at the Nov. 25 meeting that if ExoticRidge sought another three to four generators, it could trigger a "very rigorous" round of permits. He said most companies choose to scale back rather than do this.