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Missoula County commissioners delay decision on cryptocurrency mining moratorium

Missoula County commissioners admitted their confusion Thursday during a two-hour public hearing on proposed emergency zoning to limit growth of a cryptocurrency mining operation in Bonner.

In fact, they delayed until at least August a decision on the interim zoning plan, which would place a one-year moratorium on home-based and commercial-sized cryptocurrency mining countywide.

Existing mining operations would be exempt from the prohibition, but would not be permitted to expand. During the stand-down, the county would more thoroughly investigate the impacts – and potential future impacts – of such developments.

But the attorney and general manager of one of the companies operating the Bonner mine emphasized that there is no “emergency” necessitating interim zoning.

Missoula County should give Project Spokane a chance, said attorney Jaymie Bowditch. The proposed zoning, he said, would cause the company to postpone future investments, which could harm the business.

“I think what’s lacking here is any definition, or even any evidence at all, of any emergency that requires the adoption of interim zoning,” Bowditch said. “I think there are a lot of unknowns. … But there’s no emergency that justifies Missoula County [prohibiting] future expansion of an existing business.”

Cryptocurrency is a digital currency “mined” by banks of computers that solve complex mathematical puzzles. Successful miners are rewarded with new cryptocurrency stored on digital public transaction ledgers called block chains. The value of one Bitcoin Thursday was over $6,000.

Created in 2009, Bitcoin is the most widely used of 1,200 cryptocurrencies, requiring more and more computing power to solve its mathematical puzzles.

Two commercial-sized cryptocurrency mining facilities are operating in Missoula County, along with an unknown number of home-based mining operations.

The Bonner Bitcoin data center was, until recently, the largest in the world. Last year, the Missoula Economic Partnership estimated that the company would grow from its current 12,000 servers to 55,000.

Because cryptocurrency mines require a large number of computers, they must be cooled by an equally large number of fans. That requires a lot of energy, and creates considerable noise. Montana is an attractive market for cryptocurrency mining companies because of its low electricity rates and cooler climate.

Already, the cryptocurrency mines in Missoula County use as much electricity as about one-third of local households.

The facility in Bonner has operated for two years, uses clean and plentiful hydroelectric power, provides good-paying jobs and gives Montana a role in advancing technology, general manager Dan Stivers said Thursday.

Its power comes from Energy Keepers, the Confederated Salish and Kootenai Tribes’ utility that owns and operates the former Kerr Dam, now called Se̓liš Ksanka Qĺispe̓. The hydroelectric plant has a surplus of available power, Stivers said.

The crypto-mine’s critics were also in attendance for the standing-room-only session, citing concerns about noise from the mine’s cooling fans, greenhouse gas emissions created by the increased energy usage, the potential impact on electrical grid reliability and safety, the disposal of E-waste, and possible fire hazards at home mining facilities that are not designed for high energy use.

One Bonner resident who is an investor in Bitcoin explained that her family can no longer keep their windows open during the summer, and that visitors who rent her Airbnb property complain about the noise.

Stivers countered, saying the operation’s 400 fans – needed to cool its computers – will be retrofitted with quieter blades next month.

Impacts to greenhouse gas emissions and energy consumption were also widely discussed.

Climate Smart Missoula executive director Amy Cilimburg voiced her support for the emergency zoning and talked about the potential impacts of cryptocurrency mining nationwide.

The mines should be required to use renewable energy, and E-waste disposal should be mandatory, she said.

If the county does impose a moratorium, it should use that year to study the potential future impact on electric rates for area residents, she said.

“Our community has goals to reach carbon neutrality so that we have, going forth, a livable planet,” Cilimburg said. “The excessive energy use of cryptocurrency challenges these goals and this is legitimate to carefully consider.”

Commissioners responded to all comers with questions and concessions that they don’t yet know enough to make a good decision.

Commissioner Cola Rowley called Thursday’s hearing “fascinating” and said she gleaned a lot of new information from the presentations.

Commissioner Jean Curtiss wondered about the future, saying there are too many unknowns about long-term impacts and projections.

“We all understand that we don’t understand,” she said.

Thus the commissioners’ plan to have another public meeting in early August to hear more resident input about the possible moratorium. A decision on the interim zoning might be made following the hearing, the board said.