This story originally said the draft law was tabled "on behalf" of MAGA Energy. It has been revised to reflect the fact that the law was tabled because the county was approached by MAGA to create a crypocurrency mining centre.
Sturgeon County residents will get to weigh new rules for cryptocurrency operations later this month.
County council held first reading for its proposed new data processing facility regulations Jan. 25. The draft law goes before a public hearing Feb. 22.
The draft law, if passed, would make data processing facilities (computer sites that process data which could be related to cryptocurrencies) a discretionary use on agricultural, resource extraction, rural industry support, local industrial district, medium industrial (serviced and not), heavy industrial, industrial reserve, and public utility lands.
The law was tabled by county administration after Calgary’s MAGA Energy approached the county with plans to use gas wells in Sturgeon County to mine cryptocurrencies.
Cryptocurrencies such as Bitcoin are currencies secured through cryptography, reports Investopedia. Many of these currencies are based on computer networks and are not issued by a central government authority. People can earn or “mine” cryptocurrencies by having computers complete complex calculations.
MAGA Energy chairperson David Tian said his company owns about 40 natural gas wells in Sturgeon County but doesn’t have the pipelines needed to sell the gas in them. Instead of spending two years and about $2 million to hook up pipelines, his company hopes to use gas from up to 10 of these wells to power computers and mine cryptocurrencies, producing tax dollars for the county and royalties for the province.
County council has heard that each of these sites would create four jobs and generate about $20,000 in taxes a year.
The Vancouver-based Link Global set up a cryptocurrency mine on one of MAGA’s sites in Greystone Manor in 2020 without permission from county or provincial regulators. The Alberta Utilities Commission shut the mine down and is now seeking to fine Link Global about $7.1 million.
That experience has left a bad taste in the mouths of Greystone Manor residents, and they’re not interested in hosting another cryptocurrency operation, said area Coun. Kristin Toms. Still, crypto-mining is an emerging field, and the county does not have any rules in place for it.
“It’s a new industry for everybody,” she said, and most county residents have no experience with it.
Toms said the biggest issue Greystone Manor residents had with the Link Global mines was the noise caused by their generators and computers running 24/7.
“There was this weird metallic buzz incessantly behind them,” Toms said, comparable to having a mosquito in your room at night all the time.
The proposed bylaw would require data processing facilities with power plants to be at least 1,500 metres from any homes and may subject them to noise impact assessments and mitigation. Mayor Alanna Hnatiw told council that the Greystone Manor mines were 685 metres from homes.
Tian said his company plans to house its mines and generators in soundproof steel buildings instead of shipping containers. It was not working with Link Global on these new mines and he would insist its new partner show them they were meeting all regulatory requirements.
Cryptocurrency transactions require vast amounts of energy and produce huge amounts of greenhouse-gas emissions, noted Saeed Kaddoura, a senior analyst with the Pembina Institute. Bitcoin uses about the same amount of energy as Thailand each year, for example, with one Bitcoin transaction producing some 1,038 kilograms of CO2 — equivalent to driving a car from St. Albert to Calgary 13 times, according to the U.S. EPA’s emissions calculator.
Tian said his company hopes to build on-site greenhouses to grow food using waste heat and CO2 from its mines within a year of the start of operations.
Kaddoura said governments should regulate cryptocurrency mining to reduce its environmental impact.
“We can do it cleaner with renewables and carbon offsets. We just have to be telling these companies, ‘Hey, this is something you should consider doing.’”
Toms said she wants to hear more about how MAGA Energy would address the environmental impacts of these operations and how they would ensure its miners followed government regulations.
“We want to be open for business, but we want to make sure residents are happy and businesses are compliant with all the regulations.”