Eli McKay and John Weber, volunteers for the Sierra Club’s Coastal Bend Group, already had their hands full fighting plans for water- and energy-intensive projects in Corpus Christi when Bootstrap Energy’s proposal for two cryptocurrency mines appeared on the city council’s agenda in March 2022.
By then, Bitcoin mines were already popping up all over Texas, following China’s ban on cryptomining the prior year. Governor Greg Abbott had swung the state’s doors open, and Bitcoin miners were flocking to cities like Corpus and to far-flung unincorporated areas, where they benefitted from sparse regulations and local officials willing to shell out lucrative tax breaks to lure a growing number of mining facilities operated by Texas firms and others based everywhere from Australia to Singapore.
McKay and Weber knew that these proposed Bitcoin mines would be monsters: Each would use up to 300 megawatts (MW) of energy to power up to 100,000 specialized computers to generate random numbers for a global digital ledger called the blockchain. They also knew that to keep the machines cool, miners employ enormous, noisy fans and often a technique called immersion cooling, which can reduce noise but increases water consumption. The pair had heard complaints from other Texans about the energy, water, and noise impacts of these types of mines.
Given the 300,000-plus-person city’s dwindling reservoirs amid a three-year drought, the activists feared the mines’ consumption. Corpus was already drilling for water—and considering a controversial desalination plant—to supply existing mega-industrial plastics, ammonia, and lithium plants. Weber considered the Bitcoin plans a squandering of limited resources that residents couldn’t afford. “I just think it’s real wasteful—taking electricity and turning it into waste heat and doing nothing with it,” he told the Texas Observer.
During the 2022 city council meeting, then-Assistant City Manager Andrea Gardner assured the council that these mines wouldn’t use “city services” or require municipal infrastructure upgrades. But she did tell members that Bootstrap’s request to de-annex 75 acres on the city’s northwest outskirts would effectively hand the company a huge tax break: Corpus stood to lose more than $70.5 million over a 10-year period, her presentation showed. However, the city would collect an estimated $32 million to $50 million in fees from the company during that decade.
The council ultimately approved the firm’s request despite residents’ stated concerns about the tax gift and the impacts on water and electricity. Councilman Gil Hernandez was one of few to express reservations. “We’re setting [this agreement] up, but 10 years down the road, it could be whole different people, different council, maybe different finance people,” he said during the meeting. “We’re going to look back at this like, ‘What the hell were they thinking?’”
Ultimately, only one of the two proposed Corpus mines was built. Virginia-based Peak Mining, which acquired the project from Bootstrap in December 2023, indicated then that it planned to ramp up the mine to its full 300-MW capacity—enough power to supply as many as 75,000 homes. Peak Mining was sold to Elektron Energy, based in Nigeria, in September.
Even with just one mine, the project has strained the municipal water supply: Billing data from Corpus Christi Water obtained by the Observer shows the Bitcoin mine guzzled 11,563,000 gallons from May to August this year. It consumed 3,950,000 gallons in July alone, an average of about 127,500 gallons a day. Additionally, the owners requested that the city add a wider, 4-inch water meter to the site this year, water utility records show.
That data came as a surprise to Roland Barrera, a city council member who supported the original deal and later received campaign contributions in his bid for a state House seat from two Bootstrap executives, the original Bitcoin miners. “We knew that they’d be using some kind of water, but … it was my impression that they weren’t going to be considered, like, a high-volume user,” he told the Observer. High-volume users are city water customers who consume more than 100,000 gallons a day, Barrera said.
Other documents reveal that the mine operators paid just $2,639 in “Payment in Lieu of Taxes” fees to the city from February 7, 2023, to January 8, 2025—a small fraction of the projected revenues of $3.2 to $5 million per year.
McKay, who is now the Sierra Club group’s vice chair, said members are trying to turn up enough evidence to convince the city to terminate its agreement and reannex the property. “It’s going to put too much strain on our grid,” McKay said. “There’s already too much industrialization in that area, which is pulling water from our very low resources … and I don’t think that the council has done their research on Bitcoin either to have a clear understanding of what some of the consequences are.”
Dozens of data centers and Bitcoin mines, highly energy intensive projects, have proliferated across Texas straining the electrical grid and power plants like this one. (Jordan Vonderhaar/Texas Observer)
Such sagas of lost tax funds and ballooning utility burdens are a dark underside of deals approved by Texas cities and counties as part of a boom in Bitcoin mines, alongside artificial intelligence (AI) data centers, a distinct yet overlapping expansion that’s taken hold since 2021. Both kinds of energy-intensive projects involve huge warehouses of computers that are typically specialized for either cryptomining or AI training.
Those facilities present a threat to the state’s grid—which crashed during Winter Storm Uri in 2021, causing blackouts blamed for killing at least 246 Texans. The projects are such enormous drains that the state’s grid operator often pays cryptominers to cease operations during spikes in demand. Yet the state doesn’t regulate Bitcoin mines and has failed to track how the costs have been passed on to consumers in terms of public revenue cuts and higher electricity rates.
Meanwhile, the Public Utility Commission of Texas (PUC), the state agency that regulates utilities, recently assembled its first registry of the most energy-consuming mines, but the agency is trying to shield the information from the public.
Last November, the PUC belatedly passed a rule that required companies operating mines consuming over 75 MW to report basic information about their mines’ locations and energy consumption. But, in March, the commission denied an Observer records request for that registry, citing “national security concerns” and suggesting that “bad actors” may be intentionally operating mines in ways that could disrupt the grid.
The state attorney general’s office then sided with the Observer, advising the PUC to release much of the information. But the agency sued the AG to block disclosure, arguing that the information “could be used by terrorists in planning attacks on Texas’s energy grid and critical infrastructure through manipulation of the volume of available reliable electricity.”
The AG’s response to the PUC’s appeal to withhold the list did provide sufficient information to confirm that only 13 cryptomining companies, a fraction of the total number operating in Texas, had registered as of February. The commission has yet to fine any company for failing to comply with the 2024 rule, even though an Observer analysis has identified mines above 75 MW associated with at least one firm that appears unregistered.
Without the PUC’s registry, the Observer conducted an independent analysis of Texas cryptomine locations using a combination of open data sources—including corporate data, tax records, and an older list assembled by the nonprofit FracTracker Alliance—finding that since 2021, at least 60 cryptomines have been developed or are under construction. Those mines are located in at least 33 counties statewide, from remote outposts including sparsely populated Pecos County in West Texas to urban areas such as Austin and Temple.
The state’s grid operator, the Electric Reliability Council of Texas (ERCOT), has acknowledged that cryptomining poses a risk to the state’s electricity supply. A March presentation from one of its technical advisory committees identified at least 13 events from 2020 to 2023 in which mines suddenly lost power. While the more common concern about mines is their power consumption, such sudden drop-offs can cause surges that also risk failures and blackouts. The presentation showed that the problem has increased: It detailed another 24 crypto-specific events from November 2023 to March 2025 in which sudden electricity volume losses led to potentially disruptive power spikes.
In June 2024, ERCOT Senior Vice President Woody Rickerson testified during a Texas Senate committee hearing that peak crypto energy consumption was approximately 2,600 MW—similar to that of the city of Austin—with another 2,600 approved to come online. ERCOT’s March internal presentation showed that nearly 3,700 MW of crypto consumption had been approved just in the regions where the 2023-2025 power losses occurred. So far, most losses occurred in Far West Texas, where mines first rapidly proliferated with the help of local tax breaks.
In this year’s legislative session, state lawmakers belatedly tightened the reins on both cryptomines and AI data centers, approving a measure that for the first time grants ERCOT the ability to force large electricity users to shut down during an emergency (rather than just pay them to voluntarily do so). But legislators also passed a bill to create a cryptocurrency reserve that will likely prompt more industry expansion.
Texas’ mines have already consumed enough electricity in the past two years to power 925,000 homes, based on ERCOT’s internal presentation. General electricity consumption is on track to nearly double by 2030, partly due to the boom in both cryptomining and AI data centers. ERCOT’s Rickerson told lawmakers that grid operators expect to add another 11 gigawatts (GW) of cryptomining to the grid by 2030.
Texas consumers will be picking up the tab. A 2023 Texas A&M University study found that wholesale electricity rates rise 2 percent for every 1 GW of cryptomining load added to the state grid, meaning consumers’ rates could rise as much as 22 percent by 2030 just to cover that expansion.
The massive growth comes as cities and counties continue to grant multimillion-dollar tax gifts to mining firms. A search of local property tax abatements reported to the state comptroller revealed at least nine such agreements, from 2021 to 2025, some of which involve firms invested in both mining and AI data training.
The New Jersey-based computing firm CoreWeave, which began as a cryptocurrency company, received an abatement from the City of Plano beginning in July 2023 to the tune of nearly $7 million annually based on its property’s appraised value and the current tax rate. Both the City of Fort Stockton and Pecos County offered approximately $134,801 in annual property tax relief in September 2021 to Lancium, a firm based in The Woodlands that initially invested in mining but rapidly pivoted to AI data training. In January 2022, Pecos County commissioners gave yet another abatement, to Blockstream Services U.S.A. Inc., exclusively focused on mining, costing the county’s 15,000 residents an estimated $2.9 million over 20 years. The three companies either declined to comment for this story or did not respond.
Other cryptominers benefit from generous tax breaks achieved through de-annexation, like the sweetheart deal in Corpus, or through leasing property that was previously granted tax breaks, such as with MARA Holdings’ notoriously noisy 300-MW mine in Hood County.
Nearly 80 cryptominers and AI data centers have also been granted sales tax exemptions as part of a program the state comptroller offers to incentivize the development of both mines and data centers, meaning those companies pay about 6 percent less for electricity than the average Texan.
In unincorporated areas and rural counties, Texans have found they have few tools to stop mines that disrupt their way of life from getting public money. As the Observer previously reported, Navarro County commissioners approved a multimillion-dollar tax break for the state’s largest, 1-GW mine after Riot Platforms bused in over 50 employees to a Tuesday-morning meeting, vastly outnumbering local residents who attended in opposition.
Even counties whose leaders firmly oppose such mines are almost powerless to fight them. That’s what local residents and a Milam County commissioner told the Observer about Austin-based Data Factory’s plans to sink a 15-MW mine on the outskirts of the one-stoplight town of Thorndale. That mine would consume enough energy to power 3,750 homes—more than six times the town’s number of occupied housing units.
When the firm first proposed locating the mine in another site squarely in the middle of a floodplain in 2024, the City of Thorndale unanimously adopted a resolution opposing the development of any more mines in or near the city. Milam County had already become an epicenter for Bitcoin mining by then, hosting a Riot Platforms 700-MW mine and another 564-MW mine in an unincorporated industrial area southeast of Thorndale. (A new fracked gas power plant being developed 15 miles away will help support the mines’ massive energy needs.)
Milam County commissioners managed to convince Data Factory not to build in the floodplain after showing representatives photos of the waterlogged area. By December, the county approved its own resolution against cryptomines except in an area that was already industrialized because of an Alcoa aluminum smelter that, after decades in operation, was permanently closed in 2017.
But the cryptomining company quickly leased a different 10-acre spot 2.5 miles north of Thorndale along rural Farm to Market Road 486 and proceeded with development despite city and county opposition. Area residents banded together, forming a Facebook group to share concerns about the mine’s impact on the area’s energy and water resources, as well as possible noise pollution.
Milam County Commissioner Wesley Payne told the Observer that residents had already complained about the racket from whirring fans used to cool an existing 10-MW Data Factory mine near Rockdale, a slightly larger town 13 miles northeast of Thorndale. The noise near that mine peaked at 99 decibels—louder than a subway or a blender—according to noise statistics and an app-based measurement taken in August. The site has experienced at least four fires since mid-March, according to Rockdale Volunteer Fire Department incident reports.
About 60 mines have been developed or are under construction in 33 counties across Texas. (Source maps from 1841, 1904; public domain)
Local organizer Heather Richter, whose 56 acres near the proposed mine on FM 486 have been in her family since 1913, told the Observer she’s worried that yet another noisy and fire-prone mine just 2 miles away could affect her quality of life and that of her cattle and chickens. Richter contacted several agencies, including the Texas Commission on Environmental Quality (TCEQ) and the U.S. Army Corps of Engineers, as well as state and federal legislators for help, only to learn that cryptomines in unincorporated areas are virtually unregulated. (Though other Texans have tried to get relief by filing civil nuisance lawsuits.)
County commissioners pressed the firm to follow through on its initial promise to hold a public meeting, which finally happened in June. Video obtained by the Observer revealed heated opposition from some 100 community members. “Who here in the community can benefit from Bitcoin?” one man yelled. “Nobody!” a woman responded.
A little later, the crowd erupted in shouted protests over project developer Ryan Nuckolls’ suggestion that the mine would provide jobs and tax revenue. Thunderous applause followed another speaker, who told Nuckolls, “Bitcoin miners in general, if you map out across the United States, this is my opinion, are taking advantage of small rural communities that don’t have the wherewithal to fight back.”
During the meeting, Nuckolls and his brother told residents the mine would use a cooling technique that relies on two water towers supplied with about 100 barrels of water each, though it would still use fans inside the buildings. Payne, the county commissioner, told the Observer the firm has argued its immersion cooling system will prove less noisy. Nuckolls did not respond to the Observer’s request for comment.
Some residents aren’t buying claims that the tower system will prove quieter and less water-intensive than other already-existing mines. Callie Stone, who bought her 5-acre property in October 2023 immediately adjacent to the leased mining site, said she plans to move. “Pushed out is how I feel—like I’m being pushed out of my home that was supposed to be my forever home, and I’m not getting any compensation, any apology, any letter, any communication, anything,” she said.
With the county’s hands legally tied, community members are weighing whether to send a cease-and-desist letter and potentially even sue for injunctive relief once construction starts in earnest, options that may prove prohibitively expensive.
“We did everything we could, and we still failed with it, and that’s the frustrating part,” Payne told the Observer. “There needs to be some kind of change to where we can implement some kind of regulations in certain areas.”
As the Observer has reported, counties’ lack of zoning and regulatory authority is why residents along Hood County’s Mitchell Bend Highway are voting this November on whether to incorporate into a township to introduce noise rules they could enforce against MARA’s 300-MW mine. Residents there say they are already preparing noise- and pollution-related ordinances aimed at the mine and an adjacent fracked-gas power plant that supports it, should they prevail. (On November 4, Hood County voters elected not to form the city.)
Locals there are also separately challenging a planned expansion of the power plant linked to the mine in a contested case hearing process before TCEQ, and some have joined the National Coalition Against Cryptomining, a group actively campaigning for increased regulations.
In Texas cities, organizers have had more luck pushing local officials with more regulatory authority to halt the advance of controversial supercomputing facilities. This is especially true of AI data centers, which sometimes include separate computers that mine Bitcoin but generally focus on feeding massive amounts of data to train AI applications to make predictions and currently number around 100 in Texas, according to data collated by FracTracker cartographer Karen Edelstein.
On August 19, Torrie Martin, sporting a black cowgirl hat and a heart-shaped belt buckle over a floor-length brown skirt, stepped up to the lectern at San Marcos City Hall. The three minutes she had to pour her heart out to the seven members of the San Marcos City Council had begun.
“I’ve been so proud of the ranch my father owns, for it to one day be mine, until recently, because the life I’ve been living for decades and generations out there is being threatened,” she said. “I’m not lying when I say that my life and my future depends on the decision that y’all will be making.”
Torrie Martin, whose ranch is adjacent to a proposed data center, has joined local protests against the project. (Jordan Vonderhaar/Texas Observer)
Property owners immediately adjacent to her 110-acre horse ranch southwest of the city had approached the council in late 2024 for zoning changes necessary to build Dallas-based AI tech giant CyrusOne’s $1.5-billion data center on 200 acres along Francis Harris Lane.
Although AI data center developers purport to offer the public more actual technological benefit than cryptominers, these data centers dwarf even some of the largest Texas cryptomines’ energy and water consumption. Both kinds of massive facilities, some of which are used for both AI training and Bitcoin mining, have been fueling ongoing debate about whether the benefits ultimately outweigh environmental costs. New community organizing networks, including San Marcos’ Data Center Action Coalition—formed in opposition to CyrusOne’s proposal and other planned data centers—argue they don’t.
Another San Marcos project, Denver-based CloudBurst Data Center’s 1.2-GW AI data center on 96 acres southwest of town, for instance, would surpass the energy usage even of the state’s largest 1-GW cryptomine in Navarro County. To power its bevy of supercomputers, the tech startup hopes to colocate it with an Energy Transfer Partners fracked gas power plant. Nearby, Sabey Data Centers, out of Washington, hopes to build another data center on 786 acres.
According to an audio recording, CyrusOne executives told residents and city leaders six days prior to the August council meeting that their 375-MW data center had been allocated 75,000 gallons of water per day from a city already imposing drought restrictions on existing water customers.
In response to swelling opposition, company leaders submitted a follow-up letter saying they themselves would no longer advocate for the planned April 19 rezoning vote. “After listening to your feedback and hearing your concerns, we have withdrawn our involvement in the rezoning case to take the time needed to address the concerns raised and to ensure that any future plans align with the needs and values of our community,” CyrusOne executives wrote. The parcel’s landowners, however, pushed for action anyway.
Following hours of impassioned testimony from Martin and scores of concerned residents, two council members voted down a measure to rezone the land for commercial use, denying developers the necessary supermajority needed to proceed. The vote taken just before 1 a.m. sent the project back to the city’s Planning and Zoning Commission, whose members previously voted 8-1 against recommending rezoning during a similarly impassioned March meeting that stretched past midnight.
It was one of the state’s first grassroots victories against rapidly proliferating, resource-intensive supercomputing facilities.
Martin, whose grandfather bought her current home in the 1970s, told the Observer she first learned of CyrusOne’s plans to build a data center from neighbors who spotted a sign on a property near theirs about the proposed zoning change. To learn more, Martin traveled to Hood County’s Mitchell Bend area to hear the noise from MARA’s cryptomine for herself and discover all she could about residents’ struggle against that mine and a planned expansion of its neighboring fracked gas plant.
She joined the San Marcos action coalition after neighborhood residents held their first street protest in February. Outside City Hall in August, activists blared audio of the Hood County cryptomine’s relentless din from equipment they set up at a table with information about their own data center fight.
At the protest, Martin told the Observer that she tries to imagine how much worse that noise pollution must be for creatures with far better hearing than humans.
“Horses can hear a heartbeat 4 feet away from them,” she said. “That’s a nightmare for animals that can hear frequencies that we can’t even hear, and I have working horses, so it’s like, ‘How’s it gonna be when I ride them?’”
In addition to Martin and the coalition’s worries about potential noise pollution, residents say local roads, water, and power lines are ill-equipped to handle the data centers’ massive construction, water, and energy burdens. In fact, Martin said, residents experienced a brownout in the area on the same day CyrusOne executives held a public town hall about the now-delayed project. She fears the added energy load will not only cause more-frequent outages but also spike her electricity bill.
She and her neighbors worry that retention ponds designed to hold treated water used for immersion cooling could harm wildlife and contaminate the area’s three natural springs. Construction activities could also disturb a historic cemetery that was used by Freedmen and includes graves of formerly enslaved people, they say, though a CyrusOne representative told residents the firm would create a “protection zone” around it.
Save Our Springs Alliance Senior Staff Attorney Bobby Levinski told the Observer that the coalition hopes the San Marcos council will adopt a resolution or ordinance that would limit the locations and potable water usage specifically for data centers.
Another local organizer, Texas State University biology graduate student Silas Jenkins, told the Observer the preliminary win against CyrusOne is just the beginning of efforts to raise awareness about the costs of Texas’ AI and Bitcoin build-out. “We’re building our collective power and meeting one another,” she said. “Most of the people who are working together did not know each other. We came together because of this. … To me, that’s kind of encouraging.”
Back in Corpus Christi, environmentalists and Bitcoin mine opponents celebrated in early September when the city council voted to terminate plans for a controversial seawater desalination plant. Environmental experts had warned the city that the plant’s brine discharge would devastate the bay area’s ecosystem.
Even with desalination sunk, local advocates remain skeptical that large industrial water users like the local cryptomine will be forced to scale back.
“I’m frustrated that [the Bitcoin mine is] even being allowed to continue … because they never talked about using a lot of water and here they are seemingly frivolously using the water,” the Sierra Club’s McKay said. “And they’re not paying their fair share.”
This story was supported by a grant from the Fund for Investigative Journalism.
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