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Hearing examiner mulls approval of Usk crypto mining operation at Ponderay


At the end of about five hours of testimony Wednesday, a hearing examiner ended the discussion about permitting what could become the largest crypto-mining operation in the country in Usk with a question: What name do I use?

Christopher Anderson, a Spokane County hearing examiner, who also sometimes hears cases for Pend Oreille County, hosted the virtual hearing on whether to approve a conditional-use permit brought by California-based Allrise Capital Inc. to convert a former Ponderay Newsprint Mill into a massive electricity-consuming cryptocurrency mining site.

“I am curious to one point that I’ll admit is slightly confusing in all of this,” Anderson said. “Who is the entity … that this should be directed towards as far as conditions, etc.?”

Spokane-based attorney Taudd Hume, one of two attorneys at the hearing representing Merkle Standard, the company that will operate the cryptocurrency mining operation, didn’t immediately provide the name.

“I think I have an answer for you. Let me check with my colleagues here,” Hume said as he muted his Zoom call for several seconds. “We are going to answer your question with a question.”

Hume said the county’s staff report listed Pend Oreille Real Estate LLC on the application, but Hume noted it would be operated by a different company, Merkle Standard. That’s not to be confused with Pend Oreille Industries LLC, which was another company formed by Allrise Capital.

While the confusion probably won’t effect the outcome of the permit, it represented yet another line of questions for opponents and even those residents who said they would be willing to support the operation.

Susan Hobbs attended the Zoom hearing on Wednesday.

Hobbs, a former member of the Pend Oreille Planning Commission, asked the county to proceed with caution on Merkle Standard’s plans to obtain 600 megawatts of electricity a year, which would equate to two former Kaiser Aluminum Mead smelters operating at full capacity.

“This is the largest thing that has ever come down the pike for Pend Oreille County,” Hobbs said. “If there were ever a time for being certain, that no stones are left unturned, this would be it. I hope we do that before rushing in.”

But Hume, the attorney for Merkle Standard, said the county only needs to follow state and federal law, especially for an area that has had “certain impacts priced into that neighborhood … for a long, long, long time.

“This is a very clean, high-tech use,” he said. “All we are doing is putting computers in boxes, putting them in the parking lot and letting them run.”

However, an appeal filed by Ed Styskel argued the county failed to contemplate the noise impacts on humans and wildlife from more than 30,000 computers and dozens of cooling towers planned for the site.

Styskel, a wildlife biologist, testified about nearby white pelicans, threatened long-eared bats and other species that are known to live in the area.

“The applicant provided no acknowledgment that loud noise is a significant byproduct of 30,000 proposed crypto-mining servers and failed to identify measures that would minimize or avoid public nuisance complaints,” he said.

Hume noted that conflicts over noise generally are dealt with after-the-fact through “nuisance” lawsuits.

“Noise is a very strange animal in the land-use world,” he said. “We don’t have case law that says you don’t have a right to not hear anything. What we live in is a regulatory environment that says you have the right to not hear something at a certain decibel level at certain times.”

Ultimately, Hume argued Styskel’s effort to force the county to perform a more detailed environmental impact statement failed on several fronts.

Under questioning, Styskel could not say how much sound would be created by the computers or whether the 900-plus acre site was currently home to any endangered or threatened species, Hume said.

Proving the impacts was “their job,” Hume argued. “We know that there’s a lot of, quite frankly smart people, that have been able to find lot of information on the internet.

“What we haven’t heard is what happens on the site. That’s what they needed to do and they didn’t accomplish that.”

But the internet appears to have helped Merkle Standard secure a “determination of nonsignificance,” which means the county planning officials did not believe the cryptocurrency mine would have a significant adverse environmental impact.

County Planning Director Greg Snow testified that when he was informed by company officials that the computer servers would generate about 75 decibels of sound, he didn’t know what the equivalent noise level would be.

“I looked on the internet. ‘What does that equate…



Read More: Hearing examiner mulls approval of Usk crypto mining operation at Ponderay

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