Bitcoin Mining Site Quietly Begins Pulling Water Amid Drought
By Julia Strong, Beatz Alvarado
Highlights:
- Bitcoin mining operation initially operating air-cooled hardware quitely switches to liquid-cooling.
- Data obtained through a public information request shows water use started one month before the City of Corpus Christi entered stage 3 drought restrictions.
Amid drought restrictions that disallow watering lawns in Corpus Christi, a bitcoin mining operation has quietly begun draining about 3 million gallons of water per month to cool its hardware, according to water use data obtained by Chisme Collective.
This is happening despite the original owner of the bitcoin mining operation, Bootstrap Energy LLC, assuring Corpus Christi City Council that the company would not need to rely on the city’s utility services, according to the March 29, 2022, council meeting. At this meeting, two Industrial District Agreements (IDAs) were approved for the project.
“No, we will not provide services,” stated then-assistant city manager Andrea Gardner during the meeting.
In August, the mining site slurped up as much water as 500 homes typically use in Corpus Christi.
In an effort not to provide city services, the City Council voted to deannex a portion of the site in 2022, forgoing more than $70 million in tax revenue that would have otherwise been owed to the City over a span of 10 years.
In exchange for forgoing the tax revenue, Bootstrap agreed to “Payments in Lieu of Taxes,” also called PILOT payments, that would average $10 million per year over the same timeframe.
To date, the City has received a total of $2,698 in PILOT payments from Bootstrap Energy since the agreement was established in 2022, according to records obtained by Chisme Collective through a public information request.
Much has changed since the initial IDAs were established between Bootstrap Energy and the City in 2022, especially for a large cryptomining operation powered by two 300-megawatt substations.
In 2023, amid cryptocurrency prices plummeting, Bootstrap amended one of its IDAs to scale back its cryptomining plans to instead develop a battery storage facility.
The price of bitcoin has begun to rise since the Trump Administration took office. In December, Peak Mining , by Northern Data Group. announced the purchase of Bootstrap’s site for bitcoin mining using “liquid-cooled” hardware.
The City has since established two new IDAs for the site off McKenzie Road with Peak Mining, doing business as 1102 Mckenzie LLC and 1242 Mckenzie LLC. A spokesperson confirmed to Chisme Collective that it has not received any PILOT payments from Peak Mining since the purchase.
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