Crypto Company’s Cryptic Foray Blocked in Rural Kansas Keeping it Rural in McLouth 

MCLOUTH, Kansas — Parked cars lined Lucy Street in the center of a normally quiet country town.  

Flashlights glowed as people clustered around folding tables and clipboards outside of the fire station, where the City Council meeting was about to begin. 

“Anybody want to sign a petition against crypto?” Robin Courtney asked and held up two clipboards that were almost filled.  

“Yes ma’am!” someone replied and grabbed a clipboard.  

At the beginning of February, Courtney saw a post on Facebook about a cryptocurrency mining facility being built less than half a mile outside of her small hometown.  

“I kind of went down the rabbit hole,” Courtney said after seeing the post.  

Since then, the town of 858 people has rallied.  

A Facebook group started, scrap wood spraypainted with “No Crypto Mining” went on display in front of houses and businesses, and inboxes of county officials and state representatives were inundated with emails against the project.  

Concerns surround just about every aspect of Crypto Colo Center Corp. (CCC). Would-be neighbors fret about the environmental impact, the associated noise, the integrity of the property owners and the safety of its operations.  

As of Monday afternoon, CCC’s application for a conditional use permit was withdrawn from consideration and the Jefferson County Board of Commissioners issued a 12-month moratorium on similar cases.  

It might be considered a battle won. But McLouthians don’t believe this is the end of the land-use war. 

Origins 

In December 2022, CCC applied for a conditional use permit on behalf of property owners Dei Vitae Enterprises.  

According to CCC’s plan, it would harvest natural gas available on the property to produce 32.4 megawatts of power — enough to power 13,000-29,000 homes per year, according to the Nuclear Regulatory Commission — provide colocation services.  

Colocation services (sometimes called carrier hotels) house, power, protect and manage servers for outside companies who use them for things like crypto mining or other web functions that require enormous amounts of computer processing.  

CCC also plans to build an Internet Exchange Point (IXP) in the region to provide the high internet speeds required by colocation facilities. Kansas is one of 17 states without an IXP, though Kansas City is home to one of the larger IXPs in the country.  

Towards the end of January, property owners within a 1,000-foot buffer zone of the CCC property were alerted about the application and asked to submit public comment to Jefferson County.  

The application and letter to surrounding property owners were included along with many other documents in the Planning Commission’s staff report, published Feb. 22. 

Edith Williams started the private Facebook group “Keep JeffCo Rural” in early February. It has gained more than 700 members and is the primary way folks have shared information and research on the issue.

“I was horrified at how close it is to town,” Williams said.  

Interested locals started to research and found stories where similar operations in North Carolina affected quaint rural towns with a near constant turbine-like noise and disrupted wildlife.  

Noise is the primary concern of most residents in and around McLouth.  

More than 75 emails and letters were sent to the county’s Planning Commission, all opposing the facility. Many of the letters described quiet mornings and evenings spent on front porches and feared the rural lifestyle cherished in McLouth would be tarnished.  

They also fear the noise will cause people to move out of the already struggling town. 

Folks pointed to a large explosion and fire that occurred on the property in mid-December. According to Jefferson County Fire District #9, six surrounding county fire districts responded to extinguish the fire. 

According to the staff report, CCC did not submit an emergency response plan. Safety from such incidents is a large concern for the community, considering CCC will be operating gas and oil wells and cooling perpetually operating machinery. 

The CCC site is about 0.3 miles outside the city limits of McLouth. As such, the city doesn’t have the power to do much. Under the county planning rules, however, a city within a three-mile radius of the site targeted for a conditional use permit application can submit a recommendation to the county.  

About 140 McLouthians – about one-sixth of the town’s residents – showed up last week to make sure their city council knew the will of the people.  

Many came to learn more about the project, share their frustrations with one another and obtain “we say NO to Crypto” signs.  

CCC did not have representation present at the council meeting.  

Council members made a unanimous motion to recommend denial on the conditional use permit, acting on the original plans submitted by CCC, though they noted CCC had submitted revised plans earlier that day.

 Folks planned to turn out just as strong on Monday as the Jefferson County Planning Commission was scheduled to recommend approval or denial of CCC’s plan to the Jefferson County Commission.  

But they didn’t have to. 

Earlier in the day, the conditional use permit was withdrawn by the property’s new owners. Dei Vitae Enterprises sold the property to a different company over the weekend.  

Promptly, the Jefferson County Board of Commissioners approved a resolution to prohibit the installation or development of data centers in Jefferson County for 12 months.  

Stuck in the Web  

That doesn’t necessarily mean the end of the controversy.  

Those against the project have been distrustful of CCC, Dei Vitae Enterprises and related entities since the beginning.  

For one, the two companies are in active litigation and have a complicated relationship. 

The staff report included a lengthy document from Phil Hook on behalf of ARC Energy Development, an established company in the area, that paints a cloudy picture of the ownership of the oil and gas wells on the property. According to the document, rights have shifted between KLMKH Inc. (another oil and gas company) to Dei Vitae and to ARC Energy.  

The same document also questions CCC’s ability to meet its energy needs through the gas reserves alone and brings up concerns about the toxicity of the gas it plans to harvest.  

Representatives of CCC stated in an interview with Flatland that the company had the rights to its wells, and they had tested negative for hydrogen sulfide (a toxic gas common in oil and gas refining).  

Folks in McLouth note that CCC’s story has evolved over time.  

At one point, the company’s website boasted support from Kansas legislators. The claim was removed after Kansas Rep. Lance Neelly attended the city council meeting in solidarity with McLouth.  

As of Wednesday, the CCC website was nothing but a landing page. Previously, it detailed the land, natural gas wells, IXP potential and staff.  

Such fluctuations fuel the passion in Keep JeffCo Rural Facebook posts.  

The city voiced its opposition, and the county’s planning commission’s staff report skewed negatively, yet it did not recommend denial of the CUP.  

“While the application for this use was complete, the information provided therein is lacking,” the report read. “Stated public benefits have been offered by CCC, but no evidence showing such benefits have been provided to staff. Staff recommends that CCC be given an opportunity to provide this information prior to a decision being made.” 

Steve Cisneros, vice president of government relations for CCC, said future applications will be much richer, including more environmental reports, emergency response plans and a better explanation of the employment opportunities the facility will bring.  

According to Cisneros, most of these studies have already been conducted.  

CCC’s submitted economic impact plan mentioned it would create 35 jobs but did not specify their nature or if they would be available to locals.  

David Diaz, the chief technology officer with CCC, has worked on IXPs and facilities like what CCC plans to build. Diaz said all these developments hired and trained local workers in these positions and gave them the core networking skills to later land jobs at Google and the like.  

“The same thing would happen here,” Diaz said of the CCC site.  

Within the first year of CCC’s operations, Diaz estimates it would have about 50 positions of this nature, and he hopes many of them will be filled with eager Jefferson County applicants.  

“It’s really stuff you pick up on the job and go through training,” Diaz said. “As long as you have an interest in technology and a motivation, you can learn this stuff.”  

Cisneros said the company wants nothing more than to be a part of the fabric of Jefferson County. If that means waiting a year, per the moratorium, that offers more time to make up with the community.  

“We want to be a part of the community, part of the fiber,” Cisneros said. “If they feel that they’ve not been heard, that’s something we can improve. That’s what we’re going to do is improve. We want to help the community and work with them and walk side by side.” 

Cisneros and other members of CCC are planning meetings to get to know the folks of McLouth and make them feel included in the development.  

Thus far, those efforts have not been made. According to Cisneros, CCC was acting under the advice of its legal counsel.  

Mayor Keith Meador said McLouth won’t be won over easily.  

“I don’t think there’s anything they could do or tell us that would change that,” Meador said. “The noise level that this thing would create would be detrimental to the human environment and to our animals … In my opinion, there’s no amount of money that this could generate that would justify destroying that.”  

Meador’s voice cracked as he talked about the way he’s seen his town react in the past month.  

“This town pulls together for everything. They stand side by side, shoulder to shoulder to fight something, and then they’ll stand toe to toe, nose to nose to fight for each other,” Mead chuckled. “They love their community.”  

Keep JeffCo Rural is still as active as it was before Monday.  

Courtney said she doesn’t see the community backing down. She noted the issue has brought folks closer together.  

“I haven’t seen people come together like that, other than (for) our high school sports team,” Courtney said. “It gives you hope that when the time is necessary, we’re all gonna have each other’s backs.”  

Cami Koons covers rural affairs for Kansas City PBS in cooperation with Report for America. The work of our Report for America corps members is made possible, in part, through the generous support of the Ewing Marion Kauffman Foundation.