Residents grow concerned over incoming crypto operation in Tennessee: 'Our concerns are regarding how this facility will be powered'

A Tennessee cryptocurrency mining facility is facing blowback as residents worry about its impacts.

What's happening?

Memphis Light, Gas, and Water entered an agreement with Merkle Standard to provide 45 megawatts of electricity every 30 minutes during off-peak hours for the data center, the Institute for Public Service Reporting said. Despite Merkle's marketing itself as community-oriented and low-carbon, the institute reported, its "business practices are not consistent with the Memphis area's Climate Action Plan."

"Every municipality in our country needs to be thinking about how they want to deal with data centers," Memphis City Council member Jeff Warren said.

It's the second supercomputer project in South Memphis after Elon Musk's xAI venture. Both have been criticized for contributing pollution to an already industrialized area. NPR reported that city officials were unaware xAI was coming to the city and that the company violated environmental regulations during construction. It will use 150 megawatts as well as 1 million gallons of water per day.

Locals worry that a second data center makes for a growing trend, and the institute noted that the crypto industry is growing in the South, where regulations are favorable.

"Our concerns are regarding how this facility will be powered," Memphis Community Against Pollution President KeShaun Pearson told Fox13 Memphis about the mining operation. "We're also concerned with how these computers will be cooled. Will they use our years-old and aged-to-perfection aquifer water that should be used for our families? What is the solution there, and how much will it accelerate the ecological devastation?"

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Why is this important?

In South Memphis, cancer rates are four times higher than the national average, life expectancy is 10 years lower than it is in other areas of the city, and asthma is more prevalent than elsewhere, according to NPR, citing other sources. The historically Black neighborhoods in the area suffer the effects of poor air quality created by a decommissioned coal plant, a steel mill, an oil refinery, a wastewater facility, a power plant, and now xAI.

The Merkle facility is about 15 miles away from downtown on the southeast side of the city, not far from the Mississippi state line.

"Artificial intelligence may be a cutting-edge technology," Southern Environmental Law Center senior attorney Amanda Garcia told NPR. "But it's imposing the same kinds of pollution burdens on communities that industrial sources have been for the past 100 years."

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What's being done about the crypto mining operation?

MLGW said it was not allowed to deny a request for service "if there is capacity and no impact on existing customers."

But Musk has said that xAI has experienced "power fluctuation issues" and that "the electrical system freaks out about" its use of 10-to-20-megawatt spurts. The institute also reported that utilities have had to expand to meet data center needs and then have been left holding the bag.

"Data and reports available from other areas of the United States that have opened themselves up to this sort of development would suggest that caution is warranted," city officials said.

There are similar outcries against the industry elsewhere, including in Uruguay, which is in the midst of a drought, and these companies that have set up camp could implement technical advances, including a liquid cooling breakthrough. Otherwise, Pearson and others will continue to use their voices to push back.