A talk with Northeast Natural Energy and DEP about proposed data center and geothermal well at Morgantown Industrial Park

Apr. 10—MORGANTOWN — There has been much speculation around Northeast Natural Energy's proposed data center at the Morgantown Industrial Park — believed by some to be a planned bitcoin mining operation.

The Dominion Post spoke with NNE, along with the Department of Environmental Protection, about permitting issues tied to NNE's proposal, and to the WVU Energy Institute about a planned geothermal well project at the site — a project that NNE said will affect its plans.

Mike John, NNE president and CEO, talked about their plans and the bitcoin speculation.

The company's first priority, he said, is an opportunity that arose through WVU and the U.S. Department of Energy to drill a geothermal research well at NNE's MIP pad, which already hosts WVU's MSEEL project—the Marcellus Shale Energy and Environmental Laboratory.

The results of that project, he said, will clarify everything they want to do there regarding their proposed data center. "It's impossible for me to explain what's going to come next until we drill that well and see what it looks like."

He said, "Whatever we do there, we're going to be very careful to live up to a higher bar than even what the standards are for us to perform."

NNE — under the name of its sister company Marion Energy Partners (they have the same Charleston office address on their business information filed with the secretary of state) — filed for a construction permit last August to build a "Science Facility " to operate as a data processing plant, also referred to more simply as a data center.

DEP's Division of Air Quality granted the permit on March 7. The permit dealt with emissions created by four gas-fired turbines to be located at the site, powered by gas drawn from NNE's wells, combined with emissions from a nearby dehydrator that take moisture from the gas before feeding it into Dominion's pipeline.

There's no timeline to build the data center, if they build one, John said, because there's no set date to drill the geothermal well. It could be this year.

"When we are ready to talk about exactly what we're going to do there, we're not going to hide anything." But discussions at this point are premature, he said. "The results of this geothermal well could impact how we think about what else we're going to try to do there."

Speculation about an energy-intensive bitcoin mining operation at the site was fueled by several factors. Marcellus Drilling News explains that other bitcoin operations use natural gas-fired turbines to power their server farms — the banks of computers that solve the equations to earn rewards in the form of cryptocurrency.

A proposed bitcoin operation in nearby Beaver County, Pa., by WT Data Mining and Science Corp., is also referred to as a data center. Its servers will be powered by gas-fired electricity, Marcellus Drilling News reported.

Bitcoin operations typically raise several concerns: One is the general opposition from the green community to gas extraction because of methane emissions. Another is noise pollution.

Marcellus Drilling News itself, which supports gas-fired bitcoin operations, in reporting on the MIP issue, said, "The best guess is that this is another new cryptocurrency mining operation."

Another factor feeding speculation arose from an effort by the owners of the Grant Town Power Plant to end an agreement with FirstEnergy to sell its power — provided by burning waste coal — to FirstEnergy.

During testimony to the Public Service Commission about the effort, Richard Halloran, president of Grant Town Holdings Corp., told the PSC that they have a financial asset that could provide valuable investment capital for ventures including cryptocurrency mining. Even if the plan to buy out the power purchase contract fails, he said, they will use some excess generation power for a "much smaller cryptocurrency mining farm."

Marcellus Drilling News and other media have assumed he was referring to Marion Energy Partners.

Calls to Grant Town Holdings for comment were not returned.

Asked about Grant Town's plans, John said that NNE doesn't foresee tapping into that power. "I would anticipate the only thing we would be doing would be using the resource that we have there [at MIP ] and not relying on any outside source of energy."

John said he understands that there are a lot of applications for computer power. Regarding bitcoin specifically and the data center in general, he said, "I don't even know if that's going to be the right use of the electricity for us in this industrial park site.

"We're focused, " he continued, "on trying to help the area and trying to understand how we can be a part of whatever the future of energy is going to be in this area [including geothermal ]. It's in our interest to have the opportunity to consider what we can do." The permitting process they pursued gives them the flexibility to consider how to use that electricity.

"Whatever we do with the electricity that we generate there, we're extremely mindful of the noise. If there's noise, we're going to take care of it. Whatever the standards are for emissions, we're going to exceed that."

As previously reported, NNE participates in a certification program regarding ESG standards — environmental, social and governance — that cover a range of issues from emissions to corporate governance. It also has partnered with the DEP to cover the annual cost of operating and maintaining the mine drainage treatment plant, tentatively set to be complete by March 2024 according to DEP.

DEP permitting issues The Dominion Post sent DEP some questions relating to issues raised during the permitting process, including during a public hearing held in January.

People were concerned about the vague reference to a data center in Marion Energy Partners' application, and wondered why DEP's DAQ didn't demand more specifics.

DEP said, "The application Marion Energy Partners submitted only indicated they were planning to construct and operate a data processing facility consisting of four natural gas-fired engines to generate electric power for the facility. It did not indicate they were going to mine bitcoin. Regardless, the application was for the emission sources — the four engines — which is the only aspect of this facility that the WVDEP's DAQ can regulate. MEP is required to construct the facility in accordance with their permit application and meet the emission limits in the permit when they operate."

DEP continued, "As mentioned, the DAQ's jurisdiction begins and ends with the emission sources and it cannot regulate or permit a facility based on how it will use the electricity it generates. Please note that the DAQ has permitted several similar emission sources for facilities across the state, ranging from hospitals to government buildings."

MEP /NNE will have to monitor its emissions from the site and provide the data to DAQ. The Dominion Post asked how DAQ will verify the data and hold MEP /NNE accountable.

DEP said, "MEP will have to perform stack testing within 180 days of startup and every three years or 8, 760 hours of operation, whichever occurs first, and report the results to the DAQ. Stack testing is conducted by a third party contractor. MEP is required to obtain prior approval of a stack test protocol, and provide an opportunity for the agency to observe any required stack test.

"MEP is also required to maintain records of operation, and pollution control device parameters, and periodic fuel analysis. The company has to certify the accuracy of reported information. The DAQ will conduct periodic inspections. The facility is a minor source and is required to be inspected at least once every three years.

"The DAQ does not have staff on site when the facility starts up, however, the facility is required to notify the agency within 15 days of the startup of each engine. DAQ staff is notified of, and has the opportunity to observe, the initial stack test which is required to be conducted within 180 days of startup to confirm the facility is operating within permitted limits.

Regarding possible noise pollution, DEP said, "The DAQ has no jurisdiction over noise. Noise is an issue of local jurisdiction."

The geothermal project WVU announced its geothermal research project last August (watch for our Progress special section for a full story on the project).

While most geothermal reservoirs are located in the western part of the country, WVU said, there is a "hot spot " below north-central West Virginia.

WVU was awarded a $7.5 million Department of Energy grant to drill an exploratory well at NNE's industrial park site, where MSEEL is already underway.

WVU Energy Institute Assistant Director Samuel Taylor told The Dominion Post this is an exploratory well to see what's down there and what the potential is for future development. The well will be a vertical bore — with no horizontal offshoot — going down about three miles.

No energy will be produced from the well, he said.

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