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If there’s one thing that’s dictated the event of Rockdale, Texas, over time, it’s energy.
Heath Davidson’s family resides proof. His dad went to highschool there.
“Once he graduated — I feel he graduated in ‘76 — he graduated and right that summer, he went on to the coal mine,” Davidson said, the large lignite mine just north of town. Davidson’s dad started off operating a bulldozer.
“He worked his way up, and he eventually was operating the drag line. And then he ended up becoming a supervisor on the market, and he worked his way as much as superintendent,” he said.
It’s not surprising that after Heath Davidson got here back home with a level from Texas A&M, he went to work on the Sandow Power Plant on the town where the coal his dad mined generated electricity.
“I used to be working on a turbine generator, working on, , the scrubber and things like that,” he said. “My uncle, who’s my dad’s brother, was actually our control room operator.”
But five years later, in 2018, the owners of the facility plant shut it down. The Obama administration had cracked down on plants that burned dirty lignite. That eliminated about 450 jobs, including Heath Davidson’s.
It was one more blow to the economy of a town that had suffered quite a couple of of them.
Then, it appeared like a lifeline was coming to town. A Chinese bitcoin mining company saw the potential of low cost energy in Rockdale — due to the state’s deregulated energy market — and was establishing shop near the shuttered power plant.
“They said they were going to bring a complete bunch of jobs,” Davidson said. “And I actually interviewed with them, and went through an interview process with them, after which they simply weren’t hiring.”
Rockdale, Texas, was getting its first taste of just how volatile cryptocurrencies may be. The price of bitcoin tanked, and the Chinese company scaled back its plans.
Wired magazine got wind and called Rockdale “The Hard-Luck Texas Town That Bet on Bitcoin — and Lost.” It was an article that caught the attention of a bitcoin entrepreneur in New Orleans.
“I read it as opportunity,” said Chad Harris, CEO of Whinstone US, which is now a part of the publicly traded company Riot Blockchain. “I used to be like, ‘Hey, if there’s power, there’s opportunity.’”
Harris began digging around for more details about Rockdale and remembers getting a text message with an image of the Sandow Power Plant where Heath Davidson used to work.
“So I’m like, I literally see it. And I feel of the rainbow within the Lucky Charms, right? And that’s like, holy cow. We have found it,” Harris said.
It wasn’t that Harris desired to reopen the facility plant, but he saw that it was still alongside massive electrical infrastructure: transmission lines, switching stations and transformers.
It was the proper place for one more latest cryptocurrency mining plant, one which he says will ultimately eat up some 750 megawatts of power — enough electricity for greater than a 3rd of one million homes.
All of that infrastructure had been built to serve what was once the biggest aluminum smelting plant within the country.
John King worked on the Alcoa plant before he became mayor of Rockdale.
“They got here in probably in ‘51,” King said. “They built power plants to complement what was needed to do the smelting. Originally that they had three 95-megawatt power plants on the market.”
Alcoa ultimately added two more, including the Sandow plant where Heath Davidson used to work.
They were there due to that 100 million tons of lignite coal just north of town where Heath Davidson’s dad began working after highschool.
“It provided the coal that they needed for an aluminum smelter, which needs huge amounts of warmth and power, and also you needed power in the shape of electricity for that as well,” said Daniel Cohan, associate professor of civil and environmental engineering at Rice University in Houston. “And so it made loads of sense to make use of that very same coal to run an influence plant round the corner.”
After Alcoa arrived, Rockdale’s population doubled. The Saturday Evening Post called it: “The Town Where It Rains Money.”
The smelting plant, the coal mines and the facility plants employed hundreds of individuals.
Then, in 2008, Alcoa said it was shutting down the smelter. All of a sudden, those jobs were gone.
An economic shock like that may often throw local leaders in towns like Rockdale right into a headspin attempting to work out the way to make up for the lost jobs and the lost tax revenue.
“The those who you check with, the mayor, the economic developer, they’re attempting to optimize their portfolio,” said Sarah Low, associate professor of regional economics on the University of Missouri. “And so it’s this trade-off: Do we maximize growth growing bitcoin? Or will we maximize stability?”
Rockdale’s answer to that query appears to be growth through bitcoin, which has modified the town’s priorities.
“It was once the discussions were about, ‘Is the highway system adequate to support the trucks? Can the bridges handle the trucks coming out and in of the plants?’ And now far more of the discussion about is, ‘Do we now have adequate web service?’” said Ken Johnson, professor of sociology and senior demographer on the University of New Hampshire.
In addition to the Whinstone US mine, the Chinese firm that gave the town false hope a couple of years ago is back. Rockdale Mayor John King said the town gets two or three inquiries per week from cryptocurrency corporations. The hope is that, ultimately, crypto will create a couple of thousand jobs here.
Heath Davidson already got considered one of them. A few years ago he was at a restaurant on the town that his friend owns watching the World Series when he met considered one of the fellows establishing the Whinstone US mine in Rockdale.
“And he said, ‘Hey, all I could inform you is, , put your application in and are available hit the bottom running,’” Davidson said. “And so I started off in inventory. And then I proceeded to go to the miner installation team. Then I became assistant supervisor. And then I ended up becoming a manager and now I’m director of operations.”
His dad rose through the ranks within the coal mine. Now, Davidson’s done the identical thing on the bitcoin mine.
Clarification (March 29, 2022): This story has been updated to make clear the sequence of events resulting in the closing of the town’s lignite mine.
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