The Green Cost of the Pacific Airport and Bitcoin City in El Salvador

Conchagua volcano on the Gulf of Fonseca in the south-east of El Salvador
Diario El Mundo
Condadillo, El Salvador

The Green Cost of the Pacific Airport and Bitcoin City in El Salvador

The first place where the Salvadoran government planned to build the Pacific airport had to be modified due to an environmental detail: it was a mangrove where migratory birds rest during one season of the year. "It is easier to move people than birds," says José Sorto about a conversation he had with a technician from the Ministry of the Environment and Natural Resources (MARN) when they were carrying out the environmental impact study for the construction of the airport in the canton of Loma Larga, La Unión. 

The government affirms that the airport is the complement of the Bitcoin City, which will be built in Conchagua with benefits for investors. This decision resulted in moving the project to the Condadillo and Flor de Mangle farmhouse. It has caused uncertainty and anxiety for the inhabitants who will have to sell their land to the government for the construction of the airport terminal. 

Winter appeared in the last days of April and the vegetation became green again in the Condadillo hamlet, Volcancillo canton, La Unión, around 186 kilometers from the Salvadoran capital. "Chatarra" walked through a carpet of branches that was between the houses of the community that day. He is the faithful four-legged companion who accompanies Mr. José in his agricultural tasks, but on that day, he stopped to contemplate a tragic sight.

"All the young vegetation is being thrown away, with the matter of the airport, there they are... thrown on the ground," said the sixty-year-old who regrets that the biodiversity of the region is decreasing.

Around the houses of Condadillo, flora and fauna are abundant. A water spring that is close to the houses is surrounded by many centuries-old River Almond trees, according to the inhabitants, and which are now marked with red paint because they will be cut down to make way for the airport. 

The area is surrounded by black Conacaste trees that are inhabited by squirrels and “garrobos”. On the other side of the mangrove, there are raccoons and crabs. 

Now the community sees how the flora begins to die. They claim that the personnel of the ministries entered the land to cut the vegetation, without first reaching a sale agreement as promised.

Another environmental concern that the community has, is a watershed that feeds the Condadillo and Managuara rivers, on which the airport will be built. "I think it is infeasible," reflects José. 

The farmer is concerned that a government representative told him that they will throw "boulders into the river" so that “the water always runs, has its course, which I do not consider to be good." 

“Water is one of the elements that are more compromised,” warns Ángel Flores, an environmentalist from La Unión, who believes that “this type of project is extremely threatening to life, not only for human species but also for plants and animals that are in danger of extinction.” 

a man standing outdoors
Environmentalist Ángel Flores has concerns about the new airport / Credit: I. Cornejo.

However, the project has not stopped even though the Ministerio de Medio Ambiente y Recursos Naturales (MARN) studies concluded that it fulfills the condition of "moderate to high potential environmental impact." The deputy for Nuevas Ideas, Sandra Martínez, who even worked in the Ministry of the Environment, denied that the lands are agricultural. "They are not inhabited and do not generate any environmental impact," she assured. 

Diario El Mundo consulted with Martínez about whether she maintained her position after sending her photographs of the cultivation areas and the houses of the communities where the airport will be built; however, she did not respond to the query. 

Technical analysis suggests that the area where the airport would be built intersects with a part of the mangrove El Tamarindo protected natural area, and serves as a corridor and temporary transit of resident and migratory bird species. There is also high susceptibility to flooding and effects on “urban and agricultural parcels”. 

Condadillo connects with a mangrove forest, which are protected areas for their biodiversity, and act as a wall that protects the coasts from extraordinary events. Thus, the government study warns that the drainage due to the airport's sediment load could affect the natural ecosystem where species such as punches, clams, crabs, fish, and shrimp live. 

However, on the night of April 26, with 67 votes in favor of 84 deputies in the Legislative Assembly, the plans to build the airport and the Pacific Train were approved; projects that the government has said will be connected. On the one hand, the train aims to reactivate the railway network that has been unused since the Civil War in the 1980s; the airport will link to the Bitcoin City megaproject. 

An airport for Bitcoin City

The construction of the new terminal in the east of the country is part of the Bitcoin City project that President Nayib Bukele promised in November 2021 to function as a complex with tax benefits to mine bitcoin. 

"Bitcoin City, well, is going to have its airport," Federico Anliker, President of the Autonomous Executive Port Commission (CEPA), confirmed last February. 

In June 2021, as the country emerged from the second wave of Covid-19 infections, President Bukele announced at an international conference that the country would adopt bitcoin as legal tender. 

A monetary measure that occurred when the economy was still recovering from the production levels lost during the 2020 confinement due to the Covid-19 pandemic. The health crisis caused the Salvadoran Gross Domestic Product (GDP) to contract by 7.9% that year, a drop of 10.5 percentage points against the 2019 record. However, Bukele predicted that if 1% of the capitalization of the cryptocurrency were to be invested in the country, the GDP would be boosted by 25%. Currently this remains to be just a forecast for the moment because the president did not share under which scenarios this estimate was made.

El Salvador became the first country to adopt bitcoin in September 2021. Two months later, Bukele announced Bitcoin City, a project with a new geothermal power plant that the Government would build in the inactive volcano of Conchagua, La Unión, to provide energy for mining bitcoin. Encouragement in investment includes not paying taxes and relaxed immigration procedures for potential investors. 

The promise of Bitcoin City was accompanied by the announcement of the issuance of $1 billion in bitcoin, known as "volcano bonds", financing that would be used both for mining and for the purchase of the cryptocurrency.

"What we have is like a presentation of an idea with questionable intentions," clarified the economist Lourdes Molina, from the Central American Institute for Fiscal Studies (Icefi), who considers it is "ironic" that the area where it will be built is one of the "most impoverished in the country". 

people washing clothes in a pond
A family in Condadillo washes clothes in a water source that would disappear with the airport project / Credit: I. Cornejo.

Government data confirms that 38.6% of the population in the department of La Unión lives in multidimensional poverty, a place where more than 274,500 Salvadorans live, according to the 2019 Multi-Purpose Household Survey. 

Environmentalist Ricardo Navarro, from Cesta Amigos de la Tierra, shows the same fear, He sums up that the geothermal energy generation project, for bitcoin mining, is "a disaster". "The big problem is that it consumes a large amount of electricity," reiterates Navarro. 

If the government executes the project, it will have "a high opportunity cost," adds Molina, because it will stop allocating public funds for key development areas in exchange for bitcoin mining. 

“Here it is not only the operation of the servers but also that they demand a lot of energy, they have to be at certain controlled temperatures to be able to work, we are talking about the almost industrial use of air conditioning”, says Molina.

Far from the image of a miner with a pick and stick in hand, bitcoin mining is a digital process where user transactions are validated in a network called a blockchain. “This process provides security to the network while allowing the generation of new coins,” says the crypto news site. 

The blockchain is an accounting book where those transactions are reported to "extract their value", as in minerals, hence the term bitcoin mining. The difference is that this digital process is done in thousands of grouped computers, which through programs; validate each transaction made by users. 

The place where these computers or mining sites are located is usually cold, such as in Canada, Patagonia, and Argentina, because the equipment should not overheat. 

However, Conchagua, where the future geothermal plant for bitcoin mining will be located, is one of the areas with the highest temperatures in El Salvador, which can reach up to 35 degrees Celsius. 

The energy matrix

Currently, El Salvador has nine thermal generators that represent 32% of the installed capacity registered in 2020. The rest is made up of hydroelectric, biomass, photovoltaic, wind, and geothermal plants, although the country also imports through the Regional Electricity Market (MER). 

There are two geothermal plants, one in the department of Ahuachapán, in western Salvador, and another in Usulután, in the east. In the latter, the government has installed the first bitcoin mine, since the adoption of the cryptocurrency began in September of the previous year, but little data is known about its operation. 

Meanwhile, in Conchagua, nothing is known about the plant that the government wants to build. Karen, an entrepreneur from that eastern municipality, reports that employees of the LaGeo (a public company) have resumed feasibility studies of thermal energy in the upper area of ​​the inactive volcano.

With the announcement of Bitcoin City, Bukele promised that around the project there will be "residential areas, shopping centers, and restaurants." However, for now, Conchagua is still a tourist town with small shops, a pupusódromo (sales of pupusas, a typical food), and the emblematic Santiago Apóstol church, built in 1693, where dollar cash is still the main way of doing business. 

The use of cards is unknown, and they only know of bitcoin because $30 was given by the government, to those who downloaded the Chivo Wallet.

a blue and white church
The parish of Santiago Apóstol and in the background the Conchagua volcano, in La Unión, where the Government intends to build the geothermal plant to mine bitcoin / Credit: U. Aleman.

This story was produced with support from the Internews’ Earth Journalism Network. It was originally published in Spanish by Diario el Mundo on 7 June 2022. It has been translated to English and lightly edited for length and clarity.

Banner image: Conchagua volcano on the Gulf of Fonseca in the south-east of El Salvador, where the future geothermal plant for bitcoin mining will be located / Credit: Raúl Arias via Wikimedia Commons.

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