ENDWELL, NY (WSKG) — Amid environmental concerns in several Finger Lakes communities, Assemblymember Anna Kelles (D-125) said she will introduce legislation this week to temporarily ban cryptocurrency mining operations.
Plan To Legislate
Last month, the Town of Torrey Planning Board, in Yates County, gave the go-ahead to Greenidge Generation to expand its Bitcoin mining operation at its facility along the western bank of Seneca Lake, much to the chagrin of activists who demonstrated against the move.
“The first course of action that I am considering, and that I’m working on right now actively, is to create a moratorium while we evaluate the full environmental impact of mining facilities in New York State,” Kelles told WSKG.
She said all options are on the table in terms of the details of the legislation, including a temporary ban on all cryptocurrency mining in New York. If passed, a moratorium would be the first statewide restriction on cryptocurrency mining in the United States.
The Road To Bitcoin Mining
Atlas Holdings, parent company of Greenidge Generation, took over the coal-fired power plant along Seneca Lake, just outside of Dresden, in 2014. The facility was then converted to use natural gas to operate as a “peaker” facility, selling electricity to the grid in times of high demand.
Dale Irwin, CEO of Greenidge, said he was not familiar with Bitcoin when they rebooted the plant, but he soon found that cryptocurrency mining was a solid way to turn a profit when the plant was not providing much electricity to the grid.
“It was a very good business solution for us,” Irwin told reporters last month at the meeting where Greenidge’s plans to expand its facility were approved.
The process of approving those plans did not come without pushback, largely from environmental activists, lead by Seneca Lake Guardian. The group alleged Greenidge operations are having a detrimental impact on the lake’s ecosystem. They also worried Greenidge will increase emissions by burning additional natural gas to power the new Bitcoin miners.
“We simply cannot allow this ludicrous scheme of burning fossil fuels to make fake money in the midst of climate change,” Yvonne Taylor, Vice President of Seneca Lake Guardian, told around a hundred people gathered to protest Greenidge last month.
Irwin would not indicate exactly how emissions will be generated as a result of the Bitcoin mining expansion, only that the plant will continue to operate within its limits as established by permits from the New York Department of Environmental Conservation (DEC).
“We follow all laws and regulations the DEC apply to us and we’ll review them, we’ll study what they ask and we’ll do everything,” Irwin said.
The DEC has said that it is “closely monitoring” Greenidge, specifically pointing to its Bitcoin mining operation. Greenidge’s permits are up for renewal later this year.
Bitcoin’s Energy Problem
Unlike Greenidge, which generates its own power, many Bitcoin miners operate using electricity pulled from utilities or the grid.
Eilyan Bitar, a Cornell University* professor who specializes in power markets and grid operations, said more cryptocurrency mining could increase the base load on electrical grids, thus requiring the suppliers of that electricity to ramp up production.
“It’s just such a complicated question. It gets at bigger issues,” Bitar said. “Well okay, so Bitcoin mining operations are driving an increase in demand. Ultimately their impact on greenhouse gas emissions, total greenhouse gas emissions outputs in New York State or the United States or the world more broadly will depend on how that demand is being met.”
Hydroelectric, wind and solar accounted for around 29 percent of all electricity generation in the state in 2019. The rest comes from nuclear, natural gas and other non-renewable sources. With the passage of the Climate Leadership and Community Protection Act, New York has ramped up efforts to try and increase the share of electricity generated by renewables to 70 percent by 2030.
Cambridge University’s Bitcoin Electricity Consumption Index estimates that worldwide Bitcoin mining is using upwards of 120 million megawatts (MW) of electricity per year, though that number tends to fluctuate. That’s more electricity than the entire state of Virginia consumed in 2019.
Future In New York
There are not any laws in New York that specifically address cryptocurrency mining. Short of a statewide law, it is up to municipalities to regulate the practice through zoning restrictions. Some localities in the Finger Lakes region have discussed the possibility of regulation or requesting the state consider regulations.
It is also still unclear how much support there would be for a moratorium on cryptocurrency mining among New York lawmakers. While Democrats have a supermajority in the state legislature, it’s unclear where many of them fall on the issue of Bitcoin mining given its intersection between tech and the environment. Also unclear is the legislative prospects of pushing a moratorium before the end of the legislature’s session in June.
For now, opportunities for Bitcoin mining remain open. Last month, another cryptocurrency operator purchased a former power station in North Tonawanda in western New York.
*Full Disclosure: Cornell University is a WSKG Underwriter