DRESDEN (TNS) — Opponents of what is becoming the state’s best-known and most controversial crypto-mining facility have enlisted a Columbia University research institute to help explain why New York environmental officials should not renew its air emissions permit.
The school’s Sabin Center for Climate Change has released a study exploring the legalities of regulating crypto mining and concluded that the Department of Environmental Conservation has the authority to issue, renew or deny air emissions permits from crypto miners who have their own power generation and don’t buy energy from the grid.
While the logic that a state agency can issue or deny permits may be self-evident, the study represents the latest dispute pitting environmentalists against crypto miners — in this case, the publicly traded Greenidge Generation, which operates a 106-megawatt natural gas plant on Seneca Lake in the Finger Lakes region that powers its crypto-mining operation.
The study also said that Gov. Kathy Hochul could impose a moratorium on new crypto mines powered by Greenidge’s own power plants pending an environmental review — similar in some respects to how Hochul’s predecessor, Andrew Cuomo, halted hydrofracking from starting in New York. Since then, study author Jacob Elkin notes, the state passed a 2019 law, the Climate Leadership and Community Protection Act, or CLCPA, calling for steep reductions in greenhouse gas emissions in coming years.
The study “gives Gov. Hochul no excuse to stall in both denying the air permit and adopting a moratorium,” said Yvonne Taylor, of the Seneca Lake Guardian group that is battling Greenidge.
The company purchased what was a retired coal power plant, converted it to natural gas and is now using that power to run a vast bank of crypto-mining machines.
Crypto mining is based on the concept of blockchains, or web-based digital ledgers in which participants can make and record transactions. Blockchain technology is best-known for the growth of cryptocurrency, or money-like digital tokens that people can use as credits to buy or sell items online.
Bitcoin is the predominant cryptocurrency but there are several others. As cryptocurrency has taken hold among the cyber-literate, crypto miners are earning money by creating new bitcoins or other tokens. That’s done by running highly complex and exotic math formulas, or algorithms, that cryptocurrency users employ to keep track of the currency. The miners who successfully run the formulas get their own bitcoin or currency which can be exchanged for cash or used to buy things on a blockchain ledger.
Crypto mining can be immensely profitable but the computing power needed to do this requires copious amounts of electricity. Thus, investment firms have been getting in the crypto-mining game, looking to buy or restart dormant power plants to run their computers, which is cheaper than buying energy off the grid.
The trouble is, restarting old power plants for crypto mining runs against efforts to reduce carbon emissions in order to fight climate change.
There are bills in the legislature calling for moratoriums on new miners but it’s unclear whether they will be successful. Thus the call for the governor or DEC to act.
For now, much of the attention has gone to Greenidge, which has become a symbol for large-scale crypto mining in New York.
Greenidge has noted that it also generates power for the grid, not just its crypto mining. In other words, some of the electricity from this gas plant also goes to light homes or run factories.
And Greenidge has already beaten back one legal challenge, when a group of environmentalists went to court to tried to close it down after the DEC gave the firm an earlier air emissions permit.
An appellate division court ruled in 2019 that the DEC did in fact have final say over the company’s air permit.
”We fully adhere to our existing air and water permits and will continue to do so,” the company said in a prepared statement.
They added that the crypto mines offer high-paying jobs at twice the average wage in the rural and largely tourism-and-agricultural-based economy of the Finger Lakes.
But since then, the state CLCPA has been signed into law and work is proceeding on enacting regulations and policies designed to cut emissions. That’s a complicating factor when it comes to Greenidge getting a new or renewed air permit.
DEC officials maintain that, at this time, Greenidge “has not demonstrated that the project is consistent with the attainment of statewide greenhouse gas emission limits established in the Climate Act.” The agency said that Greenidge has not yet shown how the operation would not hinder the goals of reducing greenhouse gas emissions.
Opponents like Taylor of the Seneca Lake Guardian group also believe that Greenidge’s operation may be a sign of what’s to come.
There are more than two dozen power plants that are either dormant or run as “peaker” plants that are turned on only during times of high power usage, such as hot summer days when air conditioners suck up countless kilowatts.
Some of those plants could end up being purchased by crypto miners who would run them constantly, which would mean putting more emissions into the atmosphere since most are powered by natural gas.
Indeed, another company, the Canadian-based Digihost, is planning to convert a North Tonawanda power plant near Buffalo into a crypto-mining operation.
”If you’ve got these energy-hungry private tech bros making fake money without green electrons, that derails our climate efforts,” remarked Taylor, taking a familiar slap at cryptocurrency which is derided by some as the latest financial fad.
As it stands now, Greenidge has submitted its air permit application to DEC.
A decision was initially planned for this past winter but DEC needed more time to review the approximately 4,000 public comments on the plan.