ICYMI: Gov. Hochul Takes Cryptomining Cash As She Considers Regulations

ALBANY, NY (05/31/2022) (readMedia)-- On Friday, Governor Hochul reported a $40,000 campaign donation from Ashton Soniat, Chairman & CEO of Coinmint, which operates one of the world's largest cryptomining facilities in Massena, NY. She also reported $78,000 in donations from Albany lobbying firm Ostroff Associates and its partners, which count crypto miner Blockfusion as a client.

These donations were made as advocates and local business owners are putting pressure on Governor Hochul to deny Greenidge Generation's air permit renewal and put a moratorium on cryptomining because of its detrimental effects on the climate, environment, and local economies. Governor Hochul is well within her legal authority to do so, according to a recent white paper from Columbia University's Sabin Center. Advocates and business owners are also urging Governor Hochul to support the bill, currently being considered by the NYS Senate, which would put a two-year moratorium on new and renewed permits for cryptomining at fossil fuel power plants.

Opposition to a cryptomining moratorium has been fueled by the Koch Brothers'-funded Club for Growth, a group that funds anti-gay, anti-abortion, far right candidates. The Club spent $30,000 to spread lies to fight the cryptomining moratorium bill.

The New York Times reports, "Ms. Hochul's campaign reported that she received the donation from Mr. Soniat, via credit card, on May 23. A day later, Ms. Hochul, during a breakfast with legislators at the governor's mansion in Albany, spoke optimistically about the potential job creation bonanza in the economically distressed area.

Assemblywoman Anna R. Kelles, a Democrat who represents the Ithaca area, said Ms. Hochul told her the state can't ignore the jobs crypto mining in Massena could bring. Ms. Kelles said Ms. Hochul told her, "I spoke to them and they said they employ about 140 people and they are looking to go up to 400 employees in an area where there are very few industries. So this is really important.'"

Assemblymember Kelles is the lead sponsor of the moratorium bill.

Another cryptomining plant, Greenidge Generation in the Finger Lakes, boasts economic opportunity while only employing 48 people. Meanwhile, its operations, which are detrimental to the climate and natural resources local businesses depend on, threatens the region's $3 billion, 60,000-employee agritourism economy.

In an op-ed today in the Syracuse Post-Standard, Cornell Professor Dr. Anthony Ingraffea asks why Governor Hochul and NYS are following the science on COVID-19 but not the climate when it comes to cryptomining, and points out the specific issue with Coinmint's plant:

"The Coinmint plant in Massena, New York, is powered by enough green, baseload hydroelectricity sourced from the public grid to power 14,000 homes. Instead of this green power being used to reduce New York's dependence on fossil fuels, we're squandering it on fake money."

Read the full text of the op-ed here and below.

NY should follow the science on climate and ban crypto mining (Guest Opinion by Anthony Ingraffea)

New York state followed the science on Covid. Government leaders took the advice of doctors and public health professionals, enacting commonsense policy to slow the spread. Following the science is, unequivocally, the right thing to do. If only New York's leaders were consistently doing the same to combat the other existential threat we face: climate change.

Scientists agree that we must reduce greenhouse gas emissions 43 percent by 2030 in order to keep global warming from exceeding dangerous levels. New York state's Climate Leadership and Community Protection Act (CLCPA), enacted in 2019, offers a roadmap to get us there, but a roadmap is worthless if it isn't followed. Cryptocurrency operations are a fast-growing industry in New York state but a climate-insidious form of operation that threatens to veer us completely off track. And Gov. Kathy Hochul has yet to do anything to stop it.

I'm a civil and environmental engineer who has studied the detrimental effects of proof-of-work cryptomining, which Bitcoin uses. Even though the "mining" happens digitally, the impacts are very tangible. Powerful computers and cooling devices whir 24/7, competing to find the answer to a complex puzzle. The first miner to solve the puzzle "mines" a Bitcoin, meaning the more machines running at once, the faster the puzzle is solved. It's confusing, but we don't need to get bogged down in the nitty gritty of how it works. Because what's not confusing is the fact that globally, proof-of-work cryptomining now uses the same amount of power as the entire country of Argentina. While governments should be doing everything they can to reduce greenhouse gas emissions and beat back climate change, New York is shepherding in an industry adding an entire country's worth of greenhouse gas emissions to the atmosphere. We're host to 20% of all Bitcoin mining in the U.S. - the most of any state.

Perhaps the worst culprit - and the test case for the cryptomining industry in New York - is Greenidge Generation, located on the shores of Seneca Lake. Greenidge is a power plant originally re-permitted to burn fracked gas and produce power for the grid in times of high demand, like during the summer when many New Yorkers are running our air conditioners. But only operating sometimes isn't the most profitable, especially for a power plant that is now owned by a private equity firm. So Greenidge changed its business plan - after receiving an air emissions permit - and now emits greenhouse gases 24/7/365 to power its nearly 20,000 energy-intensive Bitcoin mining machines, with even more machines being installed. The greenhouse gases it emits are equivalent to those of at least 78,000 of its neighbors and their businesses combined - or three-quarters of Tompkins County.

That's 78,000 everyday New Yorkers who have to completely upend our routines and go zero-emissions if we want to stay on track to meet CLCPA emission reductions goals, thanks to Greenidge. All for a facility that has brought a whopping 48 jobs to its region - equivalent to your average McDonald's. Meanwhile, the air, water, and noise pollution caused by Greenidge is a major threat to the local $3 billion, 60,000-job agritourism economy.

Greenidge's air permits are currently up for renewal by the state, and the deadline to make a decision has already been extended five additional months, to the climate's detriment. Hochul and the Department of Environmental Conservation must follow the science, protect the CLCPA from climate-killing cryptomining, and deny Greenidge's permits, especially because this decision is about more than just one plant. If Greenidge is given the greenlight, it's a signal to more outside speculators that New York's closed and underutilized fossil fuel-powered plants are up for grabs to take us farther backward in our fight against climate change, just to make a few rich people richer with speculative "money."

Many have suggested using renewable energy as a solution to this problem, but it's not. The Coinmint plant in Massena, New York, is powered by enough green, baseload hydroelectricity sourced from the public grid to power 14,000 homes. Instead of this green power being used to reduce New York's dependence on fossil fuels, we're squandering it on fake money.

Thankfully, the state Assembly recognized the cryptomining threat and just passed a two-year moratorium on new and renewed permits for facilities like Greenidge. Now, it's up to the Senate to pass this bill. But even when they do, it will be too late to impact Greenidge's fate.

So it's up to Hochul and the Department of Environmental Conservation to be the leaders on climate they claim to be. They must follow the science, deny Greenidge's permits, and support a cryptomining moratorium. Our climate law - and the climate itself - is at stake.

Background

Proof-of-work cryptocurrency is an extremely energy-intensive process that requires thousands of machines whirring 24/7 to solve complex equations. The more machines that are running, the faster a coin is mined. Each one of these machines requires energy to run, plus more energy to run cooling technology. Globally, proof-of-work Bitcoin mining uses the same amount of energy each day as the entire country of Argentina. It produces 30,700 metric tons of e-waste each year, comparable to the yearly IT equipment waste of the Netherlands.

More than 1,000 organizations, businesses, environmental activists, concerned residents, wine makers, elected officials, and more have taken action over the last year in opposition to Greenidge and crypto mining in New York State. A letter sent to Governor Hochul in October was signed by more than 650 individuals and groups. In letters to Governor Cuomo last year opposing Greenidge Generation's expansion from an emergency peaker plant to a 24/7 Bitcoin mining operation, organizations, businesses, and Finger Lakes residents demanded Gov. Cuomo revoke Greenidge's grandfathered-in permits. And recently, several groups sent an open letter to Senators Gillibrand and Schumer urging them to visit the Finger Lakes and meet the residents and business owners whose livelihoods are suffering the environmental and economic consequences of Greenidge.

Greenidge Generation is the test case for cryptomining in New York.

Located on the shores of Seneca Lake, Greenidge operates over 17,000 Bitcoin mining machines and is expanding to over 32,500, with visible smokestacks pumping dirty fossil fuels into the air 24/7. This will lead to over 1 million tons of CO2 emissions each year, equal to that of 100,000 homes. Greenidge also sucks up to 139 million gallons of water each day from Seneca Lake and dumps it back in at up to 108 degrees. Gregory Boyer, director of SUNY's Great Lakes Research Consortium, has warned about Greenidge's potential to cause harmful algal blooms, which can be dangerous or fatal to humans and other animals in Seneca Lake, and make this water source for 100,000 people non-potable.

Greenidge's air permits are up for renewal by Governor Hochul and the DEC, who have given themselves five additional months to make a decision. The new deadline is June 30, two days after the gubernatorial primary. The DEC has consistently cited the need to sift through 4,000 public comments as part of the reason for this delay, but researchers from Cornell University FOILed for the comments, and found that 98% of the comments are opposed to Greenidge. In addition, more than 1,000 local businesses, organizations, wineries, labor unions, and more have taken action against Greenidge because of the threats its air, water, and noise pollution pose to the local $3 billion agritourism economy.

Advocates warn that a renewal of its air permits would signal to more outside speculators that New York's fossil fuel power plants, closed as we work toward meeting greenhouse gas emissions reductions goals, are available to be bought up and re-opened as gas guzzling Bitcoin mining threats to local businesses and cancers on communities. In addition to calling for Greenidge's permits to be denied, electeds, local businesses, residents, and advocates are calling on Governor Hochul to support a cryptomining moratorium.

The DEC has already confirmed that Greenidge is a threat to New York's energy goals as outlined in the state's Climate Leadership and Community Protection Act. In a recent story, "DEC Commissioner Basil Seggos told WSKG that he continues to have "significant concerns" whether Greenidge Generation's operations will be compliant with the state's statutory climate goals under the Climate Leadership and Community Protection Act, or CLCPA." Seggos later said, "Our belief still stands that this is a facility that's going to have an uphill battle complying with the law."

And at a recent Environmental Conservation budget hearing when asked about the potential impact of the escalating cryptocurrency mining activity in upstate NY on the states energy grid, the NYS Energy Research and Development Authority (NYSERDA) President Doreen Harris stated, "There could be a very significant impact on NY load resulting from cryptocurrency mining depending on the penetration of the resource."

Because of Greenidge and other fossil fuel burning cryptomining plants, advocates are calling for a moratorium on cryptomining. Legislation (A7389B/S6486C) to place a 2 year moratorium on proof-of-work cryptomining in New York State passed the Assembly, and it's now up to the Senate to pass it. Opposition to the proposed moratorium has relied on misrepresentations of the bill from far right groups such as the Koch Brothers-funded Club for Growth.

Advocates are also calling on Governor Hochul to put a moratorium on cryptomining. The Governor is well within her legal authority to act, according to a new white paper from Columbia Law School Sabin Center for Climate Change Law: A Pause on Proof-Of-Work: The New York State Executive Branch's Authority to Enact a Moratorium on the Permitting of Consolidated Proof of Work Cryptocurrency Mining Facilities. The paper (summary of findings available here) draws on precedent established in 2010 when the executive branch signed the fracking moratorium. It finds the Governor has authority to stop new proof-of-work cryptomining operations by enacting a moratorium on the permitting of these facilities until a Generic Environmental Impact Statement (GEIS) to determine the full extent of the impacts of mining on communities is complete.

Cryptomining is at odds with the overwhelmingly popular amendment to the New York state constitution passed last year, which guarantees every New Yorker the right to clean air, clean water, and a healthful environment. Revitalizing old polluting power plants for private financial gain, with drastic consequences for our air, water and climate, all while causing huge amounts of noise pollution, is now unconstitutional - and ought to be treated as such.

Reform groups Common Cause/NY and NYPIRG have specifically criticized the crypto mining industry for exploiting public resources and straining the energy grid for private gain, and a group of federal lawmakers led by Senator Elizabeth Warren requested details from six major Bitcoin mining companies about their electricity usage and contributions to climate change. The NY League of Conservation voters sent a letter to Governor Hochul urging her to pause and regulate cryptomining, and 1199 SEIU recently announced their endorsement of a cryptomining moratorium. Earlier this year, President Biden issued an executive order requiring federal agencies study the legal, economic, and environmental impacts of cryptocurrencies, including Bitcoin mining. Even the Mayor of New York City, Eric Adams, an avid crypto booster has come out against mining, declaring at a February 9th joint session of the Legislature: "I support cryptocurrency, not crypto mining."

About Seneca Lake Guardian

Seneca Lake Guardian is a New York State Not-for-Profit Corporation with 501(c)(3) and is dedicated to preserving and protecting the health of the Finger Lakes, its residents and visitors, its rural community character, and its agricultural and tourist related businesses through public education, citizen participation, engagement with decision makers, and networking with like-minded organizations.