ALBANY, NY (05/20/2022) (readMedia)-- Today, Politico reported that the conservative Club for Growth spent $35,000 on mass texts and digital ads targeting Senate Democrats to influence their upcoming votes on the cryptomining moratorium bill. The bill would put a two-year moratorium on new and renewed permits for climate-killing cryptomining at fossil fuel power plants and require an environmental impact study.
After being banned in China, outside speculators are flocking to New York. New York now hosts 20% of the country's proof-of-work cryptomining - the most of any state. The growing cryptomining industry in New York threatens to make it impossible to meet the greenhouse gas emissions goals mandated in the Climate Leadership and Community Protection Act.
"The Club for Growth's texts and ads have targeted Democratic Sens. Michael Gianaris, Kevin Parker, Liz Krueger, José Serrano, Neil Breslin and Stewart-Cousins, the group said. The Club also targeted environmentally minded residents in other districts, including constituents of Democratic Sens. Brian Kavanagh, Michelle Hinchey and Republican Sen. Pam Helming, according to texts obtained by POLITICO," writes Marie French.
"The firm of one of the most significant wealthy backers of the Club for Growth, Jeff Yass, has long been engaged in cryptocurrency trading. Other donors have boosted cryptocurrency in the past, as well," the article states later.
Alongside Club for Growth, the Blockchain Association has spent at least $1.5 million against the bill. The Association sent a letter to Senate Majority Leader Stewart-Cousins that, as Politico reported, "misrepresents the bill."
ALBANY, N.Y. - The conservative Club for Growth is targeting Senate Democrats in an effort to prevent passage of a measure that would put a moratorium on new permits for fossil fuel-powered cryptocurrency mining.
The Club for Growth, an anti-tax organization that has spent heavily in Republican primaries this year, dropped $35,000 on mass texts and digital ads targeting several Senate Democrats and conducted polling opposing the moratorium that has passed the Assembly.
Why it matters: The Club for Growth is the latest group to fight the proposed moratorium, which would be the first of its kind in the U.S. The cryptocurrency industry has warned the measure could chill investment in the state.
Environmental advocates and backers of the limited two-year moratorium say it is needed to prevent old fossil fuel plants from turning on to power energy-intensive mining of digital currencies like Bitcoin. The bill would also study the industry and have state agencies report on its energy use and environmental impacts.
Details: The bill currently pending in the Senate is specifically focused on preventing new proposals to mine "proof of work" digital currencies using behind-the-meter power from fossil fuel plants. It would not impact two such operations that have already applied for renewed air permits for their gas plants and made investment: Greenidge near Seneca Lake and Digihost in North Tonawanda.
Supporters are hoping the Senate passes the bill before New York's legislative session ends on June 2. The cryptocurrency industry has vigorously lobbied against the bill and groups have regularly mischaracterized the moratorium as broader than it actually is.
The bill, A7389C, "would establish a two-year moratorium on new and existing crypto mining operations that use proof-of-work consensus mechanisms to validate transactions on a blockchain unless they get all of their energy from renewable sources," wrote the Blockchain Association and other industry supporters in a letter to Senate Majority Leader Andrea Stewart-Cousins on May 17.
The letter misrepresents the bill, which would not impact existing cryptocurrency mining operations or miners relying on power from the electricity grid - which is not 100 percent renewable.
John Olsen, the Blockchain Association's New York lobbyist, said in response to questions that the goal of the "environmental lobby" is a full ban on cryptocurrency mining in New York. He said "we believe" the goal of the lawmakers sponsoring the legislation is to require miners to use 100 percent renewables and to expand the moratorium.
Environmental groups have indicated they would support such a move, raising concerns that the industry would suck up renewable energy needed to facilitate the electrification of transportation and buildings as part of the state's climate law.
"We take issue with the statements from the bill's supporters that this legislation is somehow an accommodation that the industry should be pleased with," Olsen said. "Our philosophical issue with its language is the highly unusual targeting of a particular technology when other, more power-hungry industries are not mentioned."
Club for Growth spending: The Club for Growth's texts and ads have targeted Democratic Sens. Michael Gianaris, Kevin Parker, Liz Krueger, José Serrano, Neil Breslin and Stewart-Cousins, the group said. The Club also targeted environmentally minded residents in other districts, including constituents of Democratic Sens. Brian Kavanagh, Michelle Hinchey and Republican Sen. Pam Helming, according to texts obtained by POLITICO.
The texts do note the ban is on carbon-based mining.
"This ban would not help New York achieve its goal of reducing energy use and carbon emissions because digital asset miners are among the largest funders of renewables," the text continues. "This bill would stifle green energy, cut jobs, and reduce access to equitable technology training across New York."
The Club for Growth cited another industry group as the source of the claim about funding renewables. That group pointed to data from the Bitcoin Mining Council, another industry group, which indicates self-reporting miners use about 60 percent zero-emissions energy and cited some examples of projects involving renewable projects.
Using electricity from the grid, however, with a low carbon mix is not the same as funding new renewables.
At least one cryptocurrency miner in New York has leased some land at a former coal plant for a potential solar project, but it appears the developer will still seek state subsidies - not a contract with a cryptocurrency project. Most miners in New York buy electricity from the grid, not renewables. Some buy carbon credits to offset the emitting portion of the electricity from the grid.
"Club for Growth opposes unnecessary and onerous regulations like the proposed digital asset mining ban in New York," David McIntosh, the group's president, said in a statement.
The group also funded polling that did not include information about the moratorium targeting fossil fuel plants or that it would not impact existing mining facilities. Instead, the polling stated that cryptocurrency companies fund renewable energy projects and promoted a competing measure, A9275, to simply study the issue.
The firm of one of the most significant wealthy backers of the Club for Growth, Jeff Yass, has long been engaged in cryptocurrency trading. Other donors have boosted cryptocurrency in the past, as well.
Competing proposal: The cryptocurrency industry has also promoted the bill to study issues around blockchain technology, including energy consumption. It has passed the Assembly and is pending action in the Senate.
Olsen said the bill is a "patient approach" in line with actions at the federal level and in California.
"If you believe... that crypto is here to stay, why not study the best manner in which to let the industry develop safely, rather than rushing to cripple a key cog in the crypto ecosystem?" he said.
The study backed by the industry would be conducted by a task force of appointees by the governor and legislative leaders. The commissioner of the Department of Environmental Conservation would be on the task force.
Supporters of the moratorium bill, which also includes an environmental analysis of the industry by DEC, say the agency is the appropriate authority to scrutinize cryptocurrency mining's impact on the environment in the context of the state's climate law.
"Proof-of-work crypto mining globally consumes as much energy as entire countries - we need DEC, one of the key state agency's that has been charged with the implementation of the [climate law], to be the ones to determine if the expansion of proof-of-work mining in New York will jeopardize New York's ability to meet our climate law," Liz Moran, a policy advocate for Earthjustice, said.
What's next: The legislative session ends on June 2.
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.
Located on the shores of Seneca Lake, Greenidge operates over 17,000 Bitcoin mining machines and is expanding to over 32,500, 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 is the test case for cryptomining in New York State. Its air permits are currently up for renewal by the NY Department of Environmental Conservation (DEC), and 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.
The DEC has consistently cited the need to sift through 4000 public comments as part of the reason for the now five month delay in making a decision. The new deadline is June 30th, two days after the gubernatorial primary. Researchers from Cornell University FOILed for the comments, and found that 98% of the comments are opposed to Greenidge.
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."
In addition to supporting legislation (A7389B/S6486C) to place a 2 year moratorium on proof-of-work cryptomining in New York State, advocates are calling on Governor Hochul to do the same.
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.