NYC Comptroller Brad Lander Urges Senate and Gov to Put Pause on Cryptomining
In letter, Lander writes that cryptomining moratorium is necessary to protect NYC and environmental justice communities
NEW YORK, NY (06/01/2022) (readMedia)-- This morning, NYC Comptroller Brad Lander sent a letter to Governor Hochul, Majority Leader Stewart-Cousins, and Speaker Heastie voicing his strong support for legislation that would place a two-year moratorium on new and renewed air permits for fossil fuel plants used for cryptocurrency mining. The legislation, A7389B/S6486C, passed the Assembly on April 26, and now must be passed by the Senate before Governor Hochul signs it into law. A similar, broader version of this bill passed the Senate last year.
Lander writes, "The Comptroller's Office manages New York City's budget and allocates financial support to the goals of the Climate Leadership and Community Protection Act ("CLCPA") by advancing the transition to a green economy, investing climate solutions that create long-term opportunities, and reducing the contributions our investments make to climate change. Thus, we take the position that passing this legislation is necessary to protect New York City."
And later, "An increase in energy demand, at a time when fossil fueled power plants need to start operating less, will undoubtedly lead to a strain on New York's generation resources. When this occurs, peaking units will be forced to come online around New York City to meet the city's demand needs. As the PEAK Coalition's report shows, most peaker plants around New York City are cited in environmental justice communities. In order for us to meet our goals, more clean, renewable energy is needed downstate to minimize the use of peaking plants in New York City. However, the increased energy demand from cryptocurrency mining could do the exact opposite-by increasing our energy demand, it will result in downstate peakers being relied upon more and more. Our office seeks to avert the worst impacts of the climate crises, especially for the frontline environmental justice communities. We must act to protect our environmental justice communities from further burdens."
Read the full text of the letter attached and pasted below.
June 1, 2022
Re: Support for S.6486-D/A.7389-C, to implement a two-year moratorium on the issuance of air permits for fossil fuel power plants used for proof-of-work crypto mining, and an environmental review
Dear Governor Hochul, Majority Leader Stewart-Cousins, and Speaker Heastie:
I write today to express the strong support from the Office of the New York City Comptroller for A.7389- C/S.6486-D, which would place a two-year moratorium on air permits for fossil fuel plants used for cryptocurrency mining, while the Department of Environmental Conservation (DEC) conducts an environmental review. New York state is reaching a pivotal time in its attempt to electrify the energy sector, and the current proof of work cryptocurrency mining in New York state diverges from our goals by increasing our reliance on fossil fuels, thereby creating additional financial stressors and endanger investments for New York City.
The Comptroller's Office manages New York City's budget and allocates financial support to the goals of the Climate Leadership and Community Protection Act ("CLCPA") by advancing the transition to a green economy, investing climate solutions that create long-term opportunities, and reducing the contributions our investments make to climate change. Thus, we take the position that passing this legislation is necessary to protect New York City.
This legislation will prevent the proof-of-work cryptocurrency mining industry from repowering and extending the life of fossil fuel power plants for two-years while DEC can conduct a review on the energy use and demand that comes with proof-of-work cryptocurrency mining. It is crucial to ensure that New York City is able to transition to clean energy, in accordance with the CLCPA, and decrease the reliance on existing downstate peaking units. The study that would be initiated by signing this bill into law will help us to learn whether or not increased crypto mining would lead to the increased use of peaker plants in New York City, which are disproportionally located within several environmental justice communities.
As Earthjustice recently noted in their New York Executive Order Comments, proof-of-work mining increases the operations of fossil fueled power plants. 1 Proof-of-work cryptocurrency mining consumes massive amounts of electricity – should operations expand in New York as proposed, the energy demand would be equivalent to powering 750,000 homes, which is double the size of Buffalo. New York is home to approximately 20% of the nation's proof-of-work cryptocurrency mining operations, and this is expected to increase over the upcoming years. 2 This has created a situation where proof-of-work cryptocurrency mining entities are extending the life of fossil fueled power plants or even going as far as resurrecting previously retired plants.
An increase in energy demand, at a time when fossil fueled power plants need to start operating less, will undoubtably lead to a strain on New York's generation resources. 4 When this occurs, peaking units will be forced to come online around New York City to meet the city's demand needs. As the PEAK Coalition's report shows, most peaker plants around New York City are cited in environmental justice communities. 5 In order for us to meet our goals, more clean, renewable energy is needed downstate to minimize the use of peaking plants in New York City. However, the increased energy demand from cryptocurrency mining could do the exact opposite-by increasing our energy demand, it will result in downstate peakers being relied upon more and more. Our office seeks to avert the worst impacts of the climate crises, especially for the frontline environmental justice communities. We must act to protect our environmental justice communities from further burdens.
Our office recognizes that the climate crisis poses systemic risk to the global financial system and to the long- term viability of companies that currently rely on extractive energy, assets that may become stranded, and infrastructure at risk for damage from growing storms. Ensuring that the proof-of-work cryptocurrency mining industry does not increase New York City's challenges of electrification and further burden environmental justice communities is a priority for my office. For these reasons, we continue to promote and support legislation that will make it easier to reach our climate goals. I urge for passage and signature of S.6486-D/A.7389-C.
New York City Comptroller
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.