NYLCV: Protect Climate Goals w/ Cryptomining Moratorium

ALBANY, NY (05/02/2022) (readMedia)-- The influential New York League of Conservation Voters (LCV) is sharing their support for a moratorium on cryptomining, and urging Governor Hochul to deny Greenidge Generation's air permit renewal; a climate-killing and natural resources-destroying Bitcoin mining operation on Seneca Lake. The news comes after the NYS Assembly passed a bill last week, which would place a two-year moratorium on new and renewed permits for ?? proof-of-work cryptomining operations housed at fossil fuel-burning power plants, like Greenidge. LCV's letter specifically addresses the idea that renewable energy should not be used for cryptomining to reduce energy use.

Julie Tighe, president of New York League of Conservation Voters, writes:

"Some have argued that it is possible to sustainably mine proof-of-work cryptocurrency. NYLCV does not believe that this is the case. As we scale up renewable energy infrastructure, we face a mix of grid constraints, labor constraints, and supply chain issues that together limit the pace of renewable development in New York, and already make achieving the CLCPA's requirements that the state's grid be 70% renewable by 2030 and 100% clean by 2040 a challenge. As we work to meet the broader goals of the CLCPA, we need to reduce the energy intensity of current energy uses like buildings and appliances, bring new renewables online at an unprecedented pace, and carefully phase in the electrification of new uses like transportation and building heating so as to not overload the grid. Adding large, new, non-essential strains on the grid make achieving the CLCPA's goals more difficult."

The full text of the letter is attached and pasted below.

Last week, 1199 SEIU also endorsed legislation that would put a moratorium on cryptomining. Todd Hobler, 1199 SEIU Executive Vice President for Western and Upstate New York, said:

"The explosion of cryptocurrency mining projects in communities across New York threatens the air we breathe, the water we drink, our climate, our ecosystems and biodiversity. There is no public benefit to New Yorkers for using large amounts of our valuable energy resources to generate profit for a small number of wealthy private equity investors.

"New York is host to about 20% of all cryptocurrency mining operations in the United States. This speaks to the need for swift action at local and state levels to reign in this industry and ensure we do not worsen a climate and ecological crisis that is already at a tipping point.

"As a union of healthcare workers, many of whom live in low-income communities most effected by climate change, pollution, and health inequities, we believe that ending industrial cryptomining is important to protecting the wellbeing of all New Yorkers."

In addition to 1199 SEIU, more than 500 groups including New York City Environmental Justice Alliance, Earthjustice, Action Center on Race and Economy, Environmental Advocates NY, Sierra Club, Seneca Lake Guardian, and hundreds of Finger Lakes businesses sent a letter to legislative leadership urging passage of the legislation:

"There are very few jobs created by crypto mining, with profits accruing to the few, but the environmental impacts affect us all, particularly low-income communities that are often located near fossil fuel power plants and have been disproportionately affected by ongoing and legacy contamination. Additionally, BIPOC and low-income communities are often near polluting peaker plants – these polluting facilities could be kept online longer if crypto mining continues to ramp up statewide energy demands."

The cryptocurrency industry is spending at least $1.5 million lobbying against the bill, circulating misinformation and bad faith attacks on the legislation. Assemblymember Kelles released the following fact-check last week:

"My bill is not a ban on crypto. It's not even a ban on mining. It is a two-year moratorium specifically on cryptocurrency mining operations that are housed at fossil fuel burning power plants. The bill would require the DEC to perform a full environmental impact assessment on those operations and how they affect New York's ability to meet our climate goals under the CLCPA. The industry's outright efforts to mislead and manipulate the facts only further make the case for sensible regulation."

And in a new op-ed last week, Russ Haven, general counsel of NYPIRG, warned that thanks to cryptomining, NY's climate act risks the death of a thousand cuts:

"We need to retire fossil fuel infrastructure, not accept new excuses to keep it going. It's a disaster movie waiting to happen, and we've seen the early versions of it: climate change brought us Hurricanes Irene and Lee (2011) and Superstorm Sandy (2012), which took the lives of scores New Yorkers and resulted in billions of dollars of damage, and last summer's rains that deluged New York City with more than seven inches of rain in just a few hours, drowning residents in basement apartments and turning the streets and subways into canals."

Background

Proof-of-work cryptocurrency mining (which Bitcoin uses) 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 year 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. If left unregulated, the industry will wreak irrevocable harm on the entire state of New York, making it impossible to reach New York's crucial climate goals as outlined in the Climate Leadership and Community Protection Act (CLCPA). The CLCPA commits to an 85% reduction in greenhouse gases by 2050 and 100% zero-emission electricity by 2040.

These facilities are also major emitters of methane and toxic air pollutants including benzene, formaldehyde and polycyclic aromatic hydrocarbons (PAHs), which are precursors of ground level ozone pollution and known causes of asthma, heart attacks, strokes, reproductive damage and preterm birth.

Powering Bitcoin mining with renewables is not a viable solution, as renewables supply cannot possibly meet the extreme energy demands of Bitcoin mining in addition to daily necessities such as heating and cooling homes and running cars. Any renewable energy that supports Bitcoin mining is renewable energy that is being diverted from the public grid. And when crypto miners rely on the public grid, they stick everyday New Yorkers with the bill. A 2021 study estimates "the power demands of cryptocurrency mining operations in upstate New York push up annual electric bills by about $165 million for small businesses and $79 million for individuals.

Cryptomining is also at odds with the overwhelmingly popular amendment to the 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 recently requested details from six major Bitcoin mining companies about their electricity usage and contributions to climate change. Earlier this month, 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."

Greenidge Generation, a power plant-turned-Bitcoin mine operating under grandfathered-in permits by the private equity firm that owns it, is the test case for proof-of-work cryptomining in New York. Its air permits are currently up for renewal by the NY Department of Environmental Conservation, 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 cancers on communities.

Located on the shores of Seneca Lake, Greenidge has brought only 48 new jobs to the region compared to the existing $3 billion agritourism economy, employing approximately 60,000 people, while poisoning the Finger Lakes' natural resources. 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.

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 CLCPA. 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 fighting against Greenidge's air permit renewal, advocates, scientists, electeds, and more are urging Governor Hochul to put a moratorium on proof-of-work 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.

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 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. Live on the Brian Lehrer show, Senator Gillibrand agreed to visit the Finger Lakes and meet with residents concerned with and affected by cryptomining.

League of Conservation Voters Letter

Honorable Kathy Hochul

Governor

The State of New York

The Capitol

Albany, NY 12224

Dear Governor Hochul,

I write with concern about the many negative environmental impacts caused by proof-of-work cryptocurrency mining, especially as this industry grows in New York. Proof-of-work cryptocurrency mining is highly energy-intensive. As an example, the Bitcoin mining hub at the Greenidge Generation facility in Dresden, New York operates at least 17,300 mining machines[1] and will expand to 32,500[2] machines by the end of 2022. Burning the fossil fuels necessary to run these 32,500 mining machines will emit more than one million tons of CO2 each year, equal to the emissions from 100,000 homes. Methane leaks and upstream emissions bring this to 1,127,061 tons of CO2 per year.[3] This is incompatible with achieving the goals of the Climate Leadership and Community Protection Act (CLCPA).

Some have argued that it is possible to sustainably mine proof-of-work cryptocurrency. NYLCV does not believe that this is the case. As we scale up renewable energy infrastructure, we face a mix of grid constraints, labor constraints, and supply chain issues that together limit the pace of renewable development in New York, and already make achieving the CLCPA's requirements that the state's grid be 70% renewable by 2030 and 100% clean by 2040 a challenge. As we work to meet the broader goals of the CLCPA, we need to reduce the energy intensity of current energy uses like buildings and appliances, bring new renewables online at an unprecedented pace, and carefully phase in the electrification of new uses like transportation and building heating so as to not overload the grid. Adding large, new, non-essential strains on the grid make achieving the CLCPA's goals more difficult.

As an example of how proof-of-work cryptocurrency hurts our progress in achieving the CLCPA, the Coinmint Bitcoin mining facility in Massena, NY currently uses 435 MW[4] of green, baseload hydroelectricity. That's enough to power over 14,000 homes.[5] Coinmint relies on hydroelectric power from the grid, meaning it is diverting this renewable resource from uses that better align with the CLCPA.

NYLCV does not have a position on cryptocurrency as an asset or on proof-of-stake cryptocurrency. However, we do not believe that allowing proof-of-work cryptocurrency mining, in its current energy-intensive form, is compatible with the CLCPA. To that end I respectfully urge you to direct the drafting of environmental regulations for the cryptocurrency mining industry and declare a moratorium on proof-of-work cryptocurrency mining in New York State until those regulations are in place. Additionally, I urge the Department of Environmental Conservation to deny Greenidge Generation's permit renewal.

Sincerely,

Julie Tighe

President, League of Conservation Voters

CC:

Basil Seggos, Commission, DEC

[1]Greenidge Generation Holdings Inc., Form 8-K filed February 2, 2022, p. 4, from Waterfront Online, https://waterfrontonline.files.wordpress.com/2022/02/greenidgeprfeb2.pdf.

[2] Greenidge Generation Holdings Inc., Form S-1 filed September 20, 201, p. 3, from Greenidge Generation Inc. website, https://ir.greenidge.com/static-files/e212c3fc-c311-4437-8fd9-4de0f763d708.

[3] CO2e includes emissions of CO2, CH4, and N2O, calculated by applying Tier 1 calculations and default fuel characteristics from 40 C.F.R. § 98.33, annual average fuel consumption at Greenidge from 2019 (11,240 scf/MWh), 8,760 operating hours per year, 106 MW capacity, and a leak rate for upstream emissions of 3.5%.

[4]CleanSpark, Inc., "CleanSpark Announces Ecofriendly Bitcoin Mining Partnership with Coinmint to Increase Capacity and Expand Green Mining Initiatives," Water Tower Research, July 14, 2021, https://www.watertowerresearch.com/content/cleanspark-announces-ecofriendly-bitcoin-mining-partnership-with-coinmint-to-increase-capacity-and-expand-green-mining-initiatives/teaser.

[5]Calculated by applying average U.S. residential utility customer's monthly consumption of 893 kWh/month, per https://www.eia.gov/tools/faqs/faq.php?id=97&t=3.

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.