Pennsylvania Environmental Groups Testify On Cryptomining in Pennsylvania During State Public Hearing
Bitcoin mining alone consumes as much energy as 80% of states in the U.S.; State lawmakers have a responsibility to regulate the energy-intensive cryptomining industry
HARRISBURG, PA (05/02/2023) (readMedia)-- On Monday, Earthjustice, PennFuture, and the Sierra Club Pennsylvania Chapter all testified before the Pennsylvania House of Representatives Committee on Environmental Resources and Energy on cryptomining, local pollution, and climate change. The environmental groups raised concerns about the industry's reliance on fossil-fuels and its environmental impact on air quality, and shared potential legislative solutions for Pennsylvania lawmakers to consider. In just a few years, the cryptomining industry has exploded across the United States - often turning to fossil-fuel combustion for its energy source. Pennsylvania is now home to many fossil-fueled mining facilities powering cryptomining operations, threatening the Commonwealth's air quality and public health.
Participants of the hearing included Charles McPhedran, senior attorney in Earthjustice's Clean Energy Program (written testimony attached), Rob Altenburg of PennFuture (written testimony attached), Tom Schuster of the Sierra Club Pennsylvania Chapter (written testimony attached), New York State Assemblymember Anna Kelles, and Greg Beard of Stronghold Digital Mining.
With the exception of Greg Beard, panelists focused on the environmental consequences of burning waste coal and fracked gas to power cryptomining in Pennsylvania. Cryptomining data centers require massive amounts of electricity in order to operate, and burning waste coal to generate electricity is one of the worst possible choices for the climate and for local air pollution. Since July 2021, Stronghold Digital Mining Inc. has operated two waste-coal-fired power plants in Pennsylvania – Scrubgrass in Venango County and Panther Creek in Carbon County. Despite Greg Beard's attempts to downplay the environmental consequences of burning coal waste, harmful local air pollutants nitrogen oxide and sulfur dioxide tripled in emissions from Panther Creek from 2021 to 2022.
"We have worked hard to make progress on clean air in Pennsylvania over the decades," said Charles McPhedran, Senior Attorney in Earthjustice's Clean Energy Program. "We can't let proof-of-work crypto mining based on fossil fuels take us back."
"Bitcoin miners claim they are making money, but someone else is paying the price. Whether it's public health and environmental damage, or higher prices for electricity, the real cost of Bitcoin mining will be felt by all of us," said Rob Altenburg, Director, PennFuture Energy Center.
"Thankfully, we do not need to invent ways to throw away energy from coal refuse power plants in order to clean up abandoned mine lands," said Tom Schuster, of the Sierra Club Pennsylvania Chapter. "We now have $3 billion for this purpose flowing to Pennsylvania over the next 15 years thanks to the Bipartisan Infrastructure Law," said Tom Schuster, Director of the Sierra Club Pennsylvania Chapter.
Because the cryptomining industry currently operates in a black box with little oversight, the hearing also focused on legislative and regulatory solutions. One solution includes removing state subsidies for burning waste coal - subsidies that proof-of-work cryptomining plants rely on heavily to make profits. Greg Beard of Stronghold said himself during the hearing, "waste coal reclamation without the subsidies would not happen." Charles McPhedran of Earthjustice noted Pennsylvania's Alternative Energy Portfolio Standard which currently subsidizes waste coal by treating it as a "Tier 2 alternative energy source", and in turn subsidizes crypto-mining that relies on dirty waste coal generation. Additionally, lawmakers can remove the Coal Refuse Energy and Reclamation Tax Credit, which gives an owner of a waste coal generation plant a tax credit of $4 per ton of waste coal used for combustion.
In addition to weakening subsidies, environmental groups cited the need for more rigorous enforcement from the Pennsylvania DEP. For example, Diversified Production, a large company that relies on fracked gas for cryptomining, is currently operating in Pennsylvania with 20 outstanding environmental violations.
For more information on proof-of-work cryptomining in Pennsylvania, please find an informational one pager linked here. For additional information, please find Earthjustice and Sierra Club's guidebook on this topic here.
In its recent report, the Intergovernmental Panel on Climate Change (IPCC) warned that global warming will reach dangerous levels if we don't drastically reduce our dependence on fossil fuels much faster than we are. But after China banned proof-of-work cryptomining (the process Bitcoin uses) in 2021, citing, among other things, the environmental threats that mining poses to meeting emissions reduction goals, the U.S. is now hosting many energy-intensive proof-of-work cryptomining operations, including Pennsylvania. While these facilities of automated machines create few new jobs, they threaten local air, local water, and local quiet, as well as the climate, in addition to impacts on small businesses, local economies, and residents.
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