Reform Groups Tell Governor Hochul: Stop Unchecked Crypto Mining in NYS

ALBANY, NY (01/20/2022) (readMedia)-- Today, as Congress holds a hearing on "Cleaning Up Cryptocurrency," prominent reform groups sent a letter to Governor Hochul and Department of Environmental Conservation Commissioner Seggos urging them to deny the permit renewal of Greenidge Generation LLC, a Bitcoin mining plant in Dresden, NY. Common Cause/NY and NYPIRG also joined environmental advocates, including Seneca Lake Guardian, in calling on the Governor to impose a moratorium on proof-of-work cryptocurrency mining.

In the letter, Susan Lerner of Common Cause/NY, and Blair Horner and Anne Rabe of NYPIRG write:

"We write with serious concern about the possible renewal of Greenidge Generation LLC's Title V air permits. If DEC renews these permits, it will set a dangerous precedent for New York State. Greenidge is taking advantage of the absence of regulations in the quickly growing field of proof-of-work cryptocurrency mining, operating with grandfathered-in permits granted for a vastly different purpose. As reform groups, it is clear that Greenidge should not be permitted to exploit public resources for private gain. Further, a moratorium must be placed on proof-of-work cryptocurrency mining in New York State until a thorough environmental and economic review is conducted and appropriate regulations are set."

Proof-of-work cryptocurrency mining is a rapidly growing industry. Its energy use across the country has risen 320% in just the past five years, and New York hosts nearly 20% of it. There is currently no state or federal oversight for this industry, and outside speculators are flocking to New York to take advantage of the lack of regulation. Tusk Strategies recently announced a massive initiative to make New York the crypto mining capital of the country. Without swift action from the NYS government, New York's environment, local businesses, and climate goals are in their line of fire.

"After being kicked out of China, outside speculators are flocking to New York to take over mothballed power plants and mine Bitcoin. It's the wild west here, without any oversight or regulations. These tech bros are exploiting our natural resources with little to no benefit to the public - the automated machines they fill the plants with don't create jobs, while the environmental harm they cause is an existential threat to the agri-tourism industry our region depends on. The DEC must deny Greenidge's air permit renewal, and Governor Hochul must put a moratorium on proof-of-work Bitcoin mining. We're grateful to Common Cause/NY and NYPIRG for working with us on this urgent issue," said Joseph Campbell, president of Seneca Lake Guardian.

The full text of the letter to Gov. Hochul and Commissioner Seggos is attached and pasted below.

Background

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. 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 permits due to its massive greenhouse gas emissions, poisoning of the Finger Lakes, and noise pollution, with no economic benefit to the community. Greenidge Generation is still operating in Dresden, NY under grandfathered-in permits granted for use as a peaker plant, not 24/7 Bitcoin mining. Greenidge has applied for an air permit renewal and is awaiting a decision from the Department of Environmental Conservation. Similar fights have occurred in Plattsburgh and Niagara Falls, which resulted in local moratoriums.

Seneca Lake Guardian is urging Governor Hochul to place a moratorium on proof-of-work crypto mining with dozens of environmental organizations in the Stop Proof-of-Work Crypto Coalition including Earthjustice, NYPIRG, Sierra Club, and Food and Water Watch. There is a bill before both houses of the State Legislature that would place a statewide moratorium on proof-of-work crypto mining: S6486C and A7389B.

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.

There are nearly 30 decommissioned or underutilized power plants across the state, phasing out as New York reduces its greenhouse gas emissions, that could again guzzle fossil fuels - this time for their own private interests without any public benefit. 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 gasses by 2050 and 100% zero-emission electricity by 2040.

Crypto mining is also at odds with the overwhelmingly popular amendment to the state constitution guaranteeing 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 and water, is now unconstitutional.

Crypto mining privatizes access to the grid for private gain and sets a dangerous precedent, wherein anyone with the resources to do so can burn fossil fuels and strain the grid in order to make a profit. 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."

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.

Letter

Dear Governor Hochul and Commissioner Seggos,

We write with serious concern about the possible renewal of Greenidge Generation LLC's Title V air permits. If DEC renews these permits, it will set a dangerous precedent for New York State. Greenidge is taking advantage of the absence of regulations in the quickly growing field of proof-of-work cryptocurrency mining, operating with grandfathered-in permits granted for a vastly different purpose. As reform groups, it is clear that Greenidge should not be permitted to exploit public resources for private gain. Further, a moratorium must be placed on proof-of-work cryptocurrency mining in New York State until a thorough environmental and economic review is conducted and appropriate regulations are set.

Greenidge is seeking the "grandfathering" of a permit, originally granted in 2016 to produce electricity for the grid during times of peak demand, in order to continue its 24/7 proof-of-work Bitcoin mining operation. Greenidge has not changed its permit or even updated its permit application information. While Greenidge is permitted to produce electricity for the grid with benefit to the public, this Bitcoin mining operation is not in the public interest: it has brought in very few jobs while threatening the local economy and environment. This facility's material change in operations from an emergency peaker plant to a 24/7 Bitcoin mining operation, although highly lucrative for the owners, has little to no public benefit. Permits exist for a reason - it should not be up to permittees to decide what their permits allow them to do.

Greenidge is not just operating under a misappropriated permit - it is doing so unchecked. There is currently no state or federal oversight for this industry. And Greenidge is just the beginning - outside speculators are flocking to New York to take advantage of the lack of regulation. Should Greenidge be permitted to continue to operate unchecked, and without a moratorium before an environmental review is conducted and regulations are set forth, nearly 30 shuttered power plants upstate could start guzzling fossil fuels for their own private interests. New York already hosts 20% of the country's proof-of-work cryptocurrency mining.

Energy is a public resource, yet Greenidge is exploiting this public resource by privatizing its access to the grid for its own gain. Allowing it to continue would set a dangerous precedent, wherein anyone with the resources to do so could burn fossil fuels and strain the grid in order to make a profit. And requiring crypto miners to rely on the public grid is not a solution, because it means everyday New Yorkers are stuck footing 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."

In addition, proof-of-work cryptocurrency mining is completely at odds with two pieces of legislation in New York state: the Climate Leadership and Community Protection Act (CLCPA), and the overwhelmingly popular amendment to the state constitution guaranteeing every New Yorker the right to clean air, clean water, and a healthful environment. Allowing energy-intensive proof-of-work cryptomining to continue unchecked will make the CLCPA's benchmarks virtually impossible to meet, and it will divert needed renewable power from the grid. Revitalizing old polluting power plants for private financial gain, with drastic consequences for our air and water, is now antithetical to the state constitution.

For the above reasons, we urge you to reject Greenidge Generation's permit renewal application, and to impose a moratorium on proof-of-work cryptocurrency mining until a thorough review is conducted.

Sincerely,

Susan Lerner, Executive Director, Common Cause/NY

Blair Horner, Executive Director, NYPIRG

Anne Rabe, Environmental Policy Director, NYPIRG