After Ethereum Merge, Advocates and AM Kelles Call on Gov to Sign Cryptomining Moratorium

ALBANY, NY (09/21/2022) (readMedia)-- During NYC Climate Week, advocates called on Governor Hochul to finally sign a bill that would create a two year moratorium on fossil fuel generated cryptomining. Championed by Assemblymember Anna Kelles, the bill passed the Legislature in June despite arguments from opponents that it would kill the industry. The argument is clearly false: last week, industry giant Ethereum successfully "merged" from the energy-intensive proof-of-work mining method to proof of stake, reducing the cryptocurrency's energy consumption by 99.95%. Ethereum is the second largest cryptocurrency (after Bitcoin) and its merge confirms that the industry can innovate and upgrade to more sustainable business practices.

Watch the press conference here.

"Despite what our opponents claim, the Ethereum merge proves that the cryptomining industry can innovate to reduce its impact on the climate," said Yvonne Taylor, vice president of Seneca Lake Guardian. "The moratorium isn't anti-crypto: it's pro-planet, and the industry will clearly survive. Governor Hochul needs to look at the facts, ignore the lies, and sign the bill now."

Even the White House is sounding the alarm about cryptomining - earlier this month, the Office of Science and Technology Policy released a report about the industry's threats and the need for regulation. But cryptomining continues to grow rapidly across New York and the country. In June the New York Department of Environmental Conservation (DEC) denied the air permit for Greenidge Generation – a Bitcoin mine in the Finger Lakes – ruling that its operations were inconsistent with the state's climate goals as mandated by the Climate Leadership and Community Protection Act (CLCPA). But Greenidge, which is owned by a Connecticut-based private equity firm, is still operating - and expanding - as it appeals the DEC's decision and attempts to renew its water permit. Gothamist recently reported, "The company has added about 10,000 computers and mined about 300 bitcoins in July alone, which would be worth more than $6 million. Their hash rates, a unit of how much power the bitcoin network is using, increased by nearly 70% over the last four months." The added computers mean more greenhouse gas emissions (it's on track to emit at least as much as 100,000 homes), more harm to Seneca Lake, and a bigger threat to the local $3 billion agritourism industry that employs 68,000 people - all for the 48 jobs that Greenidge has brought to the region.

Greenidge isn't the only cryptomining operation threatening New York's climate goals while harming New Yorkers and creating few jobs but big profits for an out-of-state corporation. Last week, the New York Public Service Commission approved the sale of the Fortistar North Tonawanda power plant (FNT) to Digihost, a Canadian cryptomining company. Digihost has already been mining Bitcoin at the facility using power sourced from the grid, and is now one step closer to generating its own power with fracked gas for proof-of-work cryptomining. Over the last five years, FNT has only produced energy as a peaker plant between 2% and 13% of the time, emitting relatively small amounts of CO2 and other harmful air pollutants. Now Digihost will be able to pursue operating 24/7/365, multiplying its greenhouse gas emissions by up to 3000%, all while the rest of New York works to drastically reduce its greenhouse gas emissions.

Greenidge and FNT are just the beginning, which is why advocates are calling on Governor Hochul to sign the cryptomining moratorium before more outside speculators take advantage of New Yorkers, just to make rich people richer.

"This Ethereum transition is a solid demonstration that proof of stake is a globally viable cryptocurrency validation method and that a transition from the energy-intensive Proof of Work (PoW) validation method is not only possible, it is reality. What they did was truly stunning. Like rebuilding a spaceship in the middle of a flight. The importance of this cannot be understated. From this one transition, within one cryptocurrency we saw an immediate overnight 0.2% drop in global energy consumption. Imagine if all companies and industries followed suit. We would prevent the worst suffering and species decline that is our current climate change trajectory," said Assembly Member Anna Kelles.

"Cryptocurrency mining doesn't have to be a climate killer, and the legislation before Governor Hochul to pause energy guzzling cryptomining at fossil fuel power plants wouldn't kill crypto," said Liz Moran, New York Policy Advocate for Earthjustice. "Industry opponents to this legislation spent millions lying about what this bill would do, frequently saying this common sense bill would kill an entire industry. We now have another example proving that this is false. Cryptocurrency mining shouldn't come at the expense of our climate and the health and livelihoods of those living near the fossil fuel power plants powering crypto operations. Governor Hochul shouldn't hesitate to sign this legislation into law."

"The New York Legislature made the right choice when it passed a limited, two-year moratorium on crypto mining operations. For crypto miners to get returns on investments, computers need to run 24/7, which means emissions at scales comparable to mid-sized countries," said Richard Schrader, New York Legislative and Policy Director for NRDC (Natural Resources Defense Council). "We can't let crypto get us sidelined when it comes to delivering on New York's ambitious CLCPA – that's why Governor Hochul must sign the moratorium into law."

"The PSC's decision to allow a fossil fuel peaker plant to be used to power bitcoin mining in North Tonawanda flies in the face of the NYS Climate Leadership and Community Protection Act. Digihost's Proof-of-Work mining operations will increase emissions from this plant 3000%, accelerating climate change and harming human health, said Deborah Gondek, North Tonawanda, NY resident & member of North Tonawanda's Climate Smart Task Force. Governor Hochul has the power to stop similar situations from happening in other communities by signing the cryptomining moratorium bill now!"

"The Finger Lakes wine industry continues to grow and attract major investments from around the world. There is no danger that the value of the wine industry will drop by half as the proof-of-work cryptocurrency industry recently experienced. But the longer that Governor Hochul waits to sign the moratorium, the bigger existing operations like Greenidge will get as they rush to build out as fast as possible raising the threat level for Seneca Lake even more," said Michael Warren Thomas, Radio Host, Voice of the Finger Lakes.

"Fossil fueled crypto-mining opens a backdoor to the pollution supercharging the climate crisis. As Hurricane Fiona batters Puerto Rico, a commonsense bill to halt the destructive practice is collecting dust waiting for Governor Hochul's signature - this is no time for Hochul to abdicate her authority to act on the climate crisis," said Joe Varon, a Long Island-based volunteer with Food & Water Watch. "Governor Hochul must strike a blow against fracked gas and sign the moratorium now."

Background

On June 30, after more than a year of advocacy by residents, business owners, wine makers, environmental activists, and elected officials, the New York State Department of Environmental Conservation (DEC) denied Greenidge Generation a renewal of its Title V Air Permit. Greenidge has been operating as a 24/7 proof-of-work cryptocurrency mining facility for Bitcoin under grandfathered in permits for other usage.

Located on the shores of Seneca Lake, Greenidge is a once-mothballed power plant that was converted into a bitcoin mine by the private equity firm that owns it. The plant has brought only 48 new jobs to the region compared to the existing $3 billion agritourism economy, employing approximately 68,000 people, while poisoning the Finger Lakes' natural resources. With over 17,000 Bitcoin machines and plans to expand to 32,500, if permitted to continue operating and expanding, Greenidge would emit over one million tons of CO2 each year, equivalent to that of 100,000 homes. Greenidge also sucks 139 million gallons of water each day from Seneca Lake and dumps it back in at up to 108 degrees, risking toxic algal blooms that would make this water source for 100,000 people non-potable.

Greenidge is just the beginning, and advocates are urging Governor Hochul to put a statewide moratorium on proof-of-work cryptomining. New York hosts a significant portion of the U.S.'s Bitcoin mining to the detriment of small businesses, local economies, the environment, and the climate. After China banned cryptomining, citing the environmental threats the practice poses to meeting emissions reduction goals, outside speculators have flocked to upstate New York to take advantage of our clean air, cool temperatures, fresh water, and lack of cryptocurrency mining environmental regulations.

Proof-of-work cryptocurrency mining is an extremely energy intensive process that threatens the ability of governments across the globe to reduce our dependence on climate-warming fossil fuels. Mining 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 for cooling. Globally, Bitcoin mining consumes more energy each year than the entire country of Argentina. In the U.S. alone, Bitcoin mining produces an estimated 40 billion pounds of carbon emissions each year. Cryptocurrency mining facilities are major emitters of air pollutants. And when cryptocurrency miners rely on the public grid, they can stick everyday people 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."

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.

At an Environmental Conservation budget hearing when asked about the potential impact of the escalating cryptocurrency mining activity in upstate NY on the state's 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."

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 requested details from six major Bitcoin mining companies about their electricity usage and contributions to climate change.

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 permits due to its massive greenhouse gas emissions, poisoning of the Finger Lakes, and noise pollution, with no economic benefit to the community. Similar fights have occurred in Plattsburgh and Niagara Falls, which resulted in local moratoriums.

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.