NY says ‘no’ to major cryptocurrency mine and activists want a broader moratorium.

Climate activists and preservationists on Friday cheered the Hochul Administration’s decision to deny an air emission permit to a major cryptomine in the Finger Lakes that was using a once-shuttered power plant to power its activities.

With that victory behind them, they urged Gov. Kathy Hochul to sign a bill that would impose a moratorium on cryptomining across the state while the state Department of Environmental Conservation conducts an extensive review on how the practice comports with efforts to cut greenhouse gas pollution and phase out the use of fossil fuels.

At the same time, the Finger Lakes cryptominer, Greenidge Generation Holdings, said it will continue to mine crypto currency with its gas-fired plant while it appeals the state’s decision. The firm also is likely to go to court if that decision is denied, meaning that the process could go on for years until it’s fully resolved.

“Governor Hochul must finish the job by signing the crypto moratorium,” said Yvonne Taylor of Seneca Lake Guardian, the organization that has led the fight to close the Greenidge operation.

Taylor added that this was the governor’s “fracking moment,” alluding to former Gov. Andrew Cuomo’s 2014 decision not to allow hydrofracking for natural gas in New York. That was hailed by environmentalists but condemned by the oil and gas industry.

“This decision does not have any impact on our current operations,” Greenidge said in a prepared statement to investors following the decision from the state Department of Environmental Conservation to deny a new “Title V” air emission permit.”

The statement continued: “We can continue running uninterrupted under our existing Title V Air Permit, which is still in effect, for as long as it takes to successfully challenge this arbitrary and capricious decision.”  

Cryptomining is the practice in which investors and computer experts set up banks of purpose-built computers to solve the lengthy, complex math equations needed to verify transactions in cryptocurrency. That is virtual currency, sometimes redeemable in cash, that exists online in a blockchain, or digital format that allows users access with a personalized “key” or special code.

By detecting and verifying these crypto currency transactions, miners earn digital “coins” or currency that they can turn into  dollars.

The practice can be lucrative and miners operate globally, but the mining consumes enormous amounts of electricity since the special computers involved in the process run 24/7. 

As a result, miners are always seeking out locations where there is inexpensive power. 

Upstate New York is one of those places due to the availability of low-cost hydroelectricity.

Greenidge, however, took over a gas-fired power plant on Seneca Lake. While the plant adds power to the state’s electric grid, it also runs Greenridge’s cryptomine. 

Environmentalists say that so much power consumption, especially from a gas plant, runs counter to the state’s goal of reducing greenhouses gases.

State Environmental Conservation Commissioner Basil Seggos essentially agreed with that contention in denying the air permit request.

As Greenidge’s appeal plays out, activists note that other crypto miners are still coming to the state and some want to re-start dormant gas-fired power plants to run their computers.

That’s why the environmentalists are pushing for the moratorium.

Supporters such as Anna Kelles, the Ithaca Democratic Assemblywoman who sponsored the moratorium measure in the Assembly, along with Brooklyn Democratic Sen. Kevin Parker, noted that other crypto miners are eyeing gas-fired power plants for their operations, even though the state’s Climate Leadership and Community Protection Act aims at retiring these facilities.

Opponents have also noted that the crypto mines create relatively few jobs, since they are essentially buildings full of computers which can be programmed from afar. Many of the jobs entail tending the computers and making sure they keep running. Greenidge, according to earlier reports, contains more than 15,000 of these purpose-built mining computers.

Crypto supporters see things differently. They say this is a chance for upstate New York to host a growing industry, which will generate tax revenue and potentially help revive rust-belt areas of the state.

Construction and trade unions also like cryptomining since reopening power plants could create more jobs for them.

Financiers who have pursued cryptocurrency have also opened their wallets when it comes to campaign contributions.

The Times Union earlier reported that a federal PAC,  Protect Our Future, has been heavily funded by Sam Bankman-Fried, the founder of Manhattan-based FTX Group, a  crypto derivatives exchange. That PAC gave about $1 million to a New York-based group, also named Protect Our Future, which listed Hochul’s Lt. Gov. running mate Antonio Delgado as one of the candidates it planned to back this year.

FTX Group in March also hired the Hinman Straub lobbying firm for $11,000 a month to work on behalf of the crypto industry, according to state records.

While the moratorium will face a sign-or-veto decision by Hochul, another bill was also passed by lawmakers that appears to take a softer approach, by launching a study without a moratorium.

Sponsored by two Queens Democrats, Assemblyman Clyde Vanel and Sen. James Sanders, that measure would direct the state Department of Financial Services to set up a task force to study cryptocurrency. It would look at numerous aspects of cryptocurrency, including consumer protection as well as the environmental impacts.

“New York is arguably the financial capital of the world, and we must ensure that we help foster the creation of an environment that allows us to continue to lead the world in the financial sector,” reads part of the memorandum that the sponsors put forth in support of the bill.

rkarlin@timesunion.com • 518-454-5758  • @RickKarlinTU

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