The crypto mining industry spent millions of dollars to try to kill a bill that Gov. Hochul just signed into law, making New York the first state in the nation to put a moratorium on an extremely energy-intensive process. It’s a big deal.
The new law puts a two-year pause on corporate purchasing of fossil fuel-based power plants for the purpose of mining cryptocurrencies like Bitcoin. It also requires the state to study the impact of pollution from cryptocurrency mining on local communities and on New York’s ability to reach our state climate goals, which will enable us to enact fact-based policies around the practice in the future. But, despite crypto’s current scandals, the cryptocurrency mining industry continues to spread across the nation, increasing our country’s dependence on fossil fuels when the science makes clear we must be laser-focused on reducing our emissions.
What happens in New York shouldn’t stay only in New York.
Proof-of-work cryptocurrency mining is the validation process that Bitcoin and a small handful of other cryptocurrencies use. When China banned the practice in 2021, speculators flocked to the U.S., where we have no federal oversight or regulation. Cryptocurrency mining requires thousands of machines to operate at full capacity 24/7 solving complex algorithms to validate transactions. According to a recent guidebook from Earthjustice and the Sierra Club, in one year, Bitcoin mining in the U.S. alone consumed as much electricity as four states combined, emitting 27.4 million tons of CO2 — equivalent to the emissions of as much as 6 million cars annually. In September, the White House Office of Science and Technology Policy released a report about the industry’s threat to the climate and the need for regulation.
At this point in the climate crisis, we can’t afford any additional greenhouse gas emissions, especially ones coming from fossil fuel-based power plants that have already been closed or only operate part-time when demand for energy is high, like during cold snaps and heat waves. Take Greenidge Generating Station, a once-mothballed coal plant that was purchased by a Connecticut-based private equity firm. The firm repowered and reopened the plant, and it makes electricity using fracked gas to operate its massive fleet of Bitcoin mining machines. The plant is on track to emit close to a half-a-million tons of CO2 this year — equivalent to approximately 50,000 homes. And there isn’t a good jobs argument either: Greenidge employs 48 people, while presenting a major threat (via its harmful air and water pollution) to the $3 billion, 60,000-job agritourism industry that serves as the region’s economic engine.
Fortunately, on June 30 of this year, the New York State Department of Environmental Conservation (DEC) denied Greenidge’s air permit on the grounds that the power plant’s operations are incompatible with New York’s greenhouse gas reduction mandates. Although the plant will remain open as Greenidge appeals the state’s decision, we are hopeful that it will soon close for good.
This could be a major win, but we can’t afford separate grassroots campaigns every time we need to shut down a climate change-accelerating cryptocurrency mine — hence the cryptocurrency mining moratorium. But other states, like Texas, Kentucky and Pennsylvania, also host a significant amount of the country’s cryptocurrency mining. Emissions are increasing exponentially, while Bitcoin’s value continues to fluctuate wildly and the crypto industry as a whole is plagued by scandal after scandal.
Proponents of the cryptocurrency mining industry claim that it is sustainable, but their talking points have been soundly debunked. There is no evidence that cryptocurrency mining has spurred significant renewable energy development, improved electricity grids, or that it runs primarily on renewables. Any renewables that are diverted for the use of cryptocurrency mining means more overall fossil fuel dependence for everyday people and higher electric bills. A 2021 study estimates that in one New York community alone, cryptocurrency mining increased the cost of electricity for individuals by $79 million and for small businesses by $165 million. Significant cryptocurrency mining activity in New York is increasing the total demand on our electric grid making it more difficult to transition the state to 100% electric by 2050, as required by New York state law.
According to the United Nations’ Intergovernmental Panel on Climate Change (IPCC), we must reduce our total greenhouse gas emissions by 50% in the next seven years if we are to prevent the worst ravages of climate change. About 25% of those emissions come from the United States alone. We must do our part for a livable future, and that means curtailing heavy polluting industries like proof-of-work-based cryptocurrency mining. New York has created both a framework and precedent. Now we need other states to follow our lead.
Kelles, author and prime sponsor of the cryptocurrency mining moratorium, represents Tompkins County and parts of Cortland County in the state Assembly; DeRoche is the deputy managing attorney of the Clean Energy Program at Earthjustice.