The New York Assembly wants to stop the setting up of mining operations in the state. Legislation has been drafted by an Assembly member to reduce greenhouse gas emissions from the power intensive industry. Assembly Bill A7389C calls for an amendment of the state's environmental conservativism law to establish a moratorium on the use of proof-of-work methods in the mining of cryptocurrencies. The New York Department of Environmental Conservation would have to study the environmental impacts of existing and proposed mining operations. The bill passed the state Assembly's Environmental Conservation Committee in March of 2022, and is now pending a vote in the full state legislature. If the bill passes, it will ban cryptocurrencies mining operations in the state for two years. Kelles says that those moves are necessary to reduce pollution because when mining operations compete against each other, they have to set up large facilities with high-powered computers, so many operations set up shop in old power plants. Whenever they update their hardware, cryptocurrencies try to get an edge by using the newest, fastest processors. Kelles spoke with Earther about the bill. The interview has been edited for clarity.
Why is New York State a good location for coin mining?
Anna Kelle said that mining companies always look for the cheapest source of electricity because they use so much of it. You need to cool the facilities when the computers get hotter.
There are 30 retired power plants in upstate New York. New York has cold temperatures, abundant freshwater, and clean air. Companies went to where they could get hydro power for less than market rate because we have a lot of hydroelectric energy. Massena is one of the largest mining operations in the country. They were able to take advantage of the low energy cost.
Greenidge is near fresh water because of the heat produced. They just use the water, circulate it around the facility to capture the heat, and then dump that back into the lake. They have a permit that allows them to pull up 130 million gallons of water per day. The water can be released back into the class C trout stream at temperatures up to 112 degrees in the summer. The trout show signs of stress. Fishermen and hunters in the area are very concerned about the impact it has on the wildlife.
What are the environmental concerns of the businesses in the state?
The greenhouse gas emissions. When Greenidge bought the plant, it was releasing zero admissions for years, and now it's maxing out its air permit for GHG emissions, which they could exceed depending on how many mining rigs they are putting in the facility.
There is a lot of sound pollution. It sounds like you are standing on a tarmac with multiple jet engines blowing at you and the sound travels really far if you have all of them running all the time.
In low income communities, these mining operations offer PILOT pay in lieu of taxes because they make a fixed payment for a set period of time. It is less than what they would pay if they paid market rate.
When it was a coal fire plant, the facility paid over a million dollars a year in lieu of taxes to the community. The last time I looked, they had a revenue of $40 million, but now they have more than doubled that, and they only paid.
There are about 30 retired power plants in New York. Is there more companies trying to take advantage of that?
There is an active proposal for the Fortistar power plant in North Tonawanda from a company from Canada.
You have to look at the opportunity costs when offsetting their energy usage. If we are using our hydroelectric energy for mining, we will have to significantly increase our new energy infrastructure, as well as our entire statewide transmission system, to meet the energy demands of our existing energy, let alone the significant increase from all of the mining operations.
Is there any concern that the elected officials will be anti-tech because of this bill?
It isn't true. New York state can be the capital of the internet. Buying and selling cryptocurrencies can be done in this state, without the need for mining. There is a moratorium on mining in New York.
I wish that mining wouldn't happen all over the world. I would like to see cryptocurrencies transition to a form of validation that doesn't use a lot of energy.
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