Crypto miners have acquired their own power plant. This is a climate disaster.

It’s a June morning in 2022 so early that most homes on Seneca Lake in upstate New York are filled with nothing but the sound of water lapping against its wooded shores. But in Yvonne Taylor’s home, there is a hum of grassroots organizations fighting one of the biggest new threats to the climate.

Click, click, click.

Taylor reaches out on Facebook to a stranger from Pennsylvania who posted about the cryptocurrency mining industry coming to her town.

“We’d like to talk to you about this,” Taylor writes. “Bitcoin mining in our community also affects us, and [we] form a national group of people who feel the harmful effects of this industry.’

The downside of certain types of cryptocurrency is that the production of new virtual coins – known as “mining” – requires a shocking amount of electricity. When this energy is produced using fossil fuels, it creates a lot of local pollution and climate emissions.

Bitcoin mining is so energy intensive that it increases the demand for new fossil fuel plants or gives old plants new life.

In Seneca Lake, a private equity firm purchased the once-defunct Greenidge coal plant in 2014 and converted it into a gas fracturing plant. In 2020, this firm launched a commercial cryptocurrency mining operation by connecting thousands of computers directly to a Bitcoin mining factory. This move turned out to be a mistake. An industry that had gone under the radar—too new to regulate—suddenly entered a community with extensive experience in fending off environmental threats.

Taylor, a speech therapist whose family has lived on the lake for seven generations, first mobilized around banning fracking in the region. Then, when the company came up with a scheme to store 88 million gallons of liquefied petroleum gas in salt caverns along the lake, she and others fought it off with legal help from Earthjustice.

Yvonne Taylor, photographed at Seneca Lake, where her family has lived for seven generations.

Yvonne Taylor, photographed at Seneca Lake, where her family has lived for seven generations.

Lauren Petracca for Earthjustice

The lake was the only constant I ever had in my tumultuous life, Taylor says. I protect him as fiercely as a mother bear protects her cub.”

So in 2020, when Taylor realized what was going on at her local power plant and learned that global Bitcoin mining was using more electricity than some mid-sized European countries, she knew exactly who to turn to for help.

She called Earthjustice.

New fight, old enemy

Taylor’s tip reached Mandy DeRoche, the new deputy managing attorney at Earthjustice.

A former securities and commercial litigator with a background in corporate whistleblowing, Desroches had the necessary skills to tackle the complex new climate threat.

Taylor and other local partners kept DeRoche informed of their environmental stewardship efforts. In 2017, Greenidge Power Station restarted gas-fired operation. It has operated intermittently for several years, providing electricity to the grid at times of peak demand.

Then observers noticed unusual movements at the plant. They learned of building permit applications to house computers for a “data center” and “behind the meter” operation, which means the electricity will not go to the utility grid, but directly to that data center.

But this was no ordinary data center.

In 2020, the power plant increased its work. Those nearby began to hear a low hum that one resident described as the sound of a plane never landing. The noise came from the cooling fans of the computers. The level of air pollution jumped.

Residents were stunned and tried to understand what exactly had moved to the city.

Mandy DeRoche, left, deputy managing attorney for the Coal Program, speaks with Earthjustice senior attorney Meighan Burton during a staff meeting in New York.

Mandy DeRoche, left, deputy managing attorney for the Coal Program, speaks with Earthjustice senior attorney Meighan Burton during a staff meeting in New York.

A cold holiday for justice on earth

From her earlier career, DeRoche knew where to get better information than the traditional environmental regulatory system. The power plant’s buyers, Greenidge Generation LLC, went public in a complex reverse merger. That meant they would have to make disclosures to the Securities and Exchange Commission and investors.

The details dispelled any hopes that mining was just a side hustle. The plant operated for just 48 days in 2019, producing carbon emissions equivalent to roughly 7,700 gas-powered cars driven for a year. The following year, the plant worked for 343 days and produced the equivalent of more than 44,500 cars. By the end of 2020, the company managed approximately 6,900 miners. More mining machines have been added since the company builds up to the planned 32,500 machines.

The plant’s air permit, a replica of when it provided electricity to local homes and businesses in previous decades, gave the plant’s new investors a significant runway to pollute just to mine cryptocurrency for themselves. The company also had ambitions to scale this model elsewhere.

Earthjustice has spent decades trying to shut down more than 100 coal plants. DeRoche saw the outlines of a new industry that could bring plants back from the dead and boost other fossil fuel-powered plants across the country.

“Greenidge Generation LLC has given other retired, retiring or peak businesses a road map of how to get back online or pollute more, how to get investors, how to go public on the NASDAQ,” she says .

A shot is heard in the blockchain

In 2021, DeRoche and the Atlantic Chapter of the Sierra Club sent a letter to the New York State Department of Environmental Protection stating that if the energy-consuming mining seen in Greenidge took off and ran on fossil fuels, the state there was no hope of fulfilling its new obligations to reduce emissions into the climate. The agency, the letter noted, may deny the power plant’s air permit, which was to be extended.

Her phone was instantly buzzing with calls from journalists interested in the crypto mining controversy. Bitcoin, the oldest and most famous cryptocurrency, inspires passionate fans and tireless critics.

Desroches refused to participate. “Crypto is the new and shiny thing that gets the press attention, but our focus remains on pollution and energy use,” Desroches says. “We see that the power plant is working all the time, which was not there before. We do not support returning from dead power plants or operating more than necessary.”

In practice, this means that Earthjustice’s concerns are limited to a specific type of cryptocurrency mining called “proof of work,” which is primarily used by Bitcoin. Many other coins use much less energy.

The narrow focus continued to provoke intense pushback from Bitcoin fans. Local watchdogs have faced threats from people who are “almost evangelical about proof-of-work cryptomining,” Taylor says. “In fact, we became very afraid for our safety. As a result, we installed an extensive security system in our home.’

The media moment also brought new information and allies. Journalists and local partners discovered other mining organizations after US operations exploded following China’s ban, prompting miners to scramble for cheap and fast energy. Residents of other communities involved in cryptocurrency mining operations have begun reaching out to Seneca Lake and Earthjustice activists.

Bitcoin mining machines in a warehouse at North America's largest bitcoin mining facility, Whinstone US, in Rockdale, Texas.  Transactions like this one have been fueled by China's growing crackdown on crypto, which has pushed the industry westward.

Bitcoin mining machines in a warehouse at North America’s largest bitcoin mining facility, Whinstone US, in Rockdale, Texas. Transactions like this one have been fueled by China’s growing crackdown on crypto, which has pushed the industry westward.

Mark Felix/AFP via Getty Images

Many of the miners are located in states where Earthjustice has experience fighting dirty power plants, including Kentucky, Indiana, Montana, Pennsylvania and New York.

Most miners connect directly to power grids, some of which are very dirty, such as Kentucky’s grid, which is about 70% coal-fired. Miners can often get sweet prices from utilities through power purchase agreements or feed-in tariffs. Earthjustice is starting to challenge these deals, which leave ordinary people and local businesses with higher electricity bills and more pollution.

In addition, cryptomining is rapidly increasing in oil and gas fields – Miners are bringing shipping containers filled with computers right up to the wellheads.

Slowdown Showdown

Sensing that lawmakers and regulators needed more time and information, Earthjustice and allies pushed New York State to enact a partial moratorium.

The idea: delay permitting crypto mining at fossil fuel plants for two years while the state conducts a study on the environmental impact of cryptocurrency mining — specifically with an eye toward implementing a 2019 state law called the Climate Leadership and Community Protection Act . The CLCPA commits New York to major reductions in greenhouse gas emissions.

The crypto mining industry will have none of that. They retained almost every lobbying firm in Albany, says Earthjustice’s Liz Moran, who had to fight this army of suits.

“I’ve heard from some legislators that they will hear from a lobbyist representing a crypto company at least three times a day,” Moran says. “It was scary.”

She understood that the only way to repel them is the power of the people.

Earth justice advocate Elizabeth Moran is pictured at the New York State Capitol in Albany.

Earth justice advocate Elizabeth Moran is pictured at the New York State Capitol in Albany.

Patrick Dodson for Earthjustice

She has organized for grassroots advocates from groups such as Taylor’s Seneca Lake Guardian, Fossil Free Tompkins, the Finger Lakes Conservation Committee and many others to travel to Albany or join calls or virtual meetings to share their personal stories. Then, in recent days, they increased their 24-hour calls to key lawmakers. Support for the moratorium will be canceled – and will fall away.

The fight went into the final minutes of the New York Legislature’s session and finally ended around 2:30 a.m. on June 3.

“It was David versus Goliath. It really felt like the little guys won here,” says Moran.

Return to the lake

However, the victory was not complete for residents around Seneca Lake or around the state. Governor Hachul was scheduled to sign the bill (she has not yet signed it at press time). ​​​​​​​However, the bill will not directly affect Greenidge because it exempts miners from permit applications filed before any moratorium.

But the big news came when the state decided to deny Greenidge its Title V flight permit on June 30. State advocates turned up the volume by submitting nearly 4,000 comments, 98% of them against extending the permit, including their own 57-page technical and legal comments Earthjustice.

“My phone started lighting up with ‘Title V flight authorization denied.’ I literally dropped the phone,” says Taylor. The flash startled her partner. “I said, ‘We did it, we did it, they refused permission!’ We were both jumping and hugging each other and laughing a little.”

Greenidge Challenges Air Permit Denial; It is protected by Earthjustice and the state conservation agency. Greenidge, meanwhile, continues to operate, but the exposure and containment of a new pernicious industry has begun. And more trouble from Earthjustice

Leave a Reply

Your email address will not be published. Required fields are marked *