Bitcoin cryto-mining could be banned in New York

Gov. Kathy Hochul is getting pressure from environmental activists to sign a law that would impose a two-year moratorium on a type of crypto mining that uses large amounts of energy to make bitcoins. But the governor is not tipping her hand on whether she will sign or veto the measure.

The State Legislature approved the bill in June. It would put a two-year hold on the state issuing air permits to companies who want to buy old fossil fuel power plants and convert them to what’s known as “proof of work” crypto mining. The process uses vast amounts of energy to power computers to solve complex equations to “mine” the bitcoins.

Under the legislation, the state’s Department of Environmental Conservation would use the two-year pause to conduct a study into the environmental impacts of the industry.

Groups including the Sierra Club and Earthjustice staged a demonstration outside Hochul’s New York City offices on Tuesday, asking her to immediately sign the bill.

They chanted, “Hey, hey, Hochul, fossil fuels have got to go,” and “We’re in a climate emergency, Hochul needs more urgency.”

Earthjustice’s Liz Moran said the energy-intensive process hampers the state’s ability to meet carbon emission reduction goals designed to fight climate change.

“There should be no hesitancy from Governor Hochul to sign this legislation into law,” Moran said. “It aligns so well with the actions that the state has already been taking.”

Hochul was asked about the crypto mining moratorium shortly after winning election to a full term as governor earlier this month. She said the measure is one of hundreds of bills that she will review and act on in the coming weeks.

“We have a couple of weeks,” Hochul said on Nov. 10. “I’ll give you this one prediction: It will all be known and settled by midnight Dec. 31.”

The bitcoin industry is against the moratorium, saying it would prevent New York from creating more jobs in the industry. Hochul’s campaign was endorsed by a union that represents workers associated with the crypto mining plants.

Hochul’s Department of Environmental Conservation has taken some steps to stall the burgeoning industry.

On June 30, the DEC denied the renewal of an air emission permit for the Greenidge power plant on Seneca Lake in the Finger Lakes. The company converted an old coal-burning plant to natural gas, and in recent years has used the plant’s power to fuel proof-of-work bitcoin mining.

The agency cited the “dramatic increase in greenhouse gas emissions from the facility” as one of the reasons to deny the permit.

Some residents have long complained that the crypto mining plant is incompatible with the wine and related tourism businesses that have flourished in the region.

Joseph Campbell is with Seneca Lake Guardian, a group that is trying to protect the lake and lobbied for the moratorium.

He says the state’s wine industry generates $2.4 billion in tax revenue for New York, and $6.65 billion in direct economic activity. He says the wine and agritourism industry in the Finger Lakes employs 60,000 people.

“Greendige’s operations threaten all of that,” said Campbell, who added the plant employs just 48 workers.

The group is also concerned about a former coal-burning plant in Tonawanda, near Buffalo, that could become a second bitcoin mining facility if there’s no moratorium.

The state’s environmental agency did give the Greenidge plant more time to comply with another requirement to install protective screens around its water intake pipes to protect fish and other animals that live in the lake. That work was to have been completed in September but is now required to be done by January.

The actions come as the bitcoin industry’s profits have declined steeply in recent months. According to Greenidge’s third-quarter report, the company lost almost $30 million compared to the same time period last year.