Environmentalists Target Greenidge as They Turn Up Pressure on NY Governor to Sign Mining Moratorium Bill

A moratorium on new PoW mining projects that use behind-the-meter fossil fuel energy is now on the NY governor's desk.

AccessTimeIconJun 3, 2022 at 9:46 p.m. UTC
Updated Jun 6, 2022 at 7:12 p.m. UTC

Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia.

Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.

NEW YORK — Emotions are running high after the New York state Senate passed a bill that disallows fossil fuel power plants from setting up new projects to provide energy to proof-of-work (PoW) cryptocurrency mines for two years.

Environmentalists and state Assemblywoman Anna Kelles – who sponsored the Assembly version of the bill – called on New York Gov. Kathy Hochul to not only sign the bill into law, but to also deny air permits for bitcoin mining company Greenidge Generation at a press conference on Friday.

The environmental groups congratulated each other in a gleeful online press conference and thanked the elected officials who passed the bill through the state’s two houses.

At 5:00 a.m. ET this morning, Greenidge Generation rushed to declare that the bill does not apply to its operations, even quoting Kelles herself from an April Wall Street Journal story.

The bill effectively bars the creation of new bitcoin mines that use behind-the-meter fossil fuel power by denying the air permits to the power plants that supply them with electricity. Mining at home, using renewable energy or using fossil fuels through the grid are all allowed under the bill.

“In essence this is a power plant bill. This bill says that we will not for the next two years allow cryptocurrency mining companies to purchase power plants that use fossil fuels … and use them for cryptocurrency mining. ... That is the crux of this bill,” Kelles, the lead sponsor of the bill in the state’s lower house, said at the press conference.

Greenidge Generation is one of two bitcoin miners that use this model in the state, and its air permit is currently under review by the state’s Department of Environmental Conservation (DEC). The department pushed the deadline for making a decision to June 30, just two days after the state is set to elect a new governor.

The power plant in Dresden in upstate New York has been the eye of the storm in the state’s struggle over bitcoin mining. Located next to Seneca Lake, a tourist destination known for its vineyards, the power plant has been using lake water to cool its operation, which some residents of the picturesque locale say is causing algae blooms and jeopardizing the lake’s fauna.

Environmental advocates also called for the denial of air permits to Digihost, a crypto miner that is working to convert another fossil fuel power plant in New York state about 120 miles northwest of the Greenidge Generation site.

Digihost declined to comment for this report, as well as Coinmint, whose bitcoin mines in Plattsburgh and Massena, New York, have also run into controversy. A spokesperson for Greenidge Generation contacted after the press conference said the company doesn’t have any further comment.

The bill’s opposition

Bitcoiners decried the measure. Some called it an unjustified restriction to economic freedom – several of them inaccurately labeling it as a full-on ban on bitcoin mining in the state.

Others took a more moderate stance, expressing concern about the future of the industry in the state.

“Although the bill is quite limited in its scope, it will project an image of New York being ‘anti-bitcoin’ so it will likely limit any expansion of crypto mining in the state and accelerate even more the move to other jurisdictions, like Texas or Oklahoma, where there is strong political support for miners,” said Alex Martini, CEO of Blockfusion, which operates a mining operation in Niagara Falls.

“Even if the governor ends up vetoing this, I would imagine people are going to be very hesitant to set up more bitcoin mines in New York,” said Joe Burnett, a mining analyst at Blockware Solutions.

Kelles claimed that conservative economic freedom groups fought the bill. Her colleagues are getting 700 emails every single day that appear to be templates, not from New York residents, she said. The assemblywoman believes they are funded by two conservative organizations, Club for Growth and Freedom Works. CoinDesk could not reach either organization for comment at the time of publication.

The environmental groups claimed that they were met with vehement opposition in the form of lobbying efforts.

“We took on a very powerful industry with vast financial resources at its disposal,” said Eric Weltman, an organizer with Food & Water Watch, at the press conference.

The governor’s dilemma

The bill is now before Gov. Hochul, for her signature or veto. Kelles said Hochul’s environmental staff “very much recognize the concerns about the environmental impact.” Now that the bill has passed both houses, it is clear that this is the will of the people of New York, Kelles said.

The bitcoin mining industry plans to continue its lobbying efforts.

“We’re trying to determine when the governor will request the bill [to sign it into law]. It’s really a question of whether she [Hochul] wants to have this hanging out there for a while or not. So, we just continue to watch and see when it gets delivered, and we’ll be engaging with her office immediately to explain the problem with the bill and the potential impact,” said John Olsen, head of New York policy at lobbying group Blockchain Association.

Gov. Hochul has received a $40,000 donation from Ashton Soniat, the chairman and CEO of Coinmint, as well as $78,000 from Albany lobbying firm Ostroff Associates, which includes Blockfusion in its list of clients, The New York Times reported. The governor raised $10 million from mid-January to May, according to the report.

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Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia.

CoinDesk - Unknown

Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.

CoinDesk - Unknown

Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia.

CoinDesk - Unknown

Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.