Moratorium on Proof of Work Cryptocurrency Individual Sign on Letter
Dear Members of the State Senate and Assembly,
We, the undersigned, stand together in urging you to support Bill A7389/ S6486 which would place a moratorium on any new or expanding cryptocurrency mining operations in the state of New York until a comprehensive study of the industry and its impacts can be fully evaluated.
Cryptocurrencies are virtual currencies where transactions are validated by people or companies that participate in the currency. Some validation methods are significantly more energy intensive than others. One in particular, called Proof of Work, requires solving a complicated mathematical formulae to validate a transaction. The first person or company to validate a transaction also wins currency, which is how new currency enters circulation. This is called mining. Companies have built massive centers of high speed, high powered computers running all day every day to win the most currency. This model is extremely energy intensive and also requires robust turbine systems, which is often achieved by circulating cool water from a fresh water body.
Lured by the skyrocketing value of one currency, Bitcoin, operators are looking to New York State for locations to build out mining facilities using old or decommissioned power plants that should be phased out, not repowered or expanded. Cryptocurrency mining, particularly for Bitcoin, is now estimated to consume more energy than many entire countries the size of Argentina, Sweden, or Pakistan. Parts of China and India are considering bans on cryptocurrency mining because it is defeating all of their climate goals and taking power away from the public sector for the miner’s private use.
Climate change threatens the health, welfare, and economy of the state with increasingly severe and widespread impacts to our communities due to flooding, sea level rise, heat waves, coastal erosion, erratic and unpredictable weather patterns, shifting climactic zones, loss of wildlife, increased harmful algal blooms and invasive species, and increased risk of disease. These consequences disproportionately impact environmental justice communities making the need for this comprehensive assessment both an environmental issue and a social justice issue. We must not go backwards on our commitment, in law via the Climate Leadership and Community Protection Act (CLCPA), to prevent disastrous impacts to the residents of New York.
Everything we do or plan to do about climate change will be undermined by growing cryptocurrency mining operations unless we address this industry.
The Greenidge power plant in the heart of Finger Lakes Wine Country is merely the test case for how the rest of the state’s old and retiring power plants will fall. Greenidge is not an outlier, it is the beginning of a new business model that threatens the gains we are making toward New York’s climate goals. At full capacity, it is estimated that the Greenidge facility would emit over a million tons of CO2 equivalent Greenhouse Gas (GHG) emissions annually.
Adding so much demand to the world’s electricity grids is risky, especially at a time when the window to meaningfully cut greenhouse gas emissions is rapidly closing. Because many of these facilities are operating “behind the meter”, they are able to evade the CLCPA requirement that by 2030 70% of grid electricity must be from renewable sources.
In an April 6 letter to Governor Cuomo, Earthjustice and the Sierra Club warned the governor that the Greenidge business model could be copied by up to 30 other retired or antiquated fossil fuels plants across the state. The groups said: “Additional scrutiny of the Greenidge air permit … is essential to prevent the floodgates from opening for other retiring power plants or peaker plants to follow Greenidge’s example. Without it, the state would face grave challenges to meeting the CLCPA requirements for reductions in New York’s carbon emissions of 40 percent by 2030 and 85 percent by 2050.”
This is proving to be true as representatives of bitcoin operations have been scouring the state for locations that already have allocations of low-cost energy, such as North Tonawanda and Watkins Glen.
In addition, power plants use more water than any other industry. With billions of gallons of water being used each day produce electricity, thermoelectric power plants have been the largest water users in the country since 1965. Most of the water used in thermoelectric power generation is for cooling and condensing the steam at power plants.
In once-through cooling systems, like the Greenidge facility’s on Seneca Lake, water is withdrawn from nearby bodies of water, diverted through a condenser where it absorbs heat from the steam, and then discharged back to its original source at higher temperatures. Because once-through cooling systems do not recycle the cooling water, this leads to incredibly high volumes of daily water withdrawals and subsequent discharges. The water intake structures at power plants with once-through cooling can kill billions of fish annually, and the thermal discharge downstream can also harm aquatic organisms. In addition, the large volume of water required to operate once-through cooling systems makes these power plants especially problematic in times of drought and extreme heat. Regulations on new power plants prohibit the use of once through cooling, but many of the older facilities continue to operate with these less efficient systems. In a time of growing water contamination and water scarcity, this aspect cannot be overlooked.
This currently unregulated industry plans to swiftly sweep through New York State much like the fracking industry had planned to do, before a thorough analysis of its environmental and economic impacts can be completed.
Cryptocurrency mining is not a job creator, as the machines are fully automated. However, it will be a job destroyer in places like the Finger Lakes, where the vibrant agriculture and tourism industry rely on the health of its water and air. In fact, all of New York State deserves clean air and water, and we must do everything we can as leaders on climate to leave a viable planet for future generations. We simply cannot allow this scheme of burning fossil fuels to make fake money in the midst of climate change to move forward without a thorough analysis.
A moratorium on “proof of work” cryptocurrency mining in the state while completing a comprehensive study of its impacts will allow us to determine whether the growth of the cryptocurrency mining center industry is incompatible with our greenhouse gas emission targets established in law, or has other significant detrimental impacts to our air, water, or public health. Your support of A07389/ S6486 will give NY this crucial information about the industry’s impact upon our climate law, and associated water, air and wildlife impacts, and can guide any potential future policy related to industry regulation.
The Honorable Governor Andrew Cuomo
DEC Commissioner Basil Seggos
Senator Charles Schumer
Senator Kirsten Gillibrand
Speaker Carl Heastie
Majority Leader Andrea Stewart Cousins
Assemblymember Crystal People's Stokes