Megan Waxpress, a staff attorney at the Sierra Club, said in an interview, “We have a better understanding of what’s going on, and we’re going against coal and gas plants that operate primarily for the benefit of the cryptocurrency business.” We need to enforce the environmental laws that we have,” he said.
The New York law is a “very important first step in getting that information and better understanding how cryptocurrency miners basically turn coal and gas into bitcoin and the implications.” is,” she said.
environmental groups pressed for pause He opposed some types of cryptocurrency mining in New York out of concern that old fossil fuel factories would be brought back online or run computers to earn cryptocurrency. They also warn that the industry itself may not be meeting the state’s new climate laws, which require drastic reductions in emissions.
The law does not affect cryptocurrency mining that uses electricity drawn from the grid. Operations can continue at sites large and small in upstate New York, including a former aluminum smelter in Massena near the Canadian border and a former coal plant in Somerset near Niagara Falls.
partial ban coming As upstate New York became more attractive For companies that mine digital currencies, including Bitcoin. The region is rich in old power plants and manufacturing sites with unused electrical infrastructure that are attractive to the industry.
The law is likely to scare companies away from coming to New York after the digital currency market crashed following the bankruptcy of Bahamas-based crypto exchange FTX, some owners said. Told. uncertainty.
Kyle Schneppes, director of public policy at Foundry, said the cryptocurrency business is already directing investments elsewhere. He said the Rochester-based bitcoin mining company has acquired two sites in other states and is concentrating its investments there.
“Currently, the prevailing sentiment in the cryptocurrency industry is that New York is willing to use its climate change goals to arbitrarily exclude industries that are politically appropriate to target.” said Schneppes.
“Cryptocurrency companies that are not yet covered by New York’s idiosyncratic crypto laws, whether proof of work or proof of stake, are unlikely to build a business in New York in the current climate. ”
The moratorium bill exempted only two plants that currently burn fossil fuels to run cryptocurrency mining machines, excluding plants that had already submitted permit applications.
David Fogel, CEO of Coinmint, which operates a cryptocurrency mining facility of up to 160 megawatts in Massena, said:
One company has already been affected by the new law.
BlockFusion, which owns a cryptocurrency mining facility in Niagara Falls and is currently dormant under a city order, has lost insurance coverage due to a statewide moratorium, despite being unaffected, said CEO Alex Martini. Mr Romant said. He supported the moratorium, but said it should have gone further and banned fossil fuel plants from reopening for whatever reason. It was powered by electricity from the grid.
“It’s like a circus: media and politics, but with very little influence,” says Martini-LoManto. “Bitcoin mining in New York remains unchanged…no retroactive effect”
Crypto industry groups have sounded the alarm on calls from environmental groups to broaden the restrictions on the “proof of work” method underpinning bitcoin, as well as moves in other states to do the same. there is Miners participate in a global race to solve complex calculations to validate transactions, all in exchange for fees. This approach is called “proof of work” and the more computing power your mining operation has, the more commissions you earn. And that means a thirst for electricity.
“In some ways, all the concerns the industry had about this bill and the rhetoric around it were valid,” said John Olsen, an Albany lobbyist for the Blockchain Association. It is not about the use of energy and whether it is valid for that energy to be for a particular task.”
Greenidge is a former coal-fired power plant turned gas-fired plant turned cryptocurrency mining site that is still in operation today.State Department of Environmental Conservation Declined Company Renewal However, under state administrative law, factories can continue to operate during appeals. Greenidge is also looking to renew their water permits.
Additionally, the Fortistar gas plant near a residential neighborhood in North Tonawanda in Niagara County has a storage container-like pod with cryptocurrency miners and fans on the outside to keep it running. The facility, which was purchased by Digihost, a Toronto-based blockchain company, is pending a Title V aviation permit application from the State DEC. The application has not yet been considered complete by the agency.
New applications to operate fossil fuel power plants for cryptocurrency mining will not be approved by DEC under the law.
The agency also has big lifts slated for a short timeline. By November 22nd, the law will issue a “general environmental impact statement,” taking into account various issues related to cryptocurrency mining using the energy-intensive “proof of work” method that underpins Bitcoin. is directing DEC to finalize the
The statute also requires DEC to hold 120 days of public comment and multiple public hearings statewide on drafts of this document, so this sets a tight schedule.
The law requires DEC to determine the number of “proof of work” cryptocurrency mining locations in the state, the amount and source of energy used, the amount of greenhouse gas emissions from operations, and the anticipated expansion of mining. We are asking to analyze the increase and potential impact. The study also considers water use and its impact on public health.
The final product outcome and details of that process could lead to additional regulation from the state legislature to the industry. For example, the general environmental impact statement on hydraulic fracturing of natural gas was an important step towards banning hydraulic fracturing in New York State in 2014, which was also the first in the nation at the time.
“We expect DEC to recommend policy … and will decide whether this particular verification practice should actually be undertaken and, if so, whether it is in line with our climate goals.” and Moran, 1990 levels by 2050.