ITHACA, N.Y.—A pending decision to renew the air permits of Greenidge Generation LLC, a natural gas-fired power plant doubling as a bitcoin mining facility, will stand as a precedent setting case for how New York’s flagship climate policy, the Climate Leadership and Community Protection Act (CLCPA), is interpreted by the New York State Department of Environmental Conservation (DEC).
Precedent setting at least for bitcoin mining operations in New York’s power plants, said Liz Moran, the New York Policy advocate for Earthjustice. She spoke at a press conference on Oct. 13, composed of groups opposing Greenidge’s permits being renewed ahead of a virtual hearing held by the DEC to gather public input on the matter.
At both events, environmental advocates made the case that allowing bitcoin mining in power plants is an inappropriate use of energy and reason to allow greenhouse gas (GHG) emissions into the atmosphere as the worsening effects of a global climate crisis loom.
Greenidge’s plant is off the shore of Seneca Lake in the town of Dresden in Yates County. Greenidge officially launched commercial cryptocurrency mining there in late 2020. The company markets themselves as pioneers of vertically integrating bitcoin mining and power generation, which makes them incredibly effective at mining the energy-intensive cryptocurrency.
Between Jan. 1, 2021, and June 30, 2021, Greenidge dedicated 112,474 megawatts (MW) to mining bitcoin and performing transactions, almost 55 percent of the electricity it generated in that span of time. Based on averages from the U.S. Energy Information Administration, that’s enough energy to keep over 10,000 U.S. homes powered for an entire year, and Greenidge plans on growing.
Greenidge’s own projected emissions for 2022 are 520,386 metric tons of onsite carbon dioxide equivalent (CO2e), which, according to calculations in an Apr. 6 letter from Earthjustice and the Sierra Club, would put them in the ballpark of dedicating 55MW an hour to bitcoin mining.
Greenidge is mining close to 8 bitcoins a day. A single bitcoin—the price of which is notoriously volatile—was valued near $60,000 on Oct. 15, which would mean Greenidge should rake in just over $470,000 dollars of revenue before the day is done.
But since hitting the jackpot, Greenidge has seen mounting opposition from lawmakers, environmental advocates, and concerned members of the public. These calls of opposition are currently manifesting around Greenidge’s application to renew its Title V Air and Title IV Acid Rain permits with the DEC.
“They’re buying us. They’re buying our environment for cheap.”
At Wednesday’s press conference, all of the speakers opposing Greenidge’s permit renewal contributed different dimensions to the same core argument: Greenidge should be denied renewal for their air and acid rain permits because they were granted them to operate primarily as a natural-gas fired power plant, not the energy-intensive industrial scale bitcoin mining operation they’ve developed into. The greenhouse gas emissions resulting from their bitcoin mining are in conflict with the CLCPA which aims to reduce New York’s greenhouse gas emissions (GHG) by 85 percent from the statewide 1990 baseline by 2050. Opponents argue that there should be a moratorium on the most energy-intensive cryptocurrencies, so a comprehensive study on the environmental impacts of this emerging industry can be done to inform regulations. The fear being that if a moratorium isn’t put in place then Greenidge will serve as a model for other power plants to use behind-the-meter energy for bitcoin mining. Up to 30 other potential power plants have been identified in New York by Earthjustice and the Sierra Club that could implement this business model.
At the start of the press conference, this argument was outlined by Yvonne Taylor, Vice President of Seneca Lake Guardian, an environmental watchdog organization that has been at the forefront of opposition against Greendige’s bitcoin mining.
Taylor said, “We believe this is the top environmental issue facing our great state.”
Wednesday’s speakers also included Assemblymembers Anna Kelles (D) and Steve Otis (D); Roger Downs, the Conservation Director for the Sierra Club Atlantic Chapter; Michael Thomas, a radio journalist that has covered the Finger Lakes’ wine industry for over 25 years; and Food & Water Watch senior organizer Eric Weltman.
Greenidge’s carbon-heavy bitcoin mining motivated Assemblymember Kelles to introduce a moratorium bill to the New York State Legislature on proof-of-work cryptocurrency blockchain technology, the most energy intensive system of transaction validation used by cryptocurrencies, most notably bitcoin. It passed in the state senate but, as the year’s legislative session closed, it didn’t make it through the Assembly due to opposition from the International Brotherhood of Electrical Workers (IBEW).
But now Greenidge has the attention of both New York Senators Kirsten Gillibrand (D) and Chuck Schumer (D). Both sent letters to the Environmental Protection Agency’s (EPA) Administrator Michael Regan, asking for the EPA to exercise the its oversight powers and involve itself in the DEC’s review of Greenidge’s permit renewals.
The two public hearings the DEC held on Oct. 13, revealed overwhelming opposition from attendees against Greenidge, save for support expressed by Yates County officials, Greenidge’s CEO Dale Irwin, and the IBEW. The DEC will accept written comments until Oct.22.
The plant has created a number of high paying jobs in rural Yates County, employing about 40 people full-time, many of which are unionized electricians which is why the IBEW so strongly supports Greenidge.
While Kelles acknowledged these jobs as benefits at Wednesday’s press conference, she urged that they be looked at in the context of the volume of GHG emissions they’re associated with.
“When you look at that full equation, it comes out clearly negative for the community. It is a significant amount of greenhouse gas emissions. It’s a significant use of our natural resources for free.”
Greenidge’s highly successful bitcoin mining operation increased 2020 local tax payments to the Town of Torrey, Penn Yan Central School, and Yates County by almost $300,000, earning the company the staunch support of the Yates County Legislature. On Oct. 12, the elected body passed a resolution 13-0 to call on the DEC to renew the facility’s air permit.
To this, Kelles made the point that, “less that one day’s worth of income for them for the entire year is what it takes to buy our counties.”
“They’re buying us. They’re buying our environment for cheap,” said Kelles.
Kelles and opponents of Greenidge cite environmental impacts from the plant past its greenhouse gas emissions. Greenidge uses a lake source cooling system at it’s plant, and is permitted to discharge 135 million gallons of water back into Seneca Lake with temperatures up to 86 degrees in the summer and 108 in the winter. The water empties near the mouth of a class C trout stream, which advocates say endangers the temperature sensitive species.
Moreover, the warm water raises the concern of worsening Harmful Algal Blooms (HABs) in Seneca Lake. Going off old data that Greenidge released, the plant doesn’t discharge the full 135 million gallons they’re permitted to every day, nor have water temperatures been the highest limit they’re permitted to discharge. Greenidge has fought claims that their thermal discharge is endangering the health of the entire Lake. But warmed water is a well understood contributing factor to HABs and stands a strong chance of increasing the prevalence of toxic blooms in the local Dresden Bay area. Multiple scientists have put their names behind this, including Dr. Gregory Boyer of SUNY-ESF, and Dr. John Halfman of Hobart William and Smith Colleges.
It would seem that the DEC has some accord with the arguments of environmentalists. On Sept. 8, DEC Commissioner Basil Seggos tweeted that Greenidge “has not shown compliance” with the CLCPA. A final determination has not yet been made on renewing the plant’s permits, but the DEC isn’t publicly offering any hints as to where it finds Greenidge out of step with the CLCPA. It’s unclear when the DEC will present its final decision.
NYS is taking action on #ClimateChange. Today @NYSDEC released for public comment draft air permits for former coal plant turned bitcoin mine, Greenidge LLC. DEC has not made a final determination on the permits and Greenidge has not shown compliance with NY’s climate law./1 pic.twitter.com/PKozYCUIeQ— Basil Seggos
(@BasilSeggos) September 8, 2021
To permit wiggle room, or not
Moran told The Ithaca Voice that Earthjustice feels Greenidge doesn’t meet any of the elements of the CLCPA Assessment that the DEC is supposed to consider power plant permit applications under. But the DEC issued a technical guidance memo, which provided some wiggle room for Greenidge—or so it seemed.
The memo, known as DAIG-11, allows for the additional requirements of the CLCPA assessment to be suspended for power plants renewing their permits and minor modifications. For new plants coming online, and plants that have had major modifications to their operations, the CLCPA Assessment requires them to provide a litany of additional information for the DEC to consider their applications
Greenidge originally submitted its permit renewal application without a CLCPA Assessment on March 5th. The DEC notified the company that it’s application was not complete on May 3., forcing Greenidge to reveal detailed information about it’s GHG emissions, and the amount of energy it uses for mining bitcoin.
Moran said the DEC is likely considering Greenidge’s bitcoin mining, “as a major modification of the permit. And that’s why they’re saying they want to apply the CLCPA standards and goals to this facility right now.” A point which Greenidge pushed back against when it submitted it’s CLCPA Assessment, writing that they were applying for a “renewal…without requesting significant modifications.”
The electricity generation that Greenidge has dedicated to mining bitcoin and other blockchain services has inched past the energy it sold to the grid in 2021. The plant didn’t start ramping up it’s commercial bitcoin mining and blockchain technology services until late 2020, so 2021 offers the best sense of direction for the plant’s operations.
Since beginning their bitcoin mining operation in 2020, Greenidge shows a substantial increase in the actual GHG/CO2e emissions versus the years it solely provided energy to the grid.
The upstream emissions—which are GHG emissions related to the out-of-state extraction, transmission, and use of fossil fuels associated with Greenidge’s operations—adds 432,582 CO2e Metric tons a year to Greenidge’s emissions.
As criticisms of its bitcoin mining’s carbon and energy footprint mounted throughout 2021, Greenidge moved to brand itself as a leader in environmentally responsible cryptocurrency mining. In June, the company said that it achieved carbon neutrality in it’s bitcoin mining operation through the voluntary purchase of carbon offsets.
However, Moran stressed that Greenidge’s carbon offsets aren’t supposed to do it any favors in their permit renewal and permit application process under the CLCPA. The CLCPA reads, “Sources in the electric generation sector shall not be eligible to participate in such a mechanism,” as carbon offsets to meet the standards of New York’s climate and energy goals.
Accordingly, Greenidge didn’t detail it’s offsets in its CLCPA Assessment. Some of the GHG reduction projects Greenidge suggested to the DEC as future possibilities include increasing solar energy capacity, co-firing hydrogen with natural gas, and various efficiency projects.
The strongest point the company made for being in compliance with New York’s climate laws are that they have reduced their GHG emissions and upstream carbon emissions by 70.3 percent from their 1990 baseline levels, which was when the plant burned coal, a fossil fuel that contributes almost twice the GHG emissions to the atmosphere than natural gas.
Although, to what degree natural gas is more environmentally friendly than coal has been put to question. Previously standardized estimates of the fracking industry’s upstream methane leakage have been scrutinized.
Moran said Earthjustice is willing to argue that Greenidge should be treated as a new facility. It went online as a gas-fired power plant in 2017.
Cryptocurrency: “Here to Stay”
Kelles stressed that she isn’t against cryptocurrency mining, saying that the phenomenon “is here to stay.”
Kelles said that she is not against cryptocurrency mining, not when there are other less energy intensive transaction systems with other cryptocurrencies.
“All I’m saying is let’s not allow the movement of cryptocurrency…to destroy our planet in the process,” said Kelles. “So the one form of validation which is proof of work is one that I am saying is unnecessary for us to be the leading state in the cryptocurrency arena.”
Below is the full CLCPA Assessment the DEC required Greenidge to prepare.