Crypto miners bought their own power plant.  It is a climate disaster.

Crypto miners bought their own power plant. It is a climate disaster.

It’s a June morning in 2022, so early that most homes on Seneca Lake in upstate New York are filled with only water chatter on wooded beaches. But in Yvonne Taylor’s home, there’s the roar of grassroots organizing to fight one of the biggest new threats to climate.

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Taylor connects via Facebook with a stranger in Pennsylvania who posted about the crypto-mining industry coming to her hometown.

“We’d like to talk to you about this,” Taylor wrote. “We are affected by bitcoin mining in our community as well, and [we] They constitute a national group of people who suffer the adverse effects of this industry.”

The harm caused by certain types of cryptocurrency is that producing new virtual currencies – known as “mining” – requires a huge amount of electricity. When this energy is produced from fossil fuels, it creates a lot of local pollution and climate emissions.

Bitcoin mining is so energy-intensive that it drives demand for new fossil fuel stations or gives old plants new life.

In Seneca Lake, a private equity firm bought the once-abandoned Greenedge coal plant in 2014 and turned it into a crack gas plant. In 2020, this company started a commercial cryptocurrency mining operation by connecting thousands of computers directly to the factory to mine bitcoins. This step turned out to be a fatal mistake. An industry that has flown under the radar — too new to regulate — has suddenly entered a community with deep expertise in fending off environmental threats.

Taylor, a speech therapist whose family has lived on the lake for seven generations, first rallied around a ban on hydraulic fracturing in the area. Then, when a company came up with a scheme to store 88 million gallons of LPG in salt caverns along the lake, she and others got around that with legal help from Earthjustice.

Yvonne Taylor, photographed in Seneca Lake, where her family has lived for seven generations.

Lauren Petraca on Earth Justice

Taylor says the lake was really the only constant I’ve ever had in a very turbulent life. I’m as fierce about protecting her as a mama bear would be around her cub.”

So, in 2020, when Taylor realized what was going on at a local power plant and learned that global bitcoin mining was using more electricity than some mid-sized European countries, she knew exactly who to turn to for help.

Earth justice called.

New fight, old enemy

Taylor’s tip made its way to Mandy Deruchi, the new deputy attorney general at Earthjustice.

As a former securities and trading attorney with experience in corporate disclosures, DeRoche had just the right skills to deal with a complex new climate threat.

Taylor and other local partners have provided DeRoche with the latest ESA efforts. In 2017, the Greenedge Power Plant restarted as a gas-fired plant. It worked intermittently for a few years, providing power to the grid during times of peak demand.

After that, observers noticed unusual movements in full swing at the plant. They learned permit applications to build buildings to house computers for a “data center” and to work “behind the counter,” meaning that the power would not go to the grid for public use but directly to that data center.

But this was no ordinary data center.

In 2020, the power plant has strengthened its operations. Those nearby began to hear a low buzzing noise, described by one resident as the sound of an airplane that never lands. The noise came from the computers cooling fans. Air pollution levels have jumped.

The residents were stunned and hastened to understand what exactly has moved to the city.

Mandy Deruchi, left, Deputy Administrative Counsel for the Coal Program, speaks with Senior Justice District Attorney Megan Burton during a staff meeting in New York City.

Mandy Deruchi, left, Deputy Administrative Counsel for the Coal Program, speaks with Senior Justice District Attorney Megan Burton during a staff meeting in New York City.

Eid eternity for the justice of the earth

DeRoche knew from her previous career where to get better information than a traditional regulatory ecosystem. The power plant’s buyers, Greenidge Generation LLC, were going public through a complex reverse merger. This means that they will have to file disclosures with the Securities and Exchange Commission and investors.

The details dispelled any hopes that mining was just a side hustle. The plant ran for just 48 days in 2019, producing the carbon emissions equivalent of nearly 7,700 gas-powered cars for a year. The following year, the plant worked 343 days and produced the equivalent of more than 44,500 cars. By the end of 2020, the company was managing approximately 6,900 miners. More mining machines have been added since then with the company building up to 32,500 planned machines.

The air permit for the station, a replica of the time it operated homes and local businesses in previous decades, gave the new factory’s investors a big slate to mine just to mine cryptocurrency for themselves. The company also had ambitions to expand this model elsewhere.

Earthjustice has spent decades shutting down more than 100 coal-fired plants. DeRoche has hinted at the outlines of a new industry that could bring factories back from the dead and also increase operations of other fossil-fuel-powered factories across the country.

“Greenidge Generation LLC has given the other retired, retired, or climaxed factories a roadmap for how to come back online or pollute more, how to recruit investors, and how to go public on the Nasdaq,” she says.

Shot About Blockchain

DeRoche and the Sierra Club Atlantic Chapter sent a letter in 2021 to the New York State Department of Environmental Conservation suggesting that if the kind of energy-draining mining seen in Greenidge took off and was powered by fossil fuels, the state had no hope of it. Commitment to newly established climate emissions cuts. The letter indicated that the agency could refuse the power plant’s air permit, which was about to be renewed.

Her phone immediately exploded with calls from journalists who were drawn to the crypto-mining controversy. Bitcoin, the oldest and most popular cryptocurrency, inspires ardent followers and relentless critics.

DeRoche refused to be attracted to her. “Cryptography is something new and shiny that is getting the attention of the press, but our focus remains on pollution and energy use,” DeRoche says. “We are seeing a power plant running all the time like never before. We are not supporting power plants coming back from dead, or running any more than they desperately need.”

In practical terms, this means that Earthjustice’s concern is limited to a specific type of cryptocurrency mining called “Proof of Work” which is primarily used by Bitcoin. Many other coins use much less energy.

The narrow focus continues to unleash fierce resistance from Bitcoin believers. Local watchdogs have faced threats from “semi-evangelicals about proof-of-work crypto mining,” Taylor says. “We actually became very afraid for our safety. As a result, we installed a comprehensive security system in our home.”

The media moment also brought new information and allies. Journalists and local partners appeared on other mining hardware after operations in the United States escalated after a ban in China, prompting miners to search for cheap and fast power. Residents of other crypto-mining communities have begun reaching out to Seneca Lake and Earthjustice activists.

Bitcoin mining machines in a warehouse at the Whinstone US Bitcoin mining facility in Rockdale, Texas, the largest in North America.  Operations like this have been bolstered by China's massive crackdown on cryptocurrencies that has pushed the industry to the West.

Bitcoin mining machines in a warehouse at the Whinstone US Bitcoin mining facility in Rockdale, Texas, the largest in North America. Operations like this have been bolstered by China’s massive crackdown on cryptocurrencies that has pushed the industry to the West.

Marc Felix/AFP via Getty Images

Many miners are based in states where Earthjustice has experience fighting dirty power plants, including Kentucky, Indiana, Montana, Pennsylvania and New York.

Most miners plug in electric grids directly, and some are very dirty, like Kentucky, which runs about 70% coal. Miners often get great rates for utilities through power purchase agreements or through preferential rates. Earth Justice has begun to challenge these deals, which leave ordinary people and local businesses with higher electricity bills and more pollution.

In addition, cryptocurrency mining is growing rapidly in the oil and gas fields — miners are bringing shipping containers full of computers right up to the wellheads.

slow confrontation

Sensing lawmakers and regulators needed more time and information, Earthjustice and allies pushed New York State to pass a partial suspension.

Idea: Defer allowing cryptocurrency mining at fossil fuel stations for two years while the state conducts a study on the environmental impacts of crypto mining—particularly taking into account a 2019 state law called the Climate Leadership and Community Protection Act. CLCPA commits New York to serious cuts in greenhouse gases.

The cryptocurrency mining industry will not own any of it. They kept nearly every pressure company in Albany, recounts Liz Moran, of Just Earth, who handled that army of suits.

“I’ve heard from some legislative offices that they may hear from a lobbyist representing a crypto company at least three times a day,” Moran says. “That was scary.”

I realized that the only way to beat them was through people’s strength.

Land justice policy advocate Elizabeth Moran, photographed at the New York State Capitol in Albany.

Land justice policy advocate Elizabeth Moran, photographed at the New York State Capitol in Albany.

Patrick Dodson on Earth Justice

It arranged for grassroots advocates from groups like Taylor’s Seneca Lake Guardian, Fossil Free Tompkins, Committee to Preserve the Finger Lakes and many others to travel to Albany, join virtual calls or meetings, to share their personal stories. Then, in recent days, they ramped up calls to key lawmakers around the clock. Endowment support will flip – and go backwards.

The fight reached the final minutes of the New York legislative session, and finally ended at about 2:30 a.m. on June 3.

“It was David against Goliath. It really felt like the little guys won here,” Moran says.

Back in the lake

However, it was not a complete victory for the residents around Seneca Lake or around the state. Governor Hochul needed to sign the law (at the time of publication, she had not yet done so). Regardless, the bill won’t directly affect Greenidge because it exempts miners with permit requests that precede any ban.

But the good news came when the state decided on June 30 to deny Greenedge’s V Title V flight permit. Statewide advocates pumped up the volume, submitting nearly 4,000 comments, 98% against the renewal of the permit, including technical and legal comments for component Earthjustice. of 57 pages.

“My phone started flashing with messages ‘Door 5 air permit denied.’ “I literally dropped my phone,” Taylor says. “The explosion startled her partner.” I said, ‘We did it, we did it, they refused!’ We both jumped up and down hugging each other and laughing Little “.

Greenedge challenges air permit denial; Earth Justice and the government’s environmental agency will stand up for it. Greenidge continues to operate in the meantime, but exposure and containment of a new, insidious industry has begun. And more challenges by Earthjustice to come

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