As the New York state legislature entered the eleventh hour, its first-in-the-nation crypto mining moratorium bill passed with little time left to spare. Its passage by the state Senate Thursday could define what happens with the burgeoning crypto mining industry taking over upstate New York and how the state meets its climate goals.
New York has become a major hub for crypto mining, particularly following a crackdown in China last year. In an effort to stem the opening of a slew of mines, members in both houses of the state legislature introduced legislation last year that would put a two-year moratorium on mining that uses proof of work, an energy-intensive computational technique that keeps the blockchain secure. That bill passed the state Senate but not the Assembly.
The legislation was reintroduced and passed with modified language this session, and will now go to Gov. Kathy Hochul's desk. The governor will have 10 days to sign or veto the law.
“This is Gov. Hochul and the administration’s new fracking moment,” Liz Moran, Earthjustice’s New York public advocate, told Protocol, referring to a similar showdown that happened over fracking eight years ago that ended in former Gov. Andrew Cumo banning the practice.
Miners generally seek out cheap energy to maximize returns, and they found a little slice of heaven in upstate New York, where natural gas and hydropower are abundant. A number of shuttered or nearly shuttered power plants have proven to be particularly attractive as sites to construct vertically integrated bitcoin mines.
But while miners have found heaven, residents have seen places they love become hell. The epicenter of the battle over crypto mining is on the shores of Seneca Lake, the largest of the Finger Lakes. There, Greenidge Generation revived a dormant coal plant built in the 1960s. Retrofitted to burn natural gas, the power plant sends a tiny amount of juice onto the grid and spends the rest of its operating time mining bitcoins.
Residents nearby have complained of noise pollution from the mining rigs' cacophony. They've also said the plant destroys the bucolic character of the region and its burgeoning wine industry. That would all be problematic enough, but the plant will also make it harder for the state to reach its climate goals, particularly if other aging power plants are also retrofitted the same way.
“Instead of cowering to cryptomining cash, Governor Hochul must follow the legislature’s lead by signing this bill into law and then denying Greenidge Generation’s air permit renewal,” Yvonne Taylor, vice president of Seneca Lake Guardian, said in a statement.
That pollution permit is up for renewal, and the state Department of Environmental Conservation has punted on it for months. With the moratorium in the governor’s hands and the DEC itself previously saying Greenidge “has not shown” it wouldn’t affect the state’s ability to meet its climate goals, the pressure to reject it will ratchet up further. (The state is also hosting a gubernatorial primary later this month.)
“With this legislation in particular, it put forwards a simple question: In the face of New York’s ambitious climate law, should we be allowing an industry to repurpose fossil-fuel power plants when we’re trying to move away from fossil fuels entirely?” Moran said.
The now-passed moratorium, if signed into law, would put the brakes on that. It would allow mines with the proper air pollution permits to stay open but forbid new ones from being constructed during a two-year pause. That would allow the state to study the impacts and decide if a full-on ban or other approach makes more sense.
This story has been updated Thursday to reflect the bill's passage. Advocates' reactions and more details were added on Friday.