New York restarts crypto mining, a clash between environment and interests

The emerging industry of Bitcoin mining is constantly discovering digital wealth, but it is also strongly resisted by environmentalists.

Greenidge Generation is a coal-fired power plant founded in 1937 that is now turning to cleaner natural gas energy to mine Bitcoin. It argues that it complies with all New York environmental regulations. Environmentalists disagree, arguing that Greenidge not only harms the earth's environment, but will also cause a deterioration in New York's climate. Although Greenidge can only mine 4 Bitcoins a day, it has become a thorn in the eyes of energy conservation and emission reduction advocates.

Greenidge Generation claims to be a Bitcoin mining facility that uses natural gas to generate electricity around the clock. According to data from the U.S. Energy Information Administration, natural gas emits about 117 pounds of carbon dioxide per million British thermal units (MMBtu), which is more than 40% lower than coal's 200 MMBtu. Although natural gas is more environmentally friendly than coal energy, its carbon emissions still far exceed renewable energy sources such as solar and wind power.

“It’s not environmentally friendly at all,” Mandy DeRoche, an attorney at Earth Justice, told Decrypt. “I don’t think it’s consistent with greenhouse gas reduction goals anywhere except for a few days in the summer and winter to restart a power plant that was shut down and burn natural gas 24/7.”

Earlier this month, New York Senator Kevin Parker (D) submitted a bill to the Environmental Protection Committee that, if passed, would allow Bitcoin mining centers to operate only after a comprehensive environmental review, a process that could take up to three years. The bill states that "the continued mining of cryptocurrencies has significantly increased New York State's energy use," and that "this mining activity will emit carbon dioxide that will even cause the entire state to exceed greenhouse gas emissions regulations." This bill not only targets Greenidge, but also threatens the Bitcoin mining centers that continue to emerge in the state. The bill may also become a model for other states and countries to curb crypto businesses.

Greenidge opposes the measure and says it has permission to operate its facility in Dresden, New York. Greenidge obtained a Title V license in 2016 and hopes to renew it in September of this year. On March 25, Greenidge submitted materials to the New York Department of Environmental Protection for the renewal of Title V. Dresden emits about 640,000 tons of carbon dioxide equivalent per year. According to the Environmental Protection Agency's carbon emissions calculations, 640,000 tons of carbon dioxide emissions are equivalent to burning 708 million pounds of coal, the annual electricity consumption of 16,000 households, or driving 160 million miles. Greenidge's environmental impact can also be inferred from Bitcoin's overall carbon emissions record. If Greenidge's annual carbon dioxide emissions are extrapolated based on the highest value, the carbon emissions generated by Bitcoin miners account for 1% of the total carbon emissions.

In addition to environmental issues, DeRoche also told Decrypt that Greenidge's emissions may not be regulated. "Generally, commercial licenses are renewed normally, but for plants like Greenidge, the business behind them is actually unattended." DeRoche and Earth Justice jointly sent a letter to New York environmental regulators to warn that restarting power plants like Greenidge may be part of the plan to grow Bitcoin mining business in the future. Blockchain company Digihose Technology is planning to develop the Fortistar North Tonawanda power plant for Bitcoin mining operations. DeRoche added, "If plants like Greenidge are not resisted, it will greatly affect carbon emission targets in the future. These plants are not abandoned for no reason."

Dale Irwin, CEO of Greenidge Generation, refuted some of the criticisms of the company in a conversation with Decrypt. Irwin said that Greenidge's restart is not just for Bitcoin mining. However, as early as 2019, Greenidge conducted a pilot project for Bitcoin mining. But Irwin said that Greenidge's restart also stimulated the New York economy. "We now have 35 employees, and we will expand to 40 to 50 in the future, and our average salary is twice the social level."

According to economic analysis data from the 2020 Census on Town Charts, the average wage in Dresden is $38,214 per year. Irwin claims that the average wage in Greenidge is $77,000. Irwin also plans to not continue to use natural gas in the future and will actively respond to the policy that by 2030, 70% of New York's electricity will come from renewable energy.

Greenidge's mining equipment can mine 3.8-4 bitcoins per day, which means it earns about $150,000 a day, a significant increase from $50,000 in March 2020. Iriwin believes that the company not only provides services to the surrounding areas, but also contributes to the economic lifeline of Bitcoin around the world. These remarks obviously will not impress environmentalists like DeRoche, who believes that Greenidge is touting unrealistic profits to cover up the environmental pollution caused.

At present, the dispute over the interests of Bitcoin mining and environmental protection is intensifying, and government officials have different opinions. New York Governor Andrew Cuomo tweeted that he had ignored climate change and that not signing the environmental protection bill in time was a serious negligence. However, the International Brotherhood of Electrical Workers (IBEW) believes that signing the environmental protection bill to prevent huge interests is a big mistake.

In the United States, Bitcoin mining has continued to grow, from 4% in September 2019 to nearly 8% of the global share today. Irwin said that Bitcoin mining will exist for a long time, and compared with China's unenvironmentally friendly and unregulated mining operations, it will be better and more prosperous in New York. "It is better to develop in a place with known and complete environmental regulations than to develop in a place where emissions are not estimated and regulations are not clear."