Rebuttal to Buffalo Rising Series Advocating Against Unregulated Cryptocurrency Mining and Against A.7389C/S.6486D for

July 15, 2022

You may have read the three-part coverage on Buffalo Rising earlier this month written in large part by Foundry Digital, a Bitcoin mining firm, which actively advocated against A.7389C/S.6486D, even going so far as to include a form letter for people to copy and send to Governor Hochul urging her to veto the bill.
In response, we wrote and submitted this rebuttal, including our own call for letters of support for A.7389C/S.6486D. Unfortunately, Buffalo Rising declined to publish our rebuttal, so we are instead posting it here to our organization’s blog. Please share widely to help us dispel industry propaganda about this bill and about this issue.

As advocates for environmental justice and public health, and in response to the recent featured series on the Cryptocurrency Mining Industry, The Clean Air Coalition of WNY would like to offer an alternative perspective for the public from that of Foundry Digital on this issue and on the related bill, A.7389C/ S. 6486D, which we strongly encourage Governor Hochul to sign into law.

We were first made aware of this issue by the residents immediately surrounding the Fortistar North Tonawanda Power Plant, a methane gas-burning “peaker” power plant which has historically been used intermittently when our power grid is under strain due to heavy loads, such as during high temperatures when AC use increases. Although only running under these rare circumstances, this plant still pumps an average of 19,000 tons of CO2 annually1 into our atmosphere in addition to other hazardous pollutants.

Residents contacted us to help them raise the alarm about plans to directly sell this power station to Digihost, a Canadian cryptocurrency company which relies on the Proof-of-Work method to “mine” Bitcoins2, which would shift the use of this power station from this intermittent public use to 24/7/365 for privatized “behind the meter use”.

If the Public Service Commission of NY, (the statewide public utilities commission that regulates and oversees our electric, gas, water, and telecommunication industries), allows this sale3, this new use will significantly increase greenhouse gas emissions as well as particulate matter, directly impacting the public health of these surrounding residents as well as undermining efforts to meet our statewide climate goals set by the Climate Leadership and Community Protection Act, a groundbreaking bill passed in 2019 which, among other major benchmarks, commits our state to 100% zero-emission electricity by 2040.

The more we learned about this issue, the more alarmed we became – we learned, for example, that in Dresden NY, on the shore of Seneca Lake, an investment firm, Atlas Holdings, very similarly purchased a coal-fired power plant that had been retired for several years, converted it to methane gas, and repurposed it solely for Proof-of-Work based Bitcoin mining4. With less than 10 years to halve global greenhouse gas emissions and “secure a liveable future”5 according to the IPCC, we added over 220,000 metric tons of carbon dioxide to our atmosphere in 2020 alone at this facility, all by mining Bitcoin. In the press release from June 30, when the DEC denied the renewal of the facilities Title V air permit, they noted that “…this natural gas-fired facility’s continued operations would be inconsistent with the statewide greenhouse gas emission limits established in the Climate Act” 6

We also learned that Erie, Niagara and Chautauqua County are home to half the documented number of POW-based cryptocurrency mines in NYS, that NYS alone has more of these operations than most nations do globally, and that EarthJustice has identified at least 30 former fossil fuel plants in New York which, without regulatory action, could potentially be used to power cryptocurrency mines7 – hardly a “localized controversy” limited to Greenidge as stated in the Buffalo Rising column on June 23rd.8

We learned that, in the absence of state or federal regulation, small local governments have been forced to develop regulations and oversight of these operations, spending limited local funds and resources to try to rein in this industry using the limited tools available to them, like zoning codes and noise ordinances9 – Dresden NY, for example, is a town of only 308 people, and it is hardly fair that a municipality of this size has had to take on the responsibility of developing regulations for this industry in the absence of statewide or federal action.

Speaking of noise, we also quickly learned that cryptocurrency mines directly cause a quality of life issue for area residents, namely the noise from cooling systems for the computers10 – Niagara Falls recently enacted a short term moratorium on all new cryptocurrency operations primarily because of related noise complaints and the need to develop local regulations.11 Prolonged noise above 70 decibels can cause permanent hearing loss.12

We learned that, despite the present slump, the exponential power demands of POW-based cryptocurrency mining currently consume 93.1 TWH of power, which is more than the entire power needs for the nation of Finland, or the power needs for all the lighting we use in the United States!13 In Plattsburg, this power consumption caused electricity prices for residents to spike, which spurred a municipal moratorium on all cryptocurrency mining14 and, while still an emerging issue of study, many experts on the power grid worry that this added strain may overwhelm our power systems and contribute to brownouts, as has happened in other nations15 – research is crucial to prevent such a catastrophe.

We learned that Proof of Work isn’t even the only means to “mine” for Bitcoin or other cryptocurrencies – Proof of Work is essentially a competitive race between computers, with a winner-takes-all award system. Proof of Stake is a similar method for mining, but one that is cooperative, where miners take instead take turns. We encourage watching this short, easily digestible video which explains the difference between Proof of Work and Proof of Stake succinctly, but in short the power consumption needs for the POW-based industry, as mentioned above, are the equivalent of nations, whereas the POS-based industry power consumption is closer to that of small towns.

We further learned that one of the reasons for the popularity of POW operations in WNY is our legacy of heavy industry which has left us burdened with a copious amount of hazardous waste sites (ie brownfields) in need of clean-up and that the data centers that POW operations are run from do not require as stringent a level of clean up as other site uses.16 The relatively lower land cost, clean-up costs, and industrial connections to utilities make these sites very attractive to data center developers, and in isolated areas, data centers and brownfields are well suited pairings – however, as a direct result of our nation’s discriminatory and racist land use practices, many brownfields are located adjacent to neighborhoods, and when we choose to not conduct a clean up to the level that we are capable of in residential areas, we are perpetuating generational environmental racism.

We also learned that the power consumption, and especially the industry practice of purchasing fossil fuel power stations for private use may potentially undercut the goals of the Climate Leadership and Community Protection Act and undermine all other efforts to reduce our statewide greenhouse gas emissions17 – it is this most egregious practice which we have seen at Greenidge in Dresden NY and Fortistar in North Tonawanda, and this preventable contribution to the existential threat of climate change, which spurred the recent statewide legislation.

But most importantly, we learned from the adjacent residents that they were opposed to this use at this facility, that they fear for the impact on their personal health and well being as well of that of their neighbors and community, and that they need our collective support to fight back. At Clean Air, we value resident knowledge and grassroots organizing power – when people most impacted by an issue have concerns, we believe it is our duty to listen to them and work for our collective health and justice.

A.7389C/ S. 6486D is a very limited, targeted, common-sense bill. Despite what the industry representatives like Foundry may claim, and unlike the broader moratoriums enacted piecemeal by various municipalities throughout the state, this is not a bill that is designed to put a full moratorium on the cryptocurrency mining industry. Miners relying on alternative, less power consuming validation methods like Proof of Stake would be unaffected, as would any miners who rely on privately-owned or grid-based renewable energy sources. It wouldn’t even stop existing behind the meter fossil fuel powered POW-based operations from running under their current permits or with grid-based fossil fuel based power!

A.7389C/ S. 6486D specifically hones in on the new or expanded use of privatized fossil fuel-based power stations (ie, the practice by the industry of purchasing methane gas or coal fired power plants for the sole private use of Proof-of-Work based cryptocurrency mining) over just the next two years while a Draft Environmental Impact Study is conducted on the use of Proof-of-Work blockchain validation and any impact it may have on our CLCPA goals, so that we, the residents of NYS, can not only look further into what we have learned so far, but also research the other unanswered questions we still have, and then take any appropriate regulatory measures to protect our environment and climate – in short, the polar opposite of a “far-reaching and set a dangerous legal precedent of banning new industries in New York without proper research and investigation”, as stated in the Buffalo Rising column on June 23rd

If Governor Hochul signs the bill it would help shift the balance of power to the people of the state of NY, prevent further unregulated expansion of this industry temporarily, and give us the research and framework we need to develop statewide regulations – why is this industry so afraid to operate under the same public health and environmental justice regulations that every other industry has to?

As Good Neighbors, we stand with the residents of North Tonawanda and of all residents living adjacent to these facilities, and we strongly support A.7389C/ S. 6486D. If you do as well, please take a moment now to send a letter to Governor Hochul using our one-click toolkit –

https://actionnetwork.org/letters/governor-hochul-stop-the-crypto-industry-from-frying-the-planet

If interested in offering direct support to the residents of North Tonawanda, you can also contact our Environmental Justice Organizer, Bridge Rauch, at bridge@cacwny.org, or you can join the Clean Air Coalition of WNY as a member by visiting https://www.cacwny.org/become-a-member/

Endnotes

RSS 2.0 feed. Both comments and pings are currently closed.

Comments are closed.

Translation

Stay Updated

Recent Posts

Rebuttal to Buffalo Rising Series Advocating Against Unregulated Cryptocurrency Mining and Against A.7389C/S.6486D for

Endnotes

Translation

Stay Updated

Recent Posts