New York Passed Crypto Mining Ban to Support Climate Change
On June 3, the New York Senate passed the U.S.’s first statewide moratorium on cryptocurrency mining, aimed at energy-intensive operations that use fossil fuels for power.
This measure still requires Governor Kathy Hochul to sign it into law. It comes at a time when the U.S. crypto mining industry is opening more operations. The U.S. accounted for just over 4% of the world’s Bitcoin mining in 2019, but by January 2022, it was nearly 40%, according to the University of Cambridge. These facilities can be directly linked to significant carbon dioxide-emitting power sources. Greenidge Generation, Dresden, N.Y. was one example. It repurposed an abandoned coal power station. Oregon is one of the other states experiencing a crypto mining boom.
New York will have two years to examine the effects of operations. Bitcoin mining is a high-energy operation that requires large amounts energy. The crypto industry has been experiencing an especially tense reckoning about its environmental impacts. To encourage Bitcoin mining to stop using energy-intensive techniques, several national environmental groups created Change the Code, Not the Climate.
“With this bill’s passage, the legislature has rightly said fossil fuel power plants can’t get a second life in New York just for private industry gain, which would fly on the face of the state’s climate mandates,” said Liz Moran, New York Policy Advocate for Earthjustice, in a statement.
Why New York’s example matters
The moratorium’s focus is relatively narrow—it won’t impact existing operations, and it’s focused only on those that generate their own power instead of drawing from the state’s supply. Environmental advocates and other industry groups claim it is a good model that could be used by other states. If implemented broadly, however, it may make a significant difference.
In part, the controversy surrounding Greenidge Generation inspired New York’s legislation. Greenidge Generation revived a Dresden-based power plant and turned it into an natural-gas-fueled data centre with thousands of Bitcoin-mining computers.
Environmental advocate Yvonne Taylor told TIME in March that the plant was a “a test case for how other underutilized or decommissioned power plants across the state are going to fall, and frankly, beyond.”
Similar cryptocurrency mining operations can be found in the United States, but they are located in different locations and run on different fuels. Residents living near them share the same complaints: noise pollution, increased strain on the electricity grid and concern about undermining climate efforts.
Continue reading: The Bitcoin Mining Showdown In New York’s Wine Country
The New York moratorium, although backed by advocates opposing the Dresden plant, will not actually affect Greenidge—it only pauses any new upstarts. Greenidge may still be subject to a crackdown by the state. It’s awaiting an air permitting decision from Governor Hochul and the state’s Department of Environmental Conservation. That decision is expected to come at the end of June, after the state’s primary election.
Lawmakers also stress this bill’s narrow purview. Anna Kelles (an assemblymember who introduced the bill) says that it is not aimed at small-scale mining businesses or companies using renewable energy.
“This bill is a power plant bill,” Kelles said on a press call the afternoon after the bill’s passage.
Kelles predicted, too that the state would still be a crypto hub as long as it uses renewable energy and is mindful of its environmental impact.
Now, advocates for the bill are focusing their attention on Governor Hochul. He still has to sign it. The advocates celebrated their last-ditch attempt to get the bill to the Senate floor on the June 3rd press conference. They’re also calling on the governor to take even more sweeping action by declaring a moratorium on all crypto mining via executive action, which she would have the authority to do.
New York’s crypto mining landscape has become increasingly political in recent months. Hochul’s campaign received $40,000 from Ashton Soniat, the chairman & CEO of Coinmint, according to the New York Times. Coinmint operates what it calls “one of the largest digital currency data centers in the world” in a former aluminum smelting plant near Massena, N.Y. That plant would not be affected by the moratorium’s narrow restrictions, although it’s been enmeshed in its own local controversy and crackdowns. In recent months, lobbyists representing entities like the Club for Growth and other conservative groups have increased their pressure on legislators to oppose the moratorium. Advocates are concerned that lobbying may put pressure on governors to relax regulations.
“We certainly hope that the governor will stand with the people of New York and not lobbyists who are dangling dollar bills in front of her,” Yvonne Taylor, vice-president of the non-profit Seneca Lake Guardian, told TIME.
Kelles shared the importance of the environmental study which would be conducted as a result of the bill’s passage, despite the pressures from the politicians. “This is about stepping away from any sort of emotional reaction, stepping away from the politics, stepping away from the big money lobbyists, and getting the actual data,” she said.
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