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

It’s a June morning in the year 2022, so early that most of the houses on Seneca Lake in upstate New York are filled with only the rush of water lapping against the wooded shores. But in Yvonne Taylor’s house, there is the buzz of grassroots organizing to fight one of the biggest new threats to the climate.

Press, press, press.

Taylor reaches out on Facebook to a stranger in Pennsylvania who wrote about the cryptocurrency mining industry coming to her town.

“We’d like to talk to you about this,” Taylor writes. “We are also affected by Bitcoin mining in our community, and [we] form a national group of people who experience the harmful effects of this industry.”

The damage from certain types of cryptocurrency is that the production of new virtual coins – known as “mining” – requires a shocking amount of electricity. When that power is produced with 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 plants or gives old plants a new lease of life.

At Seneca Lake, a private equity firm bought the once mothballed Greenidge coal plant in 2014 and converted it to a fracked gas plant. In 2020, that firm started a commercial cryptocurrency mining operation by plugging thousands of computers directly into the facility to mine Bitcoin. The move turned out to be a mistake. An industry that had flown under the radar—too new to regulate—suddenly entered a community with deep experience in fending off environmental threats.

Taylor, a speech therapist whose family has lived on the lake for seven generations, first mobilized around banning fracking in the region. Then, when a company came up with a plan to store 88 million gallons of liquefied petroleum gas in salt caverns along the lake, she and others fought it back with Earthjustice’s legal help.

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

Lauren Petracca for Earthjustice

The lake, Taylor says, “has really been the only constant I’ve ever had in an otherwise very turbulent life. I’m as fierce about protecting it as a mother bear would be about her cub.”

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

She called Earthjustice.

New battle, old enemy

Taylor’s tip made its way to Mandy DeRoche, a new assistant managing attorney at Earthjustice.

A former securities and commercial litigator with experience in corporate disclosures, DeRoche had just the right skills to tackle a complex new climate threat.

Taylor and other local partners updated DeRoche on their environmental watchdog efforts. In 2017, Greenidge Power Station restarted as a gas-fired facility. It operated sporadically for a few years, providing power to the grid during periods of high demand.

Then the watchdogs noticed unusual movements going on at the facility. They learned of permit applications to construct buildings to house computers for a “data center” and to operate “behind the meter,” meaning that the power would not go to the grid for public use, but directly to this data center.

But this was no ordinary data center.

In 2020, the power plant stepped up operations. Those nearby began hearing a low rumbling sound, described by one resident as the sound of a jet plane never landing. The noise came from fans cooling computers. Air pollution levels rose.

Residents were stunned and scrambled to understand what had moved into the city.

Mandy DeRoche, left, assistant managing attorney of the Coal Program, speaks with Earthjustice senior attorney Meagan Burton during a staff meeting in New York City.

Kholood Eid for Earthjustice

DeRoche knew from her previous career where she could get better information than the traditional environmental regulatory system provides. The buyers of the power station, Greenidge Generation LLC, were to go public through a complex reverse merger. That meant they had to make disclosures to the Securities and Exchange Commission and investors.

The details dispelled any hope that mining was just a side hustle. The plant operated for just 48 days in 2019, producing the equivalent carbon emissions of approximately 7,700 gas-powered cars driven for a year. The following year, the plant was in operation for 343 days and released the equivalent of more than 44,500 cars. At the end of 2020, the company operated approximately 6,900 miners. More mining machines have been added since then as the company builds up to the planned 32,500 machines.

The facility’s air permit, a replica of when it powered local homes and businesses in previous decades, gave the facility’s new investors significant runway to pollute just to mine cryptocurrency for themselves. The company also had ambitions to scale this model elsewhere.

Earthjustice had spent decades trying to shut down more than 100 coal plants. DeRoche saw the contours of a new industry that could bring plants back from the dead and also boost the operation of other fossil-fueled plants across the country.

“Greenidge Generation LLC gave other retirees, retirees or top plants a road map of how to get back online or pollute more, and how to recruit investors, how to go public on the NASDAQ,” she says.

Shot Heard Around Blockchain

DeRoche and the Sierra Club Atlantic Chapter sent a letter in 2021 to the New York State Department of Environmental Conservation pointing out that if the kind of energy-draining mining seen at Greenidge took off and was fueled by fossil fuels, the state had no hope of meeting its recently imposed climate emission cuts. The agency could, the letter noted, refuse the power plant’s air permit, which was under renewal.

Her phone immediately exploded with calls from journalists drawn to the crypto mining controversy. Bitcoin, the oldest and best-known cryptocurrency, inspires ardent supporters and relentless critics.

DeRoche refused to be drawn in. “Crypto is a new and shiny thing that is attracting press attention, but our focus is still on pollution and energy use,” says DeRoche. “We see a power plant that runs all the time that wasn’t there before. We do not support power plants that come back from the dead, or operate more than they absolutely need to.”

In practice, this means that Earthjustice’s concern is limited to a specific type of cryptocurrency mining called “proof-of work” that is mainly used by Bitcoin. Many other coins use far less energy.

That narrow focus still sparked intense backlash from Bitcoin believers. Local watchdogs faced threats from people who are “almost evangelical about proof-of-work cryptomining,” Taylor says. “We actually became very scared for our safety. We have installed an extensive security system in our home as a result.”

The media moment also brought forth new information and allies. Journalists and local partners turned up other mining rigs after operations ramped up in the United States following a ban in China, sending miners scurrying to find cheap, fast energy. Residents of other cryptocurrency mining communities began reaching out to Seneca Lake activists and Earthjustice.

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 amplified by China’s intensified crypto crackdown, which has pushed the industry westward.

Mark Felix/AFP via Getty Images

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

Most miners connect directly to electrical grids, some of which are very dirty, like Kentucky’s, which is about 70% coal-fired. Miners can often get sweetheart prices from utilities through power purchase agreements or through preferential pricing. Earthjustice is beginning to challenge these agreements, which leave ordinary people and local businesses with higher electricity bills and more pollution.

In addition, cryptomining has increased rapidly in oil and gas fields – miners bring shipping containers filled with computers right up to the wellheads.

A decline settlement

As lawmakers and regulators needed more time and information, Earthjustice and allies pushed New York State to enact a partial moratorium.

The idea: hold off on allowing crypto mining at fossil fuel plants for two years while the state conducts a study on the environmental effects of cryptocurrency mining — specifically with a view to meeting a 2019 state law called the Climate Leadership and Community Protection Act. The CLCPA commits New York to serious greenhouse gas reductions.

The cryptomining industry would have none of it. They kept almost every lobbying firm in Albany, says Earthjustice’s Liz Moran, who had the job of going toe-to-toe with that suit army.

“I heard from some legislative offices that they wanted to hear from a lobbyist representing a crypto company at least three times a day,” Moran says. “It was terrifying.”

The only way to beat them back, she realized, was with people power.

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

Patrick Dodson for Earthjustice

She arranged for grassroots advocates from groups like Taylor’s Seneca Lake Guardian, Fossil Free Tompkins, the Committee to Preserve the Finger Lakes and many others to travel to Albany, or join talks or virtual meetings, to share their personal stories. Then, in recent days, they ramped up calls to key lawmakers around the clock. Support for the moratorium would turn—and turn.

The battle went down to the final minutes of New York’s legislative session, finally passing around 2:30 a.m. on June 3.

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

Back at the lake

However, the victory was not complete for residents around Seneca Lake or around the state. Governor Hochul needed to sign the bill (as of press time, she still hadn’t). Regardless, the bill will not directly affect Greenidge because it exempts miners with permit applications that predate any moratorium.

But good news came when the state decided on June 30 to deny Greenidge’s Title V air permit. Statewide advocates had pumped up the volume, submitting about 4,000 comments, 98% of them against renewing the permit, including Earthjustice’s own 57-page technical and legal comments.

“My phone started lighting up with ‘Title V air clearance denied’ messages. I literally lost my phone,” says Taylor. The outburst startled her partner. “I said, ‘We did it, we did it, they refused the permit!’ We both jumped up and down and hugged each other and laughed a little.”

Greenidge challenges denial of air permit; Earthjustice and the state environmental agency will defend it. Greenidge continues to operate in the meantime, but the exposure and containment of a harmful new industry has begun. And more challenges from Earthjustice are coming