Bitcoin cryto-mining may be banned in New York

Governor Kathy Hochul is facing pressure from environmental activists to sign a law that would impose a two-year moratorium on a type of cryptomining that uses large amounts of energy to create bitcoins. But the governor is not wondering whether she will sign or veto the measure.

The state legislature approved the bill in June. It would put a two-year hold on the state issuing air permits to companies that want to buy up old fossil fuel power plants and convert them to what is known as “proof of work” crypto mining. The process uses enormous amounts of energy to power computers to solve complex equations to “mine” bitcoins.

Under the legislation, the state Department of Environmental Protection would use the two-year hiatus to conduct a study of the industry’s environmental impacts.

Groups including the Sierra Club and Earthjustice staged a demonstration outside Hochul’s New York City offices on Tuesday, calling on her to immediately sign the bill.

They chanted: “Hey, hey, Hochul, fossil fuels have to go,” and “We’re in a climate crisis, Hochul needs more pressure.”

Earthjustice’s Liz Moran says the energy-intensive process hampers the state’s ability to meet carbon emissions reduction targets designed to combat climate change.

“There should be no hesitation on the part of Governor Hochul to sign this legislation,” Moran said. “It is so consistent with the actions that the state has already taken.”

Hochul was asked about the crypto mining moratorium shortly after winning election to a full term as governor. She says the measure is one of hundreds of bills that she will review and act on in the coming weeks.

“We have a couple of weeks,” Hochul said on Nov. 10. “I will give you this one prediction: It will all be known and decided by midnight on December 31.”

The bitcoin industry opposes the moratorium, saying it will prevent New York from creating more jobs in the industry. Hochul’s campaign was supported by a union representing workers associated with the crypto mining facilities.

Hochul’s Department of Environmental Protection has taken steps to stop the growing industry.

On June 30, DEC refused the renewal of an air discharge permit for the Greenidge power plant on Seneca Lake in the Finger Lakes. The company converted an old coal-fired plant to natural gas, and in recent years has used the plant’s power to run proof-of-work bitcoin mining.

The agency cited the “dramatic increase in greenhouse gas emissions from the facility” as one of the reasons for denying the permit.

Some residents have long complained that the crypto mining facility is incompatible with the wine and related tourism businesses that have flourished in the region.

Joseph Campbell is with Seneca Lake Guardian, a group trying to protect the lake and lobbied for the moratorium.

He says the state’s wine industry generates $2.4 billion in tax revenue for New York, and $6.5 billion in direct economic activity. He says the wine and agritourism industry in the Finger Lakes employs 60,000 people.

“Greendig’s operations threaten all of this,” said Campbell, who added the plant employs only 48 workers.

The group is also concerned about a former coal-burning facility in Tonawanda, near Buffalo, that could become another bitcoin mining facility if there is no moratorium.

The state’s environmental agency gave the Greenidge facility more time to comply with another requirement to install protective screens around water intake pipes to protect fish and other animals that live in the lake. This work should have been completed in September, but must now be done by January.

The moves come as the bitcoin industry’s profits have fallen sharply in recent months. In accordance Greenidge’s report for the third quarter, the company lost nearly $30 million compared to the same time period last year.