Facing shutdown, Finger Lakes bitcoin miners boost revenue as they confront other environmental violations

Greenidge Generation, a crypto-mining farm located in its own natural gas power plant in the Finger Lakes, lost its air permit this summer after the New York State Department of Environmental Conservation ruled the facility violated climate and carbon pollution laws.

The facility has been allowed to remain open while it files an appeal — and is now on track to earn record profits based on recent company filings.

Yet as it does this financial pressure in the face of potential closure, the company is now approaching a second environmental issue – this time centered around the water permit and potential destruction of aquatic animals.

The cryptocurrency operation is nearing a late September deadline to install screens on water intake pipes that draw water from Seneca Lake. The screens protect fish from being sucked into the plant as it cools, in compliance with state and federal laws. DEC will not comment on what consequences, if any, may result from non-compliance.

Locals are now worried that the last minute move to dig up the waterbed could stir up old pollutants.

“My concern has always been about water quality,” said Gary McIntee, whose home is a mile south of the power supplier. “We depend on water from Seneca Lake for our water source. We have no other source.”

The DEC issued Greenidge’s original water permit in 2017 and gave it five years to complete the installation of the screens. The site was converted from coal to natural gas three years earlier — at a cost of $100 million — by Atlas Holdings LLC, a Connecticut-based investment firm that owns Greenidge. The former colliery on the site also lacked the fish screens.

But the plant waited until August 15 to apply for the two building permits required to carry out this work. Part of the project which is about to start will result in the dredging of the lake bed and the removal of 1,100 cubic meters of sediment.

“Since it was an old coal plant, you had to treat it [Seneca Lake] like it’s polluted, says Dr. Gregory Boyer, director of the Great Lakes Research Consortium and a biochemistry professor in the SUNY College of Environmental Science and Forestry. “That would worry me. Dredging always mixes pollutants and brings them into the water column.”

Such dredging can contaminate groundwater and affect local drinking water, including wells, according to Boyer.

Greenidge Generation has not responded to multiple inquiries from Gothamist regarding the water permit and the appeal of the denied air permit. Currently, the DEC does not have a deadline for its response to Greenidge’s challenge, or a timetable for the process.

And during the appeal process, the company is allowed to operate as usual – and it has been pushing to increase revenue since the air permit was denied on June 30.

This summer, the company added about 10,000 computers and mined about 300 bitcoins in July alone, which would be worth more than $6 million. Their hash rates, a unit of how much power the bitcoin network uses, increased by almost 70% in the last four months.

The trend means that even amid this year’s dramatic drop in cryptocurrency prices, Greenidge Generation is on track to have its best year ever — if it can stay open.

“It is important for all Greenidge stakeholders to know this [denial of the air permit] the decision has no impact on our current operations in Dresden,” Greenidge Generation wrote in a statement to investors that the air permit was denied. “We can continue to operate without interruption under our existing Title V air permit, which remains in effect, for as long as it takes to successfully challenge this arbitrary and capricious decision.”