New York cracks down on carbon fuel-based crypto-mining operations

New York cracks down on carbon fuel-based crypto-mining operations


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New York State has banned a practice becoming more common in the crypto-mining industry – the rescuing and repurposing of mothballed fossil fuel plants to exclusively provide energy for mining digital currency.

Governor Kathy Hochul yesterday enacted a bill in the works since May 2021 that establishes a two-year moratorium on applications or permits for “an electricity generating facility that utilizes a carbon-based fuel and that provides, in whole or in part, behind-the-meter electric energy consumed or utilized by cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions.” This includes applications to renew such permits.

The bill cites the contribution to climate change of dirty fuel plants at a time when the state has committed to reduce greenhouse gas emissions by 85 percent by 2050, with “net zero emissions in all sectors of the economy by that time.”

Though it notes that the industry is growing in New York, the bill says: “The continued and expanded operation of cryptocurrency mining operations running proof-of-work authentication methods to validate blockchain transactions will greatly increase the amount of energy usage in the state of New York, and impact compliance with the Climate Leadership and Community Protection Act.”

All existing crypto-mining outfits in the state will now be subject to a generic environmental impact statement measuring the amount of energy consumed, the source of that energy and its impact, their emissions and the impact they may have on public health, water usage, and “social and economic costs and benefits, if any.” The statements will be available for public comment and the Department of Environmental Conservation will hold hearings on the matter in each region of the state.

Since when do crypto miners taker over power plants?

The crypto-mining boom in the US is largely due to moves in China, once the world’s mining epicenter, that essentially shut the industry down. Companies in search of cheap power then set up shop in the States, which now accounts for some 38 percent of the world’s miners. Globally, Bitcoin mining consumes more electricity than Finland.

The cost of this shift is measurable. Montana environmentalists watched aghast as mining company Marathon swooped on the Hardin generation station, a 115-megawatt coal plant, in 2021. With a datacenter now on the premises, the station belched out 187,000 tons of CO2 in the second quarter, a more than 5,000 percent increase on what was emitted during the same period in 2020.

“This isn’t helping old ladies from freezing to death, it’s to enrich a few people while destroying our climate for all of us,” Anne Hedges, co-director of the Montana Environmental Information Center, told The Guardian. “If you’re concerned about climate change you should have nothing to do with cryptocurrency, it’s a disaster for the climate.”

Jamie Zawinski – who named the Mozilla project and was one of the original Netscape developers – earlier this year told The Register there was “literally nothing in the modern tech ecosystem more short-sighted than the gambling instrument and ecological disaster that we know as cryptocurrencies.”

Another company, Greenridge Generation, claimed to be bringing “a piece of the world’s digital future” to upstate New York when it revived a coal plant near the shore of Seneca Lake in the Finger Lakes region in 2020. The megawatts dedicated to Bitcoin here were said to be enough to “power more than 35,000 homes.”

The Scrubgrass plant in western Pennsylvania, which burns waste coal and was on the brink of closure, is now lined with shipping containers hosting thousands of mining computers. Kentucky, meanwhile, is actively trying to attract investment from mining companies by exempting them from electricity sales tax.

While big industry players like to be seen to take the environmental impact of their technology seriously, the cryptocurrency brigade forges ahead – even as FTX, once one of the largest and most trusted exchanges, was recently revealed to be built on, well, nothing.

Crypto players responded unfavorably. The Chamber of Digital Commerce said in a statement: “To date, no other industry in the state has been sidelined like this for its energy usage. This is a dangerous precedent to set in determining who may or may not use power.

“The [proof-of-work] mining industry has been spurring economic growth, job creation, and inclusion for historically underrepresented populations in New York, while also creating financial incentives for the buildout of renewable energy infrastructure. With this legislation becoming law, we expect the mining companies, or those considering business in the state, to leave and head to more friendly regulatory jurisdictions in the US – a trend far too many industries in New York State are realizing daily.”

Likewise, Kevin Zhang of digital currency company Foundry told CNBC: “Not only is it a clear signal that New York is closed for business to bitcoin miners, it sets a dangerous precedent for singling out a particular industry to ban from energy usage.”

Others claimed that the law will discourage renewable-based miners from doing business in the state due to the threat of increased regulation.

We suppose it all comes down to what you think is more unfair – crypto-bros being prevented from setting up shop in New York or crypto-bros destroying the planet for the sake of magic internet money. ®

Tech

via The Register https://ift.tt/bkyxfZp

November 23, 2022 at 09:08AM

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