Hochul Is Next Step for Pulling Plug on Some New York Cryptomining

In a defeat for a burgeoning New York industry, the state senate passed legislation that would institute a moratorium on fossil-fuel-based cryptomining, possibly paving the way for other states to do the same — or to instead act as harbors for industrialists fleeing the Empire State.In order to go into effect, the moratorium needs to be signed by Governor Hochul, which advocates see as likely despite some headwinds.“Governor Hochul cannot possibly now greenlight Greenidge Generation’s fracked gas-fueled mining just to make volatile speculative money in the middle of a climate crisis,” activist Yvonne Taylor said Friday.Greenidge Generation, a cryptomining plant caught in the middle of the debate, did not respond to a request for comment.Others argue that the governor may be more sympathetic than the state senate to the crypto industry’s interests, especially after having received some $40,000 from an executive of a Massena-based cryptomining plant. The administration maintains that donations have no bearing on policy decisions.“We have to balance the protection of the environment, but also protect the opportunity for jobs that go to areas that don’t see a lot of activity and make sure that the energy that’s consumed by these entities is managed properly,” Ms. Hochul said in late May.Ms. Hochul twice previously delayed decisions on renewing one crypto plant’s permits, though the Department of Environmental Conservation has said that such delays are “not unusual.”The governor’s office has not responded to a request for comment.The legislation comes after years of pressure from a diverse coalition of agriculturalists, winemakers, and environmental activists centered in the Finger Lakes. These activists argue that the cryptomining facilities have been damaging the environment in the area and with it the agricultural industries the region relies on.The bill’s summary explains that it would establish a two-year moratorium on “cryptocurrency mining operations that use proof-of-work authentication methods.”This first-in-the-nation bill would not only pause new and renewed permits for fossil-fuel-burning cryptomining plants, but also trigger a full environmental impact review for operations across the state. The review would determine if cryptomining complies with New York’s laws and regulations on power plants, as well as the state’s Climate Leadership and Community Protection Act, which has been a central issue in the debate.For two years, the moratorium would specifically ban the issuing of permits to proof of work cryptomining plants that are powered using fossil fuels. This would include only a small number of plants at the moment, though business leaders expect that if the moratorium is not approved the industry would rapidly expand to other obsolete power plants. There are dozens of such plants in New York and hundreds across the county. Many speculate that New York’s moratorium could be the first of many as some states ban and others welcome the industry.The bill would not prevent New Yorkers from investing in cryptomining operations in the state or elsewhere.Cryptomining is the process of generating new cryptocurrencies such as Bitcoin or Ethereum. This bill specifically targets cryptomining facilities that use the proof-of-work model for generating new digital assets.To understand this model, imagine a warehouse full of top-of-the-line computers attempting to solve puzzles all day and all night; whichever computer solves a given puzzle first is awarded one Bitcoin.The problem with this model of cryptominining, some argue, is that it is incredibly energy-intensive, using a similar amount of energy every year as the global gold industry or nations like Egypt or Ukraine.Some countries, including China, have gone as far as banning the industry outright, citing its high energy usage as a prime reason. Communities across the United States have seen their energy prices driven up by these plants.In New York, a new model of cryptomining plant has been developed, one that is both a power plant and a cryptomining facility and that allows the miners to pay lower prices for electricity.These are called “behind the meter” plants, because they do not buy electricity from the grid but rather produce electricity and are permitted to operate as power plants.This strikes at the core of the issue, as power plants in New York operate under a certificate of public convenience and necessity that is supposed to be reserved for utilities that serve the public at large, as opposed to private investment firms.

Hochul Is Next Step for Pulling Plug on Some New York Cryptomining

More from the New York Sun

Luxury Minivans Are Having a Moment

Trump Vows To Keep Strait of Hormuz Open as America Sends Warships, Global Coalition Forms

Americans and South Koreans Train by Building a Bridge in ‘Real War’ Exercise

More from the New York Sun

Luxury Minivans Are Having a Moment

Trump Vows To Keep Strait of Hormuz Open as America Sends Warships, Global Coalition Forms

Americans and South Koreans Train by Building a Bridge in ‘Real War’ Exercise

Texas Convictions Validate Trump Move To Label Antifa as Domestic Terrorist Organization

Trump Names Diplomat To Replace Kari Lake at Helm of America’s Overseas Broadcasters

Man Linked to Congresswoman Jasmine Crockett’s Security Detail Dies in Dallas Police Standoff

Two Billy Joel Tributes Honor New York’s Utmost Piano Man

Trump Releases Renderings of ‘New, Highly Improved’ Kennedy Center