Bitcoin Mining Is Bad for the Climate—and Local Communities Too
Upstate New York’s defunct power plants have become a hot spot for cryptocurrency operations, and Finger Lakes residents say they’re just another blight.
UPDATE: On November 23, 2022, New York governor Kathy Hochul signed into law a two-year moratorium on cryptocurrency mining operations in the state. The law requires the New York Department of Environmental Conservation to study the environmental impacts of the crypto industry.
UPDATE: On June 30, 2022, the New York State Department of Environmental Conservation denied Greenidge Generation's application to renew its Title V air permit, stating that it doesn't comply with the state's Climate Leadership and Community Protection Act (CLCPA) and that continued operations would conflict with the greenhouse gas emission limits the CLCPA has set. Greenidge is challenging the outcome.
From the balcony of his office at Boundary Breaks vineyard in Lodi, New York, vineyard manager Kees Stapel looks out on Seneca Lake, the largest and deepest of the 11 Finger Lakes. Farms pepper the rolling green landscape alongside the long, narrow lake, and each summer, wine enthusiasts from around the world come to enjoy this bucolic setting. Penetrating the scenery, however, are the brick smokestacks of a power plant on the lake’s western shore. Pollution billows from the plant around the clock, a constant reminder of the latest threat to the region’s wine industry, its lakes, and, ultimately, its way of life.
“Right where people sit and enjoy their wine and the view, you can clearly see this thing chugging away,” Stapel says. “The beauty of this place is what brings all the tourism to the area, generates revenue, and allows us to create jobs. So why would we let an environmental eyesore continue to operate?”
That eyesore is Greenidge Generation, a Bitcoin mining operation that, since the spring of 2020, has been running 24 hours a day, 7 days a week. Atlas Holdings, a Connecticut-based investment firm, bought the former coal-fired plant in 2014 and converted it to burn natural gas.
After realizing that running a “peaker plant” at 6 percent capacity was unprofitable, Greenidge made a pivot to Bitcoin mining. To mine Bitcoin, the most popular form of cryptocurrency, powerful computer rigs work nonstop to solve complex equations, consuming enormous amounts of electricity in the process.
Greenidge has so far installed more than 17,000 machines and plans to double that number to 32,500 by the end of 2022. The increase would eat up about the same amount of energy every year as nearly 100,000 homes. Because of its “behind the meter” status, which means it doesn’t provide electricity to the public, the Greenidge power plant has, so far, been able to largely skirt environmental regulation.
“To be resurrecting decommissioned or underutilized power plants in the middle of this climate crisis to make fake money feels literally insane to us,” says Yvonne Taylor, vice president of Seneca Lake Guardian, an all-volunteer local grassroots organization. The group is pushing New York State’s Department of Environmental Conservation (DEC) to deny Greenidge’s air pollution permit reapplication and asking Governor Kathy Hochul to declare a moratorium on Bitcoin mining in the state. The activists argue that allowing Greenidge to continue its operations would derail New York’s 2019 climate law, which aims to reduce greenhouse gas emissions by 40 percent by 2030 and by 85 percent by 2050.
But for Vinny Aliperti, owner of Billsboro Winery, which is located about eight miles north of Greenidge, climate change is only one of the concerns. New York State wine is a $6.6 billion industry that supports 70,000 jobs, the vast majority centered in the Finger Lakes region, and the winemakers fear Greenidge’s presence will dampen the tourist appeal they so heavily rely upon. It’s further stress to an industry that is suffering from more frequent heavy rainfalls (which can damage soil and cause mildew and rot to grape crops) and warmer, more humid conditions (which can bring more pests).
“Climate change is already impacting our grape-growing seasons, and now we have this climate-busting facility on our shores that’s only going to cause more problems,” says Aliperti.
Crypto: Testing the Waters in New York
Every day, the Greenidge plant removes 139 million gallons of water—the equivalent of 27,000 full tanker trucks—from Seneca Lake to cool its machines. It then dumps the heated water, up to 108 degrees Fahrenheit, back into the lake. Warmer water can exacerbate the growth of toxic algal blooms, which have been forming on the lake in recent years, threatening health and the drinking water for 100,000 people. The thermal pollution could also hasten the decline of the lake’s trout, which become severely stressed at temperatures above 70 degrees.
That’s not all. The plant extracts the water through massive pipes without taking even basic measures—like adding screens, a Clean Water Act requirement for water withdrawals—to avoid sucking up fish and other aquatic life. (Greenidge has until October 1, the end of its five-year grace period, to comply.)
In December 2020, Seneca Lake Guardian joined Sierra Club, Committee to Preserve the Finger Lakes, and 30 residents in challenging Greenidge’s permit. They contended that the Town of Torrey (which includes the Village of Dresden) gave permission to the company to expand without properly considering the environmental consequences. Earlier this month, the court ruled in Greenidge’s favor, but the fight is far from over.
Abi Buddington, one of the resident challengers, is determined to prevent Greenidge and other cryptocurrency operations from moving into other unassuming towns. From her lakefront house about a mile north of Greenidge, she can see the pollution spewing into the air and, from her dock, she can hear the din of the plant’s many machines, fans, and turbines buzzing away without pause. In addition to the impact on tourism (she rents her house to visitors in the summers), Buddington worries about the health and climate consequences of allowing the plant to continue to operate.
Environmental advocates see Greenidge’s operation as a way for cryptocurrency companies to test what’s possible in the state, which hosts 20 percent of the country’s Bitcoin mining operations in the United States. With 49 power plants in New York that are either mothballed or underutilized, the Bitcoin industry could soon take over more and more of them. Yet what happens at Greenidge is also an opportunity for Governor Hochul and the state to prove that New York is serious about meeting its climate goals.
First and foremost, advocates are asking the DEC to deny the renewal of Greenidge’s air permit, which was based on the original coal plant’s emissions. The permit expired in September 2021, and the agency, which has twice delayed its decision on the renewal, now says to expect one by the end of June. Advocates would also like to see a moratorium on cryptocurrency mining in New York until more is known about its climate impacts. Lawmakers in the New York State Assembly just passed a bill that would pause “proof-of-work” operations—a more energy-intensive form of crypto mining—for two years. The bill is now making its way to the Senate. But a recent white paper by the Sabin Center for Climate Change Law at Columbia University argues that the governor has the authority to declare one herself.
“If Governor Hochul decides to be a champion of New York’s bold climate law, she has to impose a moratorium on this energy-intensive, climate-busting industry,” Taylor says. “She also needs to be a leader on climate for the rest of the country.”
A Familiar Fight Against Big Industry
Michael Warren Thomas, known as “the voice of the Finger Lakes” and the host of several local radio shows on food and wine, has been following the development of the area’s mostly family-owned wine industry for the past 25 years. Like others, he feels the massive Bitcoin operation comes with high costs but with little benefit to the community. “We need a change of mindset to protect our future as a world-class wine region, rather than protect our past, which was, to a large degree, industrial,” he says.
Greenidge’s presence in Dresden is just the area’s latest example of a big corporation with deep pockets descending on a small, depressed town desperate for revenue. The 48 jobs Greenidge says it’s adding to the local economy won’t do much, but the $25,000 the company donated to the local fire department, for example, holds a lot of sway. “As soon as something like that happens, the town does everything it can to welcome them in,” Campbell says. “The companies can purchase goodwill.”
For this reason, Taylor is adamant that this can’t be a town-by-town fight. “Small towns are poorly equipped to make decisions on an industry that’s relatively new and not understood,” she says. State-level regulations—as well as broad public education efforts by community advocates and media members like Thomas—are critical to reigning in the Bitcoin industry.
“We need enough people to be informed, and the wave big enough, so the governor can jump on and feel safe,” says Rick Rainey of Forge Cellars, a winery on the lake’s eastern shore, about the prospect of Hochul imposing a moratorium.
Greenidge comes to Seneca Lake on the heels of several other attempts over the last decade to bring new industrial projects to the area. Seneca Lake Guardian and other regional, state, and national groups (including NRDC) spent eight years fighting a gas storage and transport hub facility on the lake’s western shore. Soon after, the groups succeeded in keeping a massive garbage incinerator from moving into the small town of Romulus between Seneca and Cayuga lakes.
There was also the long battle against fracking in the state, which ended in a ban—after a moratorium to study health impacts—in 2015. These hard-won victories, Taylor explains, buoy environmental advocates to now go up against the crypto industry.
“We’re a worthy opponent,” says Rainey. “I think they’ve underestimated the will of the people of the Finger Lakes.”
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