A two-year moratorium on new permits for cryptocurrency mining at carbon-based fuel plants in New York will not impact the controversial Greenidge Generating Station on the western shore of Seneca Lake.
The legislation, signed Tuesday by Gov. Kathy Hochul, applies to cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions. However, operators that have already filed paperwork for new or renewal permits are exempt. The law also does not apply to proof-of-stake operations, which use a fraction of the energy required by proof-of-work mines.
Greenidge Generation Holdings Inc. applied for renewal of its air permit, which expired in September 2021. In June, state Department of Environmental Conservation denied the permit renewal application; Greenidge is challenging that decision.
The same month, the state Legislature approved the two-year moratorium on cryptocurrency mining permits. Throughout this fall’s election campaign, Hochul declined to take a position on the legislation, saying that she was studying it.
In a memo accompanying her approval, Hochul said she was signing the legislation into law “to build on New York’s nation-leading Climate Leadership and Community Protection Act, the most aggressive climate and clean energy law in the nation, while also continuing our steadfast efforts to support economic development and job creation in upstate New York.”
The governor described the moratorium as the first of its kind in the nation.
Seneca Lake Guardian, an advocacy group that pushed for Hochul to approve the moratorium, praised the governor. “Thank you, Governor Hochul, for stepping up to protect New Yorkers from corporate bullies who want to exploit communities like mine in the Finger Lakes,” said Yvonne Taylor, vice president of Seneca Lake Guardian, in a statement. “(She) did the right thing by putting real New Yorkers over the failing outside speculators who choose not to mine crypto in more efficient ways that don’t destroy the climate, environment, and local economies.”
The group called on Hochul to “finish the job” by shutting down existing cryptocurrency mines including Greenidge Generating Station and Foristart in North Tonawanda.
Business and crypto industry groups, however, criticized the moratorium.
“The Business Council does not believe the legislature should seek to categorically limit the growth and expansion of any business or sector in New York,” said Heather Briccetti Mulligan, president and CEO of the Business Council of New York State, in a statement. “We plan to further engage and help educate them regarding this industry and the benefits it provides to the local, regional, and state economy.”
The Chamber of Digital Commerce said it was “severely disappointed” in Hochul’s decision. “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 U.S.—a trend far too many industries in New York State are realizing daily.”
When the state DEC denied the Greenidge air permit renewal application, it said “this natural gas-fired facility’s continued operations would be inconsistent with the statewide greenhouse gas emission limits established in the Climate Act,” a law enacted in 2019 that requires New York to reduce the release of greenhouse gases 40 percent by 2030 and no less than 85 percent by 2050, based on 1990 levels.
The Seneca Lake facility ceased operating as a coal-fired plant a decade ago. Since 2014, it has been owned by private equity firm Atlas Holdings and operated using natural gas by Greenidge, which began bitcoin mining there three years ago.
The operation has generated controversy from the start, with critics saying proof-of-work cryptocurrency mining in the Finger Lakes poses a range of environmental hazards such as greenhouse gas emissions.
In addition to the permitting moratorium, the new law requires the DEC to conduct a study of the environmental impact of proof-of-work cryptocurrency mining operations on New York’s ability to reach the Climate Act’s goals.