ITHACA, N.Y. — Legislation that would implement a state-wide moratorium on energy intensive forms of cryptocurrency mining passed the New York Assembly on Tuesday, stoking the ambitions of environmental activists alongside the scorn of crypto-boosters.
The bill is a more targeted version of one that stalled in the assembly during last year’s legislative session. The current one, which now has to pass the state senate, would stop new proof-of-work (POW) cryptocurrency mining operations from being allowed to set up shop in power plants across New York State, and prevent the renewal of permits for power plants that are conducting proof-of-work cryptocurrency mining.
The bill is sponsored by Ithaca Assemblymember Anna Kelles (D-125) who has been the political face of a grassroots effort, largely pushed by Seneca Lake Guardian, to raise awareness around the greenhouse gas emissions that can result from cryptocurrency that uses POW as an authentication method to validate blockchain transactions, namely bitcoin, the most valuable and popular cryptocurrency.
According to the Cambridge University research center, the annualized electricity consumption of bitcoin mining and all its transactions is estimated at 150.7 Terawatt hours per year, surpassing the electricity consumption of countries like Poland, Malaysia, and Ukraine.
The moratorium bill would also make it the New York State Department of Environmental Conservation’s task to develop and implement a comprehensive environmental impact statement pertaining to statewide cryptocurrency mining operations to inform the potential of further legislative action.
Among other measures, such a statement would reveal the number and location of existing cryptocurrency mining operations in new York; their electric energy consumption; their energy and fuel sources; related greenhouse gas emissions; the social and economic costs and benefits of proof-of-work cryptocurrency mining; and the impact that proof-of-work cryptocurrency mining would have on New York State meeting its climate targets under the landmark Climate Leadership and Community Protection Act (CLCPA). The landmark 2019 law stipulates that New York needs to reduce its state-wide greenhouse gas emission by 85% by 2050.
If the bill were to pass the senate, it would still need Governor Kathy Hochul’s signature, who has been markedly taciturn on the issue.
Environmentalists, such as Liz Moran, the New York Policy Advocate for Earthjustice, have been pushing the message that New York state’s high ambitious climate goals under the CLCPA are “nearly impossible to meet” if proof of work cryptocurrency mining would be allowed to persist.
The moratorium bill is moving through the state legislature at a time where the conflict around the permit renewal of Greenidge Generation LLC — a gas-fired power plant that generates electricity for its bitcoin mining operation — has reached its boiling point.
For bitcoin boosters, Greenidge is a darling, a success story to model other bitcoin mining operations after. But for environmental activists, Greenidge was the canary in the coal mine. Its rapid scaling into a heavy greenhouse gas emissions associated with its bitcoin mining set off a wave of opposition.
DEC Commissioner Basil Seggos told WSKG that he has “significant concerns” that the Greenidge Generation’s operations are in compliance with the state’s statutory climate goals under the CLCPA, but justified a March extension of Greenidge’s permit renewal as being “fair” given the complicated nature of the topic. The new deadline for the DEC is June 31, after the end of New York’s 2022 legislative session.
The moratorium law moving through the legislature has become a focus of the larger cryptocurrency community for its potential as a precedent setter. Across the U.S. there are few other laws that have challenged the rise of energy-intensive forms of cryptocurrency mining.