by Roger Downs, Conservation Director
The saga of the Greenidge 106 MW power plant and its energy hungry Bitcoin mine entered a new chapter in late June when the New York State Department of Environmental Conservation (DEC) denied the Title V Air Permit renewal for the fracked gas power generator on the shores of Seneca Lake. This former shuttered coal plant, resurrected as a gas powered, behind-the-meter bitcoin mine, has challenged state regulators who are grappling with how to handle this energy consumptive new ”proof of work” (PoW) cryptocurrency industry with their limited regulatory powers.
When the plant received its permits to generate electricity in 2016, the state assumed this old, inefficient facility was revived from the scrap heap to provide power to the grid in peak demand times - the only time it would be profitable to run. Estimates suggested that even though the plant was permitted to run year round, market constraints would force the facility to only operate for 15 days a year when the energy was needed most. At the time of permitting, there was never any mention of the company’s desire to run the facility at full capacity 24 hours a day, year-round, to power yet-to-be-built warehouses packed with thousands of computer processors to “mine” cryptocurrency.
The Sierra Club, Seneca Lake Guardian and other advocates sued to stop the initial operation of the power plant in 2016 and then again in 2019 to stop the building of the Bitcoin mining facilities - which were approved locally without any substantive environmental review. At the time, the DEC and Public Service Commission under Governor Cuomo refused to intervene in matters where it had uncertain authority, and the Yates County Supreme Court relied on this inaction as proof of no environmental impact, rather than seeing crypto mining as a new emerging environmental threat flying under the radar of existing regulations.
But as with all polluting facilities requiring air permits in NY, there is a renewal process every five years, so that the state can recertify pollution limits and make sure that there are no adverse impacts from changes to the operations or emissions from these facilities. Normally these permit renewals are rubber-stamped. The 2016 air permit for Greenidge expired in 2021, and the DEC took an additional nine months to weigh the legal ramifications of all that had transpired since issuing the permit. The Greenidge owners tried to argue that nothing had materially changed with the emissions of the plant since it was issued - but DEC established in their denial letter that there were two profoundly different factors that altered the impact of the plant: 1) the originally omitted Bitcoin mine that significantly increased expected emissions, and 2) passage of the Climate Leadership and Community Protection Act in 2019 - legislation that mandates an emissions free grid by 2040 and near carbon neutrality by 2050. From the beginning of the air permit review process, Commissioner Seggos publicly questioned whether such a facility could comply with NY’s climate laws, noting that each cryptocurrency facility consumes the same amount of energy as an upstate NY city and that even a small accumulation of cryptomines could upend grid reliability and derail our emissions reduction goals. The DEC received over 4,000 comments on the permit renewal, mostly in opposition to the Greenidge facility.
But beyond clearly spelling out the incompatibility of this facility with State laws, DEC’s Title V Air Permit denial letter establishes for the first time a basis by which the Department can legally close any existing emitting facility that doesn’t have a plan to transition to 100% clean energy. Expiring permits on 5-year cycles now can become the benchmark for phaseouts for fossil fuels and the “stick” to forcing real industry change if companies like Greenidge refuse to comply.
The Title V Air Permit denial, however bold, did not actually result in the closure of the Greenidge plant. The State Administrative Procedures Act allows for facilities to continue to operate while they challenge their permit denials in the courts. In fact, Greenidge continues to expand its mining capacity despite the plummeting price of Bitcoin and has vowed to keep running as long as the appeals hold out.
Another wrinkle in the Greenidge case is the expiring water permits that allow the power plant to withdraw up to 139 million gallons of water a day from Seneca Lake and discharge hundreds of thousands of gallons of warm effluent back into the lake. In 2017, DEC granted incredibly generous permit conditions to Greenidge that gave them five years to install mitigation screens on the plant’s intake pipes to reduce the millions of pre- and post-larval fish kills. The complicated screen infrastructure must be installed by October 1, 2022, and the company is only now starting this aquatic engineering project. DEC has yet to approve the final application for the massive new intake structures, and with the denial of the plant’s air permits it feels absurd for the state to facilitate further construction on a generating plant they mean to close.
While advocates will be gearing up to support DEC in the appeals process, we have not lost sight of the legislation passed earlier this year that would impose a 2-year moratorium on reviving any fossil fuel facility attached to PoW cryptocurrency mining. This bill would also initiate an official Environmental Impact Statement (EIS) process (to be conducted by DEC) that could help inform future regulations or prohibitions. Governor Hochul is poised to sign the bill, but the cryptocurrency industry has spent much of this electoral season stuffing campaign coffers with millions of dollars hoping to scare any lawmaker critical of PoW cryptocurrency. Let us hope that political courage wins out.