Environmental group sues New York for approving crypto-mining facility | New York

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On Friday, environmental activists filed a lawsuit against a New York state agency for approving a cryptocurrency mining company’s takeover of an upstate power plant.

The group said the move violates the state’s landmark climate law that was passed in 2019 and the lawsuit is the first to test how energy-intensive crypto mining legally resists the state’s climate goals. .

In September, the New York Public Service Commission (PSC), which oversees and regulates utilities, gave the go-ahead to the company’s takeover of the Fortistar power plant in North Tonawanda, a town near Niagara Falls. Canadian crypto-miner Digihost.

The Clean Air Coalition of Western New York and the Sierra Club, represented by the nonprofit Earthjustice, argued in their Albany County Supreme Court filing that the PSC’s approval of the transfer violated the state’s sweeping climate law, the Climate Leadership and Community Protection Act (CLCPA), which passed in 2019.

The law set ambitious goals for the state, including 70% of the state’s electricity generated by renewable energy by 2030, zero-emission electricity by 2040, and an 85% reduction statewide emissions by 2050.

In their lawsuit, Clean Air and the Sierra Club said the Fortistar plant was used as a peaking plant that would operate 10 to 74 days a year, only when there was a high demand for electricity, such as during cold winters. and hot summers. As a crypto-mining factory, the facility would operate 24/7, producing up to 3,000% more greenhouse gas emissions, according to court documents.

The groups argue that the CLCPA generally requires the state to conduct environmental reviews when making approvals and decisions, to ensure that the state will ultimately meet its climate goals. The PSC declined to consider the CLCPA and its requirements during the approval process, which began in April 2021, according to the court filing.

Along with rising greenhouse gas emissions, the groups say several communities around the Fortistar plant have been designated as potentially disadvantaged communities under the state’s climate law, meaning that those living in the region bear greater environmental burdens and have experienced historic divestment.

The law requires all public bodies, including the [commission] to consider greenhouse gas emissions and impacts on disadvantaged communities when reviewing approvals and administrative decisions, the court filing said. If such action threatens the CLCPA’s greenhouse gas reduction mandates, it cannot proceed without justification.

In response to environmental concerns that were brought to the PSC by Clear Air and the Sierra Club during the approval process, Digihost said it would convert the facility to renewable natural gas, with the ultimate goal of using all hydrogen by the end of 2023, according to public filings. The company also told the commission that its mining facility had been approved by the North Tonawanda Planning Commission, which conducted its own environmental review.

Crypto mining, like Bitcoin, is very energy intensive. If Bitcoin mining were its own country, it would rank 36th in annual electricity consumption, according to the Cambridge Bitcoin Electricity Consumption Index, which tracks electricity consumption used to mine. Bitcoin.

After China, once the center of crypto mining, banned it in 2021, the United States has emerged as the biggest center for mining. Businesses flocked to states with cheap electricity and large power plants, including New York, Texas and Kentucky.

While other states have been more welcoming to the crypto mining industry, New York state officials have recently stalled mining growth, citing the goals of the State of climate change.

In June, Greenidge Generation, a mining company that took over an upstate power plant, was denied renewal of a key aerial permit by the state’s Department of Environmental Conservation. , which cited the CLCPA as the driving force behind its decision. Greenidge is currently battling its license denial and is still in business.

In November, Governor Kathy Hochul passed a two-year moratorium on new crypto-mining operations using fossil fuels in the state. Digihosts’ takeover of the factory precedes the enactment of the bill, making it exempt from the moratorium.

Hochul, while signing the bill, said it was a key step for New York as we work to address the global climate crisis.

Proponents of cryptocurrency mining claim that miners help create jobs and economic activity in rural areas, although critics say the volume of job creation is negligible. Mining advocates also claim that crypto mining has been unfairly singled out in the state for its electricity consumption and that miners will likely head to more industry-friendly states.

To date, no other industry in the state has been sidelined like this for its energy consumption. This is a dangerous precedent to be set for determining who can or cannot use the power, the Chamber of Digital Commerce, an advocacy group, said in a statement on the adoption of the moratoriums.

The lawsuit also comes at a tumultuous time for the crypto industry after FTX, once one of the biggest crypto exchanges, collapsed in the fall. After the company disappeared, the price of Bitcoin fell below $16,000, leaving many miners with plummeting assets.

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