A Fossil Fuel Power Plant That Mines Bitcoin Is Fighting to Stay Open

Regulators say the Greenidge plant in New York State is fighting an an "uphill battle" to prove it's environmentally-friendly enough to stay open.
A Fossil Fuel Power Plant That Mines Bitcoin is Fighting to Stay Open
Image: Bloomberg / Contributor via Getty Images

A natural gas-fired power plant connected to a Bitcoin mine in Dresden, New York is fighting to green its image as it vies for renewed permits from the state.

The Greenidge power plant has become the center of fierce debate over Bitcoin mining in New York State and how the industry fits into the state’s climate goals. Decommissioned as a coal-fired plant in 2011, Greenidge was reopened in 2017 after being purchased by Atlas Holdings and converted to a natural gas plant, spinning up Bitcoin mining starting in 2019. Today, it’s one of the largest Bitcoin mining facilities in the U.S., running 17,000 rigs

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Greenidge lauds itself as “carbon neutral,” claiming to offset the emissions that come from burning fossil fuels to generate bitcoins with “reliable, verified” credits and systems that it says are more efficient than the network standard. But that’s not enough for many environmentalist opponents, including Sen. Elizabeth Warren (D-MA), who say the environmental footprint of Bitcoin mining outweighs any justification for its existence, especially when it uses fossil fuels directly. 

“Given the extraordinarily high energy usage and carbon emissions associated with Bitcoin mining, mining operations at Greenidge and other plants raise concerns about their impacts on the global environment, on local ecosystems, and on consumer electricity costs,” Warren wrote in a letter to the plant’s CEO, Jeffrey Kirt, last December. 

Despite purchasing offsets, the plant’s emissions increased “nearly tenfold from 2019 to 2020,” Warren’s letter claims, citing data from the New York State Department of Environmental Conservation (DEC)  obtained by the Committee To Preserve The Finger Lakes, which opposes the Greenidge plant’s mining operation. In 2020, those emissions were comparable to that of 50,000 cars, the letter reads. At the time, Greenidge told Bloomberg that the operation “meets all of New York’s nation-leading environmental standards.”

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Even so, the plant faces an “uphill battle,” for its permits, DEC Commissioner Basil Seggos told Binghamton, New York-based broadcaster WSKG on Monday, noting that he still has “significant concerns” about the environmental impact of its operations. 

The New York State Department of Environmental Conservation (DEC) is currently weighing a decision to approve or deny the plant’s application for the renewal of its five-year permits, including one for air quality that has faced intense scrutiny in recent months. In September, 2021, the DEC submitted the permits for public comment before holding a number of public hearings on the plant. Greenidge submitted a proposal with greenhouse gas mitigation efforts on March 25. Its permits were expected to be approved by March 31; this deadline was pushed out to June 30 to afford the regulator more time to review its proposal. The DEC has yet to issue a formal call until it sees tangible signs that Greendige is working to slash its carbon footprint. 

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“DEC has advised the applicant, Greenidge Generation, LLC, of the need for additional greenhouse gas (GHG) mitigation measures to meet the requirements of the Climate Leadership and Community Protection Act,” a warning on the DEC website reads. “On March 25, the applicant, Greenidge Generation, LLC, proposed GHG mitigation measures for the facility as part of the current Title V and IV permit renewal process. DEC has not made a determination regarding the sufficiency of the proposed GHG mitigation measures in meeting these requirements.” 

“DEC subjects every application to all applicable federal and State standards to ensure the agency’s decision is protective of public health and the environment and upholds environmental justice and fairness,” the agency told Motherboard in an email. 

The regulator is still “reviewing additional information submitted by” Greenidge, alongside some 4,000 public comments it received about the plant, the notice continues.

The agency’s hesitation primarily comes down to a piece of landmark climate legislation passed in 2019 that, at the time, positioned New York state as a national leader in environmental policy. The Climate and Community Leadership Protection Act (CLCPA) established a set of legally-binding environmental targets requiring 70 percent of New York’s energy to come from renewable sources by 2030 in order to reduce statewide greenhouse gas emissions by 85 percent by 2050. Now, three years after the Act’s passage, advocates say the state is far from achieving these goals. Allowing the proliferation of Bitcoin mining tied to fossil fuel plants would set New York even farther back from them, critics say, as it extends a lifeline to fossil fuel infrastructure that would otherwise have no reason to exist. 

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Greenidge underscored in its March 25 proposal to the DEC that it is “prepared do more than the legal minimum—and more that it has already done—to reduce [greenhouse gas] emissions in support of the Department’s effort to achieve CLCPA’s goals.” It proposed reducing its overall emissions volumes by 40 per cent from what’s currently permitted by the end of 2025, five years before the CLCPA’s 2030 renewable targets. The plant underscored that its own emissions comprise well under one percent of the state’s overall emissions and power volumes.

“The State of New York should lead, embracing the cryptocurrency industry and all the opportunity we’ve shown it can create for New Yorkers while complying with the nation’s most aggressive environmental standards and laws addressing climate change,” Greenidge said in a statement emailed to Motherboard. “We look forward to finalizing a strong, renewed [air] permit to allow Greenidge to continue its environmental and economic stewardship in New York.” 

In addition to regulators’ concerns, local critics like Seneca Lake Guardian and Committee to Preserve the Finger Lakes oppose not just Greenidge’s atmospheric emissions, but its potential impact on water quality around the plant. Last year, a claim that the facility has turned the glacial lake it sits next to into a “hot tub” went viral. That claim wasn’t true, but shows the level of angst Greenidge has fomented in the region, and may have a kernel of truth to it. The facility’s intake pipe draws up fresh water from the nearby Seneca Lake to power the facility with steam and cool it, pumping it back out at an allowed maximum of 108 degrees. Greenridge maintains that in 2021 it never reached that temperature and the average discharge temperature is approximately 32 degrees below the permitted level. 

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That this type of setup can imperil local wildlife is a well-documented phenomenon. Intake pipes suck in water and wildlife indiscriminately, Grist reported in 2021. This can result in fish and wildlife being mangled by facilities, which the Sierra Club once described as “giant fish blenders.” 

Many of these environmental groups hope to see the state issue a moratorium on the issuing of permits for Bitcoin mining as a whole: Citing the state’s move to ban fracking in 2014, advocates say the state has a well-defined legislative pathway to putting an end to Bitcoin mining. Most recently, that chorus of voices came to include New York City Public Advocate and gubernatorial candidate Jumaane Williams, who called on Governor Kathy Hochul to place a moratorium on Proof-of-Work mining. The technique for providing network security used by Bitcoin and other cryptocurrencies involves brute-force number crunching in a global lottery to add a block of valid transactions to the chain. To Bitcoiners, this is a critical part of the system, but to critics, it’s a lot of wasted energy. 

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“Bitcoin mines that use a 'Proof-of-Work' process are known to cause significant damage to the environment and local economy, which is why many countries have completely banned the practice,” Williams told local broadcaster Spectrum News in February. “Unfortunately New York has fallen behind, allowing nearly 20 percent of the country's mines to operate in our state without any oversight or regulation. We need to ask questions now rather than dealing with the fallout later."

A bill that would put a two-year moratorium on all Proof-of-Work mining in New York has garnered traction in the state legislature—it would put an end to what The New York Times called a “Bitcoin boom” in Northern and Western New York. Bitcoin mining doesn’t need fossil fuels, and New York State is home to ample hydropower and shuttered industrial plants, making it a leading producer of new bitcoins nationwide as firms seek cheap power. 

Still, many environmentalists fear that Greenidge’s case is part of a larger wave of once-mothballed power plants coming back to life via Bitcoin. There are an estimated 30 mothballed coal and oil-powered plants across the state that could be fodder for mining operations like this one, Buffalo News reported last July

Greenidge, for its part, remains firm that it’s taken steps to meet the requirements the DEC has laid out for its permit approvals. 

“We are willing to do far more than we have already done to further reduce [greenhouse gas] emissions and help the state achieve its statewide CLCPA goals,” the plant said in a statement on March 31. “Notwithstanding the noise from our few remaining opponents, this is a standard air permit renewal governing permitted emissions levels, not a cryptocurrency permit. Their efforts to mislead the public—and to cause our team members and IBEW [union] partners to lose their jobs without any basis in law or fact—have been shameful.” 

Correction: An earlier version of this article contained incorrect figures for the size and timeline of Greenidge’s mining operation. The story has also been updated with additional information from Greenidge on the temperature of its intake pipe.