Environmental Group Sues New York Over Approving Crypto Mining Facility | New York

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

The group said the move violates the state’s historic climate law that was passed in 2019, and the lawsuit is the first to test how energy-intensive cryptocurrency mining legally stands up to the state’s climate goals.

In September, the New York Public Service Commission (PSC), which oversees and regulates public utilities, gave the green light to the acquisition of the Fortistar power plant in North Tonawanda, a city near Niagara Falls, by the Canadian company cryptocurrency mining site, 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 suit that the PSC’s approval of the relocation violated the state’s sweeping air pollution law. climate, the Climate Leadership and Community Protection Act (CLCPA), passed in 2019.

The act set ambitious goals for the state, including having 70 percent of the state’s electricity generated from renewable energy by 2030, carbon-neutral electricity by 2040, and an 85 percent reduction in emissions statewide. by 2050.

In their lawsuit, Clean Air and the Sierra Club said the Fortistar plant was used as a “flagship” plant that would operate 10 to 74 days a year, only when there was a high demand for electricity, such as in cold winters and hot summers. As a cryptocurrency mining facility, 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 the state ultimately meets its climate goals. The PSC “refused 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 possible “disadvantaged communities” under the state’s climate law, meaning those living in the area are enduring greater environmental burdens and have undergone historic divestment.

The law “requires all state agencies – including the [commission] – consider greenhouse gas emissions and impacts on underprivileged communities when considering administrative approvals and decisions,” the court filing said. “Whether such an action threatens CLCPA greenhouse gas reduction mandates 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 will convert the plant to renewable natural gas, with the ultimate goal of using all hydrogen by end of 2023, according to public records. The company also told the commission that its mining facility has been approved by the North Tonawanda planning commission, which has conducted its own environmental review.

Mining cryptocurrencies, such as Bitcoin, requires a lot of energy. If Bitcoin mining were its country, it would rank 36th in annual electricity consumption, according to the Cambridge Bitcoin Electricity Consumption Index, which tracks the electricity consumption used to mine Bitcoin.

After China, once the center of cryptocurrency mining, banned it in 2021, the United States has become the largest hub for mining. Companies have flocked to states with cheap electricity and large power plants, including New York, Texas and Kentucky.

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

In June, Greenidge Generation, a mining company that took over an upstate power plant, was denied renewal of a key aviation permit by the state Department of Environmental Conservation, which cited the CLCPA as the impetus for its decision. . Greenidge is currently battling permit denials and is still in operation.

In November, Governor Kathy Hochul approved a two-year moratorium on new cryptocurrency mining operations using fossil fuels in the state. Digihost’s acquisition of the plant precedes the signing of the bill, making it exempt from the moratorium.

Hochul, signing the bill into law, said it is “a critical step for New York as we work to address the global climate crisis.”

Proponents of cryptocurrency mining say the miners help bring jobs and economic activity to rural areas, though critics say the amount of job creation is negligible. Proponents of mining also argue that cryptocurrency mining has been unfairly singled out in the state for its electricity consumption, and miners are likely to head to states that are friendlier to the industry.

“To date, no other sector in the state has been set aside like this for its energy consumption. This is a dangerous precedent to be set to determine who can and cannot use power,” said the Digital Chamber of Commerce, an advocacy group, in a statement on the moratorium’s approval.

The lawsuit also comes at a tumultuous time for the cryptocurrency industry following the collapse of FTX, once one of the largest cryptocurrency exchanges, in the fall. After the company’s demise, Bitcoin’s price dropped below $16,000, leaving many miners with sharply declining assets.

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