What the presidential election could mean for cryptocurrency mining in New York

On a sunny, 75-degree day in June 2023, Yvonne Taylor and her husband were out for a drive in the Finger Lakes – a lush section of Central New York known for rolling vineyards and sparkling glacial lakes. As she looked into the distance, Taylor heard a loud screech and watched as a flame shot into the air like a torch, as a local bitcoin mining operation flared natural gas as part of a mandatory safety check.

The flare, and the screech, interrupted an otherwise bucolic Father’s Day weekend. For Taylor, the vice president of the grassroots environmental group Seneca Lake Guardian, it was yet another reminder that the Greenidge power plant was burning fossil fuels around the clock. And unlike typical power plants, which produce energy to power homes and businesses, Greenidge’s power is primarily used to run thousands of computer servers stored on the grounds of the plant. Those servers are mining bitcoin – running the same computational process over and over again in order to help secure and verify the cryptocurrency’s decentralized network, in exchange for some of the virtual currency. Taylor and other advocates in the state have been working for years to shut down the Greenidge facility and other energy-hungry crypto mining operations. So far, they have had mixed success.

As the presidential election draws near, the fate of New York’s crypto mining policies – and the state’s overall climate goals – hangs in the balance. Environmental advocates and policy experts say that federal regulation of fossil fuel-based bitcoin mining is needed, especially since state-level policies meant to restrict the practice have proven difficult to enforce. With both former President Donald Trump and Vice President Kamala Harris looking to attract support from the cryptocurrency industry, which has poured hundreds of millions of dollars into the presidential race and congressional campaigns, a federal crackdown on the industry seems increasingly unlikely.

Private power plants

About 100 miles west of the Greenidge Generating Station, in the riverside town of North Tonawanda, Deb Gondek has learned more about bitcoin mining than she ever imagined she would. She recalled attending a meeting three years ago where representatives of Digihost, a crypto mining company that took over a local power plant, shared their vision with the town’s Common Council. “I’ve never seen so much greenwashing in a single presentation in my entire career," Gondek said.

Though she is now retired, Gondek previously worked at a local company with an ambitious sustainability program, which she led. Now, she’s become active in the fight to shut down Digihost, and she accuses the company of misleading townspeople about the impact of its crypto mining operation.

Before Digihost took over the plant, it was a peaker plant and only generated electricity for the grid when demand was especially high. These days, the plant is in almost constant use. In the first quarter of 2024, according to data compiled by Earthjustice, the plant was operational for 84 out of 90 days. In 2021, the plant ran for just eight days during the entire year.

“You’re taking a fossil fuel-burning plant running at about 10% capacity for public benefit, and now it’s running at 100% capacity, five days a year, 24/7, for private benefit,” Gondek said.

The plant’s cooling fans can be heard for a significant distance and impact residents’ quality of life. Resident Frank Laurendi, a retired manufacturing engineer and project manager, moved into the area in December 2023, looking to embrace the quiet of a street with multiple cul-de-sacs. He’s half a mile from the plant but says, “I can hear it from my front porch.”

Both Digihost and Greenidge are fossil fuel-powered plants that were originally built to serve the general public. They burned fossil fuels in order to generate electricity and then sold that electricity to ratepayers. But the plants have since been converted to private use – burning gas to generate electricity that is primarily used to run (and cool) their own crypto mining servers. In 2022, the state recognized the potential for more power plant conversions and passed a two-year moratorium on similar fossil fuel-based bitcoin mining operations, warning that unchecked expansion of bitcoin mining would threaten the state’s climate progress.

The Climate Leadership and Community Protection Act, passed in 2019, requires New York state to reduce its greenhouse gas emissions by 40% from 1990 levels and get 70% of its electricity from renewable energy by 2030, among other targets. Yet the state is struggling to shut down facilities that violate its policies. The state Department of Environmental Conservation denied the renewal of Greenidge’s air permit in 2022, but Greenidge appealed the decision – and the plant has continued to operate throughout the yearslong appeals process.

“If corporations are allowed to keep indefinitely operating under the appeals process, New York will never achieve its climate goals,” Taylor said.

The state’s two-year moratorium on converting power plants to crypto mining operations is now set to expire, with no clear plan in place for an alternative.

“It’s going to make it really hard to meet Climate Leadership and Community Protection Act goals if, through the front door, you’re trying to replace (fossil fuel-powered generation) with renewables and through the back door, they’re just firing up fossil fuel plants,” Gondek said.

Federal regulation

In the absence of effective state regulation, advocates have looked to the federal government to limit crypto mining operations.

“We came to the Capitol to make sure that our congressional leaders were hearing the people’s voice as this industry spreads across the country like a cancer,” Taylor said during a lunch panel held at the U.S. Senate in July.

Along with other advocates and affected residents, she spoke about crypto mining’s harmful effects, from stress on the energy grid to increased water consumption and noise pollution. Together, they presented their vision for federal regulation of bitcoin mining.

Bitcoin mining gained a foothold in the U.S. in 2021, after China banned the practice and many crypto miners decided to set up shop in the United States with easy access to cheap power and water, which is typically needed to cool the operations. New York is particularly appealing because of its abundant water and cooler climate.

Bitcoin backers often claim that their industry brings much-needed tax dollars to rural areas and incentivizes the transition to renewable energy. On its website, Greenidge Generation Holdings claims to be “investing a portion of all profits from bitcoin mining into renewable energy projects” and installing a new solar farm. The company also says that  it sends energy back to the grid when power demand is especially high.

Federal regulation of bitcoin mining has, so far, been unsuccessful. In January, the U.S. Energy Information Administration announced that crypto miners would need to share data on their energy use, under an emergency request for data collection. In response, the cryptocurrency filed a lawsuit, and the request for data collection was later canceled.

Crypto campaigning

Even as advocates push for more aggressive regulation of fossil fuel-based crypto mining, both Republicans and Democrats are courting money from the cryptocurrency industry. According to a new report from Public Citizen, a nonprofit watchdog, cryptocurrency corporations have poured $119 million into the presidential election and congressional elections, and the cryptocurrency industry accounted for nearly half of all corporate spending in elections so far this year.

Republicans are all-in on crypto mining. The official Republican platform includes a line stating, “We will defend the right to mine Bitcoin.” And Trump has publicly called for an expansion of crypto mining in the U.S. “We want all the remaining Bitcoin to be MADE IN THE USA!!! It will help us be ENERGY DOMINANT!!!” the former president wrote in a post on Truth Social earlier this year.

Harris has not taken a position on crypto mining, but she has made overtures to the cryptocurrency industry. In August, an aide told Bloomberg that the vice president supports pro-crypto policies, and Harris’ recently released Opportunity Agenda for Black Men includes a section about the importance of cryptocurrency.

While advocates say that they are not necessarily opposed to the use of cryptocurrency and digital assets, just the use of fossil fuel-based power plants to mine cryptocurrencies like bitcoin, the cryptocurrency industry has strongly opposed attempts to limit crypto mining.

Mandy DeRoche, a deputy managing attorney of the clean energy program at Earthjustice, noted that both parties have recently tried to sway crypto enthusiasts, which could spell trouble for attempts to regulate the crypto mining industry. “Our state, local and federal laws have not caught up to this new threat, so if federal policy started to be pro-mining, there would be a vacuum of ways to deal with this threat to our air, water and climate,” she said.