NY Senate Passes Crypto Moratorium, Assembly Prospects Remain Unclear
ENDWELL, NY (WSKG) — The New York Senate passed a measure Tuesday to put a hold on new large-scale cryptocurrency mining operations, but prospects for the bill in the assembly are unclear as unions push back on the measure and time is running out before the end of the legislative session.
The bill, primarily crafted by Assemblymember Anna Kelles (D-125), would bar the New York Department of Environmental Conservation (DEC) from granting permits to any proof of work-based data processing operation. It targets large-scale cryptocurrency mining operations, which are targeting dormant or “peaker” power plants fired by fossil fuels.
Environmental advocates take issue with the operators burning fossil fuels for the energy-intensive process and argue it could impact the state’s goals toward net-zero carbon emissions and renewable energy.
The bill would also require the DEC to study and report on the environmental and climate effects of existing cryptocurrency mining in New York.
In a 36-27 vote, the moratorium measure carried by Sen. Kevin Parker (D-21) passed Tuesday afternoon. All but one Republican senator voted against the measure. They included Senators Tom O’Mara (R-58), Pam Helming (R-54), Peter Oberacker (R-51), and Fred Akshar (R-52). Eight Democrats defected and joined Republicans in opposing the bill.
With the legislative session set to end Thursday, unions led by the International Brotherhood of Electrical Workers (IBEW) pushed back on the moratorium.
“While we strongly support the goals of the Climate Leadership and Community Protection Act, this proposed law would prohibit a business based upon whether it obtains its power from a generator behind the meter versus from the grid and targets the use of a specific technology,” IBEW Legislative Counsel, and former North Country Assemblywoman, Addie A.E. Jenne wrote in a letter opposing the moratorium provided by Kelles’ office.
The New York State Building and Construction Trades Council also wrote memos in opposition to the moratorium bill.
Kelles wrote the following to WSKG in response to the IBEW’s letter:
“This is not targeting an industry, in fact I believe that cryptocurrencies based on authentication methods that do not require significant energy are innovative currencies that we should explore. The Proof-of-Work authentication methodology used in mining facilities is not the entire industry or technology. It is simply one method of validating transaction and the only one that uses exorbitant amounts of energy to perform," Kelles said.
"Given that there are at least 15 other methods to validate transaction it is simultaneously completely unnecessary," she continued. "It is a methodology that stands alone as one of the most energy consumptive processes in the world and cannot be compared to the usage of other technology. The company with the largest share of the crypto market, Bitcoin, that is based on Proof-of-Work uses more energy globally than Amazon, Facebook, and Google combined."
"This is not a slippery slope because it’s use isn’t comparable."
Kelles said she has received memos of support from several environmental groups including the Sierra Club and New York League of Conservation Workers.
As of Tuesday night, the moratorium bill has yet to pass through the assembly rules committee, which is the gateway onto the floor for a vote. If the legislation is not amended, it could be pushed through in the course of one day. But, with the legislative session set to wrap up on Thursday, that window is growing smaller.
On Monday, Gov. Andrew Cuomo was asked about the cryptocurrency mining legislation. Cuomo said he was n0t familiar with the legislation, but indicated there are “serious concerns” about the environmental effects.
The initial version of Kelles’ moratorium legislation was introduced shortly after the Greenidge Generation power plant in Yates County, along Seneca Lake, was given permission to expand its Bitcoin mining capacity.
Greenidge’s parent company, Atlas Holdings, purchased the dormant coal-fired power plant in 2014 and converted it to burn natural gas so it could operate as a “peaker” plant, providing energy to the grid in times of peak demand. In 2018, it installed its first Bitcoin mining equipment. With the approval granted in April, Greenidge will seek to expand its mining operation to use over 80 megawatts of its 106 megawatt capacity toward mining Bitcoin.