New York lawmakers have passed a milestone environmental measure designed to tap the brakes on the spread of cryptocurrency mining operations that burn fossil fuels.
Both supporters and opponents say that the closely watched
bill, approved early Friday by the state Senate, is the first of its kind in
the US.
If it becomes law, it would establish a two-year moratorium
on new and renewed air permits for fossil fuel power plants used for
energy-intensive “proof-of-work” cryptocurrency mining — a term for the
computational process that records and secures transactions in bitcoin and
similar forms of digital money. Proof-of-work is the blockchain-based algorithm
used by bitcoin and some other cryptocurrencies. (Bitcoin price in India at
11:34am on June 4 was Rs. 24,37,492)
Environmentalists are urging Gov. Kathy Hochul to sign the
legislation. They say the state is undermining its long-term climate goals by
letting cryptomining operations run their own natural gas-burning power plants.
"We cannot be re-powering fossil fuel power plants for
the purposes of private gain in New York, especially as we're looking to move
away from fossil fuels entirely,” said Liz Moran of Earthjustice.
Dozens of fossil fuel plants in New York could potentially
be converted into mining operations, she said.
Cryptocurrency advocates complained that the measure singled
out the industry without addressing other fossil fuel use. They argue that the
legislation would crimp economic development in New York while other states
court the burgeoning field.
“The message from the bill and the embrace of that kind of
policy is not a good one for an industry that really can go anywhere,” said
John Olsen of The Blockchain Association, an industry group.
“We're very hopeful that the governor realises that the
long-term benefits of embracing this industry and this technology far outweigh
a potential pause on prospective future emissions,” he added.
Hochul, a Democrat, has said she want to make sure any
legislation balances economic and environmental concerns
Cryptocurrency mining requires specialized computers that
consume huge amounts of energy. One study calculated that as of November 2018,
bitcoin's annual electricity consumption was comparable to Hong Kong's in 2019,
according to the US Energy Information Administration. Some miners are looking
for ways to reduce their reliance on fossil fuels to produce the necessary
electricity.
A coalition of environmental groups has separately been urging the Hochul administration to deny the air permit renewal for Greenidge Generation in the Finger Lakes, which also produces power for the state's electricity grid. A decision could come at the end of the month.
The moratorium measure, if signed into law, would not affect pending applications, such as the one from Greenidge.
The measure also would require the state Department of
Environmental Conservation to perform an environmental impact assessment on how
cryptomining affects the state's ability to meet its climate goals.
The bill passed the Assembly, the Legislature's lower
chamber, in April.