NEW YORK - Emotions are running high after the New York State Senate passed a bill that would prohibit fossil fuel power plants from launching new proof-of-work (PoW) projects to power cryptocurrency mines for two years.
Environmentalists and Assemblywoman Anna Kelles - who introduced the Assembly version of the bill - urged New York Governor Kathy Hochul at a press conference on Friday to not only sign the bill, but also to deny air permits to bitcoin mining company Greenidge Generation.
The environmental groups congratulated each other in a lighthearted online press conference and thanked the elected officials who pushed the bill through both houses of the state.
At 5:00 a.m. ET this morning, Greenidge Generation hastened to explain that the bill does not apply to its activities, even quoting Kelles himself from an April Wall Street Journal article.
The bill effectively bans the creation of new bitcoin mines that use behind-the-meter electricity from fossil fuels by denying air permits to the power plants that supply them with electricity. Mining at home, using renewable energy, or using fossil fuels through the power grid are all allowed under the bill.
"Essentially, this is a power plant bill. This law says that for the next two years, we will not allow cryptocurrency mining companies to buy power plants that use fossil fuels ... And use them for cryptocurrency mining. ... That's the essence of this bill," Kelles, the bill's lead sponsor in the state's lower chamber, said at the press conference.
Greenidge Generation is one of two bitcoin miners using this model in the state, and its air permit is currently under review by the state Department of Environmental Conservation (DEC). The agency has pushed back the deadline for a decision to June 30, just two days after the election of a new governor.
The Dresden power plant in New York state is at the center of the state's dispute over bitcoin mining. The power plant, located next to Seneca Lake, a tourist destination known for its vineyards, uses the lake's water for cooling, which some residents of the picturesque town say leads to algae blooms and endangers the lake's fauna.
Environmentalists also called for denial of an air pollution permit to Digihost, a crypto mining company working to convert another fossil fuel power plant in New York state, about 120 miles northwest of the Greenidge Generation site.
Digihost declined to comment for this report, as did Coinmint, whose bitcoin mines in Plattsburgh and Massena, New York, have also come under fire. A spokesperson for Greenidge Generation, contacted after the press conference, said the company had no further comment.
The bill's opposition
Bitcoiners have condemned the measure. Some called it an unjustified restriction on economic freedom - some of them mislabeled it as a complete ban on bitcoin mining in the state.
Others took a more moderate stance, expressing concern about the future of the industry in the state.
"Although the bill is fairly limited in scope, it will project the image that New York is 'anti-Bitcoin,' so it will likely limit any expansion of crypto mining in the state and further accelerate the move to other jurisdictions like Texas or Oklahoma, where there is strong political support for miners," said Alex Martini, CEO of Blockfusion, which operates a mining operation in Niagara Falls.
"Even if the governor ends up vetoing it, I would imagine people will be very hesitant to build more bitcoin mines in New York," said Joe Burnett, a mining analyst at Blockware Solutions.
Kelles claimed that conservative economic freedom groups were fighting the law. Her colleagues receive 700 emails a day that appear to be templates and not from New Yorkers, she said. The assemblywoman believes these are funded by two conservative organizations, Club for Growth and Freedom Works. CoinDesk could not reach either organization for comment at the time of publication.
The environmental groups claimed they have faced vehement opposition in the form of lobbying.
"We're up against a very powerful industry that has tremendous financial resources," Eric Weltman, an organizer with Food & Water Watch, said at the press conference.
Governor's dilemma
The bill is now before Governor Hochul for her signature or veto. Kelles said Hochul's environmental department is "well aware of the concerns about the impact on the environment." Now that the bill has passed both houses, it is clear that this is the will of the people of New York, Kelles said.
The bitcoin mining industry plans to continue its lobbying efforts.
"We're trying to figure out when the governor is going to request the bill [to be signed into law]. It's really a question of whether or not she [Hochul] wants to leave this in limbo for a while. So we'll continue to watch and see when it's tabled, and we'll be in touch with her office right away to explain the problem with the bill and the potential impact," said John Olsen, head of New York policy at the advocacy group Blockchain Association.
Governor Hochul received a $40,000 donation from Ashton Soniat, chairman and CEO of Coinmint, and $78,000 from Albany lobbying firm Ostroff Associates, which has added Blockfusion to its client list, The New York Times reported. The governor raised $10 million from mid-January through May, according to the report.