Governor Hochul and the DEC stood with science and the people, and sent a message to outside speculators: New York’s former fossil fuel-burning plants are not yours to re-open as gas-guzzling Bitcoin mining cancers on our communities. — Yvonne Taylor, vice president of the advocacy organization Seneca Lake Guardian.
The Greenidge Power Plant was repurposed to generate electricity for a bitcoin mining activity in 2020. Bitcoin mining uses a large amount of electricity. The Greenidge plant is licensed to produce 106 megawatts of electricity, enough for 100 homes like mine for a year. Reportedly, almost all of that is now used for Bitcoin mining.
In one way, this seems like a good idea. Electric demand isn’t constant. To meet peak demand, utilities need to run large generating plants at less than capacity or maintain other less-efficient generators, gas turbine powered generators for example, for occasional use. Greenidge can suspend Bitcoin mining and provide all 106 megawatts to the electric grid when needed.
However, bitcoin mining is a worthless activity: it produces no useful goods or services. It burns valuable natural gas, releases greenhouse gases, and warms Seneca Lake. The Elmira Star-Gazette published an unsigned AP article on July 5th on the Greenidge power plant. The article reports that New York denied required air permit renewal said to threaten the state’s climate goals.
In rejecting the renewals, the state Department of Environmental Conservation said the plant’s conversion to a cryptocurrency mining operation meant it was creating a significant new demand for energy “for a wholly new purpose unrelated to its original permit.”
Instead of helping to meet the current electricity needs of the state as originally described, the facility is operating primarily to meet its own significant new energy load, the agency said in its letter to the company.
- The company said it would continue operating under its current permit while it challenged the decision. It said there was “no credible legal basis” for the denial.
- “It is absurd for anyone to look at these facts and rationally claim that renewing this specific permit — for a facility that makes up a small fraction of the state’s electricity generation capacity — would impede New York’s long term climate goals. It simply would not,” the company said.
- Greenidge has said that even if the plant ran at full capacity, its potential emissions equate to 0.23% of the state’s greenhouse gas emissions reduction target for 2030. The company argued the plant is 100% carbon neutral, thanks to the purchase of carbon offsets, such as forestry programs and projects that capture methane from landfills.
The company’s claim that pollution is insignificant isn’t logical–even small savings matter. Discarding a gum wrapper may be insignificant, but it is nevertheless littering.
Carbon offsets — balancing a polluting activity with an environmentally friendly one — can be useful, but not in this case.
- Bitcoin mining wastes natural gas and electricity.
- Bitcoin mining releases greenhouse gases, and warms Senaca Lake.
- Carbon offsets often involve investments in solar power, which while useful, don’t remove greenhouse gasses from the atmosphere or cool Senaca Lake.
The company reportedly said it would continue operating under its current permit while it challenged the decision. Whether it ultimately wins or loses, it will continue to pollute for an unknown period of time.
Of course I am not in Greenidge’s inner circle, but I cannot understand their business model. It seems to me that someone, somewhere was sold the equivalent of the Brooklyn Bridge.
Bitcoin mining uses an enormous amount of electricity to produce a few lines of binary code that are worth…nothing in themselves. Somewhere along the line, people became convinced that these lines of code are worth a great deal of money, so bitcoin mining ramped exponentially up.
As the rubes became aware that there was money to be made, more rubes jumped in, pushing the price of bitcoins into the stratosphere. Now, as in all Ponzi schemes, some people are coming to their senses and getting out. There are still enough rubes to support the price..for a while.
It’s the same situation as the 17th Century Tulip craze in Holland. One day tulip bulbs were worthless. Then people became aware that they could make a lot of money. Then tulip bulbs became HUGELY expensive. And then, the market for tulip bulbs crashed, leaving desolate and bankrupt people in the craze’s wake.
When Greenidge decided to use it’s Dresden facility for bitcoin mining, natural gas was relatively cheap and bitcoin prices were pushing $68,000. Now, natural gas prices are surging and bitcoin prices are less that 1/3 of what they were as they continue an astonishing (for some people) and predictable (for others) decline.
Back to my original thought…what kind of kooky company continues to produce a product as that price plummets and the price of production skyrockets?
History is littered with examples. This is really easy to predict.
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Actual Bitcoin mining costs…