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State's environmental agency to begin studying the effects of fossil fuel based crypto-mining

The state’s environmental agency will begin a study on the impacts of a form of crypto-currency mining that requires large amounts of energy from fossil fuels, now that Governor Kathy Hochul has signed a bill that also bans the practice in New York for two years.

Just before Thanksgiving, Governor Kathy Hochul quietly signed the measure. It imposes a two year moratorium on new state permits for the crypto-mining process known as “proof of work”. . The process uses vast amounts of energy from fossil fuel sources to power computers that solve complex equations to “mine” the bitcoins.

Hochul, in her signing statement, said that the measure is “the first of its kind in the county”, and a “key step” towards addressing the global climate crisis.

The governor, speaking with reporters a few days later, says the law is not a ban on the bitcoin industry, but only on the energy draining processes that rely on fossil fuels.

“This was an action taken to protect our environment from facilities that consume an enormous, enormous amount of energy, with very little gain in terms of jobs or benefits for our local communities,” the governor said on November 28th.

The new law stems from adverse reaction to a crypto-mining operation along Seneca Lake, in the heart of the state’s wine making region. Connecticut based company Greenidge Generation Holdings converted an old coal-burning plant to natural gas, to use for bitcoin mining.

Yvonne Taylor, with Seneca Lake Guardian, says getting the measure approved was a “herculean effort” by grass roots advocates, businesses and elected officials.

“We are grateful to Governor Hochul who stepped up to protect New Yorkers from the corporate bullies who want to exploit communities like mine in the Finger Lakes,” Taylor said.

Taylor says the crypto-mining industry spent $1.2 million dollars lobbying against the measure.

The ban, though, is only for new operations, and does not apply to the Greenidge plant, or to a recently established crypto mining facility at a repurposed coal plant in North Towanda.

In June, Greenidge was denied a new air permit by the state, but it continues to operate the Seneca Lake Plant while the decision is on appeal.

The state’s Business Council opposes the law, saying they don’t think state government should “categorically limit the growth and expansion of any business or sector in New York”. Council President Heather Briccetti Mulligan says the group hopes to better educate lawmakers on the benefits the bitcoin industry provides to the state’s local and regional economies.

Hochul, speaking in Gloversville in the Mohawk Valley, she says she supports the bitcoin industry. And she says state law still allows crypto-mining, if it uses renewable energy sources, like hydro, wind or solar power.

“That does not mean that they have to be using our limited resources here in upstate to do the mining that supports it,” the governor said.

The state Department of Environmental Conservation, working with the Department of Public Service, which regulates the state’s utilities, is beginning work on a generic environmental impact statement to determine whether proof of work crypto-mining from fossil fuels, is harmful to the climate.,

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Karen DeWitt is Capitol Bureau Chief for New York State Public Radio, a network of 10 public radio stations in New York State. She has covered state government and politics for the network since 1990.