Residents and business owners in the Finger Lakes region have been protesting for more than a year against a natural gas plant that has powered a bitcoin mining operation in the area. But the plant’s future faces even greater peril from the state as critics and officials say it flies in the face of an ambitious new state law designed to cut down on carbon emissions.

Since spring 2020, the Greenidge Generation power plant in Dresden, New York has powered a 24-7 bitcoin mining operation, wherein computer servers solve complex algorithms to collect electronic currency. It now supports nearly 20,000 computers that last year produced 1,866 bitcoins with a projected revenue of more than $100 million. The endeavor was so profitable that the company plans to double their computing power and increase power generation close to maximum capacity.

But Greenidge’s red brick smokestacks and metal transformers have long been at odds with the pristine vistas and vineyards of the Finger Lakes. Formerly a coal plant that shuttered in 2011, its revival is once again endangering the region environmentally and economically, according to some residents.

It’s also at odds with New York’s Climate Leadership and Community Protection Act, which mandates a reduction of economy-wide greenhouse gas emissions 40% by 2030 and no less than 85% by 2050 from 1990 levels. And the conflict between the state’s climate goals and a burgeoning new industry reflects a growing tension nationally between the fight against climate change and the energy-intensive pursuit of mining for cryptocurrency.

When we first moved here, you would see all manner of species and numbers of fish off the end of our dock, and we don’t see that anymore.

Ken Campbell, retired sociology and psychology teacher

“The air [permit] application does not currently meet the requirements of the Climate Leadership and Community Protection Act,” the state Department of Environmental Conservation wrote in an email to Gothamist. “Notably it has not shown that it is consistent or would not interfere with the attainment of statewide greenhouse gas emission limits; nor has it provided sufficient justification or identified alternative or sufficient mitigation.”

But before the DEC makes a final decision on reissuing the plant’s air permit, environmental activists and locals aren’t taking any chances. About 30 protestors, carrying signs and chanting, “hey hey Hochul, fossil fuels have got to go” and “no fracked gas for bitcoin mining,” gathered last Thursday as the midday traffic whizzed by in Midtown Manhattan. They waited at every entrance of the General Electric building, hoping to ask Gov. Kathy Hochul for a moratorium on reissuing Greenidge’s permit.

Greenidge Plant creates visible air pollution and takes in millions of gallons of water from Seneca Lake for cooling. When a natural gas facility releases that water back, the temperature difference can be as much as 50 degrees Fahrenheit warmer — threatening aquatic life. The area is a haven for the nearly 6 million tourists seeking to retreat into its natural beauty of forests and lakes, a $3.3 billion dollar local industry — that’s now being challenged by non-local demand for bitcoin. If the Hochul administration denies the permit renewal in late March, the power plant would be shut down.

Local wine-maker Richard Rainey is concerned that his livelihood is in jeopardy.

PQK via Shutterstock

“They're plowing energy into something that's just a make-believe currency,” said Rainey, owner of Forge Cellars on Seneca Lake. “We're here planting vineyards, caring for the land and actually creating tangible things that people can look at, can enjoy, that give pleasure.”

Atlas Holdings LLC, a Connecticut-based investment company, bought the decommissioned coal plant in 2014 and invested $100 million to convert it to natural gas. Three years later, the 106-megawatt facility was generating electricity again. The private equity firm, which has nearly $4 billion in assets, did not respond to inquiries from Gothamist.

Aside from the constant humming and the unceasing billow of smoke coming from its stacks, retired sociology and psychology teacher Ken Campbell said the plant impacts more than just aesthetics. When he first moved to the area six years ago, the plant, which is about a half-mile down the shore from his home, had been shuttered for years, but even before that, it was only on about 6% of the time. For the last couple of years, the plant has been running all the time. Campbell, an avid fisherman, started noticing the effects.

“When we first moved here, you would see all manner of species and numbers of fish off the end of our dock, and we don’t see that anymore,” Campbell said. “I’m not a very good fisherman, but suffice to say it would take a lot less than it would take now to catch a fish.”

More than half of the nation’s power plants directly discharge water with temperatures that exceed 90 degrees Fahrenheit. This near-boiling liquid can have negative consequences for aquatic life, said Todd Cowen, director of the DeFrees Hydraulics Lab at Cornell University.

“If a fish migrates into a plume of water that is much warmer, that is such a shock to their system,” Cowen said. “ Much like walking from air conditioning to a 110 degree Arizona day, and that can certainly cause stress and occasionally significant fish kills.”

Protestors gather in Midtown Manhattan to ask Gov. Kathy Hochul to put a moratorium on Greenidge Generation, which directly powers a bitcoin-mining operation near the Finger Lakes, February 10, 2022.

Protestors gather in Midtown Manhattan to ask Gov. Kathy Hochul to put a moratorium on Greenidge Generation, which directly powers a bitcoin-mining operation near the Finger Lakes.

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Protestors gather in Midtown Manhattan to ask Gov. Kathy Hochul to put a moratorium on Greenidge Generation, which directly powers a bitcoin-mining operation near the Finger Lakes.
Rosemary Misdary

In a press release on Greenidge’s website, the company stated that the average daily temperature of discharge water between March 1 through April 17, 2021 was about 50 degrees Fahrenheit with just an average difference between intake and outflow of nearly 7 degrees. But that temperature difference could influence the health of underwater species, said Gregory Boyer, professor at SUNY College of Environmental Science and Forestry.

Those impacts can intensify if the plant’s backer, Atlas Holdings LLC eventually increases the plant’s operation to maximum capacity. It’s currently running at less than half its potential.

At top capacity, the air pollution would be very significant according to calculations from Anthony Ingraffea, a Cornell University civil engineering professor who prepared an analysis for local environmental group, Seneca Lake Guardian. He estimated 1 million metric tons of carbon dioxide and methane would be released into the air as a result.

“That 1 million metric tons coming out of the Greenidge plant when it’s operating at full capacity is about two-thirds of all the emissions coming out of an entire county of 104,000 people,” Ingraffea said, comparing it to neighboring Tompkins County where he resides.

By the company’s own admission, Ingraffea’s calculations are very close to their own. In a press release July 2021, Greenidge Generation stated that running at full capacity for 24 hours every day of the year, it produces approximately 0.37% of New York’s total statewide greenhouse gas target for 2030. The math comes out to be close to 1 million metric tons. Two months later, the company released another statement revising the emissions estimate downward to 0.23%.

“It is preposterous to suggest that a facility representing only about 0.2% of the state’s emissions target for 2030 is somehow a threat to the state’s long-term climate goals,” wrote Dale Irwin, president of Greenidge Generation and native of the region, via email. “Yet our critics can’t point to a single piece of data to support their claims.”

That is only the beginning, Ingraffea fears. Bitcoin and other cryptocurrencies saw a huge spike in value last year, before declining and rebounding in 2022. New York City Mayor Eric Adams said he wants New York to be "the center of cryptocurrency" and touted that he would convert his first paychecks as mayor into bitcoin, earlier this year. One successful and profitable reopening of a defunct fossil fuel plant could lead to more coming back online. There are five non-operative plants in upstate New York that Ingraffea is concerned may reopen to power bitcoin mining.

Those defunct plants could create a total of 1,800 megawatts that Ingraffea estimates could add an additional 18 million metric tons of carbon dioxide and methane into the air. By 2030, New York is capping its total greenhouse gas emission at about 250 million metric tons, so combined, these plants could account for 8% of the environmental target the state has set for itself.

This means the other 19 million people in New York State are going to have to bite the bullet.

Anthony Ingraffea, Cornell University

“This means the other 19 million people in New York State are going to have to bite the bullet,” Ingraffea said. “If you’re going to allow that one business to produce all that greenhouse gasses, what are we going to do? Turn off our lights? Not drive? Not heat our homes or go to work?”

Currently, Greenidge is evaluating more than 3,000 megawatts of options in Texas and South Carolina. It recently entered into an exclusive agreement with a pipeline developer with at least 2,000 MW of capacity in Texas, and has a separate exclusive agreement with a Texas company that controls over 1000 MW of power generation as well as an agreement for 175-acres at a former industrial site in South Carolina. The company claims that its bitcoin operations are carbon neutral — through a mixture of purchasing carbon offsets, investments in solar energy and by powering two-thirds of its South Carolina project with nuclear energy.

And it’s not just New York, it’s happening all over the world – closed coal plants bought on the cheap by crypto miners and turned back on at full capacity. Last month, the House Energy and Commerce Committee Chair Frank Pallone (D-NJ) sent a memo that described crypotmining’s energy consumption as “stuck in a vicious circle” and “relying heavily on fossil fuels, re-opening or extending the life of coal and gas plants.”

Bitcoin’s energy usage is astronomical enough that a study showed it could singlehandedly produce enough carbon dioxide emissions to push global warming above the danger zone of 2 degree Celsius in less than 30 years. The cryptocurrency’s operations already use more energy than Norway or Ukraine and almost as much energy as Egypt, which has more than 100 million people.

Greenidge Generation has been called out for operating solely for the profits of its crypto-mining and being no longer public-serving. But it has repeatedly stated that the Dresden facility was not restarted for bitcoin profits. The company claims that it also sends energy to the grid every day providing power to thousands of homes. For example, on January 15, it suspended its mining operations to send power to the grid to meet the high electricity demands brought on by the cold weather.

The final decision for the Greenidge air permit is expected March 31, 2022.