Greenidge Generation, a cryptomining farm housed in its own natural gas power plant on the Finger Lakes, lost its air permit this summer after the New York State Department of Environmental Conservation ruled that the facility was violating climate and carbon pollution laws.
The facility has been allowed to remain open as it files an appeal — and is now on track to make record profits based on recent company filings.
Yet as it makes this financial push in the face of potential closure, the company is now approaching a second environmental hiccup — this time centered around its water permit and its potential destruction of aquatic wildlife.
The cryptocurrency operation is approaching a late-September deadline to install screens on water intake pipes that draw water from Seneca Lake. The screens protect fish from being sucked into the plant when it cools, in accordance with state and federal laws. The DEC would not comment on what consequences, if any, that could result from lack of compliance.
Locals are now concerned that the last-minute push to dig up the waterbed could stir up old contaminants.
“My concern has always been about water quality,” said Gary McIntee, whose home is located a mile south of the power provider. “We rely on Seneca Lake water for our water source. We have no other source.”
The DEC issued Greenidge’s original water permit in 2017 and gave it five years to complete the installation of the screens. The site was converted from coal to natural gas three years earlier — at a cost of $100 million — by Atlas Holdings LLC, a Connecticut-based investment company that owns Greenidge. The former coal plant at the site also lacked the fish screens.
But the plant waited until August 15th to apply for the two construction permits required to do this work. Part of the project that’s about to start will result in dredging the lake's bottom and removing 1,100 cubic yards of sediment.
“Since it was an old coal plant, you would have to treat it [Seneca Lake] like it’s contaminated,” said Dr. Gregory Boyer, director of the Great Lakes Research Consortium and a biochemistry professor at the SUNY College of Environmental Science and Forestry. “That would worry me. Dredging always mixes up contaminants and brings them into the water column.”
Such dredging might contaminate the groundwater and affect local drinking water, including wells, according to Boyer.
Greenidge Generation has not replied to multiple inquiries by Gothamist regarding its water permit and its appeal on the denied air permit. Currently, the DEC does not have a deadline for its response to Greenidge’s challenge, or a schedule for the process.
And during the appeal process, the company is allowed to operate as usual — and it’s made a push to boost revenue since its air permit was denied on June 30th.
This summer, the company has added about 10,000 computers and mined about 300 bitcoins in July alone, which would be worth more than $6 million. Their hash rates, a unit of how much power the bitcoin network is using, increased by nearly 70% over the last four months.
The trend means that even amid this year’s dramatic drop in cryptocurrency prices, Greenidge Generation is on track to have its best year ever — if it can stay open.
“It is important for all Greenidge stakeholders to know this [denial of the air permit] decision does not have any impact on our current operations in Dresden,” wrote Greenidge Generation in a statement to investors its air permit was denied. “We can continue running uninterrupted under our existing Title V Air Permit, which is still in effect, for as long as it takes to successfully challenge this arbitrary and capricious decision.”
No fish screens
The $120 million company has been operating for five years without fish screens, according to the DEC. This is highly unusual according to Dr. Edwin Cowen, a civil engineering professor at Cornell University, because it is standard practice for power plants. Cowen said the screens are also inexpensive and simple to install. The installations are also required under its existing State Pollutant Discharge Elimination System permit and the Clean Water Act to prevent fish mortality.
When the Greenidge power plant cools, it is permitted to take in a maximum of nearly 140 million gallons of lake water per day. That water enters the plant from Seneca Lake through a 7-foot-diameter suction pipe that runs from the pump house to 650 feet offshore. At maximum, it sucks in 68,000 gallons per minute.
When Greenidge prepared its construction plan in November 2020 and filed it to the DEC, it set a schedule of installing the screens next month and testing the setup by mid-October — after years of operation.
“You're drawing in water at a relatively high velocity, so any small fish that can't swim as fast as the average speed that the flow is being sucked in will not be able to escape,” said Cowen, who also directs the DeFrees Hydraulics Laboratory at Cornell.
Nothing will survive that.
After the fish are sucked in, they’ll be ground up in the pump's impellers — small metal curved propellers used to control the water’s velocity and pressure. “Nothing will survive that,” Cowen said.
The DEC told Gothamist that it is reviewing whether to extend the current requirement to install the screens by September 30th, because Greenidge cannot begin work without these approvals. The company’s August 15th applications are currently under public review, with comments due September 1st.
Air permit appeal
The bitcoin mining facility also continues to fight the recent denial of its air permit renewal application. It requested a hearing to appeal on the grounds that the DEC’s decision was “both legally and factually flawed.”
The company claims that the state agency overreached its jurisdiction under the Climate Leadership and Community Protection Act. Greenidge Generation believes it’s satisfying state climate laws, and not violating them, according to a rebuttal letter.
The letter argues that the facility has already cut its emissions by about 70% of 1990-level emissions — back when it was burning coal rather than natural gas. Coal is known to produce significantly more carbon emissions than natural gas.
While switching to natural gas may have reduced the facility's carbon dioxide output, the resulting increase in methane could put its total greenhouse gas emissions at about the same as when it was burning coal, according to Dr. Robert Howarth, a professor of ecology and environmental biology at Cornell University and a member of the Climate Action Council.
The DEC has no timeframe or schedule at this time for its response to the appeal for the air permit denial or pending water permits. The agency also won’t comment on any consequences that the upstate cryptominer might face if it is out of compliance with its water permit. Until a final decision is reached, Greenidge and its energy-intensive Bitcoin-mining operation will continue running with the full privileges of the expired permit.