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Environmentalists on Friday filed a lawsuit against a New York state agency for approving the purchase of a northern power plant by a cryptocurrency mining company.
The group said the move violated the state’s landmark climate law passed in 2019, and the lawsuit explores how energy-intensive cryptocurrency mining can legally stand up to the state’s climate goals. This is the first test to see if the
In September, the New York Public Service Commission (PSC), which oversees and regulates utilities, gave Canadian cryptocurrency mining company Digihost the go-ahead to acquire the Fortistar power plant in North Tonawanda, a town near Niagara Falls. Did.
The Clean Air Coalition of Western New York and the Sierra Club, represented by the nonprofit EarthJustice, said in documents filed with the Albany County Supreme Court that the PSC’s approval of the transfer was based on the state’s comprehensive climate law, Climate Leadership and the 2019 Passed Communities Protection Act (CLCPA).
The law calls for 70% of the state’s electricity to come from renewable sources by 2030, use zero-emission electricity by 2040, and reduce statewide emissions by 85% by 2050. set ambitious state goals, including
In the lawsuit, Clean Air and the Sierra Club said the Fortistar plant was used as a “peaker” plant, operating 10 to 74 days a year only during times of high demand for electricity, such as cold winters and hot summers. rice field. As a cryptocurrency mining plant, the facility will operate 24/7, increasing greenhouse gas emissions by up to 3,000 percent, according to court filings.
The group argues that CLCPA broadly requires states to conduct environmental reviews when making approvals and decisions to ensure states ultimately meet their climate goals. According to court filings, the PSC “refused to consider the CLCPA and its requirements” when undergoing the approval process that began in April 2021.
With rising greenhouse gas emissions, some communities around Fortister plants may be designated as “disadvantaged communities” under state climate laws, the group argues. .
The law “requires all state agencies. [commission] – Considering greenhouse gas emissions and impacts on disadvantaged communities when considering administrative approvals and decisions. “If such action threatens the CLCPA’s greenhouse gas reduction obligations, it cannot proceed without justification.”
In response to environmental concerns brought to PSC by Clear Air and Sierra Club during the approval process, Digihost has made the facility renewable, with an eventual goal of using all hydrogen by the end of 2023. said it will convert it into natural gas. For public filing. The company also informed the commission that its mining facility was approved by the North Tonawanda Planning Commission, which conducted its own environmental review.
Mining cryptocurrencies like Bitcoin is very energy intensive. According to Cambridge’s Bitcoin Electricity Consumption Index, which tracks the electricity consumption used in Bitcoin mining, it ranks 36th in annual electricity consumption if Bitcoin mining is a home country.
The US has become the biggest hub for cryptocurrency mining after China, once the center of cryptocurrency mining, banned it in 2021. Companies flocked to states like New York, Texas and Kentucky, where electricity was cheap and had large power plants.
While other states are more welcoming of the crypto mining industry, New York officials recently blocked mining growth, citing the state’s climate change goals.
In June, Greenidge Generation, the mining company that bought the northern power plant, was denied a major aviation license renewal by the state’s Department of Environmental Protection, which cited CLCPA as a driving force in the decision. Greenidge is currently fighting permission denials and is still operating.
In November, Governor Kathy Hochul passed a two-year moratorium on new fossil-fueled cryptocurrency mining operations in the state. Digihost’s acquisition of the plant takes place before the bill is signed into law and is exempt from the moratorium.
Hochol, who signed the bill, said it was “an important step for New York in its efforts to address the global climate crisis.”
Proponents of crypto mining say miners are helping bring jobs and economic activity to rural areas, but critics say the amount of job creation is negligible. Mining has been unfairly picked in the state for power usage, claiming that miners are more likely to head to states that are more friendly to the industry.
“So far, no other industry in the state has been so sidelined because of its energy use. will,” advocacy group the Digital Chamber of Commerce said in a statement about the passage of the moratorium.
The lawsuit also comes at a tumultuous time for the cryptocurrency industry after FTX, once one of the largest cryptocurrency exchanges, collapsed in the fall. After the company’s bankruptcy, the price of Bitcoin fell below his $16,000 mark, and the assets of many miners plummeted.
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