A bitcoin mining operation opens this month northeast of Niagara Falls on the site of the last working coal-fired power plant in New York State.

A former aluminum plant in Massena, already one of the largest cryptocurrency locations in the United States, is expanding across the state.

And in Owego, a metal recycling mogul with 11.3 million Instagram Followers are made by a gloomy start-up with computer banks in shipping containers next to a junkyard.

Soaring Bitcoin values ​​may be Wall Street’s investment talk, but a few hours north in upstate New York is all about companies struggling to create the digital currency by virtually using it with computer farms of all shapes and sizes. mines “. constantly whizzing through transactions.

In just a few short years it has become part of northern and western New York one of the largest Bitcoin producers in the country. The prospectors in this digital gold rush need a lot of cheap electricity to run thousands of energy-guzzling computer systems.

The area – with its cheap hydropower and abundance of decommissioned power plants and old factories – was ripe for bitcoin mining. The abandoned infrastructure, often with existing connections to the power grid, can easily be converted Bitcoin mining.

The companies say they are boosting the local economy by bringing back industry and creating a crypto vanguard north of New York City where bitcoin stocks, though unpredictable, are Reach record highs on Wall Street this year and who named the new Mayor Eric Adams a cryptocurrency hub.

But the surge in activity has also sparked a growing outcry over the amount of electricity and pollution associated with bitcoin mining. Worldwide, the mining of cryptocurrencies is said to consume more electricity every year than all of Argentina. China, once home to perhaps two-thirds of all crypto mining, banned the practice this year to meet its carbon reduction goals and drove some miners to New York.

As a result, according to environmental groups, the Wild West-style scramble, coupled with the lack of restrictions on Bitcoin mining, threaten the state’s own emission reduction targets, calling for more renewable energy and rapid reductions in fossil fuel emissions.

Bitcoin mining companies often only need basic building or planning permits from local governments, many of them faded industrial cities looking for new business tax revenue to generate.

In the Finger Lakes region, a former coal-fired power plant on pristine Seneca Lake has been converted into the Greenidge Generation natural gas incinerator, which now powers Bitcoin mining on site. Near Buffalo, a Bitcoin company is looking for cheaper electricity by taking over a part-time gas-fired power plant and running it up around the clock.

The resulting increase in greenhouse gas emissions will accelerate the effects of climate change, to say Environmental groups like Earthjustice and the Sierra Club, which oversee many old natural gas power plants in New York State that could easily be converted into Bitcoin mining operations.

Plants that draw renewable energy from the grid have also given rise to complaints. Since a large Bitcoin mining facility can use more electricity than most of the state’s cities, environmentalists are warning that crypto mining will make other areas dependent on fossil fuels.

The abundance of hydropower and other renewable energies in the state is helping large mining companies who buy them in bulk to compete as environmentally conscious.

The facility, which opens this month northeast of Niagara Falls in Somerset, NY, is part of a $ 550 million project by Terawulf, a bitcoin mining company. The project also includes a planned 150 megawatt data center in a former coal-fired power station on Lake Cayuga in the Finger Lakes.

Paul Prager, CEO of Terawulf, said the Somerset power plant will use hydropower recovered from the falls that would otherwise be difficult to redirect to other sites due to grid congestion.

And because the facility complies with government environmental regulations and does not cause air pollution, he said, “we see regulations as a really good thing.”

But although companies involved in many aspects of Bitcoin activity, including trading the currency, require a license, New York does not impose any restrictions on mining.

Some parishes including Plattsburgh and Massena, two early Bitcoin mining targets near the Canadian border, have resorted to moratoriums on this practice.

The bans have since been lifted, but some lawmakers want New York to be one of the first states to ban certain types of Bitcoin mining. In June the state Senate passed law that would have imposed a nationwide moratorium on some fossil-fuel mines; the legislation died in the congregation.

“It was easy for these companies to stay under the radar because the entire industry is confusing to understand at first,” said Anna R. Kelles MP, a Democrat who represents the Ithaca region and supported the bill. “It’s too new for an industry to not be regulated nationwide or state-wide for greenhouse gas emissions and water and air impacts.” (Ms. Kelles said she plans to revive the bill next year.)

For the same reason, some environmental activists have urged Governor Kathy Hochul to issue an executive order banning crypto mining.

In 2017, Greenidge’s closed coal-fired power plant on Seneca Lake was converted into a natural gas power plant, then owned by Atlas Holdings, a private equity firm with $ 6 billion in stakes. Greenidge is now the first publicly listed company to advertise a Bitcoin mine integrated into a power plant. The system has an output of 106 megawatts and can thus generate enough electricity to supply around 85,000 households.

Greenidge CEO Dale Irwin said in a statement that the plant “creates a new economic engine that will bring a piece of the world’s digital future to upstate New York.”

But the property’s greenhouse gas emissions have risen along with its mining activity, and so has resistance from some residents calling the property an environmental threat to this rural stretch of vineyards, farms, pristine waterways and prime canyons.

A local blogger reported Greenidge’s approval to draw more than 100 million gallons of water a day from Lake Seneca for cooling and then return it to a nearby tributary of Trout Brook at warmer levels.

Mr Irwin said the runoff posed no threat and lake temperatures, which were measured daily by independent sources, had not been affected.

And although the system’s emissions have increased since 2019, they are still well below the government-approved values. The facility does not pose a threat to the environment, he stressed.

Greenidge applies to the state to renew its air emissions permits, and opponents see an opportunity for the state to curb the company’s expansion.

Elected officials, including US Senators Kirsten Gillibrand and Chuck Schumer, have asked state and federal regulators to carefully review the plant’s application.

In the face of increasing political and public pressure, Basil Seggos, the State Environmental Protection Officer, wrote on Twitter in September that “Greenidge has failed to demonstrate compliance with NY Climate Law”. He asked residents to participate in the public comment period for renewing the permit.

Greenidge received local building committee approval from the City of Torrey in April to build multiple structures at the plant.

Patrick H. Flynn, 79, a farmer and city overseer from Torrey, called Greenidge a boon to the area and said renewable energies are “overrated”.

“We can’t restrict a deal,” he said. “Whether they make Bitcoin, it’s no different than raising cattle, pigs or chickens.”

Yvonne Taylor, the vice president of Seneca Lake Guardian, a local conservation group, accused state officials of failing the public by not requiring an environmental review prior to issuing permits to Greenidge and essentially leaving permits up to local governments.

“It can’t be a city to city struggle,” said Ms. Taylor, a speech therapist whose family has lived on Seneca Lake for generations. “We need the governor to step in. If she wants to be a trailblazer on climate, she has to pass a moratorium on this type of energy-intensive cryptocurrency or we will never meet our climate goals.”

The Greenidge case is not an isolated one. Digihost, the Bitcoin company in Buffalo that is revitalizing a gas-fired power plant, has been criticized that the increased gas emissions will affect areas that have long been plagued by industrial toxins. Underneath is Love channel, the Niagara Falls neighborhood that became notorious for the toxic waste dump that harmed hundreds of residents.

Local officials approved Digihost’s plans, however, mainly because the environmental impact of the new operation appeared minimal compared to the company’s expected benefits, including new jobs and up to $ 1 million in annual fees for communal water for cooling of the plant, said Robert Pecoraro, president of the Common Council in North Tonwanda, where the plant is located.

Digihost officials say the facility will operate within state emission limits, begin converting to more renewable energy sources over time, feed the grid in when needed, and help western New York keep up with the tech industry at the same time create at least 30 permanent jobs.

Mr Pecoraro recently stood outside the gas works and watched workers build a large shed for the new servers. He said he did not understand the resistance to Digihost and the economic boom it would bring to the region.

“A lot of industry has gone away over the years,” he said. “And here we are trying to bring in Digihost, and people are fighting us over it.”





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