Key Takeaways
- The bill, which was managed to pass by the State Assembly last month, would put a two-year moratorium on any new carbon-based fuel-powered PoW mining projects in the Empire State.
- Although existing mining companies or those in the process of renewing their permits, would be allowed to continue operating.
- The state will carry out a study on the environmental consequences of proof-of-work mining during the federal ban. The bill passed the Senate with a 36-27 vote.
The state of New York’s Bitcoin mining surge has hit a snag, with the State Senate passing a bill that will put a stop to new licenses for certain fossil-fuel power plants used in Bitcoin mining.
New crypto mining firms that use a carbon-based energy source will face a two-year moratorium under Assembly bill A7389C, sponsored by Democrat Anna Kelles. A companion bill is currently being debated in the state Senate.
On Monday, an assembly committee voted to send the bill to the full legislature for a vote.
Lawmakers who support the bill say they want to reduce the state’s carbon emissions by clamping down on mines that use electricity from fossil-fuel-burning power plants. If it passes — for the next two years, no proof-of-work mining companies will be encouraged to grow or regenerate permits, and no new entrants will be allowed entry online unless they use 100 percent renewable energy.
According to Sen. Kevin Parker, the bill’s Democratic sponsor, there is presently just one such plant in operation, which would be unaffected by the bill. He also mentioned that one pending application could be put on hold until the review is complete.
Greenidge Generating Station in New York’s Finger Lakes region has become a specific flashpoint for residents concerned about the environmental impact of cryptocurrency mining. Greenidge began as a coal-fired power plant and was converted to a nearly full-time Bitcoin mining operation in 2020.
Greenidge is exempt from the Bitcoin mining moratorium because it concentrates on fossil fuel power plants filing new applications for approvals to use energy to mine proof-of-work based cryptocurrencies rather than sending that energy to the grid.
The bill will be put to another test when it is presented to Governor Kathy Hochul for her signature or veto. According to The New York Times, Hochul received a $40,000 donation from the CEO of a company that runs a former aluminum plant turned crypto-mining facility last month.
As per Perianne Boring, the Chamber of Digital Commerce’s founder and president, The net impact would be to decimate New York’s economy by forcing businesses to relocate.
This is a major setback for the state, and it will thwart its prospect as a global frontrunner and financial services. Boring explains, ” More importantly, this decision will eliminate critical union jobs and further disenfranchise the Empire State’s many underbanked populations.”
Many anticipated the bill to succumb in committee, as it did last year’s version, after the Senate Environmental Conservation Committee refused to acknowledge it during its final meeting of the session.
On Thursday evening, however, the bill was referred at the eleventh hour from the Environmental Conservation Committee to the Senate Energy and Telecommunications Committee (which is chaired by the bill’s sponsor, Senator Parker), allowing it to achieve the full Senate floor for a vote just hours before the legislative session ended at midnight.
One section of the bill calls for a state – wide analysis of the environmental consequences of proof-of-work mining operations on New York’s ability to meet the state’s ambitious climate goals set out in the Climate Leadership and Community Protection Act, which calls for an 85 percent reduction in greenhouse gas emissions by 2050.
Since China decided to impose legal limits on bitcoin mining last year, many mining activities have established a presence in the United States. Largely owing to bounteous hydroelectricity and veteran fossil fuel plants that can be restarted to mine Bitcoin, New York quickly became a new Bitcoin mining hub.
The revival of fossil fuels has elicited negative reactions from some residents and environmentalists. They are particularly worried that revived fossil fuel plants, with Bitcoin’s help, will damage ecosystems and sidetrack the state’s endeavors to tackle climate change.
