The Bitcoin Mining Debate Is Ignoring the People Most Affected

DRESDEN, N.Y. Last year, Gov. Kathy Hochul signed a two-year ban on new crypto mining facilities powered by carbon-based energy sources, such as gas power plants.

The landmark New York law came after months of debate about the impact bitcoin (BTC) mining was having in the state. Members of a local union and residents near Greenidge Generation, a power plant that mines bitcoin at the center of this debate, opposed the moratorium. Supporters of the bill argued the plant was responsible for spewing hot water into the glacial lake, killing thousands of fish and contributing to toxic algal blooms that were harmful to other aquatic life.

The bill’s supporters, including New York Assemblywoman Anna Kelles, a Democrat who represents a number of towns south and east of Cayuga Lake, national environmental groups like Earthjustice and the Sierra Club and hyperlocal groups like the Seneca Lake Guardian, heralded its passage as a major victory. Now, theyre taking the fight national.

This year alone, Kelles has testified before the U.S. Senate’s Environment and Public Works Subcommittee and the Pennsylvania House of Representatives’ Environmental Resources and Energy Committee. Sen. Ed Markey (D-Mass.), who chairs the Senate panel, called the hearing one of the most informative hearings that Congress has had in a long time.

Facilities like Greenidge also negatively impact aquatic life, killing thousands of fish every year and increasing the risk of harmful algal bloom outbreaks that are toxic for both wildlife and humans, Kelles said during the Senate hearing.

But theres a big problem: Much of the rhetoric used by Kelles and her allies, while surely well-intentioned, isnt true. Many of the statements made by environmentalists for example, that Greenidge is causing the average temperature of Seneca Lake to rise, or causing harmful algal blooms, or emitting jet engine-loud noise are easily disproved by state-collected data and in-person experience.

At the same time, lobbyists and advocates for the industry are breathlessly touting the potential benefits of bitcoin mining more and more, saying this sector of the crypto industry could boost investments in renewable or clean energy and bolster energy grids that otherwise would have no reason to be improved. The most fervent of these bitcoin advocates attack anyone who disagrees with them. This month, someone hacked Kelles Twitter account while she was testifying about bitcoin mining before lawmakers in Pennsylvania, and used her feed to promote pepecoin (PEPE), a meme coin that was enjoying its 15 minutes of fame.

These debates have become highly politicized, a near-intractable conflict between environmentalists and bitcoiners that is, on its face, an environmental debate and, at its core, a philosophical debate about value that the cryptocurrency industry provides to the world and whether that value is worth shouldering a clear, and potentially heavy, environmental cost.

The debate around mining has thus far only picked at this philosophical conversation, without really getting into the nuances. Nor is CoinDesk making an attempt to answer the question of whether bitcoin mining is worth it.

New York, along with Texas, has become a hotspot for that debate, and Greenidge has become an unlikely poster child. Though other mining facilities, such as Riot Platforms center outside of Austin, Texas, have played bigger roles in the bitcoin mining debate, Greenidge occupies a prominent spot in discussions in Albany (New Yorks capital city) and Washington, D.C.

Its important to note that Greenidge occupies a unique role, and its difficult to directly compare these different facilities and how they affect the communities around them. Riot taps into an existing (sometimes shaky) energy grid, while Greenidge generates its own electricity. Other mining facilities, such as those in upstate Washington, might rely on a limited amount of power or use power paid for by the community as a collective, meaning the costs from an increase in usage get passed along to everyone regardless of how much power each individual may use. A county in Tennessee is suing a local mine in part due to the noise it generates, a complaint that some locals in Dresden say doesnt apply to them.

The debate and media coverage around Greenidge have become part of a snowballing collection of misinformation that doesnt take into account the reality on the ground in Dresden, New York.

This misinformation snowball consists of both minor statements exaggerated in the national discourse and massive campaigns built on faulty assumptions.

Buddington later clarified that she meant not the lake itself, but the water near Greenidges discharge pipes (the facility uses water from the lake for cooling, as it has since it was built in 1937 as a coal-fired power plant) in Keuka Outlet.

And while Buddington was correct in asserting that Greenidge is putting warmer water back into the lake than it takes in, the water discharged is nowhere near the hot tub temperature or 108 degrees Fahrenheit activists and Kelles claim it is.

The average temperature difference between Greenidges water intake and its output is between 9 and 13 degrees making it roughly 32 degrees below the level permitted by the New York State Department of Environmental Conservation, a Greenidge spokesperson said in response to CoinDesks inquiry. NBC News reported that 108 degrees is the maximum allowed temperature for water Greenidge puts back into the lake, contradicting Kelles claim that that was the actual temperature of the water discharge. The local activists at Seneca Lake Guardian accused Greenidge of strawmanning its critics, asserting that no one ever said Greenidge was discharging water at that temperature, but Kelles has said so often, including in a February 2022 press release.

Furthermore, the average temperature of Seneca Lake has remained generally consistent over the past few years, Vice News Motherboard reported, citing data from scientists at local Hobart and William Smith Colleges.

According to Motherboards investigation, the college has recorded a steady, annual 0.2 degrees Celsius rise in temperature for Seneca Lake since the mid-1990s, indicating the lake is warming slowly, but that rise has not been correlated with Greenidges operation.

Despite Buddingtons subsequent clarification, the ball was already rolling. In December 2021, less than six months after NBCs article was published, Sen. Elizabeth Warren (D-Mass.) sent a letter to Greenidge Generations CEO demanding information about the firms impact on climate change and the local environment. Her letter cited local residents concerns about the temperature of water outflow.

The water temperature misrepresentation is just one example of how an incredibly nuanced subject has become something of a political and emotional flashpoint for environmentalists and bitcoiners alike.

Complicating matters, bitcoin minings supporters have too-often chosen to combat misinformation with misinformation of their own or, at best, bad-faith trolling.

A recent video from Riot Platforms in response to a New York Times article about the pollution created by bitcoin mining facetiously claimed that bitcoin mining has zero carbon emissions based on indoor carbon dioxide testing at the Riot mining facility in Rockdale, Texas.

If taken at face value, that would obviously be a disingenuous statement. If its a joke, as Riot claimed after receiving online backlash, it wasnt widely recognized as such and served mainly to incense the other side.

It is not a question that bitcoin mining is energy intensive. In 2020, the most recent year data is available from the New York Department of Environmental Conservation (NYSDEC), Greenidge emitted a massive 288,440 tons of carbon dioxide into the air.

Some locals are OK with that, given the benefits the facility brings.

Steve Griffin, a native of New Yorks Yates County and the CEO of the Finger Lakes Economic Development Center, a quasi-governmental organization tasked with growing the economy in Yates, said that despite Greenidges emissions, concerns that its harming local wildlife may be overblown.

« We know the value and the importance of the lakes’ worth and in our environment or climate. I mean, we’re a big agricultural community, we know what the value is of the climate, he said. We wouldn’t want to incentivize anything that was going to clearly negatively impact that. »

Other examples of the misinformation surrounding the Greenidge debate range from debates about how many employment opportunities it provides to the impact it has on the local electricity grid.

Local voices like Griffins have been largely drowned out amid the debate over Greenidge, and crypto mining more broadly.

In mid-2022, CoinDesk reporters traveled to the Finger Lakes region to visit the small towns near Greenidges facility on Seneca Lake, and talked to local residents, businesses, town officials and union workers to learn how they viewed the refurbished power plant.

The visit was, according to the village of Dresdens mayor, William Hall, unprecedented. Despite the media circus surrounding Greenidge, Hall said hed never once been contacted by a reporter, lobbyist or politician about Greenidge. This includes both the bitcoin advocates using Greenidge as an example of a successful business and the critics saying it was harming the local environment.

When CoinDesk contacted Hall again in May 2023, his staff confirmed that no one had called or visited him to speak about Greenidge since our last visit.

Nobody has ever come to talk to us about it, Hall said. We need people from somewhere to take an interest, to come talk to the people that are benefitting [from Greenidges presence], not the anti-[Greenidge] people that dont even live here.

In Halls telling, only the so-called cottage people wealthy out-of-towners with lake houses or plans to retire on Seneca Lake were upset about Greenidges presence. One of the cottage people Hall referenced was Buddington.

We had a lady down on Arrowhead Beach that was very, very involved in the anti-[Greenidge] side, Hall said. [Buddington and her husband] are Rochester residents, eventually going to live here when they retire, which I understand. She told the press that the water in front of her cottage was bathwater warm. And that morning, someone had already checked the temperature and it was in the 40s.

Buddington did not respond to a request for comment.

Most of the 300-odd residents of Dresden, Hall said, support the plant. They were familiar with its long-time presence on the lake, and grateful for the contributions its executives had made to the community, such as covering part of the cost of an expensive new CT scanner for the local hospital and a hydraulic jaws of life rescue system for the fire department, where the 75-year-old Hall is still a volunteer firefighter.

There were (literal) signs of Greenidges investment throughout Dresden. The company sponsored a local playground for children, as well as an electronic sign welcoming people to the village.

Many of the individuals CoinDesk spoke to, including local residents and business owners, agreed that Greenidges presence on the lake was good for the region if they had an opinion on Greenidge at all.

CoinDesk spoke to Hall less than two weeks after NYSDEC decided to deny Greenidges application to renew its Title V air permit five-year permits required to operate facilities deemed as high polluters (Cornell University, for example, is another facility in the region with a Title V Air permit).

The decision came after a lengthy campaign against Greenidge by environmental groups, in which 4,000 letters were submitted to NYSDEC 98% of which were anti-Greenidge.

Though Greenidge was operating within the limits set by its NYSDEC-granted permits, the Department claimed its decision to deny the renewal application was based on the determination that the facilitys continued operation would be inconsistent or would interfere with the attainment of the Statewide greenhouse emission limits established by the Climate Leadership and Community Protection Act (CLCPA), an ambitious plan to reach zero net emissions by 2050.

Three months before NYSDECs denial, however, Greenidge argued that it was already compliant with CLCPA guidelines and even proposed adding two new binding emissions limits to its renewed permits to reduce permitted greenhouse gas emissions by 40% by the end of 2025, five years before the CLCPAs first targets in 2030, and to become a zero-carbon-emitting power generation facility by 2035.

The issue, to Hall, felt so cut-and-dried in favor of Greenidge that the massive outcry against it came as a shock.

Through this whole thing, the [pro-bitcoin] groups have been weak, Hall said, noting that the environmentalists, on the other hand, have mounted a strong campaign.

The very first hearing, they bussed people in here. You couldnt move in the village. But they were not residents, they came from a long ways away, Hall said.

It upsets me to the point where I get Hall trailed off. You look at some of these [environmental] groups that have been going for hundreds of years, with all kinds of money and political backing, and they come here into a little-bitty community, and this is what happens. They just overrun you.

Hall and other local supporters of Greenidge dont care much about bitcoin. What they do care about, however, are jobs.

To be clear, Greenidge any bitcoin mining operation, really, despite arguments by many bitcoin miners is not a major employer in the region. Running a bitcoin mining operation just doesnt require that many people, and most of the jobs created are either temporary construction roles or low-wage positions like maintenance or security.

Griffin, of the development center, said Greenidge employs 54 people, paying roughly twice as much as the traditional manufacturing salaries in the area.

Griffin, who is also a basketball coach at the local high school, told CoinDesk that it was rewarding to see some of his students go to work for Greenidge after graduation.

Kids I used to coach are now working near home, where you never would have expected that. Their parents sure wouldnt have expected their kids to be able to live near them, making more money than they probably made out of college, Griffin said. Its honestly everything from an economic development perspective youd hope it to be.

Mike Davis, the business manager of the International Brotherhood of Electrical Workers (IBEW) Local 840, said Greenidge is an important source of work for union members, especially during slow winter months when construction normally slows down.

IBEWs workers, Davis said, have good paying jobs especially by local standards, where the major employer is the regions $3 billion agri-tourism industry, which mainly provides low-paid and often part-time labor and hospitality jobs. A junior wireman, according to Davis, makes $38.95 per hour, with an additional $20 per hour in benefits.

In the summer months, Davis said Greenidge typically needed six to eight of the Unions electrical workers at any one time, but that number was closer to 40 in the winter months the company deliberately scheduled certain upgrades and similar operations for those winter months, Davis said, so as to keep these workers employed.

If Greenidge were to shutter its operation, Davis said, winters could be tough to find enough work to keep all his members paid.

It would probably affect 10 to 15 families, Davis said. If theres 15 less people working at Greenidge over the winter, theres 15 less jobs in the area for me to send people to.

IBEW, which has chapters all over the country, has been vocal in its resistance against Kelles push to pass the mining moratorium. The Unions opposition was responsible for killing Kelles first attempt at passing the bill in a previous Assembly session, but was not enough to stop the bill from ultimately prevailing in Kelles second attempt.

Kelles did not return CoinDesks multiple requests for comment.

It is understandable, perhaps, that lawmakers and local activists would be willing to sacrifice a few dozen union jobs to protect the environment surrounding Seneca Lake.

In their telling, Greenidge is a monstrosity, a gas-guzzling cancer that blights the otherwise serene, rolling hills surrounding the glacial lake, as Yvonne Taylor, vice president of Seneca Lake Guardian put it in a press release,

Activists like Taylor express anger that the power plant, built in 1937 but mothballed in 2011, was purchased by a Connecticut-based private-equity firm, converted to a natural gasfired plant and brought back online something they see as a step backward.

Easily disproved is Kelles assertion that the area surrounding Greenidge sounds like standing near a jet engine on a tarmac.

When CoinDesk visited the facility last summer standing outside, because Greenidge, which has been notoriously tight-lipped with the press, did not respond to CoinDesks repeated requests to tour the facility the only sounds to be heard were the soft whooshing of fans and bird calls.

Another major complaint from Taylor and activists like her is that the warm water Greenidge is putting back into Seneca Lake the same process used by the facility since 1937 is contributing to harmful algal blooms (HABs) on Seneca Lake. If true, that would be worrisome. HABs (essentially, explosions of algae) can be devastating to aquatic life.

This is a claim activists have repeated over and over and over again.

But heres the rub: data shows that each of the Finger Lakes not just Seneca Lake has experienced HABs in recent years. There is not a power plant on any of the other lakes. The first reported cyanobacterial HAB on Seneca Lake was in 2015 two years before the plant re-started and five years before it began mining bitcoin.

Furthermore, the State of New York commissioned a report on Seneca and Keuka lakes last August that found that phosphorus discharges are considered the primary substance affecting water quality and the usability of the resource for both aquatic habitat and human uses. Greenidges operation does not discharge phosphorus, a compound found in most fertilizers.

Bruce Murray has kept a fairly low profile in the debate. His winery, Boundary Breaks, sits on the east side of Seneca Lake and occupies 150 acres opposite Greenidge.

He told CoinDesk that in the last 25 years, there have been substantial changes in the aquatic condition of Seneca Lake. The salinity of the lake has risen (there are several salt mines in the area), the population of lake trout has decreased and invasive species of wildlife, like quagga mussels, have proliferated.

Activists have also repeatedly reiterated concerns that Greenidges intake pipes were responsible for sucking up fish, larvae and other aquatic critters and killing them. Greenidge spent $6 million constructing and installing wedge-wire fish screens in response to concerns.

CoinDesk tried to reach Taylor, calling and emailing several times to get Seneca Lake Guardians side of the story. When a reporter finally reached her by phone, Taylor was curt.

Were not interested in working with you, OK? Taylor said, before hanging up.

The inaccuracy of local environmental groups claims bothers local supporters of Greenidge like Hall and Davis.

Davis told CoinDesk that most of his union members are locals whose families have lived in the area for generations, and many of them are avid hunters and fisherman.

Wed be the first ones to step up and say Hey, this is bad for the lake and were not interested in doing it anymore, but thats just not the case, Davis said. Those algae blooms are on all the lakes, and theres not power plants on all the lakes. Why are we not testing to find out why that is? Why are we just pointing the finger and saying its Greenidge?

[Kelless] region has been notoriously environmentally friendly, Davis added. She goes to her base, and thats her base. Its very political. Its very divisive. And, unfortunately, most of the time, the information thats out there is from a special interest group. But the real information, if you sit down and look at it, doesnt add up.

Griffin, too, expressed frustration with what he described as the constant punching back-and-forth between environmentalists and bitcoiners over Greenidge.

He speculated that the real issue for the anti-Greenidge camp was that bitcoin simply wasnt relevant to their lives. When other data centers open up, Griffin said, there are ribbon cuttings.

Hall, the Dresden mayor, appeared to agree.

Theres people that absolutely dont understand it, he said. Someones told them the bad points, and youve got multiple people weve got some here, locally that its just jealousy. They didnt get in on the ground floor, theyre not making any money, so no one else is gonna make any money. And there it is.

Murray, the winery owner, told CoinDesk he understood the desire to make money and wasnt opposed to energy usage in principle, but didnt see the point of bitcoin.

They can run thousands of mining machines there, he said. For what, is the question. For what?

While bitcoins relevance may be debatable, the need for a consistent and reliable source of power is not. Meeting the states increasing energy demand, which is ballooning as more electric cars come online (electric vehicles are expected to gobble up 14% of New Yorks total energy output by 2050), is not currently possible without fossil fuels.

The New York Independent System Operator (NYISO), which monitors the states power grid, said in its 2022 annual analysis that the grid is strained by the deactivation of generation resources that provide critical reliability services to the grid.

Griffin told CoinDesk that Greenidge is, first and foremost, a power generation plant.

Their primary operating purpose is to generate power and send it to the grid when the grid needs it, Griffin said. Every day, power goes from that plant to the grid. Every single day.

When the power isnt needed, Griffin explained, Greenidge uses its excess capacity which would otherwise be wasted to power its bitcoin mining operation.

NYISO, the states independent entity which oversees its power generators, referred CoinDesk to its Gold Book annual report in response to a request for comment about how much electricity Greenidge provides to the states energy grid or what shuttering Greenidge might mean for it. A spokesperson told CoinDesk the entity did not have any data on how much of the energy generated goes to the grid, versus mining.

Before Greenidge began mining bitcoin, it sent an average of 186,878 megawatts (MW) of power to New Yorks grid, according to data provided by a Greenidge spokesperson. After its bitcoin mining operation came online, the amount of power Greenidge was sending to the grid excess power that was not consumed by bitcoin mining was comparable, at a yearly average of 184,889 megawatts of power.

A review of Greenidges most recent quarterly filing with the U.S. Securities and Exchange Commission indicated it did indeed generate revenue from selling electricity to the NYISO, but only provided dollar figures and not the electricity mix itself. Bitcoin mining is more profitable than selling electricity to NYISO, based on these filings. According to both the filing and NYISOs annual report, Greenidge reported a nameplate capacity of 106 MW per hour for 2022. That translates to an annual capacity of 928,560 MW, though Greenidge says it doesn’t operate to that maximum capacity.

Davis, the IBEW director, told CoinDesk hes sympathetic to desires to get away from natural gas as an electricity source.

But right now, this is what your option is, Davis said. Because when your demand goes up, if the sun isnt shining and the winds not blowing, you dont have any power. You have to generate it somewhere.

Bitcoin mining has a real and tangible impact on the environment. That fact is not in question. In places where miners are tapping into an existing energy grid or source, they create demand that may not have been accounted for. In places where miners develop their own power generation facilities, they may drive greater use of fossil fuels.

Even miners who set up in locations with renewable energy sources could, again, lead to greater fossil fuel emissions if the renewable sources are insufficient to meet the new demand.

A Greenidge spokesperson declined to respond to specific questions about the companys operations or impact on the local grid. In a statement attributed to Greenidge President Dale Irwin, the company said the campaign run against Greenidge for years has been factually inaccurate and intentionally misleading. Those untruths masked as advocacy have unquestionably impacted policy decisions and it’s unfortunate.

The debate around bitcoin minings role in the U.S. ignores much of the nuance around these companies roles and conflates the different types of facilities. This wouldnt be a problem, except these debates are driving real policies and policy outcomes in the U.S. without always hearing from those most directly affected, particularly in places like Dresden and other immediately adjacent villages like Torrey and Penn Yan.

Were direct beneficiaries of that plant, Hall said. The town of Torrey is a direct beneficiary. They get payment in lieu of taxes the town, the county, the school district is a huge beneficiary. If the school district benefits from the tax money, it obviously benefits me and you as the homeowners.

Griffin, of the development agency, said Greenidge generated $3 million in 2021 in the payments in lieu of taxes.

Though he acknowledged there are some residents who oppose the plant, Griffin said he knew way more people who supported Greenidges continued operation than who opposed it.

In my day-to-day, I hear more positives about the plant operating than negatives. Far more, Griffin said. It truly didnt become an issue until they started doing bitcoin mining. That was the trigger for when all of a sudden, all of the alarm came.

He added: We did it here, and its the end of the world. The opposition to this one, its confusing to me. And the only thing I can point to is that people are just not sure what bitcoin does for them.

Nolen Hayes contributed reporting.

CORRECTION (May 25, 2023, 19:45 UTC): Corrects that Riot Platforms filmed a video at its own facility in Rockdale, Texas.
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