A gas-fired power plant being used to support a Bitcoin mining operation in upstate New York has divided local residents over the environmental toll of the energy-intensive process versus the economic benefits the business brings to town.
Locals who have protested the operations of the plant, which is on the shores of Seneca Lake, have expressed concern that it’s polluting the air and heating the lake, the largest of the Finger Lakes, NBC News reported.
"The lake is so warm you feel like you’re in a hot tub," Abi Buddington, a resident of Dresden, New York, whose home is near the plant, told NBC.
Buddington, who also serves as secretary on the Committee to Preserve the Finger Lakes, helped organize a protest at a nearby Department of Environmental Conservation office in Avon, NY last month against the plant.
The protest was also organized by Seneca Lake Guardian, a nonprofit conservation advocacy.
"These crypto operations are looking for anywhere that has relatively cheap power in a relatively cool climate," Yvonne Taylor, vice president of the group, told NBC. "It’s a horrible business model for all of New York State, the United States and for the planet."
Bitcoin mining is the energy-intensive process that both produces new bitcoins while processing transactions made with the existing supply. It’s become a major point of criticism for the crypto, with even some of its biggest supporters like Tesla CEO Elon Musk calling out its environmental impact.
The facility on the shores of Seneca Lake is owned by private equity firm Atlas Holdings and operated by Greenidge Generation, NBC reported. Atlas bought the coal-fired plant in 2014, three years after it had closed, the report said, and converted it to natural gas, the report said.
The almost 80-year-old plant resumed operations in 2017 and generated energy for the grid only at times of high demand, according to the report.
But in 2019, Greenidge began to use the plant to power its Bitcoin mining efforts. As the price of Bitcoin soared since then, the potential profit from mining the cryptocurrency surged, too, and Greenidge increased the plant’s output.
During the 12 months ending Feb. 28, 2021, the company said it mined 1,186 bitcoins at a cost of approximately $2,869 each. Bitcoin, is extremely volatile, currently trades at around $33,600 per coin.
But the soaring demand for energy to power Bitcoin mining operations has locals and environmentalists worried.
Greenidge, for its part, says that state environmental authorities have determined that the plant "does not have a significant impact on the environment," according to NBC. The company said last month that its operations would soon be carbon neutral, NBC reported, and it’s buying carbon credits that offset the plant’s emissions.
After the local protest last month, the company announced publication of a study by an economic consulting firm that touted its jobs creation in the area and called its facility carbon neutral.
The plant employs 31, NBC said, and the company said last month that it plans to add at least 10 more full-time employees over the next year.
But Judith Enck, a former Environmental Protection Agency regional administrator and a senior fellow and visiting faculty member at Bennington College in Vermont, told NBC that Greenidge’s carbon credits is probably "not a particularly effective way to reach greenhouse gas reduction goals."
"New York had established a goal in law of reducing greenhouse gas emissions by 40 percent by 2030," Enck told NBC. "The state will not reach that goal if the Greenidge Bitcoin mining operation continues."
Documents obtained through an open records request by Earth Justice, a nonprofit environmental advocate, show that the plant’s emissions have skyrocketed since Greenidge started using it to fuel Bitcoin mining operations, NBC reported.
At the end of 2020, the plant’s carbon dioxide equivalent emissions totaled 243,103 tons, up from 28,301 tons in January, the report said. The plant generated carbon emissions of just 119,304 tons in 2018 and 39,406 tons in 2019, according to the federal documents obtained by Earth Justice.
Critics fear that more previously shuttered plants could also be reopened to support Bitcoin mining efforts. Greenidge announced last week that it will open a new Bitcoin mining operation in Spartanburg, South Carolina, at a retired printing plant owned by Atlas.
To be sure, Greenidge’s plant on Seneca Lake has its local supporters, too. The Dresden Fire Department accepted a $25,000 donation from the company, according to NBC, and the school district took a $20,000 gift.
Gwen Chamberlain, a former local newspaper editor, is on a community advisory board working with Greenidge.
"The tax base is growing, and that’s helping the school, the county, and the town tremendously," Chamberlain told NBC News. "Their employment has always been good, solid jobs for local workers."