DRESDEN, Jan. 10, 2022 — In a fresh challenge to the state’s piecemeal approach to regulating the environmental risks of Greenidge Generation’s bitcoin mining operation, 10 environmental groups are seeking to block the renewal of a discharge permit for the company’s Lockwood Hills coal ash landfill.
The Sierra Club, Seneca Lake Guardian and others argue that it is illegal to treat the Lockwood case separately from other environmental permit renewals for operations that jointly contribute to the “repurposing” of the plant for cryptocurrency mining.
Greenidge is also seeking to renew its air emissions permits, while other permits to discharge toxic waste from the plant itself and to withdrawal water from Seneca Lake are due for renewal soon.
The company’s bid to renew its Title V air permit has been particularly controversial, drawing skeptical comments from at least three U.S. senators and Commissioner Basil Seggos of the state Department of Environmental Conservation.
But the DEC continues to treat applications to renew the air permit and Lockwood’s State Pollutant Discharge Elimination System separately, as routine “Type II” actions that do not trigger public scrutiny under the State Environmental Quality Review Act.
SEQR requires a comprehensive and unified environmental review for projects that “may” have a significant negative environmental impact.
But the DEC has never required Greenidge to prepare a full environmental impact statement (EIS) — either when it allowed the former coal-burning plant to restart in 2017 or when it morphed into a bitcoin mining operation powered by natural gas two years later.
In December, the DEC tentatively agreed to renew the landfill’s SPDES permit. It allowed the public 30 days to comment and denied requests to extend the comment period beyond the winter holidays.
On Friday, the green groups asked the agency to schedule a public hearing to allow further comment. The DEC did not immediately respond.
“The overall project of which the renewal of the Lockwood SPDES permit is a part is the repurposing of Greenidge Station for bitcoin mining operations,” the groups said in a Jan. 7 letter to the DEC.
“DEC has treated this project as a matter for bilateral negotiations between the DEC and Greenidge Generation Holdings Inc. DEC’s efforts to exclude the public from participation in the negotiations surrounding the repurposing project are contrary to the requirements of (state environmental law), which mandates public involvement.”
It is also a violation of SEQR to “segment” projects to downplay overall environmental risk. “Segmentation of an action into components for individual review is contrary to the intent of SEQR,” the agency’s website states.
But during the administration of then-Gov. Andrew Cuomo, segmentation was the rule, not the exception, in the DEC’s treatment of Greenidge permit applications.
In order to rule that restarting the plant would not pose a significant environmental risk — thus avoiding an EIS — DEC explicitly excluded consideration of Lockwood’s illegal toxic discharges.
Meanwhile, the state Public Service Commission granted the company a “certificate of public convenience and necessity” to produce and sell power to the electric grid over the objections of protesters who said it was unnecessary and unwise to restart an inefficient fossil fuel plant.
The lenient treatment by the agencies coincided with $120,000 contributions by Greenidge owners to Cuomo’s reelection campaigns and more than $500,000 in payments to lobbyists who plied state officials for favorable permits.
After the plant was converted to burn natural gas rather than coal and restarted in March 2017, the market’s demand for the plant’s power slumped. That led company officials to consider switching to a more profitable business plan.
In 2019, the company began installing special-purpose computer “rigs” or “miners” designed to confirm cryptocurrency transactions in order to earn bitcoin. The bitcoin mining operation has run on power generated by the 106-megawatt Dresden plant that never reaches the grid.
Prodded by spikes in the market price of bitcoin, the company has steadily added rigs and boosted generation to power them. To help fund the rapid expansion, Greenidge converted last year to a publicly-traded company.
Today Greenidge continues to sell a fraction of its generated power to the grid, but bitcoin mining generates most of its revenues.
The company announced last week that it had 17,300 miners in place at yearend, up from 6,900 a year earlier. Greenidge said it earned 609 bitcoin in the final three months of 2021, an increase of 168 percent from the same period in 2020.
The price of one bitcoin fluctuated last year between $29,000 and $69,000 and has recently been trading around $42,000.
Greenidge has told investors it plans to substantially increase its bitcoin operation — and power generation to support it — this year. But ramping up generation will sharply boost greenhouse gas emissions, triggering worries that it will undermine the state’s chances of sticking to GHG emissions limits in its 2019 climate law, the Climate Leadership and Community Protection Act.
In fact, DEC Commissioner Seggos tweeted that Greenidge has not shown compliance with CLCPA. Meanwhile, U.S. Senators Chuck Schumer and Kirsten Gillibrand of New York and Elizabeth Warren of Massachusetts have also weighed in.
And several of 10 environmental groups that seek to block renewal of the Lockwood landfill’s permit issued a lengthy critique of the air permit application in November.
The status of the relationship between the booming Bitcoin mining business and the Lockwood landfill is not entirely clear, according to the environmental groups’ Jan. 7 letter.
Historically, the plant dumped coal wastes in the landfill located across NYS Route 14 in Dresden. When a former owner shut down the plant in 2011, the landfill was described to the DEC as an “integral element of power station operations.”
However, the landfill’s 2018 annual report says no “ash waste” was disposed of that year, and the 2019 annual report does not mention waste from the plant. A September 2021 Greenidge filing with the U.S. Securities and Exchange Commission does not say whether the landfill had taken wastes from the power plant.
However, Lockwood’s 2019 annual report estimated the projected life of a lined section of the landfill at approximately five years, “conservatively assuming a waste disposal rate of 100,000 tons per year.”
Furthermore, a recent Lockwood “fact sheet” claimed an exemption from certain federal effluent reporting requirements based on a specific legal exception that applies “when the landfill receives wastes generated by the industrial or commercial operation directly associated with the landfill.”
Thus, the fact sheet indicates that Lockwood is currently receiving wastes generated by the power plant, the environmental groups have concluded.
The Lockwood landfill discharges into the Keuka Outlet, which empties into Seneca Lake.
In 2015, Greenidge and the DEC entered into a consent agreement that required cleanup by late 2016 of polluted groundwater at the landfill. Cleanup deadlines have been repeatedly postponed since then.
The consent order identified the landfill’s leachate pond as the source of legally excessive levels of total dissolved solids, boron, manganese, magnesium, iron, sodium and sulfate.
The Lockwood SPDES permit was last modified in 2010 and administratively extended in 2016.
The DEC has tentatively agreed to renew it with modifications to comply with federal rules for coal ash landfills that were adopted in 2015 to address groundwater contamination, inspection and record keeping.
Rachel Treichler, a Hammondsport attorney who has represented the Sierra Club, argues that the DEC has failed to justify its decision to classify the Lockwood renewal application as a routine “Type II” matter and to thereby strip the requirement for a SEQR review.
The same federal coal ash rules that must be included in the renewed Lockwood permit will need to be applied to the upcoming renewal of Greenidge’s own SPDES permit, which expires Sept. 30.
Both the Lockwood and Greenidge SPDES permits set limits for mercury at 50 ng/L (parts per billion), roughly 70 times the state water quality limit of 0.7 ng/L.
Greenidge’s discharges, which include “coal pile runoff” and “bottom ash pond overflow,” are released into both Keuka Outlet and Seneca Lake.
Before the discharges reach Seneca Lake they are mixed with discharges from the neighboring Ferro Corp. in a pond several feet from the Seneca Lake shoreline.
The DEC has required Greenidge to prepare a dilution report to assess the impact of the combined Greenidge/Ferro toxic discharges into the lake. But the final report is not due until June 30, 2023.
That distresses Gary McIntee, who owns a lakeside home on Perry Point that draws water from Seneca Lake. He said the discharge of unknown toxins several hundred yards from his residence has led him to stop relying on lake water for drinking, bathing, doing laundry or brushing teeth.
“All we can do with it is flush our toilets,” McIntee said.
He said his efforts to obtain interim data on the Greenidge/Ferro discharges from the DEC have not been successful.
But even when the dilution report is finally released to the public, it will omit a key data point. It won’t mention mercury.
According to a footnote in Greenidge’s September 2019 dilution study workplan:
“NYSDEC concluded that achieving the 0.70 ng/L (for mercury) is not possible at this time. Therefore, mercury will be excluded from this dilution study.”