Hochul’s DEC Gives Greenidge Crucial Time Window to Expand Bitcoin Mining Before It Rules on Air Permit Renewal

ALBANY, Feb. 4, 2022 — In a private agreement with Greenidge Generation LLC, Gov. Kathy Hochul’s environmental regulators awarded the company a crucial two-month window to install thousands of new Bitcoin mining rigs at its Dresden power plant before they rule on renewing its long-expired air emissions permits.

The state Department of Environmental Conservation says it delayed its permitting decision from Jan. 31 to Mar. 31 to “complete its ongoing review” of about 4,000 public comments on the case.

The postponement severely undercuts state efforts to control greenhouse gas emissions and clashes with DEC Commissioner Basil Seggos’ own declaration last fall that “Greenidge has not shown compliance with New York’s 2019 climate law.”

Last week’s DEC decision drew harsh criticism from groups who have pressed Hochul to declare a statewide moratorium on energy-intensive “proof-of-work” cryptocurrency facilities such as the Dresden plant. 

“This delay from the DEC is not benign,” Seneca Lake Guardian said yesterday. “Every day that Gov. Hochul and Commissioner Seggos drag their feet on this (permitting) decision is another day for Greenidge to continue expanding operations.”

Robert Howarth, a member of the state’s Climate Action Council, which helps implement 2019 Community Leadership and Climate Protection Act, called the delay “disappointing. I hope that the DEC in the end will make the correct decision and deny the air permit. Time will tell…”

Greenidge has been racing to install special purpose computer “rigs” that confirm crypto transactions and earn Bitcoin before any potential state crackdown on the plant’s growing greenhouse gas emissions. 

At yearend, the plant operated 17,300 rigs that ran on roughly 45 megawatts of plant-generated electricity. Greenidge has told investors it plans to deploy a total of 32,000 rigs using 95 megawatts this year, more than doubling its capacity to compete with other Bitcoin miners worldwide.

The company is currently erecting four buildings at the Dresden plant to house the new machines.

The additional power usage will drive up the plant’s greenhouse gas emissions even as the state struggles to cut statewide ghg emissions by 40 percent by 2030 (from a 1990 base), as required by the CLCPA.

Greenidge’s Title V air permit expired in September. While legally allowed to operate under the expired permit, the company has asked that it be renewed with no change in its annual allowance of 641,878 tons of ghg emissions per year. 

But the company told the DEC in August that its estimated combined onsite and upstream emissions totaled 1.05 million tons annually — even before its current Bitcoin rig buildout and their new energy demands.

That acknowledgement prompted thousands of Finger Lakes residents, businesses, wine growers and environmental groups to demand that the DEC reject the company’s application to renew its Title V and Title IV air permits. Seggos appeared to agree when he Tweeted in September that Greenidge had not shown compliance with the CLCPA.

Since then, state Assembly Member Anna Kelles (D-Ithaca) has reintroduced legislation that would impose a statewide moratorium on proof-of-work crypto mining, which has a companion bill in the state Senate.

Kelles issued a statement yesterday on the permit decision delay, calling on the DEC “to lead and take swift action on this critical climate issue.”

Her statement came a day after gubernatorial candidate Jumaane Williams held a press conference in the Finger Lakes to call on Hochul to impose a proof-of-work crypto moratorium. He also urged the DEC to deny the Greenidge air permit application.

Williams said he wasn’t necessarily opposed to cryptocurrencies — only those like Bitcoin that rely on the energy-intensive proof-of-work confirmation method. 

“(Proof-of-work) mining is the absolute worst,” Williams said. “There is a way to do this that is not as dangerous to the climate.”

But the DEC’s decision to postpone its air permit ruling douses any prospect for a Hochul moratorium, activists said. And if Greenidge completes its buildout before Hochul signs any future moratorium bill into law, it would likely not apply retroactively to an established Bitcoin facility.

The DEC announced last week that it and Greenidge had “mutually agree to suspend the Uniform Procedures Act timeframe for permit reviews” so that it could review public comments. 

Joseph Campbell, president of Seneca Lake Guardian, asked, “Why was it a bilateral decision between Greenidge and the DEC to delay the decision two months? No other stakeholders were involved in the decision. Nobody asked us (SLG) or EarthJustice or NYPIRG. 

“Obviously, we would have said, ‘Absolutely not.’”

Campbell said the DEC should simply dedicate enough staff to process the comments. That’s something he and Kelles believe “they could do in a couple of days if they really wanted to.”

Campbell said he was dismayed to learn that the DEC told WaterFront that once the comment review was complete it would consider ordering an adjudicatory hearing on the permit application — further delaying the process for months, if not years.

He said SLG would adamantly oppose an adjudicatory hearing because it would cause unwarranted delay at the expense of CLCPA compliance.

Williams joined Campbell and several winery officials at a Jan. 31 press conference on Greenidge’s Bitcoin buildout at the Forge Cellars winery in Burdett. 

Several speakers stressed that soaring ghg emissions in the Finger Lakes were a threat to the region’s grape-dependent wine industry. 

Michael Warren Thomas noted that world-renowned winemakers — including Louis Barruol of Forge Cellars — were investing millions of dollars in Finger Lakes winery operations, some of which are downwind of the Greenidge plant. 

“We need the state Legislature and Gov. Hochul to help protect one of the biggest economic engines in the state, which is the Finger Lakes, a world-class wine region,” Thomas said.

Williams, a former member of the New York City Council, is challenging Hochul in the Democratic primary this year. He lost to Hochul in the 2018 race for lieutenant governor. A year later, he was elected New York City Public Advocate, replacing Letitia James, who became the state Attorney General.

Williams trails Hochul by a wide margin in the polls.

But this is the third straight Democratic primary for governor that has featured an underdog challenger raising a Finger Lakes environmental threat as a key campaign issue.

In the 2014 campaign, Zephyr Teachout strongly opposed fracking for natural gas  when then-Gov. Andrew Cuomo was less committed on the issue. Although she lost the primary, Teachout carried many upstate counties, including most of the Finger Lakes region. 

Months later, Cuomo ordered a statewide ban on fracking.

In her 2018 campaign against Cuomo, Cynthia Nixon stood against a plan to build the state’s largest garbage incinerator in Romulus, a project proposed by one of Cuomo’s largest campaign contributors. Nixon goaded him by saying:

“Jerry Brown (then-governor of California) would never ever allow a giant garbage incinerator to be sited in the middle of Napa Valley. Why in the world would our governor sit idly by and allow this incinerator to be sited in the heart of the Finger Lakes?”

Cuomo, who demolished Nixon in the primary by more than 30 percentage points, eventually signed the incinerator bill into law.

Hochul’s office did not respond to emailed questions Thursday about her stance on the Greenidge air permit issue. 

The DEC, when asked to respond to charges that it had politicized the air permit process, said Thursday:

“DEC subjects every application to all applicable federal and state standards to ensure the agency’s decision is protective of public health and the environment and upholds environmental justice and fairness, including standards related to the Climate Leadership and Community Protection Act.”

DEC did not directly address questions about its role in enabling Greenidge to continue building out its Bitcoin mining operators or the potential adjudicatory hearing.

Greenidge’s Dale Irwin said today: “DEC requested an extension to continue its review of public comments received, which is commonplace under the State Administrative Procedures Act, and we were happy to agree to the extension.  Greenidge operates in full compliance with our existing permit and appreciates the DEC’s review of our application.  We look forward to finalizing this renewal process with publication of a strong final permit.”  

The Hochul Administration’s decision to delay its ruling on the Greenidge air permit follows the Cuomo Administration’s routine practice of relaxing the company’s environmental deadlines.

For example, Greenidge signed a consent order with the DEC in 2015 that required the company to clean up its Lockwood coal ash landfill by late 2016, but that deadline has been repeatedly postponed. 

Cuomo’s DEC also allowed the company five years to comply with federal Clean Water Act rules on water intake and discharge. Its intake pipe still doesn’t comply.

The agency has also allowed the company to take years to provide a report on thermal pollution from its water discharges into the Keuka Outlet, which flows into Seneca Lake. Warmer lake water is believed to contribute to harmful algal blooms. 

And a DEC permit that allows Greenidge to discharge mercury and other pollutants directly into Seneca Lake doesn’t require a dilution study report until next year. Even then, the report doesn’t need to specify how the mercury has spread in Seneca Lake.