DEC Sees No Environmental Risk in Mercury-Laced Sediment Only Yards From Greenidge’s Proposed Dredging

DRESDEN, Aug. 29, 2022 — Sediment highly contaminated with mercury, lead, PCBs and pesticides lies only a few yards away from a Seneca Lake dredging project proposed by Greenidge Generation.

Despite its proximity to sediment laced with mercury in concentrations the state deems “acutely toxic to aquatic biota,” the planned excavation “will not have a significant impact on the environment,” state regulators ruled Aug. 12.

That pronouncement has allowed the state Department of Environmental Conservation to fast-track the company’s permit application, requiring only a 15-day public comment period — which ends Thursday — instead of a full environmental impact statement.

Greenidge seeks permission to dig out 1,100 cubic yards of sediment from a 95×82-foot area at the end of the power plant’s coolant water intake pipe, where the water is about 12 feet deep.

That will create a six-foot depression to accommodate a massive wedge-wire screen assembly designed to protect aquatic life.

Federal law requires power plants to have fish screens on their water intake pipes. But the DEC allowed the Greenidge plant to restart without them in early 2017 on the condition that the company install them within five years.

The grace period extends for the life of the plant’s state water permit. That permit expires Sept. 30, which is the installation deadline.

Gary McIntee, who uses lake water at his Perry Point home about a mile south of the proposed dredging site, said he worries the digging will stir up long-settled contaminants buried in the sediment.

“My concern is toxic chemicals being released into the water column,” said McIntee, who uses lake water for showering and making ice cubes but rarely for drinking. 

He and several neighbors rely on bottled water, and he is exploring options for an expensive reverse-osmosis water system to make the lake water safer to drink.

In recent days, McIntee has videotaped apparent dredging in the vicinity of the proposed Greenidge project, which has clouded the lake water with silt. 

When he forwarded his video evidence to the DEC, agency officials told him that the excavating was being conducted by NYSEG, not Greenidge. The power company’s underwater cable runs from the Greenidge plant to the east side of Seneca Lake.

Greenidge may not begin dredging before it receives its DEC permit, which could arrive any time after the public comment period ends Thursday.

Dale Irwin, Greenidge Generation Holdings’ president, did not respond to emailed questions about when it expects to receive a dredging permit and to complete the installation of the fish screens.

The company has tested sediment at four locations near its proposed dredging area, as shown on a map (see above) provided in its permit application filed in March.

For each of the four locations, samples were collected from near the surface and from a depth of four-to-five feet. Minimal contamination was detected in each of the four surface samples and in three of the four deeper samples. 

However, the deeper sample from the location labeled “GR-CWIS-1” showed mercury concentration of 23.8 milligrams per kilogram, roughly 15 times the threshold for DEC’s most toxic category of sediment contamination.

That sample’s concentrations of lead, PCBs and pesticides were also elevated, though not quite high enough for the DEC’s most toxic category.

Based on the company’s map, the contaminated sample was extracted from a point 15-20 yards from the end of the plant’s water intake pipe, where the company plans to dredge up to six feet of sediment.

In its Aug. 12 ruling, the DEC characterized the proposed project as “a small amount of dredging.”

The agency estimated that 80-100 truck trips would be required to remove the excavated sediment, “assuming 10-15-ton dump trucks are used to remove the material.”

Six years ago, when the DEC first determined that wedge-wire screens were the best technology available to fulfill the law, it asserted that their installation would require “no significant modification or alteration” of the lakebed. That erroneous claim was part of its “negative declaration” that the plant’s restart would have no adverse impact on the environment.

The agency’s Aug. 12 negative declaration, like the one in June 2016, allowed Greenidge to sidestep the state regulation that requires an environmental impact statement — a public process — “when the agency determines that there may be one or more significant adverse environmental impacts from a proposed action.”

Furthermore, the DEC has allowed Greenidge to exclude mercury from its pending study of how effluent the company releases directly into Seneca Lake affects toxic chemical levels in the lake. The company said in 2019 “Dilution Study Workplan” that its final report on lake contamination levels may be ready by June 2023.

The presence of mercury in fish is a health concern for virtually all New York waterbodies, including all of the Finger Lakes. While Seneca Lake’s mercury levels are not known to be exceptionally high, the state Department of Health recommends fish caught there be eaten no more than four times per month.

During the administration of former Gov. Andrew Cuomo, Greenidge lobbied to win a string of regulatory favors from the DEC, most notably the negative declaration for the plant’s 2017 restart. 

Gov. Kathy Hochul, who succeeded Cuomo a year ago, has continued that pattern of accommodating the company. 

The fast-tracking of the dredging permit application comes only weeks after it chose not to interrupt Greenidge’s growing Bitcoin mining business at the Dresden plant despite the plant’s failure to comply with the state’s 2019 climate law.

Although Hochul won praise from environmental advocates when the state denied Greenidge’s bid to renew its air permit June 30, the impact of that decision was quietly gutted a month later.  

By granting Greenidge’s July 28 request for an adjudicatory hearing within the DEC of the air permit denial, the agency awarded the Bitcoin operation years of regulatory breathing room.

The plant’s air permit, which formally expired Sept. 2021, will be automatically extended until four months after the resolution of the potentially open-ended internal legal review.

“While no adjudicatory proceedings have been scheduled to date, the company expects that the appeals process may take a number of years to fully resolve,” Greenidge stated in its latest 10Q filing with the Securities and Exchange Commission.

Investors quickly noted that the air permit denial was no big deal.

In fact, the company’s stock rose more than 80 percent in the six weeks after the permit denial was announced ($2.54 on June 30 to $4.65 on Aug. 15) because it was apparent that the air permit denial would have no effect on Greenidge’s plans to expand its Bitcoin operations.

However, the shares have tumbled since Aug. 15, the day the company revealed in its SEC filing that it was facing financial stress.

The combination of falling prices for Bitcoin and rising prices for the natural gas that fuels the Dresden plant has strained the company’s ability to meet payment obligations on debt incurred to buy thousands of new Bitcoin mining machines. (In the second quarter, the price of Bitcoin fell 57 percent, while the price of natural gas rose 53 percent, the company said.)

On Aug. 10, a key lender agreed to restructure Greenidge debt, extending payment deadlines and cutting monthly amortization payments. 

Even so, in its SEC filing, Greenidge warned:  “Given current industry and economic conditions, our cash flow may not be sufficient to allow us to pay principal and interest on our debt and meet our other obligations.”

In a more upbeat press release Aug. 15, Greenidge reported that in July — the month after the state denied its air permit renewal — Greenidge added 1,800 mining machines to reach a total of 29,300. And after earning 621 Bitcoin in the three months ended June 30, it earned 287 more in July alone. 

The company also said it planned to continue building its Bitcoin mining computer capacity through early 2023.