Each time transactions are added to Bitcoin’s digital ledger, they have to be verified by its network, which requires “miners” to devote huge quantities of computational power to solving cryptographic problems. As more miners join the network—lured by the skyrocketing value of the bitcoin they receive in exchange for their work—the puzzles get harder, requiring ever greater amounts of processing power, and thus electricity, to solve.
Since 2019, when the University of Cambridge’s Centre for Alternative Finance placed the cryptocurrency’s power needs ahead of Switzerland’s, its consumption has more than doubled, surpassing that of Sweden.
Adding so much demand to the world’s electricity grids is risky, especially at a time when the window to meaningfully cut greenhouse gas emissions is rapidly closing.
Jack Dorsey and Elon Musk, whose respective companies Square and Tesla have invested heavily in Bitcoin, claim the cryptocurrency will actually hurry the green energy transition by steering investment into renewables.
On the sleepy shores of Seneca Lake in Dresden, New York, that prediction is already being realized.
There’s just one problem: If it weren’t for Bitcoin, there would almost certainly be no reason to run the power plant in Dresden at all.
After belching noxious fumes and dumping toxic coal ash into a nearby landfill for seven decades, the plant was poised to be remediated and reused.
And that’s sort of what happened, in 2014, when Atlas Holdings, a private investment firm based in tony Greenwich, Connecticut, purchased Greenidge.
When Greenidge applied for permits to restart operations, it claimed it would be generating power to meet existing electricity demand.
In an attempt to claw back the tens of millions that Atlas invested to convert the plant to natural gas, Greenidge turned to mining Bitcoin.
By March 2020, the plant was reportedly using over 14 megawatts of power, enough for roughly 9,000 homes, to mine around $50,000 worth of Bitcoin per day.
As Greenidge increased its mining capacity last year, there was a corresponding jump in its contributions to global warming.
That’s just a fraction of the 580,000 metric tons the plant is currently permitted to emit annually, and the nearly 1 million metric tons it could release every year if operating at full capacity.
In its announcement, Greenidge said it wants to more than double its mining capacity on Seneca Lake by July—and to double it again by the end of 2022, at which point it will total 85 megawatts.
Greenidge also said that the company plans to replicate its vertically integrated model—cryptocurrency mining at the source of energy production—at other power plants, with a goal of at least 500 megawatts of combined mining capacity by 2025.
Contra Dorsey and Musk, there’s no incentive for Bitcoin miners to purchase or invest in renewable energy if it’s less expensive to produce their own by burning fossil fuels at dirt cheap plants that nobody else wants.
This lawsuit is only the latest legal action organizations like the Committee to Preserve the Finger Lakes have taken to try to halt the plant’s operation and proposed expansion.
In late March, Phil and Linda Bracht, two of the 30 petitioners on the lawsuit against Torrey, the county planning board, and Greenidge, took me and another petitioner, Carolyn McAllister, out in their boat to get a look at the plant from the water.
The first part of the facility to catch the eye is its giant intake pipe, which is 7 feet in diameter and extends further than the length of two football fields from the shore over the water, like an elevated train to nowhere, before dropping below the lake surface.
Like all thermoelectric power plants, Greenidge uses steam to spin the turbines that produce electricity, but the steam has to be condensed back to water by exchanging heat with the fresh water before it can be reused.
Greenidge’s former owners once commissioned an engineering study that estimated that the plant impinged or entrained nearly 10,000 fish and crayfish annually in 2006-2007, while an additional 592,000 eggs, larvae, and juvenile fish were entrained every year.
Greenidge is permitted to discharge up to 134 million gallons of water daily at temperatures that range from 108 degrees Fahrenheit in the summer to 86 degrees F in the winter.
John Halfman, a professor of geoscience and environmental studies at Hobart and William Smith College on the northern end of Seneca Lake, says the size of the biggest fish caught in the derby has been steadily decreasing, while the time it takes to make a catch is increasing.
Tiffany Garcia, a freshwater ecologist at Oregon State University, wrote a letter to the Town of Torrey raising similar concerns about the effects of hot water discharges on the larger lake ecosystem.
While the presence of blue-green algae or cyanobacteria is normal in lakes, a small number of these organisms produce potent toxins that can be dangerous or even fatal for people and other animals.
Gregory Boyer, the director of the Great Lakes Research Consortium at the State University of New York, studied the effect of artificially increasing water temperature by just 2 degrees on Lake Champlain.
In earlier lawsuits challenging permits the DEC issued to Greenidge, Boyer submitted affidavits on behalf of local environmental groups saying that the large discharges of heated water from Greenidge could increase HABs in the area and should be studied further.
Many people who live near Seneca Lake, including petitioners like Black and McIntee, use water drawn directly from the lake in their homes: to shower, to wash clothes and dishes, to water their gardens or—in the case of the region’s dozens of wineries—even their vineyards.
More than anything, many locals object to being subject to these ecological risks for a power plant that’s not actually providing them needed electricity in return.
“Greenidge is a unique success story,” Mike McKeon, a lobbyist and crisis communicator retained by Greenidge, told Grist in a statement.
In response to concerns about impingement and entrainment in the cooling system, Greenidge has said that the risk is mitigated by variable speed drives recently installed on the facility’s water pumps, which lower the speed of water intake—making it easier for fish to swim away and escape.
The company’s response to residents’ concerns about HABs is to say there were no HABs within 4 miles of the plant last year, so it couldn’t possibly cause them.
Environmental Protection Agency, or EPA, which determine how much water the plant can withdraw and discharge and at what temperatures, as well as the plant’s air emissions limits.
How Greenidge received those “uniquely strong” permits is a point of longstanding interest to Peter Mantius, a journalist who resides in Watkins Glen, a town at the southern tip of Seneca Lake.
That lawyer wrote his former employer on his new client’s behalf, requesting that Greenidge not be treated as a “new” facility under the Clean Air Act, which would avoid the stricter environmental review to which new or significantly altered air pollution sources are otherwise subject.
That same year, the firm and its principals began donating to Governor Cuomo’s reelection campaign, beginning with a $25,000 donation from the company in March.
In March 2014, the plant hired McKeon, a lobbyist at Mercury Public Affairs and the founder and former executive director of Republicans for Cuomo, which organized bipartisan support for the now-governor during his first run for the office.
In March 2015, Atlas representatives met with top state officials, including Joe Martens and Basil Seggos, the former and current commissioner of the DEC, as well as Thomas O’Mara, a member of the State Senate who also happened to be a partner at the law firm retained by Greenidge Generation.
Despite these efforts, Greenidge was ultimately subject to stricter treatment as a “new source” under the Clean Air Act, but only after the EPA took the DEC to task for trying to reissue the plant’s air permits after nearly five years of inactivity.
More significantly, when the DEC renewed the plant’s water withdrawal and discharge permits in 2016, the agency waived the normal requirement that the company complete a comprehensive environmental impact statement.
Environmentalists have repeatedly challenged this decision in court.
For example, since 2011 the DEC has recommended new and repowered plants use so-called closed-cycle cooling, in which cooling water is recirculated through the plant instead of discarded, significantly reducing wildlife mortality from impingement and entrainment, as well as the volume of hot water discharges.
Some locals told me they wouldn’t have a problem—or as big a problem—with the plant’s environmental impact if it were supplying much-needed energy to the grid.
“The only good thing about mining Bitcoin is somebody makes money,” John Halfman told me on a video call.
There are subtle signs that the DEC is feeling the heat; after the agency received the environmental organizations’ letter, it described its oversight of Greenidge as “aggressive” and said it would carefully review the “precedential” nature of the facility.
At the end of April, the Town of Torrey gave the company a green light to build four new buildings to house additional Bitcoin-mining hardware.
Before leaving town, I spent some time on the Keuka Outlet Trail.
A nonprofit has since transformed the area into a nature retreat with a wide gravel path for walking, running, and biking, well-situated benches for moments of quiet repose, and water access for fishing or boating.
This could have been the fate of an old coal-fired power plant on Seneca Lake, which in its later years produced energy people rarely needed and was too costly to run at a profit.
Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone.
If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2021 demands.