New York lawmakers have advanced a proposed law that aims to rein in the state's expanding crypto mining industry.
The State Assembly's Environmental Conservation Committee advanced a proposed moratorium on proof-of-work mining to the Ways and Means Committee on March 22. The Block previewed the meeting earlier today.
The advancement to a second-tier committee is a big step for legislation in the state assembly. “It is finally moving in both houses. Before the issue was it moved in the Senate but not the Assembly,” Assemblymember Anna Kelles tells The Block. “Once a bill starts moving then it’s really live. We have over 12,000 bills a year and most go nowhere.”
A lot has changed since the moratorium's introduction last year. The original version of the bill was far more aggressive, saying: "There shall be a three-year moratorium on the operation of cryptocurrency mining centers in the state, including, but not limited to cryptocurrency mining centers located in converted fossil fuel power plants."
The version heading to the committee now is much more focused on the surge in massive proof-of-work operations in New York. Part of that is a compromise the bill's author, Assembly Member Anna Kelles, made with an electric workers' union that ultimately hobbled the original bill. The new version features a two-year moratorium that is much more specific, barring the state from issuing new permits to:
"An electric generating facility that utilizes a carbon-based fuel and that provides, in whole or in part, behind-the-meter electric energy consumed or utilized by cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions."
This significantly narrows the scope of the moratorium to plants like Greenidge, which took center stage in the current debate when it jump-started a mothballed coal powerplant on Seneca Lake in upstate New York, complete with natural gas outfitting and a carbon offset program, to mine Bitcoin. Even then, the new language takes aim at the expansion of operations and doesn't target those within existing levels.
At the same time, the overall bill sets the stage for further legislative responses.
The updated version accelerates the timeline for a General Environmental Impact Statement from the Department of Environmental Conservation, cutting it down to one year rather than two. Kelles sees a GEIS as a roadmap for a more comprehensive legislative response. Unlike the moratorium, the impact statement would apply to all crypto operations in the state, not just the behind-the-meter ones.
“Everything would be on the table with respect to how we want to proceed,” she said.
The United States became the largest source of bitcoin's hashrate early last year, following a crackdown in China. Since then, there's been a great deal of debate as to the actual utility of crypto miners, particularly of energy-intensive proof-of-work networks. Proponents say they can monetize stranded energy resources like flare gas, wind farms and waterfalls far away from population centers. Critics, like Kelles, are skeptical that the communities and states hosting such mining operations ever see those revenue streams.
As for the bill's timeline, the Ways and Means Committee is fully entrenched in work on the state's budget, and Kelles anticipates motion on her legislation no sooner than April. In addition, to become law, the Senate version also needs to advance.
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