By Joseph Otis Minott
While cryptocurrency has received some national attention in recent years with TV commercials and assorted financial scandals, the environmental consequences of some cryptocurrencies – which are “mined” – have largely flown under the radar. Until now.
The New York Times just recently published a damning expose on the significant environmental and climate impacts of bitcoin “mining,” pulling back the curtain on an industry operating in a black box.
The Times identified the 34 biggest crypto-mining sites in the United States and determined they use as much power as three million households. Two of those sites are right here in Pennsylvania. This energy-intensive industry’s impact on our air quality is only worsening.
And if we turn a blind eye, crypto-mining may very well become Pennsylvania’s next big pollution crisis.
One of the many misconceptions regarding the “proof of work” crypto-mining industry is how it’s powered. It’s often believed crypto-mining is simply people on their personal computers — but that’s rarely the case.
Crypto-mining entails millions of machines competing to solve complex problems to generate a new unit of digital currency. As more mining machines enter the competition, the electricity required to win grows exponentially. Because of this, mining companies regularly turn to fossil fuels to generate their electricity. This is happening in our backyard and with hardly any oversight.
In Northwest Pennsylvania, an oil and gas operator, Diversified Energy, installed gas-powered generators at one of its existing gas well pads to fuel crypto mining operations in Elk County.
To make matters worse, the plant began crypto-mining operations without the necessary permits from the Pennsylvania Department of Environmental Protection (DEP), leading to noise complaints (crypto mining is not just energy-intensive, but also extremely noisy).
A group of environmental advocacy organizations urged the agency to withdraw its planned approval of Diversified’s permit to install the generators – citing Diversified’s long history of ongoing, unaddressed permit violations.
Soon after, DEP confirmed that Diversified began operations before obtaining the required permits, stating that Diversified is “required by law to obtain a plan approval from DEP prior to installation and operation of the air contamination sources.”
Crypto-mining advocates are even floating the idea of operating at orphan oil and gas wells to generate currency. Pennsylvania is ground zero for the orphan well crisis, with an estimated hundreds of thousands of unplugged wells scattered across the state that were drilled long ago and have no solvent or identifiable owner.
These wells – the vast majority of which are currently undocumented – spew methane and other toxic pollutants into the air and groundwater.
Remediation efforts have been identified as a top priority by the Shapiro administration and will be supported by roughly $400 million in federal grants from the Bipartisan Infrastructure Law. But the idea that a highly-mobile crypto-mining operation, in a highly-volatile industry, would attempt to restart production at these legacy wells – with no idea of the dangerous environmental impact – is alarming.
Proof of work crypto-mining companies aren’t just turning to gas, they are acquiring old waste coal plants, too. Just as it sounds, these plants burn piles of coal refuse that were left over from coal mining operations to generate electricity.
In just the last two years, Stronghold Digital Mining Inc. began operating two waste-coal-fired power plants and installed 57,000 cryptocurrency mining machines across Pennsylvania. Their sites include the 94 MW Scrubgrass power plant in Venango County and the 94 MW Panther Creek facility in Carbon County. Local air pollution — emissions of both sulfur dioxide and nitrogen oxides – at Panther Creek skyrocketed in 2022 after making the switch to cryptomining.
To put it simply, expanding dirty, fossil-fuel generated proof of work cryptocurrency mining will undermine Pennsylvania’s efforts to reduce both local air pollution and emissions of greenhouse gasses, which are fueling the climate crisis. Air pollution continues to be one of the biggest environmental threats to public health. Combustion of coal and fracked gas, regardless of what it’s being used for, results in increased levels of sulfur dioxide, nitrogen oxides, and air toxics.
Two things are clear: this industry is currently operating in a black box with little regulation and oversight, and their many environmental impacts must be taken seriously.
To its credit, the Pennsylvania House Environmental Resources and Energy Committee recently held a public hearing focused on cryptocurrency and climate change, spurring much needed attention on crypto-mining’s impacts on our state’s energy use and environment, as well as potential solutions.
Pennsylvania has made strides to protect our air quality and environment in recent decades with much more work still ahead — let’s not allow crypto to undo that.
Joseph Otis Minott is the executive director and chief counsel for Clean Air Council. He writes from Philadelphia. His work appears frequently on the Capital-Star’s Commentary Page.
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