Crypto

Electrical Workers Union Fights to Expand Crypto Mining in New York

This story was co-published with New York Focus, an investigative news site covering New York politics.

New York’s 2022 legislative session ended earlier this month with little action on climate. Lawmakers criticized proposals to gas ban in new constructionauthorize the state to build renewable energy projects, reduce fossil fuel subsidiesY secure funding to achieve state decarbonization goals. However, climate advocates had a victory to celebrate: The legislature voted to impose a two-year moratorium on new fossil fuel-powered proof-of-work cryptocurrency mining, combating an emerging threat to the state’s clean energy goals.

But the bill still has to get past Gov. Kathy Hochul to become law. Once the legislature hands the bill to her, which usually happens at a time of her choosing, Hochul will have 10 days to sign or veto it. She has floated delaying her decision until the end of the year, explaining that “we have a lot of work to do over the next six months.” New York City Mayor Eric Adams, who raised at least $200,000 from crypto donors between 2018 and 2021, wants Hochul to veto the moratorium.

That gives crypto companies time to influence Hochul’s decision and attack New York’s dozens of decommissioned power plants in the meantime, since the bill would not affect mining centers already in operation. But there is another powerful interest group working to stop the bill: key sectors of organized labor.

Read more from New York Focus

The initial mining bill, introduced in May 2021, called for a three-year moratorium and a broader ban on trial-of-work mining. When that bill died in the State Assembly last June, a staff member of its lead sponsor saying The Block: “The obstacle was the unions.”

In particular, the International Brotherhood of Electrical Workers (IBEW), which represents construction workers across the state building and renovating crypto mining centers, has cultivated close ties to the industry and has condemned the moratorium in the past on grounds of economic opportunities. would execute. The state AFL-CIO also opposes the moratorium.

Hochul has echoed their concerns: “We have to balance protecting the environment, but also protecting the opportunity for jobs that go into areas that don’t see a lot of activity.” she said at a press conference last month.

Supporters of the bill counter that gas-guzzling power plants have their own economic costs. Anna Kelles of Ithaca, who is sponsoring the bill in the Assembly, told New York Focus that the public should consider “the handful of jobs the bill creates. [Greenidge] facility versus jobs that may be threatened due to the facility,” citing the nearly 60,000 tourism industry workers in the Finger Lakes region affected by air, water, and noise pollution.

Not all unions oppose the moratorium. But the situation is only the last to highlight an uncomfortable tension between labor and environmental interests.

An Upstate Crypto Mining Boom

Proof-of-work mining, pioneered by Bitcoin, verifies blocks of cryptocurrency transactions using specialized computers that compete to solve complex puzzles. The process consumes surprising amounts of energy: each Bitcoin transaction uses enough power to power an American home for 75 days.

New York has become a major force in crypto mining. In 2021, the state was home to 20 percent of mining power in the United States, according to one estimate. Industry players have flocked to the state in search of shuttered power plants and manufacturing sites. The most notable renovation is a once-closed coal plant in the Finger Lakes region, now fueled by natural gas and renovated to mine Bitcoin. In 2020, the facility emitted 220,000 metric tons of carbon dioxide.

The bill passed by the legislature would not close the Greenidge plant, as its mining operations are already up and running. But it will prevent new power plants from being converted in the two-year moratorium period. In North Tonawanda, two hours west, a fossil fuel plant conversion project by Canadian company Digihost is also seeking approval before Hochul takes action. “There is a trend,” Kelles said, adding that there are “two environmental justice communities within a half-mile” of the Digihost plant.

The exceptions have not stopped crypto interests from lobbying heavily against the bill. Governor Hochul has pocketed $40,000 from Ashton Soniat, president and CEO of Coinmint, a company that operates out of a former aluminum plant in Massena, New York. The company, which runs the plant on hydroelectric power, emigrated from Plattsburgh, New York, after power rates skyrocketed and the city became the first city to temporarily ban crypto mining.

A PAC funded by cryptocurrency billionaire Sam Bankman-Fried recently donated $1 million to Hochul’s running mate, Lt. Governor Antonio Delgado, attracting strong criticism of his challenger. A PAC spokesperson told the Albany Times Union that the contribution was based on Delgado’s track record in preparing for a pandemic, which the group says is his main priority in races across the country.

Disunity between work

The cryptocurrency mining industry has promised to bring jobs to declining industrial cities, and unions are hoping to reap the benefits. According to former State Assemblywoman Addie Jenne, who heads the IBEW legislative council, the union represents workers at the Greenidge and Coinmint facilities. Jenne was unable to confirm how many unionized workers operate crypto facilities, but materials from the power company that services the Greenidge plant indicated last year that the facility had a workforce of “nearly 40 IBEW members.”

The crypto industry can “revive” disinvested communities through jobs and taxes, Jenne argued, and “generate enthusiasm to attract certain types of labor…and attract economic development groups.”

The union has submitted three memos opposing the moratorium. Last month, the New York State AFL-CIO intervened, affirming that the proposed legislation “evades and undermines the validity of the normative processes destined to protect our environment”. The IBEW has also conducted direct outreach with members of the legislature and the governor’s staff, Jenne said. And the IBEW New York PAC contributed $20,000 to Hochul’s campaign.

But the work is not unified on the subject. The influential 1199SEIU United Healthcare Workers East supports the moratorium. “There is no public benefit to New Yorkers from using large amounts of our valuable energy resources to generate profits for a small number of wealthy private equity investors,” the union said in a statement. statement.

Nationally, IBEW members work in nearly every sector of the natural gas industry. Jenne said there should be jobs in the fossil fuel sector for “several more years” and that union members “see fossil fuels as a possible bridge to the future”.

“Blown Out of Water”

The tensions underscore the lack of support New York has so far offered to workers affected by the energy transition. The original version of the state’s landmark 2019 climate law included a number of labor provisions, including a safety net for fossil fuel workers who lose their jobs, which were stripped of final bill. State unions and climate justice advocates keep pushing for those protections.

Another section of the crypto mining bill would also require the state energy department to assess the impact of the crypto mining industry on New York’s ability to meet emission reduction commitments. Kelles emphasizes the importance of this provision, arguing that the magnitude of the energy that cryptocurrency mining consumes “means that the estimates we made of how much renewable energy infrastructure [the state needs may get] blown out of the water.”

Hochul’s decision to delay cryptocurrency mining regulation is part of a pattern. She has already twice rated on a decision on permits for Greenidge Generation, most recently extending a deadline to two days after their June 28 primary. The IBEW encourages the “department to expeditiously complete its work and issue a final Title V air permit to Greenidge.”

According to Kelles, there are approximately 49 retired plants in the state of New York that crypto firms might have in mind. “If they say they are part of the climate solution,” Kelles asked the unions, “why are we fighting so hard to keep access to fossil fuel-based power plants?”

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