New York Pushes Bitcoin (BTC) Mining into Renewable Energy

Key Insights:

• Bitcoin (BTC) mining was in focus once more, with New York taking steps to clean up crypto mining.
• New York Assembly lawmakers passed a bill that prevents the establishment of new non-renewable energy-fueled crypto mining firms.
• The vote follows the Bitcoin Mining Council’s quarterly report that painted a positive environmental picture of Bitcoin mining.

In the US, lawmakers’ sentiment toward Proof-of-Work (PoW) and Bitcoin (BTC) mining is far from bipartisan.

Earlier this year, a sub-committee hearing on crypto mining became more of an anti-Bitcoin hearing than an open hearing on crypto mining and the pros and cons to the environment and local communities.

Democrats have taken an anti-Bitcoin stance to support President Joe Biden’s climate change goals. These include a net-zero emissions target by 2050.

This week, New York lawmakers took a step to curtail the growth of non-renewable energy fueled Bitcoin mining.

New York Lawmakers Passes Bill to Block Non-Renewable Energy Mining

On Tuesday, the New York Assembly passed a bill blocking new crypto mining companies from carbon-based crypto mining.

Sponsored by Democrat Anna Kelles, The Assembly bill A7389C,

“Establishes a moratorium on cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions; provides that such operations shall be subject to a full generic environmental impact statement review.”

The bill goes on further to say that, for a period of two years, the Department of Public Service will not approve a new application or issue a new permit for

“an electric generating facility that utilizes 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.”

In addition, the Department of Public Service is not permitted to approve applications to renew any existing permits during the two-year period.

At the time of writing, the bill is awaiting a senate vote before making its way to the New York Governor.

Should the Senate pass the bill, Democrat Governor Kathy Hochul would need to sign or veto the bill.

The latest move by lawmakers follows a letter from lawmakers to the Environmental Protection Agency (EPA). The letter calls on the EPA to investigate possible infringements by crypto miners.

Democrats Call on the Environmental Protection Agency to Target Cryptos

Last week, US lawmakers called on the Environmental Protection Agency (EPA) to investigate possible crypto mining infringements of environmental laws.

House of Representatives member and Democrat Jared Huffman wrote,

“The rapidly expanding cryptocurrency industry needs to be held accountable to ensure it operates in a sustainable and just manner to protect communities.”

Huffman discussed areas, including the issue of waste and noise pollution.

On noise pollution, Huffman added,

“Communities around cryptocurrency mining facilities from New York, Tennessee, to Georgia have reported significant noise pollution.”

Crypto Industry Statistics Paint a Different Picture

This week, FX Empire reported numbers from the Bitcoin Mining Council’s Q1 2022 Bitcoin Mining Data Review.

While Democrats continue to target proof-of-work and Bitcoin mining, crypto industry numbers suggest progress towards sustainable energy.

Some key numbers from the report included,

• Bitcoin mining uses an insignificant amount of global energy (16 bps) and creates negligible carbon emissions (8 bps).
• Mining efficiency is on the rise, with the mining hashrate up 23% year-on-year, while energy usage is down 25%.
• Bitcoin has a 58% sustainable energy mix, making it the industry leader.
• Compared to total global energy consumption, Bitcoin energy consumption on the world electrical grid is just 247 TWh (0.16%) compared with a worldwide total energy generation of 154,750.
• Bitcoin mining produces 0.03 BMt (0.085%) versus a global production of 34.8 BMt.

The report also showed that Bitcoin mining has the highest sustainable energy mix of any single nation.

In February, we reported new CoinShares mining statistics that questioned the numbers from the briefing memorandum and those used by other anti-crypto lawmakers.

Key statistics from a CoinShares paper titled “The Bitcoin Mining Network, Energy, and Carbon Impact” included,

• The Bitcoin mining network emitted 36 Mt of CO2 in 2020 and 39 Mt in 2021, accounting for less than 0.08% of a global total of 49,360 Mt of CO2 emissions.
• Emissions estimates for the minting and printing of fiat currency sit at approximately 8 Mt of CO2 emissions per year.
• The gold industry generates between 100 and 145 Mt of CO2 emissions annually (estimated).
• Global banking system emissions are around 130 Mt of CO2 emissions each year.

The statistics from both CoinShares and the BMC quarterly review were in stark contrast to numbers considered by lawmakers in a January sub-committee hearing on crypto mining.

US Lawmakers Continue to Focus on January Statistics

The briefing memorandum provided some PoW mining statistics to generate debate through the hearing. These included,

• The estimated annual energy usage of the Bitcoin network grew from 77.78 Terawatt-hours (TWh) on January 02, 2021, to 198 TWh on November 26, 2021.
• Over the same period, the Ethereum network’s annual energy usage grew from 14.81 TWh to more than 92 TWh.
• A single ETH transaction added more than 90 pounds of CO2 to the atmosphere, while a single BTC transaction added more than 1,000 pounds.
• The global 2021 CO2 emissions of ETH and BTC mining are equivalent to tailpipe emissions from more than 15.5m gasoline-powered cars on the road each year.

In addition to the above numbers, there were other influencing factors for lawmakers to consider,

• As part of a goal to be carbon neutral by 2060, China banned Bitcoin in June 2021.
• According to Cambridge Centre for Alternative Finance, the United States is the largest Bitcoin mining nation.
• In April 2021, President Joe Biden set greenhouse gas reduction targets. These included a 50-52% reduction from 2005 levels in economy-wide net greenhouse gas pollution by 2030.
• The US has a net-zero emissions target of 2050.

With the New York Governor likely to sign the latest bill, there may be more interest in the Environmental Protection Agency’s take on crypto mining.

The House of Representatives has called on the EPA to respond upon the conclusion of its investigation.