State legislators are studying the effects of cryptocurrency on the climate. Cryptocurrency like Bitcoin is attractive to some because it is decentralized and unregulated.
But cryptocurrency “mining”, in which computers use complex processes to generate digital money, consumes a lot of energy. Globally, cryptocurrency uses more electricity than countries like Argentina and Australia.
In Pennsylvania, some crypto-mining companies are taking advantage of incentives to burn waste coal and remediate former mining lands.
Leftovers from coal mining were not considered good enough to generate electricity or help make steel. The toxic remains were dumped in huge piles near the original mine sites, so the state has designated power plants that use coal waste as environmentally beneficial. According to Pennsylvania’s Alternative Energy Portfolio Standards, electric utilities must purchase 10% of their electricity from a pool of sources that includes waste coal.
But conservationists say the practice only moves pollution into the air, and the rise in the use of plants for crypto has increased harmful pollution.
Charlie McPhedran, an attorney with the public interest law firm Earthjustice, said in one case the purchase of the Panther Creek plant by a crypto-mining firm resulted in nitrogen oxide emissions and of sulfur dioxide which have more than tripled from 2021 to 2022.
“The Commonwealth must not encourage a practice that increases carbon dioxide emissions and climate impacts even as we work hard to reduce them elsewhere,” McPhedran said.
Greg Beard, CEO of Stronghold Digital Mining, which now owns the Scrubgrass Power Plant in Venango County, said the mills are the best option for disposing of coal waste.
“We’ve been made to look like renegade power producers who run power plants that are horribly inefficient and pollute even more than ordinary coal-fired power plants,” Beard said. “Our power plants were designed for sanitation first, not for the production of electricity.”
He added that the plants can act as a backup to the power grid during times of high demand.
Environmentalists want Pennsylvania to get rid of incentives to burn coal and force crypto-mining companies to use less energy-intensive practices.
The House Environmental Resources and Energy Committee recently held a hearing with environmental lobbyists, cryptocurrency companies, and a New York legislator to examine the cryptocurrency mining industry in Pennsylvania. No legislation on the subject has been introduced.
New York State recently created a 2-year moratorium on crypto mining while it reviews the issue.
This story is produced in partnership with StateImpact Pennsylvania, a collaboration between The Allegheny Front, WPSU, WITF and WHYY to cover the Commonwealth’s energy economy.