State legislators are investigating the effects cryptocurrency has 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, uses a lot of energy. Globally, the cryptocurrency uses more electricity than countries like Argentina and Australia.
In Pennsylvania, some crypto mining companies are taking advantage of incentives to burn coal waste to remediate old mines.
The remains of coal mining were not considered good enough to produce power or help make steel. The toxic remains were dumped in huge piles near the original mining sites, so the state has designated power plants that use residual coal as environmentally beneficial. Under the Pennsylvania Alternative Energy Portfolio Standards, electric utilities must purchase 10% of their power from a group of sources that includes coal waste.
But environmental advocates say this practice only moves pollution into the air, and the increased use of plants for cryptography has increased harmful pollution.
Charlie McPhedran, a lawyer with the public interest law firm Earthjustice, said in one case that a crypto mining company's purchase of the Panther Creek plant caused nitrogen oxide and sulfur dioxide emissions to more than triple between 2021 and 2022.
“The Commonwealth should 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, chief executive of Stronghold Digital Mining, which now owns the Scrubgrass Power Plant in Venango County, said the plants are the best option for removing residual coal.
“We have been passed off as renegade power producers who are running terribly inefficient power plants and polluting even more than regular thermal coal plants,” Beard said. “Our plants were designed for remediation as a priority, not for energy production.”
He added that the plants can serve as backup to the power grid during periods of high demand.
Environmentalists want Pennsylvania to get rid of incentives to burn coal and require 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 discuss the cryptocurrency mining industry in Pennsylvania. No legislation has been introduced on the subject.
New York state recently created a 2-year moratorium on crypto mining while it looks into the issue.
This story is produced in association with StateImpact Pennsylvania, a collaboration between WESA, The Allegheny Front, WITF, and WHYY.
