Pollution Concerns around Cryptocurrency
Harrisburg, PA (January 28, 2022) Clean Air Council has serious concerns about the immense energy consumption and resulting air and water pollution that comes with cryptocurrencies. Cryptocurrencies, like Bitcoin, are computer processes that are used to produce digital currency and they are growing in popularity. Bitcoin is produced by running large computers to solve mathematical equations. These custom built computers are commonly referred to as “mining rigs” and consume large amounts of electricity. On average, one Bitcoin is generated from the processing of 1 Megabyte of digital information and the “miner” of that Bitcoin can then sell it to other Bitcoin users. Bitcoin is not prescriptive of the design of “mining rigs” or the source of the electricity to power the computer processor. This means that renewable energy like wind and solar could technically be used to manufacture Bitcoin, but unfortunately the fossil fuel industry currently dominates the Bitcoin mining market and some state governments are encouraging this relationship.
In the oil fields of the central United States, a disturbing trend is occurring: Bitcoin is being used to further subsidize the oil industry, incentivizing fossil fuel extraction and increasing greenhouse gases and other types of air pollution. Midwestern oil drillers are not equipped to gather and transport all the methane gas that is emitted during oil extraction and Bitcoin miners have exploited this by creating mobile, gas-fired power plants connected to mobile bitcoin rigs. The oil and gas industry has established partnerships with Bitcoin miners and are now selling cheap natural gas to miners at the point of extraction to power onsite bitcoin rigs. Wyoming and North Dakota passed laws this year giving oil and gas companies tax breaks for supplying cryptocurrency manufacturers with methane gas. If such tax breaks are offered to Pennsylvania’s fossil fuel industries, Clean Air Council will oppose them based on air pollution concerns.
Clean Air Council has been advocating for the Pennsylvania state government and the federal government to reduce methane leakage at oil and gas facilities for many years. The trend of co-locating “bitcoin rigs” with gas drilling sites could potentially reduce methane pollution from gas sites. However, these rigs are instead burning the gas, which also results in harmful air pollution. If state governments continue to subsidize the relationship between oil and gas extraction and Bitcoin mining, it could potentially discourage the gas industry from pursuing best management practices or technologies that could reduce methane pollution. Methane is 87 times more potent a greenhouse gas than carbon dioxide over a twenty year time period and is released from all facets of the drilling industry. In order to avoid the worst effects of climate change, governments and industry must do everything possible to reduce greenhouse gas emissions, not find new ways to subsidize the fossil fuel industry.
In Pennsylvania, the waste coal industry is undertaking a similar effort. Waste coal is a polluting byproduct of older types of coal mining and Pennsylvania has the largest abundance of waste coal piles in the country. In the mid-1980s, technology was developed to incinerate this low-quality coal byproduct and 14 waste coal power plants were constructed in Pennsylvania to use this polluting coal by-product. These plants produce immense amounts of air and water pollution and in recent years were steadily retiring or converting to gas plants before Bitcoin manufacturers considered operating them as an electricity source. Pennsylvania continues to deeply incentivize this polluting industry in the form of the $20 million-a-year Coal Refuse Energy and Reclamation Tax Credit while exempting waste coal power plants from requirements to lower greenhouse gas pollution. Clean Air Council has previously opposed these tax breaks and exemptions.
The Scrubgrass Coal Waste Power Plant with Bitcoin mining trailers in back. (Credit: Andrew Rush/Post-Gazette)
The Scrubgrass Coal Waste Power Plant, located in Kennerdell, PA, was recently purchased by Stronghold Digital Mining, a Bitcoin manufacturer, because it was not competitive in the traditional electricity market. Existing tax incentives have given this Bitcoin manufacturer a reason to continue to operate this unnecessary, polluting facility. The facility has a history of Clean Air Act violations and is currently in violation of the Clean Water Act. It also releases a large amount of dangerous heavy metals like lead and mercury.
Clean Air Council is deeply concerned that the expansion of Bitcoin mining and manufacturing is causing state governments to further support polluting fossil fuel operations that would have likely otherwise retired.
Please reach out to Russell Zerbo at rzerbo@cleanair.org for more information.
