BILL NUMBER: S6584              REVISED 05/26/2021

SPONSOR: PARKER
 
TITLE OF BILL:

An act directing the New York state energy research and development
authority to conduct a study on powering cryptocurrency mining centers
with renewable energy

 
PURPOSE OR GENERAL IDEA OF BILL:

Directs the New York state energy research and development authority to
conduct a study on powering cryptocurrency mining facilities with renew-
able energy.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1. Directs NYSERDA to conduct study, provides definitions,
provides what the study shall include, and whom shall the report be
delivered to.

              

Section 2. Provides the effective date.

 
JUSTIFICATION:

The validity of cryptocurrencies relies on block-chain technology,
which, unlike a central bank, verifies the authenticity of each bitcoin
transaction through a process called "cryptomining." The process
requires purposefully modified computers to solve complex equations per
second in order to verify each cryptocurrency transaction.  Because
Cryptocurrency mining requires a vast amount of electricity, the process
is inherently energy intensive.

Cryptocurrency mining centers are an expanding industry in the State of
New York, with the value and use of digital currencies dramatically
increasing over recent months. However, the process of extracting cryp-
tocurrencies can take massive amounts of energy use, with studies show-
ing that the magnitude of the computer processing output required to
mine a single coin for some cryptocurrencies uses as much energy as an
average American household uses in a month. The annual global energy use
for cryptocurrency mining is equivalent to that of the country of Swed-
en.

The increased energy usage and corresponding increased greenhouse gas
emissions that cryptocurrency mining requires could hinder or prevent
compliance with the critical state carbon emissions goals put in law in
the Climate Leadership and Community Protection Act of 2019. Under this
law, statewide greenhouse gas emissions must he reduced eighty-five
percent by 2050 and the state economy must nave net zero emissions
across all sectors.

We must determine whether the growth of the cryptocurrency mining center
industry is incompatible with our greenhouse gas emission targets estab-
lished in law, or has other significant detrimental impacts to our air,
water, or public health. We must also survey existing cryptocurrency
mining centers in the state to determine and to what extent such centers
are powered by renewables, evaluate the economic and technical feasibil-
ity of powering all cryptocurrency mining centers in the state with
renewables and the construction of additional facilities powered by
renewable energy. By assessing the economic impacts on affected communi-
ties powering the cryptocurrency mining centers with renewable energy,
including the impacts on local employment and job creation, we will be
able to evaluate whether cryptocurrency mining powered renewable energy
could develop into a sustainable industry in the state.

Climate change threatens the health, welfare, and economy of the state
with increasingly severe and widespread impacts to our communities due
to flooding, sea level rise, heat waves, coastal erosion, erratic and
unpredictable weather patterns, shifting climatic zones, loss of wild-
life, increased harmful algal blooms and invasive species, and increased
risk of disease. These consequences disproportionately impact environ-
mental justice communities making the need for this comprehensive
assessment both an environmental issue as well as a social justice
issue. We must not go backwards on our commitment, in law, to prevent
these disastrous impacts to the residents of New York.

 
PRIOR LEGISLATIVE HISTORY:

New Bill.

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
Immediately.