State lawmakers are looking into the effects cryptocurrency has on the climate. Cryptocurrency like Bitcoin is appealing to some because it’s decentralized and unregulated.
But “mining” for cryptocurrency, in which computers use complex processes to generate digital money, uses a lot of energy. Globally, cryptocurrency uses more electricity than countries such as Argentina and Australia.
In Pennsylvania, some crypto-mining companies are taking advantage of incentives for burning waste coal and remediating former mine land.
The coal mining leftovers weren’t considered good enough to produce power or help make steel. The toxic remains were discarded in huge piles near the original mining sites, so the state has designated power plants that use waste coal as beneficial for the environment. Under Pennsylvania’s Alternative Energy Portfolio Standards, electric utilities must buy 10% of their power from a group of sources that includes waste coal.
But environmental advocates say this practice just moves pollution into the air, and that the uptick in using the plants for crypto has raised harmful pollution.
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Charlie McPhedran, an attorney with the public interest law firm Earthjustice, said in one case, the Panther Creek plant’s purchase by a crypto-mining company led to emissions of nitrogen oxide and sulfur dioxide more than tripling 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 plants are the best option for removing waste coal.
“We’ve been made out to be, like, renegade power producers that are running terribly inefficient power plants and are polluting even more than regular thermal coal plants,” Beard said. “Our plants were designed for remediation as a priority, not power production.”
He added the plants can serve as a back-up to the electric grid during periods of high demand.
Environmentalists want Pennsylvania to get rid of incentives for burning 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 businesses, and a New York legislator to look at the cryptocurrency mining industry in Pennsylvania. No legislation on the topic has been introduced.
The state of New York recently created a 2-year moratorium on crypto-mining while it looks at the issue.
This story is produced in partnership with StateImpact Pennsylvania, a collaboration among The Allegheny Front, WPSU, WITF and WHYY to cover the commonwealth's energy economy.