North Tonawandans unlucky enough to live near the Digihost/Fortistar fracked gas power plant-turned Bitcoin mine are experiencing a story that’s being told across the country. The company claimed it would bring new jobs, but it has created perhaps a few new security jobs. What communities with new cryptomines actually receive is increased air and water pollution, 24/7 headache-inducing noise and, in many cases, higher energy bills. There’s little proof that local economic benefits ever actually materialize. Most of the Bitcoin wealth goes to investment firms with headquarters thousands of miles away.
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Coinmint, a Bitcoin mining operation, came to Plattsburgh in 2017 when the practice – especially at a large scale – was fairly new. Then the noise started, like a plane idling 24/7. Next, residents started complaining of higher energy bills up to $30 to $40 more per month. To staff the highly automated, energy-intensive facility, only two or three cars at a time were ever parked outside.
Local governments must use their scarce resources to generate jobs. But a complete economic development analysis includes measuring jobs against the megawatts of power they require, to help determine if the negative impacts of a new operation outweigh the positives. Cryptomining’s jobs-per-megawatt hour numbers are paltry. Digihost once claimed that it would have 20 permanent employees. If that’s true, at a whopping 55 MW, that’s 24,090 MWh of electricity per employee, which is 394 times the national average of 61 MWh per employee, according to the U.S. Bureau of Labor Statistics and the U.S. Energy Information Administration.
Digihost is ramping up to operate 24/7/365 on fracked gas – a dirty, climate change-accelerating fossil fuel – as is true for most cryptomining operations. The real question is: Are these unconfirmed, limited new jobs worth so much water consumption and climate pollution as we fight against climate change?
This isn’t just a New York problem. Each of the 34 largest crypto-mining operations across the country uses at least 30,000 times as much power as the average home, with no proof of economic benefits to outweigh the harm they cause.Unless the cryptomining industry proves it’s not misleading the public, and can actually deliver on its promises without negative impacts, these operations should not be given free rein, in New York or anywhere else. New York’s Department of Environmental Conservation must deny Digihost’s air permit renewal application.
Colin Read is the professor of economics and finance at SUNY Plattsburgh and Mandy DeRoche is a deputy managing attorney of the Clean Energy Program at Earthjustice