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No Cost Too High: Private Equity Firm Heating a Glacial Lake Just to Mine Bitcoin

Pier on Seneca Lake with glowing lights at sunset
Meagan Marchant/Shutterstock.com

Seneca Lake is the largest of the Finger Lakes, located in upstate New York. The locals and tourists who normally flock to the lake for a relaxing cool swim will be disappointed this year, as it has been heated up by a nearby gas-fired power plant that’s mining Bitcoin.

“The lake is so warm you feel like you’re in a hot tub,” said Abi Buddington, a local from Dresden, whose house is located near the power plant.

The facility—owned by private equity firm Atlas Holdings since 2014 and operated by Greenidge Generation LLC—is located on the shores of the beautiful lake. Together, they have sharply increased the electrical output of the plant over the past year and a half, pushing out half a billion pounds of CO2 a year, all in the name of mining Bitcoin on computers, an incredibly energy-intensive process that involves verifying transactions to earn rewards (aka Bitcoin).

The plant is currently running 8,000 computers 24 hours a day to “mine” the virtual currency. Meanwhile, the cost of keeping the plant cool is passed onto the local environment. To keep the plant’s turbines cool, an intake pipe pulls in approximately 100 million gallons of water from the lake every day. That water, now heated up to incredibly high temperatures, is discharged into a river, which will undoubtedly impact the wildlife and plants that depend on that water source.

Greenidge has installed thousands of mining rigs that have pulled in more than 1,100 Bitcoin since February of this year. That’s about $37 million USD. The company has plans to install thousands of additional rigs, which will use 85MW of the plant’s total 108MW capacity.

Last December, when Atlas’ plant was running at a mere 13 percent of its total capacity, it produced 243,103 tons of carbon dioxide and equivalent greenhouse gases. That’s a ten-fold jump from January of that year when it first started mining. The plant currently has a permit to emit 641,000 tons of carbon dioxide equivalent emissions each year, but at its full 108MW capacity, pollution could reach as much as 1.06 million tons in a year.

Sunset on Seneca Lake at Watkins Glen, New York
Bruce Goerlitz Photo/Shutterstock.com

Seneca Lake is 12,000 years old and renowned for its sparkling high-quality water. It’s also home to a large lake trout population that has maintained the National Lake Trout Derby for 57 years running. Those fish spawn in the rivers that feed into Seneca Lake. The Keuka Lake Outlet is one such river, and the one Greenidge dumps its heated water into.

Trout are incredibly sensitive to changes in water temperature and prefer temperatures around the mid-50s (Fahrenheit) as it holds the most comfortable quantity of oxygen for them. Temperatures higher than that can stress the fish, and when temperatures exceed 70 degrees, the trout stop growing and start dying.

Greenidge has a permit to dump 135 million gallons of water into the Keuka Lake Outlet at temperatures up to 108 degrees Fahrenheit in the summer and 86 degrees during winter. As this heated water makes its way from the river into Seneca Lake, it can lead to dangerous algal blooms and other serious concerns. Though a study focused on determining the lake’s temperatures and other metrics won’t be completed until 2023, locals say they believe the water is already much hotter.

While there are understandable environmental issues accompanying crypto mining, some of Dresden’s local institutions are happy to see Greenidge back in business. NBC News reported that the company donated $20,000 to local education and enrichment programs, donated a $25,000 jaws-of-life machine to the local fire department, has created 31 jobs, and funded an economic study showing that “the company made payments to local authorities in lieu of real property taxes of $272,000 last year.”

However, many locals like Buddington aren’t interested in these donations and believe that fighting against the company is the only way to move forward. “My concern is if we don’t do something now, it’s going to be so much harder to undo.”

via Ars Technica

Suzanne Humphries Suzanne Humphries
Suzanne Humphries was a Commerce Editor for Review Geek. She has over seven years of experience across multiple publications researching and testing products, as well as writing and editing news, reviews, and how-to articles covering software, hardware, entertainment, networking, electronics, gaming, apps, security, finance, and small business. Read Full Bio »