NY State Senate Bill S6486B

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Nov 22, 2022	approval memo.26 signed chap.628 delivered to governor
Jun 02, 2022	returned to assembly passed senate 3rd reading cal.1923 substituted for s6486d
Jun 02, 2022	substituted by a7389c ordered to third reading cal.1923 committee discharged and committed to rules reference changed to energy and telecommunications
Mar 21, 2022	print number 6486d
Mar 21, 2022	amend (t) and recommit to environmental conservation
Jan 06, 2022	print number 6486c
Jan 06, 2022	amend and recommit to environmental conservation
Jan 05, 2022	referred to environmental conservation returned to senate died in assembly
Jun 08, 2021	referred to environmental conservation delivered to assembly passed senate
Jun 07, 2021	ordered to third reading cal.1564 committee discharged and committed to rules
Jun 05, 2021	print number 6486b
Jun 05, 2021	amend (t) and recommit to environmental conservation
May 25, 2021	print number 6486a
May 25, 2021	amend (t) and recommit to environmental conservation
May 03, 2021	referred to environmental conservation

Co-Sponsors

S6486 - Details

Law Section:: Environmental Conservation Law
Laws Affected:: Add §19-0329, En Con L

S6486 - Summary

Establishes a moratorium on cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions; provides that such operations shall be subject to a full generic environmental impact statement review.

S6486 - Sponsor Memo

 
BILL NUMBER: S6486       REVISED 05/05/2021

SPONSOR: PARKER
 
TITLE OF BILL:

An act to establish a moratorium on the operation of cryptocurrency
mining centers; and providing for the repeal of such provisions upon
expiration thereof

 
PURPOSE OR GENERAL IDEA OF BILL:

To establish a three-year moratorium on operation of cryptocurrency
mining centers and require completion of a comprehensive generic envi-
ronmental impact study of the cryptocurrency industry in the State of
New York in the context of the Climate Leadership and Community
Protection Act (CLCPA) goals established in statute in 2019.

 
SUMMARY OF PROVISIONS:

Section 1 declares the legislative findings.

Section 2 places a three-year moratorium on the operation of cryptocur-
rency mining centers and requires completion of a comprehensive generic
environmental impact statement by the New York State Department of Envi-
ronmental Conservation.

Section 3 requires one-hundred and twenty days of public comment on the
environmental impact statement prior to final issuance and the holding
of public hearings in eight regions across the state.

Section 4 provides definitions.

 
JUSTIFICATION:

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 be reduced eighty-five
percent by 2050 and the state economy must have 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. By requiring a statewide generic environmental
impact statement, this crucial information about the industry's impact
upon our climate law, and associated water, air and wildlife impacts,

will be understood and can guide any potential future policy related to
industry regulation.

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.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

NONE

 
EFFECTIVE DATE:
IMMEDIATELY

S6486 - Bill Text download pdf

 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6486
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                May 3, 2021
                                ___________
 
 Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
   printed to be committed to the Committee on Environmental Conservation
 
 AN ACT to establish a moratorium  on  the  operation  of  cryptocurrency
   mining  centers;  and providing for the repeal of such provisions upon
   expiration thereof

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.    Legislative  findings. The legislature hereby finds and
 declares that:
   (a) 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 climactic  zones,  loss  of
 wildlife,  increased  harmful  algal  blooms  and  invasive species, and
 increased risk of disease, in part, which  leads  directly  to  loss  of
 life,  property  damage  and  reduction in value, ecological damage, and
 increased infrastructure costs;
   (b) It is the policy of the State of New York to conserve, improve and
 protect its natural resources and environment and to prevent, abate  and
 control  water,  land and air pollution, in order to enhance the health,
 safety and welfare of the people of the state and their overall economic
 and social well-being;
   (c) To mitigate the current and future effects of climate change,  the
 State  of  New  York  implemented  the  Climate Leadership and Community
 Protection Act, requiring that statewide  greenhouse  gas  emissions  be
 reduced  eighty-five  percent  by  2050  and that the state has net zero
 emissions in all sectors of the economy by that time;
   (d) Cryptocurrency mining centers are an  expanding  industry  in  the
 State  of  New  York,  often, but not exclusively, located in retired or
 converted fossil fuel power stations, including dormant peaker plants;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11081-03-1

 S. 6486                             2
 
   (e) A single cryptocurrency transaction uses the same amount of energy
 that an average American household uses in one month, with an  estimated
 level  of global energy usage equivalent to that of the country of Swed-
 en; and
   (f)  The  continued  and  expanded  operation of cryptocurrency mining
 centers will greatly increase the amount of energy usage in the State of
 New York, and it is reasonable to believe the associated greenhouse  gas
 emissions  will  irreparably harm compliance with the Climate Leadership
 and Community Protection Act in contravention of state law.
   § 2. (a) There shall be a three-year moratorium on  the  operation  of
 cryptocurrency  mining  centers in the state, including, but not limited
 to cryptocurrency mining centers located in converted fossil fuel  power
 plants.
   (b)   Cryptocurrency  mining  centers  shall  operate  only  following
 completion of a full generic environmental impact  statement  review  as
 authorized  under  NYCRR  §617.10(a)  of the State Environmental Quality
 Review Act. Any generic environmental impact statement required by  this
 act shall be conducted by the New York State Department of Environmental
 Conservation.  Such review shall include, but not be limited to, a cumu-
 lative impact assessment of the greenhouse gas emissions of any proposed
 or existing cryptocurrency mining center for the projected  lifespan  of
 the  center  and  any  associated water quality, air quality or wildlife
 impacts.
   (c) A cryptocurrency mining center that is determined  based  on  site
 specific  or cumulative impacts to adversely affect the state greenhouse
 gas emission targets in the Climate Leadership and Community  Protection
 Act of 2019 shall not commence construction and shall not be eligible to
 receive the necessary permits to operate in the state.
   § 3. Any generic environmental impact statement draft shall be subject
 to  120 days of public comment from the date of issuance. The department
 of environmental conservation shall conduct at least one public  hearing
 in  each  of  the  following regions of the state: western New York, the
 finger lakes, the southern tier, central New York,  the  Mohawk  valley,
 the north country, the capital region/Hudson valley, and the City of New
 York/Long Island, as defined by Empire State Development.
   § 4. For the purposes of this act:
   (a) "cryptocurrency" shall mean a digital currency in which encryption
 techniques are used to regulate the generation of units and currency and
 verify  the  transfer  of  funds, operating independently from a central
 bank;
   (b) "mining" shall mean the process  of  spending  computer  power  to
 process  transactions  and  add  such transactions to a cryptocurrency's
 blockchain; and
   (c) "blockchain" shall mean a digital  ledger  in  which  transactions
 made in cryptocurrencies are recorded chronologically and publicly.
   §  5.  This  act shall take effect immediately and shall expire and be
 deemed repealed three years after such date.

Co-Sponsors

S6486A - Details

Law Section:: Environmental Conservation Law
Laws Affected:: Add §19-0329, En Con L

S6486A - Summary

Establishes a moratorium on cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions; provides that such operations shall be subject to a full generic environmental impact statement review.

S6486A - Sponsor Memo

 
BILL NUMBER: S6486A

SPONSOR: PARKER
 
TITLE OF BILL:

An act to amend the environmental conservation law, in relation to
establishing a moratorium on the operation of cryptocurrency mining
centers; and providing for the repeal of such provisions upon expiration
thereof

 
PURPOSE OR GENERAL IDEA OF BILL:

To establish a three-year moratorium on operation of cryptocurrency
mining centers and require completion of a comprehensive generic envi-
ronmental impact study of the cryptocurrency industry in the State of
New York in the context of the Climate Leadership and Community
Protection Act (CLCPA) goals established in statute in 2019.

 
SUMMARY OF PROVISIONS:

Section 1. Declares the legislative findings.

Section 2. Requires owners of cryptocurrency mining operation to regis-
ter. Places a three-year moratorium on the issuance of cryptocurrency
mining centers permits and requires completion of a comprehensive gener-
ic environmental impact statement by the New York State Department of
Environmental Conservation and requires one-hundred and twenty days of
public comment on the environmental impact statement prior to final
issuance and the holding of public hearings in eight regions across the
state.

Section 3. Effective Date.

 
JUSTIFICATION:

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 be reduced eighty-five
percent by 2050 and the state economy must have 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. By requiring a statewide generic environmental
impact statement, this crucial information about the industry's impact
upon our climate law, and associated water, air and wildlife impacts,
will be understood and can guide any potential future policy related to
industry regulation.

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.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

NONE

 
EFFECTIVE DATE:
IMMEDIATELY

S6486A - Bill Text download pdf

 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6486--A
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                May 3, 2021
                                ___________
 
 Introduced  by  Sens.  PARKER,  MAY, BRISPORT, KRUEGER, RYAN, SKOUFIS --
   read twice and ordered printed, and when printed to  be  committed  to
   the  Committee  on Environmental Conservation -- committee discharged,
   bill amended, ordered reprinted as amended  and  recommitted  to  said
   committee

 AN  ACT  to  amend  the  environmental  conservation law, in relation to
   establishing a moratorium on the operation  of  cryptocurrency  mining
   centers;  and providing for the repeal of such provisions upon expira-
   tion thereof
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.    Legislative  findings. The legislature hereby finds and
 declares that:
   (a) 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 climactic  zones,  loss  of
 wildlife,  increased  harmful  algal  blooms  and  invasive species, and
 increased risk of disease, in part, which  leads  directly  to  loss  of
 life,  property  damage  and  reduction in value, ecological damage, and
 increased infrastructure costs;
   (b) It is the policy of the State of New York to conserve, improve and
 protect its natural resources and environment and to prevent, abate  and
 control  water,  land and air pollution, in order to enhance the health,
 safety and welfare of the people of the state and their overall economic
 and social well-being;
   (c) To mitigate the current and future effects of climate change,  the
 State  of  New  York  implemented  the  Climate Leadership and Community
 Protection Act, requiring that statewide  greenhouse  gas  emissions  be
 reduced  eighty-five  percent  by  2050  and that the state has net zero
 emissions in all sectors of the economy by that time;

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD11081-06-1

 S. 6486--A                          2
 
   (d) Cryptocurrency mining centers are an  expanding  industry  in  the
 State  of  New  York,  often, but not exclusively, located in retired or
 converted fossil fuel power stations, including dormant peaker plants;
   (e) A single cryptocurrency transaction uses the same amount of energy
 that  an average American household uses in one month, with an estimated
 level of global energy usage equivalent to that of the country of  Swed-
 en; and
   (f)  The  continued  and  expanded  operation of cryptocurrency mining
 centers will greatly increase the amount of energy usage in the State of
 New York, and it is reasonable to believe the associated greenhouse  gas
 emissions  will  irreparably harm compliance with the Climate Leadership
 and Community Protection Act in contravention of state law.
   § 2. The environmental conservation law is amended  by  adding  a  new
 article 77 to read as follows:
                                 ARTICLE 77
                           CRYPTOCURRENCY MINING
 SECTION 77-0101. DEFINITIONS.
         77-0103. REGISTRATION.
         77-0105. MORATORIUM ON PERMIT ISSUANCE AND RENEWAL.
         77-0107. GENERIC ENVIRONMENTAL IMPACT STATEMENT.
         77-0109. ENFORCEMENT AND PENALTIES.
 § 77-0101. DEFINITIONS.
   1.  "BEHIND-THE-METER"  MEANS A GENERATING UNIT THAT SUPPLIES ELECTRIC
 ENERGY, IN WHOLE OR IN PART, TO AN END USER ONSITE WITHOUT CONNECTING TO
 THE BULK POWER SYSTEM OR LOCAL  ELECTRIC  DISTRIBUTION  FACILITIES,  AND
 INCLUDES  A GENERATING UNIT THAT SUPPLIES ELECTRIC ENERGY TO BOTH AN END
 USER ONSITE AND THE BULK POWER SYSTEMS OR  LOCAL  ELECTRIC  DISTRIBUTION
 FACILITIES.
   2. "CARBON-BASED FUEL" MEANS COAL, NATURAL GAS, RENEWABLE NATURAL GAS,
 BIOMASS,  PETROLEUM  PRODUCTS,  AND  ANY OTHER PRODUCT THAT EMITS CARBON
 DIOXIDE,  METHANE,  NITROUS  OXIDE,  OR  OTHER  GREENHOUSE  GASES   WHEN
 COMBUSTED,  AND THAT IS USED FOR FUEL FOR THE PURPOSE OF PRODUCING ELEC-
 TRIC ENERGY.
   3. "CRYPTOCURRENCY" SHALL MEAN A DIGITAL CURRENCY IN WHICH  ENCRYPTION
 TECHNIQUES ARE USED TO REGULATE THE GENERATION OF UNITS AND CURRENCY AND
 VERIFY  THE  TRANSFER  OF  FUNDS, OPERATING INDEPENDENTLY FROM A CENTRAL
 BANK.
   4. "MINING" SHALL MEAN THE PROCESS OF SPENDING COMPUTER POWER TO PROC-
 ESS TRANSACTIONS AND SUCH TRANSACTIONS TO A CRYPTOCURRENCY BLOCKCHAIN.
   5. "BLOCKCHAIN" SHALL MEAN A DIGITAL LEDGER IN WHICH TRANSACTIONS MADE
 IN CRYPTOCURRENCIES ARE RECORDED CHRONOLOGICALLY AND PUBLICLY.
 § 77-0103. REGISTRATION.
   1. THE OWNER OR OPERATOR OF A CRYPTOCURRENCY MINING  OPERATION  SHALL,
 ON  OR  BEFORE  THE FIRST DAY OF JULY, TWO THOUSAND TWENTY-TWO, REGISTER
 WITH THE DEPARTMENT.
   2. REGISTRATION SHALL BE IN A FORM DETERMINED BY  THE  DEPARTMENT  AND
 SHALL INCLUDE, AT A MINIMUM:
   A. THE NAME AND ADDRESS OF THE OWNER OR OPERATOR OF THE CRYPTOCURRENCY
 MINING OPERATION;
   B. THE LOCATION AND ADDRESS OF THE CRYPTOCURRENCY MINING OPERATION;
   C.  FOR THE TWELVE MONTHS IMMEDIATELY PRECEDING THE REGISTRATION DATE,
 THE WEEKLY AMOUNT OF ELECTRIC ENERGY CONSUMED OR UTILIZED BY THE  OPERA-
 TION; AND
   D.   FOR  CRYPTOCURRENCY  MINING  OPERATIONS  CONSUMING  OR  UTILIZING
 BEHIND-THE-METER ELECTRIC ENERGY, THE NAME AND ADDRESS  OF  THE  BEHIND-
 THE-METER  ENERGY  SOURCE; THE NAME AND ADDRESS OF THE SOURCE'S OWNER OR

 S. 6486--A                          3
 
 OPERATOR; THE SOURCE'S NAMEPLATE ELECTRIC GENERATING CAPACITY;  AND  THE
 FUEL TYPE USED BY THE SOURCE TO GENERATE ELECTRICITY.
 § 77-0105. MORATORIUM ON PERMIT ISSUANCE AND RENEWAL.
   1. FOR THE PERIOD COMMENCING ON THE EFFECTIVE DATE OF THIS ARTICLE AND
 ENDING  THREE  YEARS  AFTER THE EFFECTIVE DATE, THE DEPARTMENT SHALL NOT
 APPROVE A NEW APPLICATION FOR OR ISSUE A NEW PERMIT PURSUANT TO  ARTICLE
 NINETEEN  OF  THIS  CHAPTER  FOR  AN  ELECTRIC  GENERATING FACILITY THAT
 UTILIZES A CARBON-BASED FUEL AND THAT PROVIDES, IN  WHOLE  OR  IN  PART,
 BEHIND-THE-METER ELECTRIC ENERGY CONSUMED OR UTILIZED BY A CRYPTOCURREN-
 CY MINING OPERATION.
   2. FOR THE PERIOD COMMENCING ON THE EFFECTIVE DATE OF THIS ARTICLE AND
 ENDING  THREE  YEARS  AFTER THE EFFECTIVE DATE, THE DEPARTMENT SHALL NOT
 APPROVE AN APPLICATION TO RENEW AN EXISTING PERMIT OR  ISSUE  A  RENEWAL
 PERMIT  PURSUANT  TO  ARTICLE  NINETEEN  OF THIS CHAPTER FOR AN ELECTRIC
 GENERATING FACILITY THAT UTILIZES A CARBON-BASED FUEL AND THAT PROVIDES,
 IN WHOLE OR  IN  PART,  BEHIND-THE-METER  ELECTRIC  ENERGY  CONSUMED  OR
 UTILIZED BY A CRYPTOCURRENCY MINING OPERATION IF THE RENEWAL APPLICATION
 SEEKS  TO  INCREASE OR WILL ALLOW OR RESULT IN AN INCREASE IN THE AMOUNT
 OF ELECTRIC ENERGY CONSUMED OR UTILIZED BY  SUCH  CRYPTOCURRENCY  MINING
 OPERATION.
 § 77-0107. GENERIC ENVIRONMENTAL IMPACT STATEMENT.
   1.  THE  DEPARTMENT  SHALL  PREPARE, PURSUANT TO ARTICLE EIGHT OF THIS
 CHAPTER, A GENERIC ENVIRONMENTAL IMPACT STATEMENT ON  STATEWIDE  CRYPTO-
 CURRENCY MINING OPERATIONS.
   2.  THE  GENERIC  ENVIRONMENTAL  IMPACT  STATEMENT SHALL ADDRESS, AT A
 MINIMUM:
   A. THE NUMBER AND LOCATION OF  EXISTING  CRYPTOCURRENCY  MINING  OPER-
 ATIONS IN THE STATE;
   B. THE AMOUNT OF ELECTRIC ENERGY CONSUMED BY EACH SUCH OPERATION;
   C.  THE SOURCES OF ELECTRIC ENERGY CONSUMED BY EACH SUCH OPERATION AND
 THE TYPE OF FUEL USED BY EACH ENERGY SOURCE;
   D. THE AMOUNT OF GREENHOUSE GAS EMISSIONS AND  CO-POLLUTANTS  RELEASED
 BY EACH ENERGY SOURCE ATTRIBUTABLE TO PROVIDING ELECTRIC ENERGY TO CRYP-
 TOCURRENCY MINING OPERATIONS;
   E.  THE  ANTICIPATED  INCREASE, IF ANY, OF CRYPTOCURRENCY MINING OPER-
 ATIONS IN THE STATE AND THE ANTICIPATED EXPANSION, IF ANY,  OF  EXISTING
 OPERATIONS;
   F.  THE POTENTIAL IMPACTS OF ELECTRIC ENERGY CONSUMPTION BY CRYPTOCUR-
 RENCY MINING OPERATIONS ON THE STATE'S ABILITY TO  MEET  THE  GREENHOUSE
 GAS  EMISSION  REDUCTION GOALS SET FORTH IN ARTICLE SEVENTY-FIVE OF THIS
 CHAPTER;
   G. THE WATER QUALITY AND OTHER ECOLOGICAL IMPACTS, IF ANY, OF  COOLING
 WATER  USE BY CRYPTOCURRENCY MINING OPERATIONS; AND
   H.  THE  SOCIAL AND ECONOMIC COSTS AND BENEFITS, IF ANY, OF CRYPTOCUR-
 RENCY MINING OPERATIONS.
   3. THE DRAFT GENERIC ENVIRONMENTAL IMPACT STATEMENT SHALL  BE  SUBJECT
 TO  NO LESS THAN ONE HUNDRED TWENTY DAYS OF PUBLIC COMMENT FROM THE DATE
 OF ISSUANCE. THE DEPARTMENT SHALL CONDUCT AT LEAST ONE PUBLIC HEARING ON
 THE DRAFT ENVIRONMENTAL  IMPACT  STATEMENT  IN  EACH  OF  THE  FOLLOWING
 REGIONS  OF  THE STATE: WESTERN NEW YORK, THE FINGER LAKES, THE SOUTHERN
 TIER, CENTRAL NEW YORK, THE MOHAWK VALLEY, THE NORTH COUNTRY, THE  CAPI-
 TAL  REGION/HUDSON  VALLEY,  AND  THE  CITY  OF NEW YORK/LONG ISLAND, AS
 DEFINED BY THE EMPIRE STATE DEVELOPMENT CORPORATION.
   4. THE DEPARTMENT SHALL ISSUE A  FINAL  GENERIC  ENVIRONMENTAL  IMPACT
 STATEMENT  AFTER  CLOSE OF THE PUBLIC COMMENT AND PUBLIC HEARING PERIOD,

 S. 6486--A                          4
 
 AND SUCH FINAL GENERIC ENVIRONMENTAL IMPACT STATEMENT SHALL BE ISSUED ON
 OR BEFORE THE FIRST DAY OF SEPTEMBER, TWO THOUSAND TWENTY-THREE.
 § 77-0109. ENFORCEMENT AND PENALTIES.
   THE  DEPARTMENT  MAY ENFORCE THE PROVISIONS OF THIS ARTICLE, INCLUDING
 REFERRAL TO THE ATTORNEY GENERAL FOR THE PURPOSE OF  SEEKING  INJUNCTIVE
 RELIEF RESTRAINING THE OPERATION OF A CRYPTOCURRENCY MINING OPERATION OR
 ELECTRIC  GENERATING  FACILITY  NOT IN COMPLIANCE WITH THE PROVISIONS OF
 THIS ARTICLE AND CIVIL PENALTIES THEREFOR AS PROVIDED IN  TITLE  TWENTY-
 ONE OF ARTICLE SEVENTY-ONE OF THIS CHAPTER.
   §  3.  This  act shall take effect immediately and shall expire and be
 deemed repealed three years after such date.

Co-Sponsors

S6486B - Details

Law Section:: Environmental Conservation Law
Laws Affected:: Add §19-0329, En Con L

S6486B - Summary

Establishes a moratorium on cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions; provides that such operations shall be subject to a full generic environmental impact statement review.

S6486B - Sponsor Memo

 
BILL NUMBER: S6486B

SPONSOR: PARKER
 
TITLE OF BILL:

An act to amend the environmental conservation law, in relation to
establishing a moratorium on consolidated operations that use proof-of-
work authentication methods to validate blockchain transactions; and to
require a comprehensive generic environmental impact statement review

 
PURPOSE OR GENERAL IDEA OF BILL:

To establish a moratorium on consolidated operations based on proof-of-
work transaction authentication methods and require completion of a
comprehensive generic environmental impact study of the consolidated
operations using proof-of-work methodology in the State of New York in
the context of the Climate Leadership and Community Protection Act
(CLCPA) goals established in statute in 2019.

 
SUMMARY OF PROVISIONS:

Section 1 declares the legislative findings.

Section 2 places a moratorium on consolidated operations of proof-of-
work based transaction validation methods.

Section 3 requires completion of a comprehensive generic environmental
impact statement by the New York State Department of Environmental
Conservation.

Section 4 requires one-hundred and twenty days of public comment on the
environmental impact statement and the holding of public hearings in
eight regions across the state prior to final issuance.

Section 5 requires issuance of a final generic environmental impact
statement after close of the public comment and public hearing period.

Section 6 provides definitions.

Section 7 provides the effective date.

 
JUSTIFICATION:

Block chain technology is an innovative technology that allows for the
recording and efficient transfer of information. The information in each
block is authenticated by users of the system in a transparent, decen-
tralized, and democratic manner. Each block has a unique identifier that
encodes the information of the block including code for the previous
information block from which the new information block was built creat-
ing a chain of information exchange known as a block chain. Proof-of
Work is a unique methodology that has been used since 2009 to create and
authenticate new blocks on a block chain.  There are over 16 different
methodologies of authenticating information within a block. However, of
these varied methods there is only one, called Proof-of-Work, that, by
design, uses a substantial amount of computational power to perform and
thus uses a uniquely exorbitant amount of energy. The Proof-of-Work
authentication method was designed to require individuals or companies
to solve highly complex mathematical equations in order to authenticate
a transaction and earn valuable credit. The more equations are solved by
users the more complex the equations get. By design, there is no soft-
ware that can be created that will be able to solve the equations better
than brute force guesswork so the only way to get an advantage and solve
the equations faster is for an individual or company to increase their
computational power. This has led to the expansion of large data centers
consisting of thousands of high power computers that run around the
clock to solve as many equations as possible and authenticate the most
blocks.

There are an increasing number of data centers in New York performing
Proof-of-Work authentication of different blockchains with some being
built or modified to exclusively perform Proof-of-Work authentications.
Studies show that the magnitude of the computer processing output
required to authenticate a single block use as much energy as an average
American household uses in a month. The annual global energy use for PoW
authentication is equivalent to that of the country of Sweden and
exceeds the energy consumption of all the global activity of major tech
companies like Amazon, Google, and Facebook combined.

The added energy usage and corresponding increased greenhouse gas emis-
sions from these new data centers performing Proof-of-Work authentica-
tions in New York 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 be reduced eighty-five percent by 2050 and the state
economy must have net zero emissions across all sectors.

We must determine whether growth of the Proof-of-Work authentication
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. By requiring a statewide generic environmental
impact statement, this crucial information about the industry's impact
upon our climate law, and associated water, air and wildlife impacts,
will be understood and can guide any potential future policy related to
industry regulation.

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.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

NONE

 
EFFECTIVE DATE:
IMMEDIATELY

S6486B - Bill Text download pdf

 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6486--B
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                May 3, 2021
                                ___________
 
 Introduced  by  Sens.  PARKER,  MAY, BRISPORT, KRUEGER, RYAN, SKOUFIS --
   read twice and ordered printed, and when printed to  be  committed  to
   the  Committee  on Environmental Conservation -- committee discharged,
   bill amended, ordered reprinted as amended  and  recommitted  to  said
   committee  -- committee discharged, bill amended, ordered reprinted as
   amended and recommitted to said committee
 
 AN ACT to amend the  environmental  conservation  law,  in  relation  to
   establishing  a  moratorium on consolidated operations that use proof-
   of-work authentication methods to  validate  blockchain  transactions;
   and  to require a comprehensive generic environmental impact statement
   review
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.    Legislative  findings. The legislature hereby finds and
 declares that:
   (a) 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
 wildlife,  increased  harmful  algal  blooms  and  invasive species, and
 increased risk of disease, in part, which  leads  directly  to  loss  of
 life,  property  damage  and  reduction in value, ecological damage, and
 increased infrastructure costs;
   (b) It is the policy of the State of New York to conserve, improve and
 protect its natural resources and environment and to prevent, abate  and
 control  water,  land and air pollution, in order to enhance the health,
 safety and welfare of the people of the state and their overall economic
 and social well-being;
   (c) To mitigate the current and future effects of climate change,  the
 State  of  New  York  implemented  the  Climate Leadership and Community
 Protection Act, requiring that statewide  greenhouse  gas  emissions  be
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD11081-13-1

 S. 6486--B                          2
 
 reduced  eighty-five  percent  by  2050  and that the state has net zero
 emissions in all sectors of the economy by that time;
   (d) Data centers running proof-of-work authentication methods to vali-
 date  blockchain  transactions are an expanding industry in the State of
 New York, often, but not exclusively, located in  retired  or  converted
 fossil fuel power stations, including in dormant peaker plants;
   (e)  The magnitude of computer processing output required to authenti-
 cate a single block of a blockchain with a proof-of-work method uses  as
 much energy as an average American household uses in a month. The annual
 global energy use for proof-of-work authentication is equivalent to that
 of  the  country of Sweden and exceeds the energy consumption of all the
 global activity of major tech companies like Amazon, Google,  and  Face-
 book combined;
   (f)  The  continued  and  expanded  operation  of data centers running
 proof-of-work authentication methods to validate blockchain transactions
 will greatly increase the amount of energy usage in  the  State  of  New
 York,  and  it  is  reasonable  to believe the associated greenhouse gas
 emissions will irreparably harm compliance with the  Climate  Leadership
 and Community Protection Act in contravention of state law;
   (g)  Consolidated  operations  that  use  proof-of-work authentication
 methods to validate blockchain transactions often use large  amounts  of
 water,  which,  when  discharged,  can raise the temperature of adjacent
 water bodies to levels that harm aquatic life,  including  fish  species
 that  are  important  for local tourism, and may increase the amount and
 frequency of harmful algal blooms on lakes, ponds and streams; and
   (h) Many fossil fuel power plants have been shut down across the state
 in recent years due to  reduced  energy  demand,  improved  transmission
 capacity  and non-economic carbon-based fuel sources. Consolidated oper-
 ations that use proof-of-work authentication methods to validate  block-
 chain  transactions  are bringing these plants back online, with behind-
 the-meter operations  that  greatly  exceed  the  previous  intermittent
 usage,  and  can cause significant negative impacts to air quality espe-
 cially in environmental justice communities.
   § 2. The environmental conservation law is amended  by  adding  a  new
 section 19-0329 to read as follows:
 § 19-0329. MORATORIUM ON PERMIT ISSUANCE AND RENEWAL.
   1.  THE  DEPARTMENT SHALL NOT APPROVE A NEW APPLICATION FOR OR ISSUE A
 NEW PERMIT PURSUANT TO THIS ARTICLE FOR AN ELECTRIC GENERATING  FACILITY
 THAT  UTILIZES  A  CARBON-BASED  FUEL  AND THAT PROVIDES, IN WHOLE OR IN
 PART, BEHIND-THE-METER ELECTRIC ENERGY CONSUMED OR UTILIZED BY A FACILI-
 TY THAT USES PROOF-OF-WORK AUTHENTICATION METHODS TO VALIDATE BLOCKCHAIN
 TRANSACTIONS.
   2. THE DEPARTMENT SHALL NOT APPROVE AN APPLICATION TO RENEW AN  EXIST-
 ING  PERMIT  OR  ISSUE  A RENEWAL PERMIT PURSUANT TO THIS ARTICLE FOR AN
 ELECTRIC GENERATING FACILITY THAT UTILIZES A CARBON-BASED FUEL AND  THAT
 PROVIDES, IN WHOLE OR IN PART, BEHIND-THE-METER ELECTRIC ENERGY CONSUMED
 OR UTILIZED BY A FACILITY THAT USES PROOF-OF-WORK AUTHENTICATION METHODS
 TO  VALIDATE BLOCKCHAIN TRANSACTIONS IF THE RENEWAL APPLICATION SEEKS TO
 INCREASE OR WILL ALLOW OR RESULT IN AN INCREASE IN THE AMOUNT  OF  ELEC-
 TRIC  ENERGY  CONSUMED OR UTILIZED BY A FACILITY THAT USES PROOF-OF-WORK
 AUTHENTICATION METHODS TO VALIDATE BLOCKCHAIN TRANSACTIONS.
   § 3. Generic environmental impact statement.  (a)  The  department  of
 environmental  conservation  shall prepare, pursuant to article eight of
 the environmental  conservation  law,  a  generic  environmental  impact
 statement  on  statewide  consolidated operations that use proof-of-work
 authentication methods to validate blockchain transactions.

 S. 6486--B                          3

   (b) The generic environmental impact statement  shall  address,  at  a
 minimum:
   (i)  the  number and location of existing consolidated operations that
 use proof-of-work authentication methods to validate  blockchain  trans-
 actions in the state;
   (ii) the amount of electric energy consumed by each such operation;
   (iii)  the  sources of electric energy consumed by each such operation
 and the type of fuel used by each energy source;
   (iv) the amount of greenhouse gas emissions and co-pollutants released
 by each energy source  attributable  to  providing  electric  energy  to
 consolidated operations that use proof-of-work authentication methods to
 validate blockchain transactions;
   (v)  the anticipated increase, if any, of consolidated operations that
 use proof-of-work authentication methods to validate  blockchain  trans-
 actions  in the state and the anticipated expansion, if any, of existing
 operations;
   (vi) the potential impacts of electric energy consumption  by  consol-
 idated operations that use proof-of-work authentication methods to vali-
 date  blockchain  transactions on the state's ability to meet the green-
 house gas emission reduction goals set forth in article seventy-five  of
 the environmental conservation law;
   (vii) the water quality and other ecological impacts, if any, of cool-
 ing  water use by consolidated operations that use proof-of-work authen-
 tication methods to validate blockchain transactions;
   (viii) the potential public health impacts, if any, due to reduced air
 and water quality in communities near consolidated operations  that  use
 proof-of-work  authentication  methods  to  validate  blockchain  trans-
 actions;
   (ix) the potential statewide  public  health  impacts,  if  any,  from
 increased  greenhouse  gas  emissions released by statewide consolidated
 operations that use proof-of-work  authentication  methods  to  validate
 blockchain transactions; and
   (x)  the  social  and  economic costs and benefits, if any, of consol-
 idated operations that use proof-of-work authentication methods to vali-
 date blockchain transactions.
   § 4. Any generic environmental impact statement draft shall be subject
 to 120 days of public comment from the date of issuance. The  department
 of  environmental conservation shall conduct at least one public hearing
 in each of the following regions of the state:  western  New  York,  the
 finger  lakes,  the  southern tier, central New York, the Mohawk valley,
 the north country, the capital region/Hudson valley, and the City of New
 York/Long Island, as defined by  the  Empire  State  Development  Corpo-
 ration.
   §  5.  The department shall issue a final generic environmental impact
 statement after close of the public comment and public hearing period.
   § 6. For the purposes of this act:
   (a) "proof-of-work" shall mean a consensus algorithm in  a  blockchain
 network  used  to  confirm  and  produce  new blocks to the chain, where
 competitors complete new blocks and  where  the  algorithm  changes  the
 complexity  of  the  competition  in a manner that is designed to and/or
 results in increased energy usage for each competitor when the complexi-
 ty is increased; and
   (b) "blockchain" shall mean a digital ledger in which transactions are
 recorded chronologically and publicly.
   § 7. This act shall take effect immediately.

Co-Sponsors

view additional co-sponsors

S6486C - Details

Law Section:: Environmental Conservation Law
Laws Affected:: Add §19-0329, En Con L

S6486C - Summary

Establishes a moratorium on cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions; provides that such operations shall be subject to a full generic environmental impact statement review.

S6486C - Sponsor Memo

 
BILL NUMBER: S6486C

SPONSOR: PARKER
 
TITLE OF BILL:

An act to amend the environmental conservation law, in relation to
establishing a moratorium on consolidated operations that use proof-of-
work authentication methods to validate blockchain transactions; and to
require a comprehensive generic environmental impact statement review

 
PURPOSE OR GENERAL IDEA OF BILL:

To establish a moratorium on consolidated operations based on proof-of-
work transaction authentication methods and require completion of a
comprehensive generic environmental impact study of the consolidated
operations using proof-of-work methodology in the State of New York in
the context of the Climate Leadership and Community Protection Act
(CLCPA) goals established in statute in 2019.

 
SUMMARY OF PROVISIONS:

Section 1 declares the legislative findings.

Section 2 places a moratorium on consolidated operations of proof-of-
work based transaction validation methods.

Section 3 requires completion of a comprehensive generic environmental
impact statement by the New York State Department of Environmental
Conservation.

Section 4 requires one-hundred and twenty days of public comment on the
environmental impact statement and the holding of public hearings in
eight regions across the state prior to final issuance.

Section 5 requires issuance of a final generic environmental impact
statement after close of the public comment and public hearing period.

Section 6 provides definitions.

Section 7 provides the effective date.

 
JUSTIFICATION:

Block chain technology is an innovative technology that allows for the
recording and efficient transfer of information. The information in each
block is authenticated by users of the system in a transparent, decen-
tralized, and democratic manner. Each block has a unique identifier that
encodes the information of the block including code for the previous
information block from which the new information block was built creat-
ing a chain of information exchange known as a block chain. Proof-of
Work is a unique methodology that has been used since 2009 to create and
authenticate new blocks on a block chain.  There are over 16 different
methodologies of authenticating information within a block. However, of
these varied methods there is only one, called Proof-of-Work, that, by
design, uses a substantial amount of computational power to perform and
thus uses a uniquely exorbitant amount of energy. The Proof-of-Work
authentication method was designed to require individuals or companies
to solve highly complex mathematical equations in order to authenticate
a transaction and earn valuable credit. The more equations are solved by
users the more complex the equations get. By design, there is no soft-
ware that can be created that will be able to solve the equations better
than brute force guesswork so the only way to get an advantage and solve
the equations faster is for an individual or company to increase their
computational power. This has led to the expansion of large data centers
consisting of thousands of high power computers that run around the
clock to solve as many equations as possible and authenticate the most
blocks.

There are an increasing number of data centers in New York performing
Proof-of-Work authentication of different blockchains with some being
built or modified to exclusively perform Proof-of-Work authentications.
Studies show that the magnitude of the computer processing output
required to authenticate a single block use as much energy as an average
American household uses in a month. The annual global energy use for PoW
authentication is equivalent to that of the country of Sweden and
exceeds the energy consumption of all the global activity of major tech
companies like Amazon, Google, and Facebook combined.

The added energy usage and corresponding increased greenhouse gas emis-
sions from these new data centers performing Proof-of-Work authentica-
tions in New York 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 be reduced eighty-five percent by 2050 and the state
economy must have net zero emissions across all sectors.

We must determine whether growth of the Proof-of-Work authentication
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. By requiring a statewide generic environmental
impact statement, this crucial information about the industry's impact
upon our climate law, and associated water, air and wildlife impacts,
will be understood and can guide any potential future policy related to
industry regulation.

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.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

NONE

 
EFFECTIVE DATE:
IMMEDIATELY

S6486C - Bill Text download pdf

 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6486--C
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                May 3, 2021
                                ___________
 
 Introduced  by  Sens.  PARKER,  MAY, BIAGGI, BRISPORT, JACKSON, KRUEGER,
   RYAN -- read twice and ordered printed, and when printed to be commit-
   ted to  the  Committee  on  Environmental  Conservation  --  committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to  said  committee  --  committee  discharged,  bill amended, ordered
   reprinted as amended and recommitted to said committee --  recommitted
   to  the  Committee  on  Environmental  Conservation in accordance with
   Senate Rule 6, sec. 8 -- committee discharged, bill  amended,  ordered
   reprinted as amended and recommitted to said committee
 
 AN  ACT  to  amend  the  environmental  conservation law, in relation to
   establishing a moratorium on consolidated operations that  use  proof-
   of-work  authentication  methods  to validate blockchain transactions;
   and to require a comprehensive generic environmental impact  statement
   review
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1.   Legislative findings. The legislature  hereby  finds  and
 declares that:
   (a)  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
 wildlife, increased harmful  algal  blooms  and  invasive  species,  and
 increased  risk  of  disease,  in  part, which leads directly to loss of
 life, property damage and reduction in  value,  ecological  damage,  and
 increased infrastructure costs;
   (b) It is the policy of the State of New York to conserve, improve and
 protect  its natural resources and environment and to prevent, abate and
 control water, land and air pollution, in order to enhance  the  health,
 safety and welfare of the people of the state and their overall economic
 and social well-being;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11081-15-1

 S. 6486--C                          2
 
   (c)  To mitigate the current and future effects of climate change, the
 State of New York  implemented  the  Climate  Leadership  and  Community
 Protection  Act,  requiring  that  statewide greenhouse gas emissions be
 reduced eighty-five percent by 2050 and that  the  state  has  net  zero
 emissions in all sectors of the economy by that time;
   (d) Data centers running proof-of-work authentication methods to vali-
 date  blockchain  transactions are an expanding industry in the State of
 New York, often, but not exclusively, located in  retired  or  converted
 fossil fuel power stations, including in dormant peaker plants;
   (e)  The magnitude of computer processing output required to authenti-
 cate a single block of a blockchain with a proof-of-work method uses  as
 much energy as an average American household uses in a month. The annual
 global energy use for proof-of-work authentication is equivalent to that
 of  the  country of Sweden and exceeds the energy consumption of all the
 global activity of major tech companies like Amazon, Google,  and  Face-
 book combined;
   (f)  The  continued  and  expanded  operation  of data centers running
 proof-of-work authentication methods to validate blockchain transactions
 will greatly increase the amount of energy usage in  the  State  of  New
 York,  and  it  is  reasonable  to believe the associated greenhouse gas
 emissions will irreparably harm compliance with the  Climate  Leadership
 and Community Protection Act in contravention of state law;
   (g)  Consolidated  operations  that  use  proof-of-work authentication
 methods to validate blockchain transactions often use large  amounts  of
 water,  which,  when  discharged,  can raise the temperature of adjacent
 water bodies to levels that harm aquatic life,  including  fish  species
 that  are  important  for local tourism, and may increase the amount and
 frequency of harmful algal blooms on lakes, ponds and streams; and
   (h) Many fossil fuel power plants have been shut down across the state
 in recent years due to  reduced  energy  demand,  improved  transmission
 capacity  and non-economic carbon-based fuel sources. Consolidated oper-
 ations that use proof-of-work authentication methods to validate  block-
 chain  transactions  are bringing these plants back online, with behind-
 the-meter operations  that  greatly  exceed  the  previous  intermittent
 usage,  and  can cause significant negative impacts to air quality espe-
 cially in environmental justice communities.
   § 2. The environmental conservation law is amended  by  adding  a  new
 section 19-0329 to read as follows:
 § 19-0329. MORATORIUM ON PERMIT ISSUANCE AND RENEWAL.
   1. FOR THE PERIOD COMMENCING ON THE EFFECTIVE DATE OF THIS SECTION AND
 ENDING  THREE  YEARS AFTER SUCH DATE, THE DEPARTMENT SHALL NOT APPROVE A
 NEW APPLICATION FOR OR ISSUE A NEW PERMIT PURSUANT TO THIS  ARTICLE  FOR
 AN  ELECTRIC  GENERATING  FACILITY THAT UTILIZES A CARBON-BASED FUEL AND
 THAT PROVIDES, IN WHOLE OR IN  PART,  BEHIND-THE-METER  ELECTRIC  ENERGY
 CONSUMED  OR  UTILIZED BY A FACILITY THAT USES PROOF-OF-WORK AUTHENTICA-
 TION METHODS TO VALIDATE BLOCKCHAIN TRANSACTIONS.
   2. FOR THE PERIOD COMMENCING ON THE EFFECTIVE DATE OF  THIS    SECTION
 AND ENDING THREE YEARS AFTER SUCH DATE, THE DEPARTMENT SHALL NOT APPROVE
 AN  APPLICATION  TO  RENEW  AN EXISTING PERMIT OR ISSUE A RENEWAL PERMIT
 PURSUANT TO THIS  ARTICLE  FOR  AN  ELECTRIC  GENERATING  FACILITY  THAT
 UTILIZES  A  CARBON-BASED  FUEL  AND THAT PROVIDES, IN WHOLE OR IN PART,
 BEHIND-THE-METER ELECTRIC ENERGY CONSUMED OR UTILIZED BY A FACILITY THAT
 USES PROOF-OF-WORK AUTHENTICATION METHODS TO VALIDATE BLOCKCHAIN  TRANS-
 ACTIONS  IF  THE  RENEWAL APPLICATION SEEKS TO INCREASE OR WILL ALLOW OR
 RESULT IN AN INCREASE IN THE  AMOUNT  OF  ELECTRIC  ENERGY  CONSUMED  OR
 S. 6486--C                          3

 UTILIZED BY A FACILITY THAT USES PROOF-OF-WORK AUTHENTICATION METHODS TO
 VALIDATE BLOCKCHAIN TRANSACTIONS.
   §  3.  Generic  environmental  impact statement. (a) The department of
 environmental conservation shall prepare, pursuant to article  eight  of
 the  environmental  conservation  law,  a  generic  environmental impact
 statement on statewide consolidated operations  that  use  proof-of-work
 authentication methods to validate blockchain transactions.
   (b)  The  generic  environmental  impact statement shall address, at a
 minimum:
   (i) the number and location of existing consolidated  operations  that
 use  proof-of-work  authentication methods to validate blockchain trans-
 actions in the state;
   (ii) the amount of electric energy consumed by each such operation;
   (iii) the sources of electric energy consumed by each  such  operation
 and the type of fuel used by each energy source;
   (iv) the amount of greenhouse gas emissions and co-pollutants released
 by  each  energy  source  attributable  to  providing electric energy to
 consolidated operations that use proof-of-work authentication methods to
 validate blockchain transactions;
   (v) the anticipated increase, if any, of consolidated operations  that
 use  proof-of-work  authentication methods to validate blockchain trans-
 actions in the state and the anticipated expansion, if any, of  existing
 operations;
   (vi)  the  potential impacts of electric energy consumption by consol-
 idated operations that use proof-of-work authentication methods to vali-
 date blockchain transactions on the state's ability to meet  the  green-
 house  gas emission reduction goals set forth in article seventy-five of
 the environmental conservation law;
   (vii) the water quality and other ecological impacts, if any, of cool-
 ing water use by consolidated operations that use proof-of-work  authen-
 tication methods to validate blockchain transactions;
   (viii) the potential public health impacts, if any, due to reduced air
 and  water  quality in communities near consolidated operations that use
 proof-of-work  authentication  methods  to  validate  blockchain  trans-
 actions;
   (ix)  the  potential  statewide  public  health  impacts, if any, from
 increased greenhouse gas emissions released  by  statewide  consolidated
 operations  that  use  proof-of-work  authentication methods to validate
 blockchain transactions; and
   (x) the social and economic costs and benefits,  if  any,  of  consol-
 idated operations that use proof-of-work authentication methods to vali-
 date blockchain transactions.
   § 4. Any generic environmental impact statement draft shall be subject
 to  120 days of public comment from the date of issuance. The department
 of environmental conservation shall conduct at least one public  hearing
 in  each  of  the  following regions of the state: western New York, the
 finger lakes, the southern tier, central New York,  the  Mohawk  valley,
 the north country, the capital region/Hudson valley, and the City of New
 York/Long  Island,  as  defined  by  the Empire State Development Corpo-
 ration.
   § 5. The department shall issue a final generic  environmental  impact
 statement  after  close  of the public comment and public hearing period
 and no later than two years after the effective date of this act.
   § 6. For the purposes of this act:
   (a) "proof-of-work" shall mean a consensus algorithm in  a  blockchain
 network  used  to  confirm  and  produce  new blocks to the chain, where
 S. 6486--C                          4
 
 competitors complete new blocks and  where  the  algorithm  changes  the
 complexity  of  the  competition  in a manner that is designed to and/or
 results in increased energy usage for each competitor when the complexi-
 ty is increased; and
   (b) "blockchain" shall mean a digital ledger in which transactions are
 recorded chronologically and publicly.
   § 7. This act shall take effect immediately.

Co-Sponsors

view additional co-sponsors

S6486D (ACTIVE) - Details

Law Section:: Environmental Conservation Law
Laws Affected:: Add §19-0329, En Con L

S6486D (ACTIVE) - Summary

Establishes a moratorium on cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions; provides that such operations shall be subject to a full generic environmental impact statement review.

S6486D (ACTIVE) - Sponsor Memo

 
BILL NUMBER: S6486D                     Revised

SPONSOR: PARKER
 
TITLE OF BILL:

An act to amend the environmental conservation law, in relation to
establishing a moratorium on cryptocurrency mining operations that use
proof-of-work authentication methods to validate blockchain trans-
actions; and to require a comprehensive generic environmental impact
statement review

 
PURPOSE OR GENERAL IDEA OF BILL:

To establish a moratorium on air permit issuance and renewal for elec-
tric generating facilities that utilize a carbon-based fuel and that
provides, in whole or in part, behind-the-meter electric energy consumed
or utilized by cryptocurrency mining operations that use proof-of-work
authentication methods to validate blockchain transactions; and require
completion of a comprehensive generic environmental impact study of
cryptocurrency mining operations using proof-of-work methodology in the
State of New York in the context of the Climate Leadership and Community
Protection Act (CLCPA) goals established in statute in 2019.

 
SUMMARY OF PROVISIONS:

Section 1 declares the legislative findings.

Section 2 places a moratorium on air permit issuance and renewal for an
electric generating facility that utilizes a carbon-based fuel and that
provides, in whole or in part, behind-the-meter electric energy consumed
or utilized by cryptocurrency mining operations that use proof-of-work
authentication methods to validate blockchain transactions.

Section 3 requires completion of a comprehensive generic environmental
impact statement by the New York State Department of Environmental
Conservation.

Section 4 requires one-hundred and twenty days of public comment on the
environmental impact statement and the holding of public hearings in
eight regions across the state prior to final issuance.

Section 5 requires issuance of a final generic environmental impact
statement after close of the public comment and public hearing period no
later than one year after the effective date of this act.

Section 6 provides definitions.

Section 7 provides the effective date.

 
JUSTIFICATION:

Blockchain technology is an innovative technology that allows for the
recording and efficient transfer of information. The information in each
block is authenticated by users of the system in a transparent, decen-
tralized, and democratic manner. Each block has a unique identifier that
encodes the information of the block including code for the previous
information block from which the new information block was built creat-
ing a chain of information exchange known as a blockchain.

Proof-of-Work (PoW) is a decentralized consensus mechanism used to vali-
date transactions and secure a blockchain. There are over 16 different
methodologies of authenticating information within a block.  However,
PoW uses a substantial amount of power. The PoW authentication method
was designed to require individuals or companies to solve highly complex
mathematical puzzles. The miners solve puzzles, trying to break the
SHA-256 encryption algorithm in order to authenticate a transaction and
earn tokens.

The more participants in the network, the more difficult it becomes to
solve the mathematical puzzles. The combined speed of all "miners"
participating in the network is commonly defined as "global hash rate."
The more miners, the higher the hash rate. When miners are disconnected,
the hash rates drop accordingly, making it easier for the remaining
miners to mine Bitcoin.

This creates incentives for miners to remain in the network. By design,
there is no software that can be created that will be able to solve the
equations better than brute force guesswork. Therefore, the only way to
get an advantage and solve the equations faster is for an individual or
company to increase their computational power. There are no comparable
alternative methods which allow miners to participate in PoW operations.
This has led to the expansion of large cryptocurrency mining operations
consisting of thousands of computers that solve as many equations as
possible. There is one block reward every nine minutes. Therefore,
miners around the world are competing for that one reward. In order to
succeed, you need more miners to give you more probability to win the
block. Miners globally "pool" their computational power together and
once one of the miners in the pool solves the puzzle, the "block reward"
is shared with every pool participant.

There are an increasing number of cryptocurrency mining operations in
New York that are mining cryptocurrencies that use PoW consensus algo-
rithm, such as Bitcoin and Ethereum. Some cryptocurrency mining compa-
nies purchased retired fossil fuel plants and began operating at a much
higher rate than the plants did previously. Those companies are essen-
tially operating as an electric generating facility that uses fossil
fuels.

However, other cryptocurrency mining operations run on zero-emission
energy sources and operate as customers to the local grid. When properly
developed, facilities that utilize zero-emission energy sources add
millions of dollars in tax revenue and bring economic development to
communities otherwise burdened with shuttered properties.

The added energy usage from behind-the-meter cryptocurrency mining oper-
ations performing PoW authentications that operate their own and operate
as electric generating facilities, could have unintended consequences on
the state's energy goals.

We must determine whether the growth of Proof-of-Work authentication
cryptocurrency mining companies that operate their own electric generat-
ing facilities and produce energy by burning fossil fuels is incompat-
ible with our greenhouse gas emission targets established in law. By
requiring a statewide generic environmental impact statement, this
crucial information about the industry's impact upon our climate law,
and associated water, air and wildlife impacts, will be understood and
can guide any potential future policy related to industry regulation.
 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

NONE

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to all permits or
renewal applications filed after such date.

S6486D (ACTIVE) - Bill Text download pdf

 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6486--D
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                May 3, 2021
                                ___________
 
 Introduced  by  Sens. PARKER, MAY, BIAGGI, BRISPORT, GOUNARDES, JACKSON,
   KRUEGER, RAMOS, RYAN, SALAZAR -- read twice and ordered  printed,  and
   when printed to be committed to the Committee on Environmental Conser-
   vation  --  committee  discharged,  bill amended, ordered reprinted as
   amended and recommitted to said  committee  --  committee  discharged,
   bill  amended,  ordered  reprinted  as amended and recommitted to said
   committee -- recommitted to the Committee on  Environmental  Conserva-
   tion in accordance with Senate Rule 6, sec. 8 -- committee discharged,
   bill  amended,  ordered  reprinted  as amended and recommitted to said
   committee -- committee discharged, bill amended, ordered reprinted  as
   amended and recommitted to said committee
 
 AN  ACT  to  amend  the  environmental  conservation law, in relation to
   establishing a moratorium on cryptocurrency mining operations that use
   proof-of-work authentication methods  to  validate  blockchain  trans-
   actions;  and  to require a comprehensive generic environmental impact
   statement review
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section  1.    Legislative  findings. The legislature hereby finds and
 declares that:
   (a) 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
 wildlife,  increased  harmful  algal  blooms  and  invasive species, and
 increased risk of disease, in part, which  leads  directly  to  loss  of
 life,  property  damage  and  reduction in value, ecological damage, and
 increased infrastructure costs;
   (b) It is the policy of the State of New York to conserve, improve and
 protect its natural resources and environment and to prevent, abate  and
 control  water,  land and air pollution, in order to enhance the health,

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11081-20-2

 S. 6486--D                          2
 
 safety and welfare of the people of the state and their overall economic
 and social well-being;
   (c)  To mitigate the current and future effects of climate change, the
 State of New York  implemented  the  Climate  Leadership  and  Community
 Protection  Act,  requiring  that  statewide greenhouse gas emissions be
 reduced eighty-five percent by 2050 and that  the  state  has  net  zero
 emissions in all sectors of the economy by that time;
   (d) Cryptocurrency mining operations running proof-of-work authentica-
 tion methods to validate blockchain transactions are an expanding indus-
 try in the State of New York; and
   (e)  The  continued  and  expanded  operation of cryptocurrency mining
 operations running  proof-of-work  authentication  methods  to  validate
 blockchain transactions will greatly increase the amount of energy usage
 in the state of New York, and impact compliance with the Climate Leader-
 ship and Community Protection Act.
   §  2.  The  environmental  conservation law is amended by adding a new
 section 19-0331 to read as follows:
 § 19-0331. MORATORIUM ON AIR PERMIT ISSUANCE AND RENEWAL.
   1. FOR THE PERIOD COMMENCING ON THE EFFECTIVE DATE OF THIS SECTION AND
 ENDING TWO YEARS AFTER SUCH DATE,  THE  DEPARTMENT,  AFTER  CONSULTATION
 WITH  THE DEPARTMENT OF PUBLIC SERVICE, SHALL NOT APPROVE A NEW APPLICA-
 TION FOR OR ISSUE A NEW PERMIT PURSUANT  TO  THIS  ARTICLE,  OR  ARTICLE
 SEVENTY  OF  THIS  CHAPTER,  FOR  AN  ELECTRIC  GENERATING FACILITY THAT
 UTILIZES A CARBON-BASED FUEL AND THAT PROVIDES, IN  WHOLE  OR  IN  PART,
 BEHIND-THE-METER  ELECTRIC ENERGY CONSUMED OR UTILIZED BY CRYPTOCURRENCY
 MINING OPERATIONS THAT USE PROOF-OF-WORK AUTHENTICATION METHODS TO VALI-
 DATE BLOCKCHAIN TRANSACTIONS.
   2. FOR THE PERIOD COMMENCING ON THE EFFECTIVE DATE OF  THIS    SECTION
 AND  ENDING  TWO YEARS AFTER SUCH DATE, THE DEPARTMENT SHALL NOT APPROVE
 AN APPLICATION TO RENEW AN EXISTING PERMIT OR  ISSUE  A  RENEWAL  PERMIT
 PURSUANT  TO  THIS  ARTICLE  FOR  AN  ELECTRIC  GENERATING FACILITY THAT
 UTILIZES A CARBON-BASED FUEL AND THAT PROVIDES, IN  WHOLE  OR  IN  PART,
 BEHIND-THE-METER ELECTRIC ENERGY CONSUMED OR UTILIZED BY A CRYPTOCURREN-
 CY  MINING  OPERATION  THAT USES PROOF-OF-WORK AUTHENTICATION METHODS TO
 VALIDATE BLOCKCHAIN TRANSACTIONS IF THE  RENEWAL  APPLICATION  SEEKS  TO
 INCREASE  OR  WILL ALLOW OR RESULT IN AN INCREASE IN THE AMOUNT OF ELEC-
 TRIC ENERGY CONSUMED OR UTILIZED BY A  CRYPTOCURRENCY  MINING  OPERATION
 THAT  USES  PROOF-OF-WORK  AUTHENTICATION METHODS TO VALIDATE BLOCKCHAIN
 TRANSACTIONS.
   § 3. Generic environmental impact statement.  (a)  The  department  of
 environmental  conservation,  in  consultation  with  the  department of
 public service, shall prepare, pursuant to article eight of the environ-
 mental conservation law, a generic  environmental  impact  statement  on
 cryptocurrency  mining  operations that use proof-of-work authentication
 methods to validate blockchain transactions.
   (b) The generic environmental impact statement  shall  address,  at  a
 minimum:
   (i)  the  number  and location of existing cryptocurrency mining oper-
 ations that use proof-of-work authentication methods to validate  block-
 chain transactions in the state;
   (ii)  the  amount  of  electric energy consumed by each cryptocurrency
 mining operation that uses proof-of-work authentication methods to vali-
 date blockchain transactions;
   (iii) the sources of electric energy consumed by  each  cryptocurrency
 mining operation that uses proof-of-work authentication methods to vali-
 S. 6486--D                          3

 date  blockchain  transactions  and the type of fuel used by each energy
 source;
   (iv) the amount of greenhouse gas emissions and co-pollutants released
 by each energy source attributable to providing electric energy to cryp-
 tocurrency mining operations that use proof-of-work authentication meth-
 ods to validate blockchain transactions;
   (v)  the  anticipated increase, if any, of cryptocurrency mining oper-
 ations that use proof-of-work authentication methods to validate  block-
 chain  transactions  in the state and the anticipated expansion, if any,
 of existing operations;
   (vi) the potential impacts of electric energy consumption  by  crypto-
 currency mining operations that use proof-of-work authentication methods
 to  validate  blockchain transactions on the state's ability to meet the
 greenhouse gas emission reduction goals set forth  in  article  seventy-
 five of the environmental conservation law;
   (vii)  the  amount  of water usage, water quality and other ecological
 impacts, if any, of cooling water use  by  cryptocurrency  mining  oper-
 ations  that use proof-of-work authentication methods to validate block-
 chain transactions;
   (viii) the potential public health impacts, if any, due to reduced air
 and water quality in communities near cryptocurrency  mining  operations
 that  use  proof-of-work  authentication  methods to validate blockchain
 transactions;
   (ix) the potential statewide  public  health  impacts,  if  any,  from
 increased  greenhouse  gas  emissions  released by cryptocurrency mining
 operations that use proof-of-work  authentication  methods  to  validate
 blockchain transactions; and
   (x)  the social and economic costs and benefits, if any, of cryptocur-
 rency mining operations that use proof-of-work authentication methods to
 validate blockchain transactions.
   § 4. Any generic environmental impact statement draft shall be  posted
 on the department of environmental conservation's website and be subject
 to  120 days of public comment from the date of issuance. The department
 of environmental conservation shall conduct at least one public  hearing
 in  each  of  the  following regions of the state: western New York, the
 finger lakes, the southern tier, central New York,  the  Mohawk  valley,
 the north country, the capital region/Hudson valley, and the City of New
 York/Long  Island,  as  defined  by  the Empire State Development Corpo-
 ration, and provide meaningful opportunity for comment.
   § 5. The department shall issue a final generic  environmental  impact
 statement  after  close  of the public comment and public hearing period
 and no later than one year after the effective date of this act.
   § 6. For the purposes of this act:
   (a) "Cryptocurrency mining operations that use proof-of-work authenti-
 cation methods" shall mean the use of a consensus algorithm in a  block-
 chain  network  used  to  confirm and produce new blocks to the chain to
 validate a cryptocurrency transaction, where  competitors  complete  new
 blocks and where the algorithm changes the complexity of the competition
 in a manner that is designed to and/or results in increased energy usage
 for each competitor when the complexity is increased; and
   (b) "blockchain" shall mean a digital ledger in which transactions are
 recorded chronologically and publicly.
   §  7.  This  act  shall take effect immediately and shall apply to all
 permits or renewal applications filed after such date.

senate Bill S6486B

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Rules Committee Vote: Jun 7, 2021

Bill Amendments

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S6486D (ACTIVE) - Details

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