About two months ago, a New York Appeals Court reversed a lower court’s dismissal of the claims brought by two public service organizations in the matter of Clean Air Coalition of Western New York v. New York State Public Service Commission, 207 N.Y.S.3d 221 (3rd Dep’t 2024).

In that case, the Sierra Club and the Clean Air Coalition of Western New York filed an action for declaratory judgment against the New York State Public Service Commission (PSC) for its review of an application to convert a natural gas-fired cogeneration facility in North Tonawanda, N.Y. to a cryptocurrency mining operation.

In 2021, the proposed new owners of this co-generation plant in North Tonawanda requested a ruling from PSC that the transaction to convert the gas-fired cogeneration facility did not need any further review or that it was approved. At the time, both the Sierra Club and the Clean Air Coalition claimed there were significant environmental impacts from a crypto mining facility and that such a facility was inconsistent with the New York State Climate Leadership and Community Protection Act (CLCPA). The PSC granted the application for the plant conversion and found that the environmental issues were outside of the proceeding.  

The alleged environmental impacts from crypto mining are well documented. An article on the MIT Climate website titled Climate Impacts of Bitcoin Mining in the US, dated June 28, 2023, finds that “… a growing body of academic studies compares Bitcoin’s carbon footprint to the emission levels of mid-sized countries.”

On the other hand, proponents of bitcoin mining “… claim potential climate benefits from grid balancing services, support of renewable energy expansion, methane emissions reductions via flare gas utilization or sealing of orphaned wells and use of waste heat from mining hardware for ancillary activities.”

In the matter of Clean Air Coalition, both the Sierra Club and the Clean Air Coalition responded to PSC’s approval of the plant conversion by requesting a rehearing. At the same time, these coalitions commenced a declaratory judgment claiming that PSC ignored: (1) the specific section of the CLCPA requiring that it consider environmental impacts; and (2) it ignored the potential impact on disadvantaged communities.

After reviewing technical aspects in the request for a rehearing, the court found that relief requested by the two coalitions was available short of unwinding the transaction. Specifically, the court found that the petitioners simply wanted the PSC to engage in the analysis required by the CLCPA: “[i]n considering and issuing permits, licenses and other administrative approvals and decisions… all state agencies… shall consider whether such decisions are inconsistent with or will interfere with the attainment of the statewide greenhouse gas emissions limits established in [ECL] article 75.”  The court also found that petitioners did demonstrate an injury in fact stemming from the ruling.

The court remitted this case for further proceedings. Undoubtedly, a real assessment of the real impact of crypto mining on greenhouse gases and emission limits will be next.